Delivering strong governance

Greg Penner,
Chairman of the Board of Directors
Wal-Mart Stores, Inc.

The past year has been a period of transition for Walmart as we make strategic investments to position the company for sustainable growth. Management took bold steps focused on winning with customers by increasing wages and training for U.S. store associates, investing in the technology powering our websites and apps, and expanding our e-commerce fulfillment capabilities. Walmart’s Board of Directors fully supports these investments in people and technology as they will strengthen the company’s competitive position both now and in the future. We’ve challenged management to increase the pace of change even further, and we’re tracking comp sales, customer satisfaction scores and growth in gross merchandise value to monitor progress on delivering this strategy.

Walmart’s Board also experienced changes this past year, and none was more notable than the retirement of my father-in-law, Rob Walton, as Chairman. We are fortunate that Rob continues to serve on our Board, offering his expertise and unequaled perspective derived from his more than two decades of effective leadership as Chairman. I’m honored to succeed him as Chairman and excited to lead a Board that is deeply committed to our company’s success, to strong governance and to the interests of Walmart’s shareholders. The members of our Board represent an exceptional array of talent, diversity and expertise in retail and a broad range of other industries and disciplines. We are committed to an independent Board, and Dr. James Cash is our Lead Independent Director.

We’ve continued to improve our proxy statement disclosure. As you review the proxy, we hope you find it informative and we ask you to vote your shares.

Our Board members are dedicated in their service to shareholders, demonstrated by their attendance at 98 percent of Board and committee meetings last year.

During this period of change, Board refreshment and succession planning remain top of mind. The Board is committed to continuous improvement, and we have adapted the way we operate to maximize our effectiveness. We’re reducing the Board’s size while maintaining its independence, changing our Board committee composition and ensuring that Walmart’s strategic priorities are a key focus. Shareholders benefit as we leverage the Board’s strategic expertise to guide Walmart’s path forward.

The past year has also brought an unprecedented level of engagement with Walmart shareholders. Members of management have actively engaged with the majority of our largest institutional shareholders to hear their perspectives on Walmart’s strategy, Board structure and compensation programs. I participated in several of those meetings, as did Dr. Cash. Shareholders told us that we’re focused on the right strategy to deliver a seamless shopping experience for customers. Shareholders value the quality and diversity of our director skill sets and believe that the Board is a strategic asset. And, most shareholders felt our executive compensation program was appropriately performance-based and aligned with Walmart’s strategy and shareholder interests. The views of shareholders have always been important to us, and we continually strive to improve our level of disclosure and transparency with shareholders. Thank you for the feedback you provided this past year.

As we look ahead, the Board is confident that Walmart’s strategy is the right one, our governance processes are strong and management is fully aligned with an actionable plan for success.

Sincerely,