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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )

Filed by the Registrant Filed by a Party other than the Registrant      

CHECK THE APPROPRIATE BOX:
  Preliminary Proxy Statement
Confidential, For Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
Definitive Proxy Statement
  Definitive Additional Materials
Soliciting Material Under Rule 14a-12

Walmart Inc.

(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

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  No fee required.
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Thank You, Associates


Sam Walton said, “Our People Make the Difference,” and the last year has shown what a difference
you make. Thank you for serving our customers, our neighbors, and each other during this
unprecedented time.




Visit our COVID-19 resource site to learn more: https://corporate.walmart.com/here-for-you



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MESSAGE FROM OUR CHAIRMAN
                                                 

Dear Fellow Shareholders:

This past year was like none other in our history as the COVID-19 pandemic impacted our businesses in markets around the world. I am so proud of how our team of amazing associates has responded to the challenges. We spent $4 billion in incremental costs related to COVID-19 and implemented changes across our operations to make our facilities safer for associates to work and our customers and members to shop. It has been amazing to see our associates adapt and continue to serve our customers and communities around the globe.

We’ve shown our appreciation to our associates, especially those serving customers on the front line in our stores, clubs, and supply chain, by paying four special cash bonuses to our U.S. hourly associates in 2020. These special cash bonuses totaled more than $1.5 billion and were in addition to U.S. hourly associates’ regular quarterly incentive payments. We also enhanced our paid time off and leave policies during the pandemic while hiring more than 500,000 new associates to support increased demand. We’ve also continued to invest in our people as we transform into an omni-channel organization. Last fall, we gave a raise to 165,000 associates in store leadership roles, including coaches, team leads, and supervisors. Earlier this year, we announced that we are raising wages for 425,000 additional associates. We’ve continued to invest to provide career advancement and a ladder of opportunity through our training and education programs and by providing access to college degrees for as little as $1 a day.

This past year also accelerated many of the customer trends we have been focused on such as eCommerce adoption and contactless shopping, and in doing so, confirmed that our strategy is the right one. Our progress in the last few years in transforming Walmart into a truly omni-channel business prepared us for this time and put us in a position to accelerate

our strategy going forward. We will continue to innovate to create a seamless, digital customer experience and deepen our customer relationships, which will also enable us to diversify our business model by providing related services such as healthcare, marketplace, advertising, and financial services. We are also finding new ways to leverage the scale and breadth of our operations, bringing technology to life to better serve our customers and associates. We are committed to doing all this in a way that creates long-term shareholder value by meeting the needs of all stakeholders, including our customers, associates, suppliers, business partners, communities, and the planet.

Your Board is highly engaged in overseeing this strategy during this time of rapid change. I am confident that the Board has the right mix of diverse skills, experience, and backgrounds to serve as a strategic asset for our company, and is well-positioned to continue to guide us in the years to come.

Thank you for your continued support of Walmart, and I encourage you to attend our virtual shareholders’ meeting. Regardless of whether you are able to join us live virtually for the 2021 Annual Shareholders’ Meeting, your views are important to us, and I encourage you to vote your Shares as described on page 101.





Our progress in the last few years in transforming
Walmart into a truly omni-channel business prepared
us for this time and put us in a position to accelerate
our strategy going forward. 


Sincerely,

  Gregory B. Penner, Chairman
 

2021 Proxy Statement       1


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MESSAGE FROM OUR
LEAD INDEPENDENT DIRECTOR
                                                 

Dear Fellow Shareholders:

As I look back at my three years as your Lead Independent Director, I have seen first-hand that your Board’s commitment to robust governance and oversight is a key to driving sustainable, long-term value. I believe this commitment has served us well during the extraordinary challenges of the past year.

As Walmart’s transformation continues to accelerate, the Board will need a diverse variety of skills, qualifications, experience, and backgrounds to maximize its effectiveness. To this end, 5 of our directors have joined the Board in the last 5 years. Our 12-year

term limits for independent directors promote a disciplined director refreshment process and give us visibility into future Board turnover, which we believe is an advantage in Board succession planning. We believe our approach to Board refreshment has resulted in a diverse and highly skilled Board with the right mix of perspectives, experience, and tenures to guide us through this exciting time in Walmart’s history.

Your Board actively seeks and values feedback from shareholders and other stakeholders. Since our 2020 Annual Shareholders’ Meeting, we invited shareholders representing approximately 520 million Shares to participate in our outreach program, and our management team ultimately engaged with shareholders representing approximately 470 million Shares, or about 33% of our public float. During these conversations we discussed strategy, governance, compensation, sustainability, diversity and inclusion, our efforts to keep our associates and customers safe during the COVID-19 pandemic, and the actions we have taken for our associates from a pay and benefits standpoint. Our management team also regularly seeks feedback from our

customers, associates, suppliers, and the communities in which we operate. This feedback is regularly shared with the Nominating and Governance Committee of the Board, which I chair, and has helped inform our decision-making and shape the disclosure in this proxy statement.

We are also committed to ensuring that our compensation program continues to be tied to performance in a way that supports our strategy during this period of rapid change. The Board’s Compensation and Management Development Committee regularly reviews the performance metrics used in our incentive plans to ensure that they promote strong operating results while enabling investments that support our ongoing transformation. Importantly, we did not adjust our fiscal 2021 incentive goals or exclude any pandemic-related impacts when calculating our incentive payouts for fiscal 2021. You can learn more about our executive compensation program in the CD&A beginning on page 40.

Thank you for your investment in Walmart. The Board continues to work to represent your interests and earn your trust.





We believe our approach to Board refreshment has resulted
in a diverse and highly skilled Board with the right mix of
perspectives, experience, and tenures to guide us through
this exciting time in Walmart’s history. 


Sincerely,

  Thomas W. Horton,
Lead Independent Director
 

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NOTICE OF 2021
ANNUAL SHAREHOLDERS’ MEETING
                                                 

How to Attend the Virtual Shareholders’ Meeting  
 

Virtual Shareholders’ Meeting at:
www.virtualshareholdermeeting.com/WMT2021

Due to the ongoing impacts of the COVID-19 pandemic, for the safety of all of our shareholders, associates, and other members of the community, our 2021 Annual Shareholders’ Meeting will be held in a virtual meeting format only with no physical location. Shareholders who held Shares as of the record date may only attend the meeting online by logging in at: www.virtualshareholdermeeting.com/WMT2021 on the date and time provided in this notice. You will not be able to attend the meeting in person.

The live audio webcast for the meeting will begin promptly at 10:30 a.m., Central Time on Wednesday, June 2, 2021. Please see pages 100-102 for additional information about how to access, vote, examine the list of shareholders, and submit questions during the meeting. For shareholders of record who are entitled to attend the meeting, the list of shareholders of record will be available during the meeting at www.virtualshareholdermeeting.com/WMT2021.

Who Can Vote

The record date for the 2021 Annual Shareholders’ Meeting is April 9, 2021. This means that you are entitled to receive notice of the meeting and vote your Shares held as of that date during the meeting if you were a shareholder of record as of the close of business on April 9, 2021.


Items of Business  
 

                   
                    
                  
         
             

To elect as directors the 12 nominees identified in this proxy statement.

To vote on a non-binding, advisory resolution to approve the compensation of Walmart’s named executive officers.

To ratify the appointment of Ernst & Young LLP as the company’s independent accountants for the fiscal year ending January 31, 2022.

To vote on the 5 shareholder proposals described in the accompanying proxy statement, if properly presented at the meeting.

(PAGE 8) ➔

(PAGE 39) ➔

(PAGE 80) ➔

(PAGE 85) ➔

 

Vote  FOR 

Vote  FOR 

Vote  FOR 

Vote  

 AGAINST 
each Shareholder
Proposal

Shareholders may also transact any other business properly brought before the 2021 Annual Shareholders’ Meeting.

How to Cast Your Vote ➔ (PAGE 101)  
 

INTERNET (BEFORE
THE MEETING)
www.proxyvote.com
      CALL
1-800-690-6903
      MOBILE DEVICE
Scan the QR code on your proxy card, notice of internet availability of proxy materials, or voting instruction form
      MAIL
Mail your signed proxy card or voting instruction form
      DURING THE
VIRTUAL MEETING
Please see pages 100-102 for details about how to attend and vote your Shares during the virtual meeting.
                     
                 
                
                                                
   
April 22, 2021
By Order of the Board of Directors,
Rachel Brand
Executive Vice President, Global Governance, Chief Legal Officer, and Corporate Secretary
This proxy statement and our Annual Report to Shareholders for the fiscal year ended January 31, 2021, are available in the “Investors” section of our corporate website at http://stock.walmart.com/annual-reports.

2021 Proxy Statement       3


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PROXY VOTING SUMMARY
                                                 

You have received these proxy materials because the Board is soliciting your proxy to vote your Shares during the 2021 Annual Shareholders’ Meeting. This summary highlights information contained elsewhere in this proxy statement. This summary does not contain all of the information that you should consider in deciding how to vote your Shares, and you should read the entire proxy statement carefully before voting. Page references (“XX”) are supplied to help you find further information in this proxy statement. Please refer to the Table of Abbreviations beginning on page 108 for the meaning of certain terms used in this summary and the rest of this proxy statement. This proxy statement and the related proxy materials were first released to shareholders and made available on the internet on April 22, 2021.

Shareholders who held Shares as of the close of business on the record date can attend the virtual meeting at www.virtualshareholdermeeting. com/WMT2021.


