Wal-Mart just announced Doug McMillan as its new CEO of Wal-Mart International. For the past three years, McMillan has served as CEO of Sam’s Club, and has long been considered a rising star at Wal-Mart. His big day comes on February 1st, when he takes over Mike Duke’s job - who’s moving up to replace Lee Scott as top dog at Wal-Mart, Inc.

According to his Wal-Mart bio:

In his 18 years with Wal-Mart Stores, Inc., McMillon has learned the business from the bottom up, holding leadership roles in all three operating segments —Walmart US, Wal-Mart International and Sam’s Club. He began his career as an hourly associate at a Wal-Mart Distribution Center in Northwest Arkansas, while he worked his way through college. In 1990, while attending graduate school at the University of Tulsa, he became a Buyer Trainee for Wal-Mart working in Store #894 in Tulsa, OK. He has served as a Buyer for Food and Candy, Ladieswear and Crafts; a Divisional Merchandise Manager for Home Furnishings and Infants and Toddlers; Vice President and General Merchandise Manager for Sam’s Club International; and Senior Vice President and General Merchandise Manager for Wal-Mart Stores, Inc. overseeing purchases for Toys, Electronics, Video Games, Photo, Sporting Goods, Stationary and Office Supplies.

Here’s a quick look at McMillan, from a 2007 interview with AOL Business:

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As the rest of the country slides into recession, Wal-Mart continues to ride high. Retail Metrics, a retail research firm, projects that Wal-Mart will post a record profit of $13.7 Billion this year - higher than the country’s next three retailers - CVS, Home Depot and Lowe’s - combined.

According to my calculations, it would take an average Wal-Mart worker making $10.86 an hour 144,008 years (working 24 hours a day, 365 days a year) to earn 13.7 billion dollars.

US Retailers Looking At Losses For 2008, With 4Q Not Helping [Dow Jones Newswire via Wall Street Journal]:

At least two dozen publicly traded retailers are on pace to show a loss for 2008, with the fourth quarter, usually the industry’s best period of the year, in many cases contributing to the red ink.

Saks Inc. (SKS), Dillard’s Inc. (DDS), Pacific Sunwear of California Inc. (PSUN), Talbot’s Inc. (TLB), Borders Group Inc. (BGP), and Zale Corp. (ZLC) are all seen posting earnings deficits for their current fiscal year, according to Retail Metrics, whose data are based on analysts’ estimates.

Rite Aid Corp. (RAD), which is contending with heavy debt as well as management turnover, is projected to show the biggest loss in the Retail Metrics group, at almost $1.5 billion for 2008.

Circuit City Stores Inc. (CCTYQ), now operating under Chapter 11 bankruptcy protection, is second, with analysts seeing a $314 million loss for the year. Building Materials Inc. (BLG) is pegged for a $154 million loss.

The diverse group also includes Saks, Talbot’s, Dillard’s, Pacific Sunwear of California, Zale and Borders Group and all are expected to see a loss for 2008.

The projections for significant red ink illustrate how deep the morass is for the retail industry, with fourth-quarter results projected to be soft and raising questions about just how bad next year might be.

“There isn’t much good news out there, and conditions are not improving,” said Ken Perkins, head of Retail Metrics.

Of the 40 retailers that Retail Metrics tracks, just 16 are expected to post a profit for 2008, which for most of the group is a fiscal year that concludes at the end of January.

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Since becoming Vice-Chairman in 2005, Michael Duke has presided over Wal-Mart’s international division. Unfortunately, the company’s international track record during these three years has been less than stellar. While aggresively expanding into Canada, Mexico, Brazil, China and recently India, Wal-Mart has been accused of sourcing from sweatshops, selling dangerous foreign products on its shelves, union-busting, and attempting to monopolize employees’ business by paying them in vouchers.

Here’s a little background on the man who will shortly run the biggest company in the world.

Early Life and Education

Michael Duke, 57, was born in 1950. He has a wife, Susan, and two daughters and a son. He graduated from Georgia Tech with a Bachelor’s degree in Industrial Engineering in 1971. He serves on the Board of Directors of the US-China Business Council as well as CIES-The Food Business Forum. He also serves on the Board of Trustees of Morehouse College and on the University of Arkansas Board of Advisors. He is also a Company Director on the Board of Directors of Arvest-Bank of Bentonville and the Retail Industry Leaders Association.

Professional Life

Before joining Wal-Mart, Duke spent 23 years working for Federated Department Stores and May Department Stores.

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Mike Duke, currently the Vice Chairman, International Division, will take the reins from Lee Scott on February 1st. Check out Wal-Mart Watch’s official statement here.

And check back later for more on Mike Duke…

Lee Scott and Eduardo Castro-Wright have spent the past two days in New York City, detailing Wal-Mart’s business plan to financial analysts. There’s a lot to run down here, but the big (and good) news: less new Wal-Marts. The company is continuing to cut down on capital expenditures and build less stores, focusing instead on remodeling and driving up sales at its current stores.

