One of the nation's largest pension funds says it will vote its 5.3 million shares against all of Wal-Mart's board nominees -- including the company's current and former CEOs -- at the retailer's annual meeting next week.
The California State Teachers' Retirement System, known as CalSTERS, said Tuesday that it has lost faith in the board's independence amid allegations of bribery in Wal-Mart's operations in Mexico.
Including CEO Mike Duke and former CEO Lee Scott, Wal-Mart has nominated 15 incumbents to the board plus one new candidate, Marissa Mayer, who is vice president for local, maps and location services at Google Inc.
The pension fund filed what's called a "derivative" lawsuit in Delaware state court in early May seeking changes in corporate governance and improvements in internal procedures at the world's largest retailer.
Late last week, two leading independent proxy advisory firms, ISS and Glass Lewis & Co., separately recommended that Wal-Mart shareholders vote against certain board members, including Duke and Scott.
Early this month, New York City comptroller John C. Liu said the five city pension funds he advises will vote against five board members. His office said in a statement then that it asked Wal-Mart in 2005 and 2006 to investigate concerns of legal and regulatory non-compliance. The New York City Pension Funds own 5.6 million shares of Wal-Mart, slightly more than CalSTERS.
Wal-Mart has about 3.4 billion shares outstanding, for a total market value of about $217 billion as of the close of trading Tuesday.
In late April, The New York Times reported that Wal-Mart allegedly failed to notify law enforcement after its own investigators found evidence that $24 million in bribes was funneled through its Mexican unit in the hopes of speeding building permits and winning other favors.
U.S. law forbids American companies from bribing foreign officials.
Scott was CEO when Wal-Mart was investigating the alleged bribery practices in late 2005, and Duke was leading the company's international business.
"(We) do not have confidence that the current board has the independence and leadership needed to address these difficult issues," CalSTERS said in a statement released Tuesday.