PROPOSAL NO. 1
Election of Directors
(page 8) ➔

     


Board Demographics

Age
56 years Median Age

Tenure
7.5 years Median Tenure
12-year term limit for Independent Directors
5 nominees were appointed in the last 5 years; 3 of whom are women or racially/ethnically diverse
Highly Engaged Board
Actively involved in Walmart’s strategic transformation
98% overall attendance rate at Board and Board committee meetings
6 Board and 20 Board committee meetings during fiscal 2021
Independence
8 of 12 nominees are independent and 11 of 12 nominees are non-management
All members of the Audit Committee; Compensation and Management Development Committee; and Nominating and Governance Committee are independent
Robust Lead Independent Director role

Relevant Skills and Experience
The nominees possess a balance of distinguished leadership, diverse perspectives, strategic skill sets, and professional experience relevant to our business and strategic objectives, including:

Senior Leadership Experience

     

Retail Experience

 

Finance, Accounting, or Financial Reporting Experience

Global or International Business Experience

 

Regulatory, Legal, or Risk Management Experience

Technology or eCommerce Experience

 

Women

Marketing or Brand Management Experience

 

Racially/ethnically diverse


FOR     The Board recommends a vote FOR
each director nominee


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Proxy Voting Summary

PROPOSAL NO. 2
Advisory Vote to Approve Named Executive Officer Compensation
(page 39) ➔

     


Compensation Aligned with Performance

Executive compensation program aligned with our strategy and heavily tied to performance
More than 75% of our CEO’s fiscal 2021 target total direct compensation was based on achieving goals related to operating income, sales, and ROI

Fiscal 2021 Total Direct Compensation (at target)


FOR The Board recommends a
vote
FOR this proposal

2021 Proxy Statement       5


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Proxy Voting Summary

PROPOSAL NO. 3
Ratification of Independent Accountants
(page 80) ➔

     

PROPOSALS NO. 4-8
Shareholder Proposals, in each case, if properly presented at the meeting
(page 85) ➔

                                                       

Quality, Experienced Independent Audit Firm

Ernst & Young LLP is an independent registered accounting firm with significant experience on Walmart’s audit.
The firm’s expertise and fees are appropriate for the breadth and complexity of our company’s global operations.
Each shareholder proposal included in this proxy statement is followed by Walmart’s response. For the reasons set forth in Walmart’s responses, the Board recommends a vote AGAINST each shareholder proposal, if properly presented at the meeting.
                 
FOR
The Board recommends a vote FOR this proposal
AGAINST
The Board recommends a vote AGAINST each shareholder proposal

This document may include forward-looking statements within the meaning of Section 21E of the Exchange Act that are intended to enjoy the protection of the safe harbor for forward-looking statements provided by the Exchange Act as well as protections afforded by other federal securities laws. All statements other than statements of historical or current facts, including statements regarding our environmental and other sustainability plans and goals, made in this document are forward-looking. We use words such as “anticipates,” “believes,” “expects,” “future,” “intends,” and similar expressions to identify forward-looking statements. Forward-looking statements reflect management's current expectations and are inherently uncertain. The forward-looking statements in this document are subject to certain risks, uncertainties and other factors including the risks relating to the company’s strategy, operations and performance and the financial, legal, tax, regulatory, compliance, reputational, and other factors discussed in “Risk Factors” in the company's Annual Report on Form 10- K for fiscal 2021 and subsequent filings with the SEC, which are available at http://www.sec.gov. Website references throughout this document are provided for convenience only, and the content on the referenced websites is not incorporated by reference into this document.

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TABLE OF CONTENTS
                                                 

Message from our Chairman       1
     
Message from our Lead Independent Director 2
     
Notice of 2021 Annual Shareholders' Meeting 3
     
Proxy Voting Summary 4
     
PROPOSAL NO. 1  Election of Directors 8
Overview of Director Nominees and Committee Assignments 8
Board Demographics 9
Board Skills Criteria and Qualifications 10
Director Nominees for 2021 12
Board Refreshment and Succession Planning 19
     
Corporate Governance 20
Corporate Governance Highlights 20
Board Structure and Effectiveness 21
Key Board Responsibilities 27
Board Processes and Practices 31
Director Compensation 37
     
PROPOSAL NO. 2  Advisory Vote to Approve Named Executive Officer Compensation 39
     
Executive Compensation 40
Compensation Discussion and Analysis (See Separate Table of Contents) 40
Compensation Committee Report 67
Risk Considerations in our Compensation Program 67
Compensation Committee Interlocks and Insider Participation 68
     
Executive Compensation Tables 69
Summary Compensation 69
Fiscal 2021 Grants of Plan-Based Awards 71
Outstanding Equity Awards at Fiscal 2021 Year-End 72
Fiscal 2021 Option Exercises and Stock Vested 73
Pension Benefits 74
Fiscal 2021 Nonqualified Deferred Compensation 75
Walmart’s Deferred Compensation Plans 76
Potential Payments Upon Termination or Change in Control 77
CEO Pay Ratio 79
     
PROPOSAL NO. 3 Ratification of Independent Accountants 80
Engagement of Independent Accountants 80
Audit Committee Pre-Approval Policy 81
Independent Accountant Fees 82
Audit Committee Report 83
     
Shareholder Proposals 85
Proposal No. 4 Report on Refrigerants Released from Operations 86
Proposal No. 5 Report on Lobbying Disclosures 88
Proposal No. 6 Report on Alignment of Racial Justice Goals and Starting Wages 90
Proposal No. 7 Create a Pandemic Workforce Advisory Council 93
Proposal No. 8 Report on Company’s Involvement with Business Roundtable “Statement on the Purpose of a Corporation” 96
     
Stock Ownership 98
Equity Compensation Plan Information 98
Holdings of Major Shareholders 98
Holdings of Officers and Directors 99
     
Annual Meeting Information 100
2021 Annual Shareholders’ Meeting – Virtual Meeting 100
Voting 101
Proxy Materials 105
Shareholder Submissions for the 2022 Annual Shareholders’ Meeting 107
Other Matters 107
     
Table of Abbreviations 108
     
Annex A A-1
Non-GAAP Financial Measures A-1

2021 Proxy Statement       7


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PROPOSAL NO. 1
ELECTION OF DIRECTORS
                      

What am I voting on?

You are voting to elect each nominee named below as a director of Walmart for a one-year term. If you return your proxy, your proxy holder will vote your Shares FOR the election of each Board nominee named below unless you instruct otherwise. If the shareholders elect all the director nominees named in this proxy statement at the 2021 Annual Shareholders’ Meeting, Walmart will have 12 directors. Each director nominee named in this proxy statement has consented to act as a director of Walmart if elected. If a nominee becomes unwilling or unable to serve as a director, your proxy holder will have the authority to vote your Shares for any substitute candidate nominated by the Board, or the Board may decrease the size of the Board.

Overview of Director Nominees and Committee Assignments

Eight of our twelve Board nominees are independent, and all members of the Audit Committee, the CMDC, and the NGC are independent. Our Board has separated the roles of Chairman and CEO, and we have a robust Lead Independent Director role. Despite their significant Share ownership, only three members of the Walton family serve as non-management Board members.

Board Committees: Chair Member
Audit Nominating and Governance Technology and eCommerce
Compensation and Management Development Strategic Planning and Finance

Cesar Conde

Independent

Chairman of NBCUniversal News Group

Age 47 | Director Since 2019

Other Public Company Boards 1

Carla Harris

Independent

Vice Chair, Wealth Management and Head of Multicultural Client Strategy, and Managing Director and Senior Client Advisor, Morgan Stanley

Age 58 | Director Since 2017

Other Public Company Boards 0

 

Tim Flynn

Independent

Retired Chairman and CEO, KPMG

Age 64 | Director Since 2012

Other Public Company Boards 3

Tom Horton

Lead Independent Director

Partner, Global Infrastructure Partners; and retired Chairman, American Airlines

Age 59 | Director Since 2014

Other Public Company Boards 2

 

Sarah Friar

Independent

CEO, Nextdoor Inc.

Age 48 | Director Since 2018

Other Public Company Boards 4

Marissa Mayer

Independent

Co-founder and CEO, Sunshine Products, Inc.; and Former President and CEO, Yahoo! Inc.

Age 45 | Director Since 2012

Other Public Company Boards 0


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Board Demographics

Our Board nominees bring a variety of backgrounds, qualifications, skills and experiences that contribute to a well-rounded Board uniquely positioned to effectively guide our strategy and oversee our operations in a rapidly evolving retail industry.

Independence  
 
67% Independent

Age  
 
56 years
BOARD NOMINEE
MEDIAN AGE
56 years
BOARD NOMINEE
AVERAGE AGE

Highly Engaged Board  
 
Actively involved in Walmart’s strategy
98% overall attendance rate at Board and Board committee meetings
20 Board committee meetings and 6 Board meetings during fiscal 2021
Gender                        Racial/Ethnic Diversity  
      
25% Female

Tenure  
 
7.5 years
BOARD NOMINEE
MEDIAN TENURE
9.5 years
BOARD NOMINEE
AVERAGE TENURE

Thoughtful Board Refreshment  
 
12-year term limit for Independent Directors
5 of the nominees were appointed in the last 5 years, 3 of whom are women or racially/ethnically diverse
Adopted policy to include women and racially/ethnically diverse candidates in all director candidate pools
Ongoing Board and committee succession planning


Doug McMillon

President and CEO, Walmart

Age 54 | Director Since 2013

Other Public Company Boards 0

      

Randall Stephenson

Independent

Retired Executive Chair and CEO, AT&T

Age 61 | Director Since 2021

Other Public Company Boards 0

 

Greg Penner

Non-Executive Chairman

General Partner, Madrone Capital Partners

Age 51 | Director Since 2008

Other Public Company Boards 0

Rob Walton

Retired Chairman, Walmart

Age 76 | Director Since 1978

Other Public Company Boards 0

 

Steve Reinemund

Independent

Managing Partner, Highline Group; Retired Dean of Business, Wake Forest University; and retired Chairman and CEO, PepsiCo., Inc.

