Saturday, April 24, 2010

Tragedy strikes Wal-Mart CEO

Business reporters are normally a jaded bunch.

Over the past couple of years, they have written one story after another about the tough economic times that have fallen upon the United States. We have learned of banks that cannot be allowed to fail, state governments that have to trim the fat to avert bankruptcy, and proclamations that continuing to cut taxes will stimulate investment in our economy.

Many times these stories are told without putting a human face to them, without letting us know that real people are suffering.

That changed this week.

Michael Duke is one of those real people who are suffering. Duke is a man who is at an age, 60, when he cannot afford to lose his job. If he is put out on the street as a result of our current economic situation, he may not be able to land another job. So, in order to pay his bills and maintain his dignity as the head of the household, he has done everything he can to hold on to the current job.

Unfortunately, as is the case with many of us, Michael is underappreciated by his bosses, the board of directors for his company. In their quest for the almighty dollar, Michael's board, despite knowing that the company is his sole means of support, slashed his pay 32 percent last year. Because of this, Michael has been forced to clip coupons, carpool to work, and order from the dollar menu at McDonald's.

After all, as the previously jaded business reporters wrote after learning of Michael Duke's can one man, even if he is the CEO of Wal-Mart, survive on $19.2 million a year in today's economy?

A proxy filed this week with the Securities and Exchange Commission shows Duke "only' received that amount last year after hitting a high of $28 million the previous year.

Financial reporters must have considered it a tragedy. Consider the following:

Reuter's- "Wal-Mart Stores Inc (WMT.N) CEO Michael Duke received a compensation package worth a bit more than $19 million in the fiscal year ended in January, down from $28.2 million a year earlier when he received a big stock award related to his promotion to chief executive."

Marketwatch- Marketwatch's article features the headline "Wal-Mart CEO Duke's compensation package shrinks."

Wall Street Journal headline-"Wal-Mart CEO Duke FY10 Total Pay Down 32% at $19.2M"

Nowhere in those three articles or in the dozens of others that I read about the "tragedy" in the Duke home was one word mentioned about the 700 to 800 people who in February became victims of Duke's decision to develop a leaner, meaner business operation for Wal-Mart, despite the company's continued outsized profit margins.

In a message to Wal-Mart associates dated Feb. 10, Duke explained his reasoning for the cuts:

We do not make these decisions lightly, and every individual decision was carefully considered. We recognize this is a difficult development for the members of our Wal-Mart family who will be leaving the company. While the number of associates that will be impacted by the restructuring is very small compared to the 2.2 million associates we have worldwide, I can assure you that we will treat them with care and dignity and help support them during their transition, consistent with our basic beliefs and respect for the individual.
If there is one constant in our organization, it is change. We are committed to our purpose of helping people save money so they can live better and we will continue to take appropriate steps to further align our support structure with our business plans. We must also challenge costs in every corner of the company in order to keep our business strong today and well into the future.
We care about our associates, especially during times like these. Thank you for everything you have done and will do to serve our customers and help make our company better.

Nor do any of the article about the trimming of Michael Duke's compensation package mention the 11,000 Sam's Club managers who were fired earlier this year.

The employees who were fired are given some severance pay, which won't last long, and are left to fend for themselves in an economy that is overflowing with workers desperately seeking their next jobs.

Of course, the same thing could happen to Michael Duke someday. Wal-Mart could fire Duke and he would be out on the street just like the thousands of employees he cut loose this year.

All alone, pounding the pavement...just Michael Duke and the $2.4 million his contract guarantees he will receive if Wal-Mart kicks him to the curb.


Busplunge said...

Sam is probably spinning in his grave.

Anonymous said...

Is this kind of stuff news now. Talk about the decline of American culture.

Randy said...

The decline in American culture came when people stopped seeing this kind of stuff as news

Anonymous said...

He owes my daughter money.