Wall Street Journal
By Maxwell Murphy
Wal-Mart Stores Inc. Chief Executive Michael Duke saw his total compensation drop 2.7% to $18.7 million for the fiscal year ended in January, as the world's largest retailer said its overall performance was not as strong as in the prior year.
Mr. Duke's base salary rose 2.4% to $1.2 million, according to a document filed Monday with the Securities and Exchange Commission, while his stock awards were valued at $12.7 million, slightly below where his fiscal 2010 award was valued at the grant date. His cash incentive came in below $3.9 million, a figure that was below the target the company set, and more than $1 million below the maximum cash incentive Mr. Duke was eligible to receive if Wal-Mart had performed better. In fiscal 2010, Mr. Duke received the maximum award set for that year of $4.8 million.
Separately, Wal-Mart said it agreed to acquire Silicon Valley start-up Kosmix Corp. in a move to accelerate the retailer's social-media and mobile-commerce offerings. Terms of the deal, which is expected to close during the first half of the year, weren't disclosed.
Kosmix, based in Mountain View, Calif., helps filter and organize content in social networks to connect people with real-time information. The company was founded in 2005 by Venky Harinarayan and Anand Rajaraman, early pioneers of online shopping, whose first company, Junglee, was acquired by Amazon.com Inc. in 1998. Wal-Mart said the founders and Kosmix will operate as part of the newly formed @WalmartLabs unit.
Wal-Mart has struggled to reverse some two years of declining quarterly sales at its U.S. stores open at least a year, and recently announced measures to try to remedy the situation. Wal-Mart had strayed from the vision of late founder Sam Walton, and U.S. consumers became disappointed that Wal-Mart wasn't always offering the best selection at the best price, causing the retailer to lose ground to rivals such as Target Corp. Wal-Mart will increase its product lineup, bringing back or adding a total of about 8,500 different products in an effort to regain its status as a one-stop shop. The company, based in Bentonville, Ark., is also launching a marketing blitz to remind customers that Wal-Mart will beat the competition on price.
In addition to his compensation, Mr. Duke saw 334,460 Wal-Mart shares from previous equity awards vest, realizing him a total value of nearly $17.6 million as of the various vesting dates. Vice Chairman Eduardo Castro-Wright, whose total fiscal 2011 compensation was $9.2 million, below only Mr. Duke at the company, realized value upon equity vesting of $15.4 million.
During fiscal 2011, Mr. Duke deferred salary, cash incentives and equity awards valued at $14.3 million, bringing the executive's total deferred compensation balance to $63.3 million, according to a proxy statement that Wal-Mart filed with the SEC.