Age 73 | Director Since 2010

Other Public Company Boards 2

Steuart Walton

Founder and Chair, RZC Investments

Age 39 | Director Since 2016

Other Public Company Boards 0


2021 Proxy Statement       9


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Proposal No. 1 Election of Directors

Board Skills Criteria and Qualifications

What qualifications do the Nominating and Governance Committee and the Board consider when selecting candidates for nomination?

At Walmart, we believe an effective Board should be made up of individuals who collectively provide an appropriate balance of distinguished leadership, diverse perspectives and viewpoints, strategic skill sets, and professional experience relevant to our business and strategic objectives.

The NGC selects potential candidates on the basis of outstanding achievement in their professional careers; broad experience and wisdom; personal and professional integrity; ability to make independent, analytical inquiries; experience and understanding of the business environment; willingness and ability to devote adequate time to Board duties; and such other experience, attributes, and skills that the NGC determines qualify candidates for service on the Board.

The NGC also considers whether a potential candidate satisfies the independence and other requirements for service on the Board and its committees, as set forth in the NYSE Listed Company Rules and the SEC’s rules. Additional information regarding qualifications for service on the Board and the nomination process for director candidates is set forth in the NGC’s charter and our Corporate Governance Guidelines, which are available on the Corporate Governance page of our website at http://stock.walmart. com/investors/corporate-governance/governance-documents.

Director Skills Criteria:

The NGC and Board regularly review the skills and experiences relevant to our Board in light of our ongoing strategic transformation. Depending on the current composition of the Board and Board committees and expected future turnover on our Board, the NGC generally seeks director candidates with experience, skills, or background in one or more of the following areas:

Experience and Skills Relevant to the Successful Oversight of our Strategy

Retail Experience As the world’s largest retailer, we seek directors who possess an understanding of financial, operational, and strategic issues facing large retail companies.     
Technology or eCommerce Experience In order to support our omni-channel strategy to combine our unique physical and digital assets and capabilities, we seek directors with experience in related industries who can provide advice and guidance on the development and uses of technology as well as eCommerce, omni-channel, and digital businesses.
Global or International Business Experience Directors with broad international exposure provide useful business and cultural perspectives, and as a global organization, we seek directors with experience at multinational companies or in international markets.
Marketing or Brand Management Experience Directors with relevant experience in consumer marketing or brand management, especially on a global basis, provide important insights to our Board.

Experience and Skills Relevant to Effective Oversight and Governance

Senior Leadership Experience Directors who have served in relevant senior leadership positions bring unique experience and perspective. We seek directors who have demonstrated expertise in governance, strategy, development, human capital management, workforce development, and execution.     
Regulatory, Legal, or Risk Management Experience Our company’s business requires compliance with a variety of regulatory requirements across a number of federal, state, and international jurisdictions. Our Board values the insights of directors who have experience advising or working at companies in regulated industries, and it benefits from the perspectives of directors with governmental, public policy, legal, and risk management experience and expertise.
Finance, Accounting, or Financial Reporting Experience We value an understanding of finance and financial reporting processes because of the importance our company places on accurate financial reporting and robust financial controls and compliance. We also seek to have multiple directors who qualify as audit committee financial experts.
Board Diversity Diversity, equity and inclusion are values embedded in our culture and fundamental to our business. We believe that a board comprised of directors with diverse backgrounds, experiences, and perspectives and viewpoints improves the dialogue and decision-making in the boardroom and contributes to overall Board effectiveness. The Board assesses the effectiveness of its approach to Board diversity as part of the Board and committee evaluation process.


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Proposal No. 1 Election of Directors

Summary of Director Nominee Qualifications and Experience

The chart below identifies the balance of skills and qualifications each director nominee brings to the Board. The fact that a particular skill or qualification is not designated does not mean the director nominee does not possess that particular attribute. Rather, the skills and qualifications noted below are those reviewed by the NGC as part of the Board succession planning process. We believe the combination of the skills and qualifications shown below demonstrates how our Board is well positioned to provide strategic advice and effective oversight to our management.

Experience and Skills Relevant
to the Successful Oversight of
our Strategy
     
Experience and Skills
Relevant to Effective
Oversight and Governance
Director Nominee Retail Global or
International
Business
Technology or
eCommerce
Marketing
or Brand
Management
Senior
Leadership
Finance,
Accounting,
or Financial
Reporting
Regulatory,
Legal, or Risk
Management
Cesar Conde
Tim Flynn
Sarah Friar
Carla Harris
Tom Horton
Marissa Mayer
Doug McMillon
Greg Penner
Steve Reinemund
Randall Stephenson
Rob Walton
Steuart Walton
TOTAL

2021 Proxy Statement     11


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Proposal No. 1 Election of Directors

Director Nominees for 2021

     
FOR
     
The Board recommends that shareholders vote FOR each of the nominees named below for election to the Board.

Who are the 2021 director nominees?

Based on the recommendation of the NGC, the Board has nominated the following candidates for election as directors at the 2021 Annual Shareholders’ Meeting. Eleven nominees were previously elected by our shareholders at the 2020 Annual Shareholders’ Meeting. The information provided below includes, for each nominee, his or her age, principal occupation and employment during the past five years, the year in which he or she first became a director of Walmart, each Board committee on which he or she currently serves, whether he or she is independent, and directorships of other public companies held by each nominee during the past five years.

     
Cesar Conde INDEPENDENT DIRECTOR
Age: 47
Joined the Board: 2019
Board Committees:
Audit
TeCC

Other Current Public Company Directorships:
PepsiCo, Inc.

Career Highlights

           May 2020 to present
Chairman of NBCUniversal News Group, a global media and entertainment company


 
    October 2015 to
May 2020
Chairman of NBCUniversal Telemundo Enterprises and NBCUniversal International Group



 
    2013 to 2015
Executive Vice President of NBCUniversal, including oversight of NBCUniversal International and NBCUniversal Digital Enterprises




 
    2009 to 2013
President of Univision Networks, a leading American media company with a portfolio of Spanish language television networks, radio stations, and digital platforms




 
    2003 to 2009
Variety of senior executive capacities at Univision Networks, where he is credited with transforming it into a leading global, multi-platform media brand




 
    2002 to 2003
White House Fellow for Secretary of State Colin L. Powell from 2002–2003


 
    Prior to 2002
Positions at StarMedia Network, the first internet company focused on Spanish- and Portuguese-speaking audiences globally


 
Further Information

Mr. Conde has served on the board of directors of PepsiCo, Inc. since March 2016, and from August 2014 to April 2019 he served on the board of directors of Owens Corning. He also is a Trustee of the Aspen Institute and the Paley Center for Media, as well as a Full Member at the Council on Foreign Relations, and he has served as a Young Global Leader for the World Economic Forum. Mr. Conde holds a B.A. with honors from Harvard University and an M.B.A. from the Wharton School at the University of Pennsylvania.

Skills and Qualifications

     

The Board benefits from Mr. Conde’s broad experience with large media companies that produce and distribute high-quality content across a range of broadcast, cable, and digital platforms.

     

Mr. Conde brings valuable perspectives in business, finance, and media gained from his experience in a variety of senior leadership roles at large, global media companies.

     

With his senior leadership experience at large, multi-platform media companies such as NBCUniversal and Univision, Mr. Conde brings valuable perspectives regarding consumer and media landscapes.



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Proposal No. 1 Election of Directors

     
Timothy P. Flynn INDEPENDENT DIRECTOR
Age: 64
Joined the Board: 2012
Board Committees:
Audit (Chair)
TeCC
Other Current Public Company Directorships:
JPMorgan Chase & Co.
UnitedHealth Group Incorporated
Alcoa Corporation*
* until May 2021

Career Highlights
           2007 to 2011
Chairman of KPMG International (“KPMG”), a global professional services organization that provides audit, tax, and advisory services



 
    2005 to 2010
Served as Chairman of KPMG LLP in the U.S., the largest individual member firm of KPMG
 
 
 
    2005 to 2008
CEO of KPMG LLP
   
    Prior to 2005
Held various leadership roles at KPMG, including as Global Head of Audit, and Vice Chairman, Audit and Risk Advisory Services, with operating responsibility for Audit, Risk Advisory and Financial Advisory Services practices
 
 
 
 
 
Further Information

Mr. Flynn joined the board of directors of UnitedHealth Group Incorporated in January 2017 and has served as a member of the board of directors of JPMorgan Chase & Co. since 2012. Mr. Flynn also has served on the board of Alcoa Corporation since November 2016. He previously served as a member of the board of directors of The Chubb Corporation from September 2013 until its acquisition in January 2016. He also previously served as a trustee of the Financial Accounting Standards Board, a member of the World Economic Forum’s International Business Council, and a director of the International Integrated Reporting Council. Mr. Flynn graduated from the University of St. Thomas, St. Paul, Minnesota and is a member of the school’s board of trustees.

Skills and Qualifications

     

Mr. Flynn has more than 32 years of experience in risk management, financial services, financial reporting, and accounting.

     

Mr. Flynn also brings extensive experience with issues facing complex, global companies, and expertise in accounting, auditing, risk management, and regulatory affairs for such companies.

     

In addition, Mr. Flynn brings his experiences in executive leadership positions at KPMG and his service on the boards of directors of other large public companies.