AP:

As a result, capital expenditures will come in at $5.8 billion to $6.4 billion for fiscal 2009 and $6.3 billion to $6.8 billion in fiscal 2010. That’s down from the $9.1 billion the company had in capital expenditures in its last fiscal year.

The Wall Street Journal tells us what that means in terms of store numbers.

Mr. Castro-Wright also said the discount retailer plans to open 142 to 157 new U.S. stores in the fiscal year ending January 2010, down from an earlier projection of 165.

150 stores is still a heck of a lot, but any decrease is a good thing. Remember that growth in 2008 had dropped from 2007, and that only several years ago Wal-Mart was opening 300+ new stores a year.

Some other tidbits from the analyst meeting below the jump-

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Dan Rather is back on Wal-Mart. 

Back in April, Dan Rather’s new show Dan Rather Reports did a full episode on the dubious workings of Wal-Mart’s PAC. This time, he takes a long look at the phenomenon of exploding gas cans, and interviews several boys that were very badly burned and disfigured.

If you haven’t heard the story before, Wal-Mart and its supplier Blitz USA have been repeatedly accused of selling gas cans that can explode if held near an open flame, shooting flaming gasoline in every direction. Experts say that a simple flame arrestor would make every can safe, and could be installed by the manufacturers for under $1 - and possibly as little as a few pennies. Wal-Mart and Blitz have of course denied any responsibility for the accidents, refused to take any action to make the cans safer, and actually deny that the cans can explode at all.

But the footage actually includes a clip of an exec on stage at a Manager’s meeting shamelessly joking about gas cans exploding.  And another unbelievable SNL-style fake-ad skit where a supposed Wal-Mart worker jokes about starting fires with gasoline from gas cans.

The clip above is the bulk of the segment on Wal-Mart, although part 6 goes on to tell us that Wal-Mart and Blitz gas cans are actually countersuing one of the families whose son was badly burned in a gas can explosion.

Every day, something new and horrifying from Wal-Mart.

If you’ve read our FEC complaint by now, you’ll be familiar with our contention that at its training sessions, Wal-Mart was explicitly advocating against the election of Democratic candidates this coming November because of its fear of possible unionization in the future. You’ll also be familiar with our contention that Wal-Mart is limited, under both the United States Code and the U.S. Code of Federal Regulations, from directing its political meetings or “trainings” at anything beyond its stockholders and executive or administrative personnel. Certainly, the issue is serious enough to warrant a looksee from the Federal Election Commission - now that multiple labor groups have sent a complaint of their own, similar to the one submitted by Wal-Mart Watch last week, we’ll see if the FEC decides to initiate an investigation.

If that does happen, attorney Bob Bauer has been helpful enought to give a brief guide on the federal regulations involved - you might want to read it in shifts, as staring too long at federal regulatory language has been known to cause eyes to bleed, etc. Bauer is the Chair of the Political Law Group of Perkins Coie LLP, and the author of numerous books including: United States Federal Election Law (1982, 1984), Soft Money Hard Law: A Guide to the New Campaign Finance Law (2002) and More Soft Money Hard Law: The Second Edition of the Guide to the New Campaign Finance Law (2004).

The Wal-Mart Matter [posted August 14, 2008]

The Wal-Mart controversy, now headed toward the Federal Election Commission, presents interesting questions about how the campaign finance laws treat coercive political conduct by a corporate employer.  As the allegations have been framed in press reports, Wal-Mart is claimed to have breached two requirements for lawful corporate political action:  (1) it spent corporate funds outside the limited allowances for election-related speech, and (2) it did so through coercive means, subjecting employees to job-related pressures to support one candidate or party rather than another.

FEC rules specify in fair detail when and how corporations may spend resources in relation to federal elections without breaking the core campaign spending prohibition.  11 C.F.R. Part 114.  The most liberal of the allowances is for “partisan” communications to the “restricted class,” of executives and shareholders, and a corporation may also repeatedly solicit them for contributions to the company’s political action committee.  It can arrange for the candidates favored by the company to address this defined group.

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More to come from the Wall Street Journal later this week.

In the wake of Wal-Mart’s massive anti-union political scandal that broke late last week, we decided to release a new Wal-Mart All Star Collectible card: Leslie Dach, Executive Vice President of Corporate Affairs and Government Relations.

As Jeffrey Goldberg points out, Dach was hired by Wal-Mart to convince Democrats to like the company. Wal-Mart, the born-and-raised red state company, has traditionally had a hard time with liberals, and Dach was brought in to win them over.

Leslie came to Wal-Mart from Edelman Public Relations, the company still responsible for most of Wal-Mart’s PR work. While there, “he led the Washington D.C. office, the company’s research, advertising, and corporate social responsibility consulting divisions and its global public affairs, crisis, technology, and healthcare practices.” He can spin with the best of them, but more important than his ability to doublespeak, Leslie Dach has serious Democrat cred. From Wal-Mart’s website:

Leslie has been active as a strategist in Democratic politics and worked in senior positions in a number of presidential campaigns, including as a senior advisor for communications for the Democratic National Committee in 2004 and managing the program at the 2000 Democratic Convention. He served the Clinton administration in a variety of project capacities, including special advisor to the National Security Advisor during the Kosovo conflict. Leslie was also a lobbyist for the National Audubon Society and Environmental Defense, and the special assistant to the chairman of the U.S. Senate Agriculture Committee.