     
Sarah J. Friar INDEPENDENT DIRECTOR
Age: 48
Joined the Board: 2018
Board Committees:
Audit
SPFC (Chair)

Other Current Public Company Directorships:
Slack Technologies, Inc.
Dragoneer Growth Opportunities Corp.
Dragoneer Growth Opportunities Corp. II
Dragoneer Growth Opportunities Corp. III


Career Highlights
           December 2018
to present
CEO of Nextdoor Inc., a social network for neighborhoods


 
    July 2012 to
November 2018
CFO of Square, Inc., a provider of commerce solutions, including managed payments and point-of-sale systems for businesses and mobile financial offerings for consumers




 
    2011 to 2012
Senior Vice President of Finance & Strategy at Salesforce.com, Inc.


 
    2000 to 2011
Various positions at The Goldman Sachs Group, Inc. including as a Managing Director in the Equity Research Division and other various positions where she focused on corporate finance, and mergers and acquisitions





 
    Prior to 2000
McKinsey & Company
   
Further Information

Ms. Friar has served as a director of Slack Technologies, Inc., the leading channelsbased messaging platform, since March 2017. She also has served as a director of Dragoneer Growth Opportunities Corp. since August 2020, Dragoneer Growth Opportunities Corp. II since November 2020, and Dragoneer Growth Opportunities Corp. III since March 2021. She also previously served on the board of directors of New Relic, Inc., a software analytics company, from December 2013 until April 2018. Ms. Friar is the co-founder of Ladies Who Launch, a non-profit organization focused on empowering female entrepreneurs. Ms. Friar is a Fellow of the inaugural class of the Finance Leaders Fellowship Program and a member of the Aspen Global Leadership Network. Ms. Friar graduated from the University of Oxford with a Master of Engineering in Metallurgy, Economics, and Management and also from Stanford Graduate School of Business with an M.B.A.

Skills and Qualifications

     

Ms. Friar brings financial, accounting, and risk management expertise as the former CFO of a multinational publicly-traded company and from her prior experience with a multinational investment banking firm.

     

The Board benefits from her leadership experience as the CEO of a large platform that connects neighbors and her prior experience as the CFO of a publicly-traded company and other various leadership positions at Square, Salesforce.com, and Goldman Sachs.

Ms. Friar brings a global perspective gained from her experience as the CEO of a multinational company that supports customers across a variety of businesses and industries.

     

The Board also benefits from Ms. Friar’s perspective regarding eCommerce and information technology in light of her leadership positions with digital community-based platforms and a publicly-traded company that provides managed payments and point-of-sale systems for businesses and mobile financial offerings for consumers.



2021 Proxy Statement     13


Table of Contents

Proposal No. 1 Election of Directors

     
Carla A. Harris INDEPENDENT DIRECTOR
Age: 58
Joined the Board: 2017
Board Committees:
CMDC
NGC
SPFC


Other Current Public Company Directorships:
None

Career Highlights

            2013 to present Vice Chair, Wealth Management and Head of Multicultural Client Strategy for Morgan Stanley, a multinational investment bank and financial services company
 
 
 
 
 
  2012 to present Managing Director and Senior Client Advisor for Morgan Stanley
 
 
 
  Since 1987 Member and a leader on execution teams across mergers and acquisitions, equity capital markets and asset management, and has held a number of other positions during her tenure with Morgan Stanley
 
 
 
 

Further Information

In her current roles at Morgan Stanley, Ms. Harris is responsible for increasing client connectivity and penetration to enhance revenue generation across the firm. Her prior experience with Morgan Stanley includes investment banking, equity capital markets, equity private placements, and initial public offerings in a number of industries such as technology, media, retail, telecommunications, transportation, healthcare, and biotechnology. In August 2013, President Obama appointed Ms. Harris to serve as Chair of the National Women’s Business Council. She currently serves on the boards of several non-profit organizations including the Mother Cabrini Health Foundation and the Morgan Stanley Foundation, as well as a member of the Board of Overseers for Harvard University. Ms. Harris holds a B.A. magna cum laude from Harvard University and also holds an M.B.A. from Harvard Business School.

Skills and Qualifications

     

Ms. Harris brings broad-based and valuable insights in finance and strategy gained from more than 30 years of experience at a prominent global investment banking firm.

     

The Board benefits from Ms. Harris’ senior leadership experience at Morgan Stanley.

     

The Board values Ms. Harris’ extensive work experience in a regulated industry and advising clients across a broad range of other regulated industries.



     
Thomas W. Horton LEAD INDEPENDENT DIRECTOR
Age: 59
Joined the Board: 2014
Board Committees:
Audit
Executive Committee
NGC (Chair)
SPFC

Other Current Public Company Directorships:
General Electric Company
EnLink Midstream, LLC

 Career Highlights

            April 2019 to present Partner, Global Infrastructure Partners, a global infrastructure investment firm
 
 
 
  October 2015 to
April 2019
Senior Advisor at Warburg Pincus LLC, a private equity firm focused on growth investing
 
 
 
  2013 to 2014 Chairman of American Airlines Group Inc. (“American”)
 
 
 
  2011 to 2013 Chairman and CEO of American
 

 
  2010 to 2011 President of American
 
 
  2006 to 2010 Executive Vice President of Finance and Planning at American
 
 
 
  2002 to 2005 Served in various roles at AT&T Corporation, including as Vice Chairman and CFO
 
 
 
  1985 to 2002 Served in various roles at American, including as Senior Vice President and CFO
 
 

Further Information

In August 2019, Mr. Horton was appointed to the board of directors of EnLink Midstream, LLC, a portfolio company of Global Infrastructure Partners that provides midstream energy services. He also has served on the board of directors of General Electric Company since April 2018, where he has served as Lead Director since October 2018. From 2008 to March 2019, Mr. Horton served on the board of directors of QUALCOMM Incorporated. Mr. Horton also serves on the executive board of the Cox School of Business at Southern Methodist University.

Skills and Qualifications

     

Mr. Horton brings unique insights gained from his executive leadership roles at large, global, publicly-traded companies.

     

Our Board benefits from Mr. Horton’s leadership experience in several complex, international industries.

     

In addition, Mr. Horton brings valuable perspective developed from more than 30 years of experience in finance, accounting, auditing, and risk management.







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Table of Contents

Proposal No. 1 Election of Directors

     
Marissa A. Mayer INDEPENDENT DIRECTOR
Age: 45
Joined the Board: 2012
Board Committees:
CMDC
TeCC


Other Current Public Company Directorships:
None

 Career Highlights

            March 2018 to present Co-founder and CEO of Sunshine Products, Inc. (formerly Lumi Labs Inc.), a technology startup focused on making everyday tasks, like contact management or scheduling, magical
 
 
 
 
 
  2012 to June 2017 President and CEO and a member of the board of directors of Yahoo! Inc. (“Yahoo”) (now Altaba Inc.). At Yahoo, she led the internet giant’s push to reinvent itself for the mobile era. With a renewed focus on user experience, Ms. Mayer grew Yahoo to serve over 1 billion people worldwide - with over 600 million mobile users - and transformed its advertising approach.
 
 
 
 
 
 
 
 
 
 
  1999 to 2012 Led Google Search for more than a decade, as well as Google Maps, Gmail, and Google News. She was one of Google’s earliest employees, later moving into leadership roles as a member of their Operating Committee.
 
 
 
 
 
 

Further Information

In July 2019, Ms. Mayer joined the board of directors of Go Forward, Inc., a company that combines virtual and in-person primary care practice. Since April 2019, Ms. Mayer has served on the board of directors of Maisonette, LLC, an online company focused on providing customized shopping experiences in children’s luxury brands and boutique clothing, accessory, and home decor items. From March 2013 until October 2016, Ms. Mayer served on the board of directors for AliphCom, which operated as Jawbone. She also serves on the board of the San Francisco Ballet, and she previously served on the foundation board for the Forum of Young Global Leaders at the World Economic Forum from 2013 to 2019. Ms. Mayer holds a bachelor’s degree in symbolic systems and a master’s degree in computer science from Stanford University.

Skills and Qualifications

     

Ms. Mayer brings extensive expertise in technology and consumer internet industries, and her senior leadership experience is demonstrated by her executive role at a prominent consumer internet company and her positions on the boards of several nonprofit organizations.

     

Ms. Mayer brings distinguished experience in internet product development, engineering, and brand management.

     

The Board values Ms. Mayer’s insights into global business and strategy gained from her experience as the CEO of a global company.




     
C. Douglas McMillon PRESIDENT AND CEO AND DIRECTOR
Age: 54
Joined the Board: 2013
Board Committees:
Executive Committee (Chair)

Other Current Public Company Directorships:
None

Career Highlights

            2014 to present President and CEO of Walmart
 
   
  2009 to 2014 Executive Vice President, President and CEO, Walmart International
 
 
   
  2005 to 2009 Executive Vice President, President and CEO, Sam’s Club
 
 
   
  Prior to 2005 Mr. McMillon has held a variety of other leadership positions since joining our company 30 years ago
 
 
 

Further Information

Mr. McMillon has served as a member of the executive committee of the Business Roundtable since 2014, and he became the chairman of the Business Roundtable in January 2020. He also serves as a member of the boards of directors of a number of organizations, including The Consumer Goods Forum, The US-China Business Council, and Crystal Bridges Museum of American Art.

Skills and Qualifications

     

Mr. McMillon brings years of executive leadership experience at our company and extensive expertise in corporate strategy, development, and execution.

     

In addition, Mr. McMillon brings extensive knowledge and unique experience leading Walmart’s International segment.

     

The Board benefits from Mr. McMillon’s 30 years of retail experience and his leadership role developing and executing our omni-channel strategy.




2021 Proxy Statement     15


Table of Contents

Proposal No. 1 Election of Directors

     
Gregory B. Penner* NON-EXECUTIVE CHAIRMAN
Age: 51
Joined the Board: 2008
Board Committees:
Executive Committee

Other Current Public Company Directorships:
None
* Greg Penner is the son-in-law of Rob Walton.

Career Highlights

            2015 to present Chairman of the Board of Walmart
 
 
  2014 to 2015 Vice Chairman of the Board of Walmart
 
 
  2005 to present General Partner of Madrone Capital Partners, LLC, an investment management firm
 
 
  2002 to 2005 Walmart’s Senior Vice President and CFO – Japan
 
 
  2001 to 2002 Senior Vice President of Finance and Strategy for Walmart.com
 
 
  Prior to 2001 General Partner at Peninsula Capital, an early stage venture capital fund, and a financial analyst for Goldman, Sachs & Co.
 

Further Information

In May 2020, Mr. Penner joined the board of trustees of the Corporation of Brown University. He also previously served on the board of directors of Baidu, Inc. from May 2004 until December 2017, and Hyatt Hotels Corporation from October 2007 to September 2014.

Skills and Qualifications

     

Mr. Penner brings expertise in strategic planning, finance, and investment matters, including prior experience as a CFO for our company’s operations in Japan, and his service on the boards of directors of public and private companies in a variety of industries.

     

The Board benefits from Mr. Penner’s retail experiences with our company’s operations internationally and at Walmart.com, as well as his leadership service as our non-executive Chairman.

     

In addition, Mr. Penner has broad knowledge of international business, particularly in Japan and China.

     

Mr. Penner brings unique expertise gained through both his service with the company and as a director of various technology companies.




     
Steven S Reinemund INDEPENDENT DIRECTOR
Age: 73
Joined the Board: 2010
Board Committees:
CMDC (Chair)
NGC
TeCC


Other Current Public Company Directorships:
Vertiv Holdings Co.
GS Acquisition Holdings Corp II

Career Highlights

            December 2019
to present
Managing Partner at Highline Group, a family office of strategic operators
 
 
  June 2014 to
December 2019
Advisory role at Wake Forest University as Executive-in-Residence
 
 
  2008 to 2014 Dean of Business and Professor of Leadership and Strategy at Wake Forest University
 
 
  2006 to 2007 Chairman of the Board of PepsiCo, Inc. (“PepsiCo”)
 
 
  2001 to 2006 Chairman and CEO of PepsiCo
 
 
  1999 to 2001 President and Chief Operating Officer at PepsiCo
 
 
  1996 to 1999 Chairman and CEO of Frito-Lay, Inc. (“Frito-Lay”)
 

Further Information

Mr. Reinemund has served as a director of GS Acquisition Holdings Corp II since July 2020. He served on the board of directors of GS Acquisition Holdings Corp. from June 2018 until February 2020, until the completion of business combination transactions that resulted in Vertiv Holdings Co., where Mr. Reinemund continues to serve on the board of directors. From 2007 until May 2020, Mr. Reinemund served as a director of each of Exxon Mobil Corporation and Marriott International, Inc. He previously served as a director of American Express Company from 2007 to 2015 and Johnson & Johnson from 2003 to 2008. Mr. Reinemund has been on the board of directors of Chick-fil-A, Inc. since June 2015, and he is a member of the boards of trustees of The Cooper Institute and the U.S. Naval Academy Foundation.

Skills and Qualifications

     

Mr. Reinemund has considerable international business leadership experience gained through his service as Chairman and CEO of a global public company, his service as dean of a prominent business school, and his service on the boards of several large companies in a variety of industries.

     

Mr. Reinemund also brings valuable experience with large, international businesses.

     

In addition, Mr. Reinemund’s experience in executive leadership positions at PepsiCo and Frito-Lay provides valuable insights to our Board regarding brand management, marketing, finance, and strategic planning.



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Table of Contents

Proposal No. 1 Election of Directors

     
Randall L. Stephenson INDEPENDENT DIRECTOR
 
Age: 61
Joined the Board:
March 2021
Board Committees:
None*
Other Current Public Company Directorships:
None
*Mr. Stephenson will be appointed to the CMDC and the SPFC effective upon his election at the 2021 Annual Shareholders’ Meeting.

Career Highlights

           July 2020 to
January 2021
Executive Chairman of the Board, AT&T Inc. (“AT&T”), a leading provider of telecommunications, media, and technology services globally

 
 
 

 
    2007 to July 2020
Chairman of the Board and Chief Executive Officer, AT&T, also served as President from 2007 until September 2019

 
 
 
    2004 to 2007
Chief Operating Officer, AT&T
   
    2001 to 2004
Chief Financial Officer, AT&T
 
    Prior to 2002
Various positions at AT&T, including as Corporate Controller and other various positions

 
 
Further Information

In addition to his service on the board of directors of AT&T Inc. (“AT&T”) from 2005 until his retirement in January 2021, Mr. Stephenson also had previously served on the boards of directors of The Boeing Company from February 2016 to December 2017 and Emerson Electric Co. from June 2006 to December 2017. Mr. Stephenson previously served as the chairman of the Business Roundtable from 2014 to 2016, and he currently serves on the boards of Boy Scouts of America and the PGA Tour. He has a B.S. in accounting from Central State University (now known as the University of Central Oklahoma) and earned his Master of Accountancy degree from the University of Oklahoma.

Skills and Qualifications

     

Mr. Stephenson brings valuable executive leadership experience gained from his nearly 40 years of service at AT&T, where at different times during his career he served in various high-level financial and operational positions at a company in a regulated industry.

     

In addition, Mr. Stephenson brings unique operations and marketing experience at a large international telecommunications, media, and technology company, where he was responsible for leading in the development, evolution, and execution of AT&T’s strategy during a period of change in the industry.



     
S. Robson Walton* DIRECTOR
Age: 76
Joined the Board:
1978
Board Committees:
SPFC
Executive Committee
Other Current Public Company Directorships:
None
*Greg Penner is the son-in-law of Rob Walton, and Steuart Walton is the nephew of Rob Walton.

Career Highlights

           1969 to present
Mr. Walton was the Chairman of Walmart from 1992 to June 2015 and has been a member of the Board since 1978. Prior to becoming Chairman, he had been an officer at our company since 1969 and held a variety of positions during his service, including Senior Vice President, Corporate Secretary, General Counsel, and Vice Chairman

 
 
 
 
 
 
    Prior to 1969
Partner with the law firm of Conner & Winters in Tulsa, Oklahoma, during which time he also served as an officer of Walmart from 1969 to 1978

 
 
 
Further Information

In addition to his duties at Walmart, Mr. Walton is involved with a number of non-profit and educational organizations, including Conservation International, where he previously served as Chairman of that organization’s executive committee, and the College of Wooster, where he is an Emeritus Life Trustee for the college. Mr. Walton is also an Emeritus Trustee for the African Parks Foundation, U.S.A.

Skills and Qualifications

     

Mr. Walton brings decades of leadership experience with Walmart and his expertise in strategic planning gained through his service on the boards and other governing bodies of non-profit organizations.

     

Mr. Walton has extensive legal, risk management, and corporate governance expertise gained as Walmart’s Chairman, Corporate Secretary, and General Counsel and as an attorney in private practice.

The Board benefits from Mr. Walton’s in-depth knowledge of our company, its history and the global retail industry, all gained through more than 40 years of service on the Board and more than 20 years of service as our company’s Chairman.



2021 Proxy Statement     17


Table of Contents

Proposal No. 1 Election of Directors

     
Steuart L. Walton* DIRECTOR
Age: 39
Joined the Board:
2016
Board Committee:
TeCC (Chair)
Other Current Public Company Directorships:
None
*Steuart Walton is the nephew of Rob Walton.

Career Highlights

           May 2016 to present
Founder and Chairman of RZC Investments, LLC, an investment business

 
 
 
    2013 to November 2017
Founder of Game Composites, Ltd., a company that manufactures carbon fiber aircraft and aircraft parts. He served as the CEO of Game Composites from its founding until November 2017

 
 
 
 
    2011 to 2013
Senior Director, International Mergers and Acquisitions, Walmart International division

 
 
 
    2007 to 2010
Associate at Allen & Overy, LLP in London, where he advised companies on securities offerings

 
 
Further Information

Mr. Walton serves on the boards of directors of Rapha Racing Limited, Crystal Bridges Museum of American Art, and the Smithsonian National Air and Space Museum. From August 2018 to January 2021, he served as a member of the board of directors of Flipkart Private Limited. He is a graduate of Georgetown University Law Center, and he holds a bachelor’s degree in business administration from the University of Colorado, Boulder.

Skills and Qualifications

     

Mr. Walton brings broad-based and valuable international legal and regulatory experience gained from his work on complex, international financial transactions.

     

Mr. Walton has a strong history and familiarity with our company and its global retail and eCommerce operations. He also brings valuable leadership, financial, and omni-channel insights gained from his entrepreneurial experiences and investments, as well as his experience gained as chair of the TeCC and prior service on the board of Flipkart.


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Table of Contents

Proposal No. 1 Election of Directors

Board Refreshment and Succession Planning

The NGC is responsible for identifying and evaluating potential director candidates, for reviewing the composition of the Board and Board committees, and for making recommendations to the full Board on these matters. The NGC actively manages the Board succession planning process throughout the year, informed by the following considerations:

     

Director Tenure Policies
Allows Board to anticipate future Board and committee turnover

          

The Board believes that a mix of longer-tenured directors and newer directors with fresh perspectives contributes to an effective Board. In order to promote thoughtful Board refreshment, the Board has adopted the following tenure policies for Independent Directors, as set forth in Walmart’s Corporate Governance Guidelines:

Term Limit: Independent Directors are expected to commit to at least six years of service and may not serve for more than 12 years.