If Wal-Mart really wants to win over Democratic consumers, maybe the company should stop badmouthing Democratic candidates to its entire workforce. What does Wal-Mart’s recent Obama-bashing mean for Mr. Dach? Will his work appealing to sentimental liberals get flushed down the drain by the retailer’s political bullying? How can a self-proclaimed Democrat work for a company so blatantly un-Democratic? And what will it take for Democrats to look past the hype?

Wal-Mart All Star Collectible Trading Cards: Collect them all!

Mike Duke, Vice Chairman, International Division
Tom Schoewe, CFO
Susan Chambers, Executive Vice President, People Division

One of our supporters forwarded this on to us - it’s the stock reply Wal-Mart is sending in response to letters about Friday’s Wall Street Journal article. The company insists it’s bipartisan ("We use our size to influence all kinds of politicians!") but admits the Employee Free Choice Act would be bad for profits ("We don’t want to pay our employees a dime more than we have to.")

Dear [redacted],

Thank you for contacting us about the news story that ran in the Wall Street Journal on August 1, 2008.  The article focused on the Employee Free Choice Act, also known as “the card check bill,” and the training we provided to managers and hourly supervisors.  It quoted several Wal-Mart associates who felt the training encouraged them to vote against democratic candidates, especially Senator Obama because of his strong support for labor unions. The training has concluded, but we want to assure you that as a company we are not taking sides in this election.  If anyone representing Wal-Mart gave the impression we were telling associates how to vote, they were wrong and acting without approval.  We will work to make sure misunderstandings like this do not happen again, regardless of the subject.

We believe that the card check bill is bad for business and have been on record as opposing it for some time.  We feel that educating our associates about the bill is the right thing to do.  However, we are a bi-partisan company and our associates, just as the customers and communities we serve, reflect the wide range of attitudes and political diversity of this country.  We work with both Republican and Democratic leaders and our political contributions reflect that as well—this year we gave roughly half of our PAC dollars to each party.

We are at the beginning of what will be a historic election and campaign period.  Our company will remain bipartisan.

Thank you,
Wal-Mart Customer Relations

Add another statuette to the Wal-Mart trophy case: the retailer has staked claim to no fewer than three spots on the list of top ten highest salaries for retail execs. Wal-Mart is the ONLY company to make more than one appearance on the list, with CEO Lee Scott, John Menzer and Mike Duke all qualifying for multimillion dollar salaries.

Lee Scott, as you’ll note, makes more than twice what the second-highest earning executive makes, and more than 1,645 times what an average Wal-Mart worker earns in a year.

Lee Scott’s compensation rose at a time when the Walton family members are all making millions of dollars off their Wal-Mart stock options. But in that same time, the wages of Wal-Mart’s lowest paid employees have remained stagnant, even decreasing if you take inflation and the rising cost of living in to account.

Here’s the full list from Women’s Wear Daily. We’ve included the detailed profiles for Wal-Mart’s executives who appear on the list.

1. H. Lee Scott Jr., 59, President and Chief Executive Officer, Wal-Mart Stores Inc.
Value of 2007 Compensation Package $31.6 million
Base salary: $1.4 million; Bonus: $0; Stock and option awards: $20.9 million; Other: $9.3 million
This Kansas-bred son of a gas station owner enjoyed a 6.4 percent jump in compensation from one year ago as Wal-mart got back on track by emphasizing value and low prices. Scott earned over $15 million more this year than his fellow top Wal-Mart executives, thanks to hefty stock and option awards - in fact, his value is $15 million more than any other executive on the list. Scott joined the company in September 1979 and under his leadership Wal-Mart has become the biggest retailer in the world. This past fiscal year, Wal-Mart spent $101,208 on Scott’s use of the company aircraft, not including pilot and crew salaries.

2. Paul Marciano, 56, Co-Chairman and Co-CEO, Guess Inc.
Value of 2007 Compensation Package $15.3 million

3. John B. Menzer, 56, Former Vice Chairman and Chief Administrative Officer, Wal-Mart Stores Inc.
Value of 2007 Compensation Package $14.9 million
Base salary: $1 million; Bonus: $0; Stock and option awards: $9.2 million; Other: $4.6 million
Menzer’s compensation is up 16.9 percent from 2006 due to increases in stock awards and other incentives, which helped catapult him into the top 10. Menzer, who retired in March, began his Wal-Mart career in 1995 as the company’s chief financial officer and was promoted to president and ceo of Wal-Mart International in 1999, where he had full responsibility for the company’s operations in 15 countries. Under his leadership, international sales grew to $60 billion from $20 billion. He also currently sits on the board of the Emerson Electric Co.

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