Retirement Age: Unless they have not yet completed their initial six-year commitment, Independent Directors may not stand for re-election after age 75.

 
      

Board/Committee Evaluations
Identify skill sets that would enhance Board effectiveness

                   
 

Director Recruitment
Identify a diverse pool of director talent with desired background and skill sets

         
 

Director Onboarding
Tailored onboarding enables new directors to learn our business and contribute quickly

The Board may make exceptions to the term limit and retirement age if circumstances warrant. For example, the Board could extend the term limit or retirement age for an individual director with particular skills or qualifications that are valuable to the Board’s effectiveness until a suitable replacement is found. Similarly, an Independent Director may retire before serving 12 years in order to stagger turnover on the Board or a Board committee. The Board believes these policies provide discipline to the Board refreshment process and have resulted in a diverse Board with an effective mix of skills and experiences, as shown on page 11.

From time to time, the NGC engages third-party consultants to assist it with the Board refreshment process and to help cultivate a pipeline of potential future director candidates. The Board has adopted a policy that all director candidate pools will include women and racially/ethnically diverse candidates. As a part of the process of identifying potential director candidates, the NGC may also consult with other directors and senior officers. If the NGC decides to proceed with further consideration of a potential candidate, the Chair of the NGC and other members of the NGC, as well as other members of the Board, may interview the candidate. The NGC then may recommend that the full Board appoint or nominate the candidate for election to the Board. Mr. Stephenson was appointed to the Board in March 2021 and is standing for election for the first time at the 2021 Annual Shareholders’ Meeting. Mr. Stephenson was initially identified as a potential director candidate by our Chairman, and his nomination was the result of the process outlined above.

2021 Proxy Statement     19

Table of Contents

CORPORATE GOVERNANCE
                                                 

Effective corporate governance is essential for maximizing long-term value for our shareholders. Our beliefs have been grounded in being a values-based ethically led organization, and it’s this foundation that continues to influence our decisions and leadership.

Our governance structure is set forth in our Corporate Governance Guidelines and other key governance documents. These guidelines are reviewed at least annually and updated as appropriate in response to evolving best practices, regulatory requirements, feedback from our annual Board evaluations, and recommendations made by our shareholders, all with the goal of supporting and effectively overseeing our ongoing strategic transformation.

Corporate Governance Highlights

Our strong corporate governance practices demonstrate our Board’s commitment to enabling an effective structure to support the successful oversight of our strategy.

Board Independence
Majority Independent Board
Lead Independent Director
Governance Committees are Fully Independent

Other Board and Board Committee Practices
Separate Chair and CEO
Risk Oversight
Oversight of Human Capital Management
Oversight of Political and Social Engagement
Robust Stock Ownership Guidelines
No Hedging and Restrictions on Pledging
No Employment Agreements with NEOs
No Change-in-Control Provisions
Policy to include women and minorities among the pool of potential new director candidates

Board Performance
      

The Board’s Year in Strategy

The Board’s activities are structured to oversee Walmart’s strategy and to provide advice and counsel to management. The Board, working closely with the executive management team, has committed to important initiatives to better serve our customers and pursue our key objectives of making every day easier for busy families, sharpening our culture and becoming more digital, operating with discipline, and making trust a competitive advantage.

Over the past year, and among other matters, the Board was involved in these governance and strategy discussions and actions:

Walmart’s COVID-19 response, including changes across our operations to make our facilities safer for customers and associates, as well as special cash bonuses and enhanced paid time off and leave policies for our hourly associates
Walmart’s ongoing investments in associate wages, training and education to support our omni-channel transformation
Ongoing review of our international portfolio of operations
Board Oversight of Company Strategy  
                   
   
Annual Board Evaluations
Robust Shareholder Engagement
Commitment to Board Refreshment and Succession Planning
Focus on Management Development and Succession Planning

Shareholder Rights
Market Standard Proxy Access Right
Shareholder Right to Call Special Meetings
No Poison Pill
No Supermajority Voting Requirements
Annual Election of All Directors
Majority Voting for Director Elections

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Table of Contents

Corporate Governance

Board Structure and Effectiveness

Board Leadership Structure

The leadership structure of our Board is designed to promote robust oversight, independent viewpoints, and the promotion of the overall effectiveness of the Board. The Board annually reviews its leadership structure as part of the process described on page 19. As discussed on page 98, approximately 49% of our company’s Shares are held by members of the family of Sam Walton, our company’s founder. Three generations of Walton family members have served on our Board, which demonstrates the Walton family’s interest in and commitment to the long-term success of our company. Despite their substantial ownership in the company, the members of the Walton family traditionally have held only three seats on our Board.

Our current Board leadership structure consists of:

  
  
     
NON-EXECUTIVE CHAIRMAN LEAD INDEPENDENT DIRECTOR PRESIDENT AND CEO
Greg Penner Tom Horton Doug McMillon
         
Primary Responsibilities Primary Responsibilities Primary Responsibilities
Presides over meetings of the Board and shareholders
Focuses on Board oversight and governance matters
Provides advice and counsel to the CEO
Agenda review process

Liaison between Independent Directors and Chairman
Agenda review process
Board and Board committee evaluations
Shareholder engagement

Leadership of Walmart’s complex global business
Implements strategic initiatives
Development of robust management team

We have separated the Chairman and CEO roles since 1988. By separating these roles, our CEO is able to focus on executing our strategy and managing Walmart’s complex daily operations, and our Chairman, who is an Outside Director, can devote his time and attention to matters of Board oversight and governance.

We have had a Lead Independent Director since 2004. The role of the Lead Independent Director is designed to enhance the candor and communication between the independent members of the Board, the Chairman, and the CEO. Our Lead Independent Director is appointed annually by the independent members of the Board and has a robust set of responsibilities, including:

presiding over executive private sessions of the Outside Directors and the Independent Directors;
authority to call meetings of the directors, including separate meetings of the Outside Directors and the Independent Directors; and
is available, when appropriate, for consultation with major shareholders.

Mr. Horton became our Lead Independent Director immediately following our 2018 Annual Shareholders’ Meeting. In addition to his role as Lead Independent Director, Mr. Horton also serves as the Chair of the NGC, which means he also oversees the annual Board evaluation process and actively participates in the work related to overall Board effectiveness, including Board development, succession planning, and refreshment.

2021 Proxy Statement       21


Table of Contents

Corporate Governance

Board Committee Chairs: Our Board committees play a critical role in the oversight of our governance and strategy, and each Board committee has access to management and the authority to retain independent advisors as it deems appropriate. Each of the governance-related Board committees, as well as our Strategic Planning and Finance Committee, is led by an independent chair.

Governance Committees Strategy Committees
   
   
INDEPENDENT CHAIR INDEPENDENT CHAIR INDEPENDENT CHAIR INDEPENDENT CHAIR CHAIR
Tim
Flynn
   Steve
Reinemund
   Tom
Horton
   Sarah
Friar
   Steuart
Walton
     
Audit Compensation
and
Management
Development
Nominating and
Governance
Strategic
Planning
and Finance
Technology and
eCommerce
         

Board Committees

To enhance the effectiveness of the Board’s risk oversight function, the Board regularly reviews its committee structure and committee responsibilities to ensure that the Board has an appropriate committee structure focused on matters of strategic and governance importance to Walmart. When possible, Independent Directors are appointed to serve on at least one strategy committee and one governance committee. Currently, the Board has six standing committees, which are described below. In addition to the duties described below, our Board committees perform the risk oversight functions described on page 28.


Strategic Planning and Finance Committee
 

2 MEETINGS DURING
FISCAL 2021

4 MEMBERS

Sarah Friar, Chair
Carla Harris
Tom Horton
Rob Walton

All four members have global or international business experience       Three members have finance, accounting, or financial reporting experience      
All four members have senior leadership experience One member has retail experience
Three members have regulatory, legal, or risk management experience One member has technology or eCommerce experience
 

Primary Responsibilities

Reviews global financial policies and practices and reviews and analyzes financial matters, acquisition and divestiture transactions
Oversees long-range strategic planning
Reviews and recommends a dividend policy to the Board
Reviews the preliminary annual financial plan and annual capital plan to be approved by the Board, as well as the company’s capital structure and capital expenditures

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Corporate Governance

 

 
Technology and eCommerce Committee

     

2 MEETINGS DURING FISCAL 2021

5 MEMBERS

Steuart Walton, Chair
Cesar Conde
Tim Flynn
Marissa Mayer
Steve Reinemund

All five members have global or international business experience

Three members have technology or eCommerce experience

    

Four members have senior leadership experience

Three members have marketing or brand management experience

One member has finance, accounting, or financial reporting experience

Two members have regulatory, legal, or risk management experience

 

Primary Responsibilities

Reviews and provides guidance on the company’s eCommerce, omni-channel, and digital businesses in key markets and in ways that weave together the company’s unique physical and digital assets and capabilities; development and uses of technology; modernization and ongoing evolution of the company’s technology infrastructure; adoption of effective ways of working; data assets, capabilities, and data use cases for commercial purposes; and measurement and tracking of key metrics related to the company’s omni-channel digital enterprise;
Reviews and provides guidance regarding trends relevant to an omni-channel digital enterprise

 

 
Audit Committee*

   

8 MEETINGS DURING FISCAL 2021

4 MEMBERS

Tim Flynn, Chair
Cesar Conde
Sarah Friar
Tom Horton

All four members have global or international business experience

All four members have senior leadership experience

    

Three members have finance, accounting, or financial reporting experience

Two members have regulatory, legal, or risk management experience

Two members have technology or eCommerce experience

 

Primary Responsibilities

Reviews the financial statements and oversees the financial reporting policies, procedures, and internal controls
Responsible for the appointment, compensation, retention, and oversight of the independent accountants
Pre-approves audit, audit-related, and non-audit services to be performed by Walmart’s independent accountants
Reviews and approves any related person transactions and other transactions subject to our Transaction Review Policy
Reviews risk assessment and risk management process and policies, processes and procedures regarding compliance with applicable laws and regulations, as well as Code of Conduct and Reporting Protocols for Senior Financial Officers
Oversees internal investigatory matters
Oversees Walmart’s global ethics and compliance program
Oversees the company’s internal audit function

* Independence and financial literacy: The Board has determined that each member of the Audit Committee is independent as defined by the Exchange Act, the SEC’s rules, and the NYSE Listed Company Rules. Each Audit Committee member named above is financially literate as required by NYSE Listed Company Rules. The Board has determined that Tim Flynn, Sarah Friar, and Tom Horton are “audit committee financial experts” as defined in the SEC’s rules.

2021 Proxy Statement       23


Table of Contents

Corporate Governance

 

 
Compensation and Management Development Committee*

     

6 MEETINGS DURING FISCAL 2021

3 MEMBERS

Steve Reinemund, Chair
Carla Harris
Marissa Mayer

All three members have global or international business experience

One member has technology or eCommerce experience

    

All three members have senior leadership experience

One member has finance, accounting, or financial reporting experience

Two members have marketing or brand management experience

One member has regulatory, legal, or risk management experience

 

Primary Responsibilities

In consultation with the CEO, approves compensation of Executive Officers other than the CEO, and reviews compensation of other senior officers
Reviews and approves the compensation of the CEO and recommends to the Board the compensation of the Outside Directors
Sets performance measures and goals and verifies the attainment of performance goals under our incentive compensation plans
Reviews workforce development, education, training, compensation, and benefits matters
Oversees the management development, succession planning, and retention practices for Executive Officers and senior leaders
Oversees culture, diversity, equity and inclusion initiatives

* Independence: The Board has determined that each member of the CMDC is independent as defined by the Exchange Act, the SEC’s rules, and the NYSE Listed Company Rules; and is a “non-employee director” as defined in the SEC’s rules.

 

 
Nominating and Governance Committee*

     

2 MEETINGS DURING FISCAL 2021

3 MEMBERS

Tom Horton, Chair
Carla Harris
Steve Reinemund

All three members have global or international business experience

Two members have finance, accounting, or financial reporting experience

    

All three members have senior leadership experience

Two members have regulatory, legal, or risk management experience

One member has marketing or brand management experience

 

Primary Responsibilities

Oversees corporate governance issues and makes recommendations to the Board
Identifies, evaluates, and recommends candidates for nomination to the Board
Reviews and makes recommendations to the Board regarding director independence
Reviews and advises management on environmental, social, and community initiatives, as well as legislative affairs and public policy engagement

* Independence: The Board has determined that each member of the NGC is independent as defined by the NYSE Listed Company Rules.

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The last standing committee of the Board is responsible for various administrative matters.

 

 
Executive Committee

     

0 MEETINGS* DURING FISCAL 2021

4 MEMBERS

Doug McMillon, Chair
Tom Horton
Greg Penner
Rob Walton

    

       

Primary Responsibilities

Implements policy decisions of the Board
Acts on the Board’s behalf between Board meetings

* The Executive Committee acted by unanimous written consent 7 times during fiscal 2021, each of which was reviewed and ratified by the Board.

Governing Documents

In addition to our Corporate Governance Guidelines, each standing committee of the Board has a written charter, which defines the roles and responsibilities of the Board committee. The Board committee charters and the Corporate Governance Guidelines, all of which are available on our corporate website, provide the overall framework for our corporate governance practices. The NGC and the Board review the Corporate Governance Guidelines, and the NGC, the Board, and each Board committee review the Board committee charters at least annually to determine whether any updates or revisions to these documents may be necessary or appropriate.


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Board Evaluations

The Board is committed to using its Board evaluation process as an important tool for promoting effectiveness and continuous improvement. This year, the process will be conducted under the leadership of the Lead Independent Director. From time to time, the Board has engaged a third-party consulting firm to lead the evaluation process in order to bring an outside perspective.

Our Board Evaluation Process

      

Questionnaires

Each director completes a detailed questionnaire.

Topics covered include, among others:

The effectiveness of the Board’s leadership structure and the Board committee structure;
Board and committee skills, composition, diversity, and succession planning;
Board culture and dynamics, including the effectiveness of discussion and debate at Board and committee meetings;
The quality of Board and committee agendas and the appropriateness of Board and committee priorities; and
Board/management dynamics, including management development and succession planning and the quality of management presentations and information provided to the Board and committees.
   
         
     

Action Items

These evaluations have consistently found that the Board and Board committees are operating effectively.

Over the past several years, this evaluation process has contributed to various refinements in the way the Board and Board committees operate, including:

Reducing the size of the Board to promote engagement and input into our strategic decision-making;
Changing the Board committee structure to create a separate Compensation and Management Development Committee and a Nominating and Governance Committee;
Changing committee assignments so that Independent Directors generally sit on one “strategy” committee and one “governance” committee;
Ensuring that Board and committee agendas are appropriately focused on strategic priorities and provide adequate time for director input;
Additional responsibilities for our Lead Independent Director, including active participation in the agenda-setting process for the Board and Board committees; and
Increased focus on continuous Board succession planning and refreshment, including developing and maintaining a long-term director candidate pipeline.
 

Director Onboarding and Engagement

All directors are expected to invest the time and energy required to quickly gain an in-depth understanding of our business and operations in order to enhance their strategic value to our Board. We develop tailored onboarding plans for each new director. Shortly after joining our Board, each new director has “learn the business” meetings with the leaders of key operational and corporate support functions. Occasionally, a Board meeting is held at a location away from our home office, usually in a market in which we operate. In connection with these Board meetings, our directors learn more about the local business market through meetings with our business leaders in these markets, visits to our stores and other facilities in the local market, and visits to the stores of our competitors. We also sometimes hold one Board meeting per year at one of our eCommerce offices, where our Board members participate in intensive sessions focused on our eCommerce strategies and operations.

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Our Board members are also expected to participate in other company activities and engage directly with our associates at a variety of events throughout the year. While the COVID-19 pandemic has limited instances of participating at in-person meetings and travel over the past year, several of our Board members attended and participated in various virtual diversity, equity, and inclusion events that were hosted by the company during the year. Other examples of activities and events that members of our Board have participated in during the past few years include:

attending Walmart leadership meetings and accompanying senior business leaders on trips to domestic and international markets;
touring facilities with our compliance associates;
speaking at various Walmart culture, diversity, equity and inclusion events; and
attending and speaking at meetings of Walmart business segments, divisions, and corporate support departments.

Board Meetings and Director Attendance

The Board held a total of six meetings during fiscal 2021. The Outside Directors and Independent Directors met regularly in separate executive sessions, with the Lead Independent Director presiding over those sessions. As a whole, during fiscal 2021, our directors attended approximately 98% of the aggregate number of Board meetings and meetings of Board committees on which they served. Each director attended at least 75% of all Board meetings and meetings of Board committees on which he or she served.

All directors are expected to attend the company’s annual shareholders’ meetings. While the Board understands that there may be situations that prevent a director from attending an annual shareholders’ meeting, the Board encourages all directors to make attendance at all annual shareholders’ meetings a priority.

All eleven directors who were members of the Board members at the time of the 2020 Annual Shareholders’ Meeting were in attendance.

Key Board Responsibilities

The Board’s Strategic Oversight Role

The Board has oversight responsibility for our company’s business strategy and strategic planning. Walmart operates in a rapidly changing environment that requires significant Board engagement with our strategy. As Walmart continues to transform its business, the Board works with management to respond to a dynamically changing environment. Given the iterative nature of this transformation, the Board’s oversight over strategy is a continuous process. Throughout the year, the Board and its committees oversee and guide management with respect to a variety of strategic matters, and strategic discussions are embedded in every Board and Board committee meeting. Walmart’s Independent Directors also regularly hold executive sessions without management present, at which sessions strategy is discussed.

While the Board and its committees oversee our strategic planning process, management is responsible for executing our strategy. The Board receives regular updates and engages actively with our senior management team regarding key strategic initiatives, technology updates, competitive and economic trends, and other developments. Since the emergence of COVID-19, the Board has been engaged in monitoring the impact of COVID-19 on the company’s strategy. The Board receives updates from management about COVID-19’s impact to our associates, customers, business, financial condition, and operations.

The Board’s oversight and our management’s execution of our business strategy are intended to help promote the creation of long-term shareholder and stakeholder value in a sustainable manner, with a focus on assessing both potential opportunities available to us and risks that we might encounter.

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The Board’s Role in Risk Oversight

Taking reasonable and responsible risks is an inherent part of Walmart’s business and is critical to our continued innovation, growth, and achievement of our strategic objectives. The Board and the Board committees actively oversee and monitor the management of the most significant risks that could impact our company. The Board does not view risk in isolation, but instead considers risk in conjunction with its oversight of Walmart’s strategy and operations.

Walmart identifies, assesses, and assigns responsibility for managing risks through its annual enterprise risk management process, other internal processes, and internal control environment. The Board, Board committees, and management coordinate risk oversight and management responsibilities in a manner that we believe serves the long-term interests of our company and our shareholders through established periodic reporting and open lines of communication.

             

Board Oversight

Has primary responsibility for overseeing risk management
Evaluates and approves strategic objectives and defines risk tolerance
Delegates certain risk management oversight responsibilities to Board committees and receives regular reports from Board committee chairs regarding risk-related matters
Engages with and receives regular reports from management regarding risk-related matters
   
        

Technology and
eCommerce Committee

Strategic Planning and
Finance Committee

Audit Committee

     

Oversees risks associated with:

Oversees risks associated with:

Responsible for oversight of overall risk identification, monitoring, and mitigation processes and policies

Oversees risks associated with:

Financial statements, systems, and reporting
Legal, ethics, and compliance
Information systems, information security, data privacy, and cybersecurity
Related person transactions
Internal investigatory matters
Integration of information technology, eCommerce, and innovation efforts with overall strategy
Emerging trends in technology and eCommerce
Financial status and financial matters, including capital expenditures, annual financial plans, and dividend policies
Long-range strategic plans
Potential acquisitions and divestitures

Compensation and Management
Development Committee

Nominating and Governance
Committee

Oversees risks associated with:

Oversees risks associated with:

Senior executive compensation
Senior executive development, succession planning, and retention
Human capital management, including pay; benefits; diversity, equity, and inclusion; recruiting and retention; and culture
Corporate governance
Director succession planning
Environmental, social, community, and charitable giving initiatives
Legislative affairs and public policy engagement strategy
 
 
 

 
             
Strategic and
Operational
Management
Committees

Legal, Regulatory
and Compliance
Risk Management
Committees

Financial Risk
Management
Committees

Global Audit
Services

 
         
 

Management Oversight

Management is responsible for the enterprise risk assessment process and the day-to-day management of risks. Management considers risks in categories which include, but are not limited to, the following:

 
     
Strategic risks
Reputational risks
Financial risks
Legal, regulatory, and compliance risks
Operational risks, including the impact of COVID-19, as well as information systems, information security, data privacy, cybersecurity, and supply chain
     

Additional information regarding risks considered by management can be found in Item 1.A. Risk Factors in the company’s Annual Report on Form 10-K for fiscal 2021. Additional information regarding the roles and responsibilities of our Board committees can be found under “Board Committees” beginning on page 22.

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Management Development and Succession Planning

Our Board places a high value in developing a talented and diverse pipeline of leaders. The CMDC has primary responsibility for executive succession planning, and senior management development is a regular topic on the agendas for meetings of the CMDC.

At these meetings, the members of our CMDC, in consultation with our CEO, our Chief People Officer, and others as the CMDC may deem appropriate, review development plans for current senior leaders, the pipeline of potential future leaders, and executive succession plans, including succession plans for our CEO position. This process has contributed to two successful CEO transitions since 2009. The Board has also adopted a CEO succession planning process to address unanticipated events and emergency situations.

Board’s Oversight of Culture and Human Capital Management

Under its charter, the CMDC has responsibility for reviewing and advising management regarding Walmart’s human capital management strategies, and the CMDC and the Board oversee Walmart’s workforce strategy, which includes the strategic priorities of inclusion, well-being, growth, and digital transformation. Management regularly presents to the CMDC and to the Board regarding workforce development; compensation; benefits; recruiting and retention; training and education; culture; and diversity, equity, and inclusion at all levels of the company.

Our commitment to help people around the world save money and live better is delivered by our associates who make the difference for our customers every day, and we believe the strength of our workforce is a significant contributor to our success. Walmart is a place of opportunity, not only as a foundational entry point to develop critical skills that are relevant for a variety of careers, but also a place where people can grow in their careers across our global omni-channel business. As customer demands and technology change the nature of work, we need to attract, develop and retain associates to thrive in an ever-changing omni-channel environment. Approximately 75% of our U.S. salaried store, club, and supply chain management started their careers in hourly positions. We believe our focus on improving career paths for our associates through robust training, competitive wages, new ways of working, and opportunities for advancement has improved turnover in the U.S. over the past few years.

Board Oversight of Legislative Affairs, Public Policy Engagement, and Charitable Giving

Pursuant to its charter, the NGC reviews and advises management regarding the company’s legislative affairs and public policy engagement strategy, as well as the company’s charitable giving strategy. Walmart engages in the political process when we believe that doing so will serve the best interests of the company and our stakeholders. Walmart is committed to engaging in the political process as a good corporate citizen and in a manner that complies with all applicable laws. Over the years, Walmart has provided greater transparency regarding the company’s political engagement. Since 2015, we have compiled lobbying disclosure information from our U.S. state-level public filings and presented them on our corporate website, and since 2016 we have also disclosed on our corporate website the lobbying expense from our public filings at the U.S. federal level. Walmart’s Government Relations Policy is available on our corporate website.

Board Oversight of Environmental, Social, and Governance Strategy

Under its charter, the NGC has responsibility for reviewing and advising management regarding social, community, and sustainability initiatives of the company. Management presents regularly to the NGC regarding Walmart’s environmental, social, and governance (“ESG”) strategy. Our ESG strategy is based on a shared value approach—creating long-term value for our shareholders by serving our stakeholders, including our customers, associates, suppliers, business partners, communities, and the planet. We set our ESG priorities based on relevance to our business, importance to our stakeholders, as well as Walmart’s ability to effect change with respect to those issues.

We have reported on our company’s aspirations, strategies, initiatives, and progress regarding sustainability and other ESG matters since 2007. Our corporate website includes the most recent information regarding Walmart’s ESG initiatives and progress.

Shareholder Outreach and Engagement

We value regular engagement with and feedback from a wide variety of stakeholders, including customers, associates, suppliers, and communities. We also recognize the value of listening to the views of our shareholders and other stakeholders, and the relationship with our shareholders is an integral part of our corporate governance practices. We conduct shareholder outreach throughout the year to ensure that management and the Board understand and consider the issues of importance to our shareholders and are able to address them appropriately.

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Senior leaders and subject matter experts from the company meet regularly with representatives at many of our top institutional shareholders and periodically with leading proxy advisory firms to discuss Walmart’s strategy, governance practices, executive compensation, compliance programs, and other ESG-related matters. From time to time, members of our Board have participated in these meetings. Management reports regularly to the CMDC and NGC about these meetings, including feedback on these diverse topics and perspectives shared by our shareholders.

We continued this program of shareholder engagement during fiscal 2021, in addition to our customary participation at industry and investment community conferences, investor road shows, and analyst meetings. We also have incorporated into this proxy statement some of the feedback we received during these meetings. We also respond to individual shareholders who provide feedback about our business. We have had success engaging with parties to understand shareholder concerns and reach resolutions on issues that are in the best interests of our shareholders, and we remain committed to these ongoing initiatives.

Active Ongoing Shareholder Engagement

Board members, senior leaders, and/or subject matter experts actively solicit feedback from our large shareholders on strategy, governance, compensation, ESG, and other topics. During fiscal 2021, we engaged with a majority of our 50 largest institutional shareholders, representing approximately 520 million Shares.
The CMDC and NGC receive regular reports on this engagement.
We welcome feedback from all shareholders, who can contact our Global Investor Relations team by:
calling
1-479-273-6463
emailing
invrelinq@wal-mart.com
using Walmart’s Global
Investor Relations app,
available for free in iTunes
and Google Play
visiting
http://stock.walmart.com

Communicating with the Board

The Board welcomes feedback from shareholders and other interested parties. There are a number of ways that you can contact the Board or individual members of the Board.

Via mail: Via email:                      
Name of Director(s) or Board of Directors
c/o Gordon Y. Allison,
Senior Vice President, Office of the
Corporate Secretary, Chief Counsel for
Finance and Corporate Governance,
Walmart Inc.
702 Southwest 8th Street
Bentonville, Arkansas 72716-0215
the entire Board at directors@wal-mart.com;
the Independent Directors at Independent.Directors@wal-mart.com;
the Outside Directors at nonmanagementdirectors@wal-mart.com; or
any individual director, at the full name of the director as listed in that director’s biography under the heading “Director Nominees for 2021” followed by “@wal-mart.com.” For example, our Chairman, Gregory B. Penner, may be reached at gregorybpenner@wal-mart.com.

We receive a large volume of correspondence regarding a wide range of subjects each day, including correspondence relating to ordinary store operations and merchandise in our stores. As a result, our individual directors are often not able to respond to all communications directly. Therefore, the Board has established a process for managing communications to the Board and individual directors.

Communications directed to the Board or individual directors are reviewed to determine whether, based on the facts and circumstances of the communication, a response on behalf of the Board or an individual director is appropriate. If a response on behalf of the Board or an individual director is appropriate, Walmart management may assist the Board or individual director

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in gathering all relevant information and preparing a response. Communications related to day-to-day store operations, merchandise, and similar matters are typically directed to an appropriate member of management for a response. Walmart maintains records of communications directed to the Board and individual directors, and these records are available to our directors at any time upon request.

Shareholders wishing to recommend director candidates for consideration should do so in writing to the address above. The recommendation should include the candidate’s name and address, a resume or curriculum vitae that demonstrates the candidate’s experience, skills, and qualifications, and other relevant information for the Board’s consideration. All director candidates recommended by shareholders will be evaluated by the NGC on the same basis as any other director candidates.

Board Processes and Practices

How We Determine Director Independence

Our Board is committed to ensuring its membership consists of the right mix of skill sets in light of Walmart’s strategy, the Board’s tenure policies, and the Board’s desire to maintain at all times a majority of directors who are independent in accordance with the NYSE Listed Company Rules. Historically, three members of the Walton family have been members of our Board, and the NGC and the Board believe this is appropriate in light of the Walton family’s significant and long-term Share ownership. Our CEO also serves on the Board, and our former CEOs have historically served on the Board for a period of time after they retire. Our incoming CEOs have supported this practice, and we believe this practice has contributed to successful CEO transitions during our company’s history. Consistent with our Board’s commitment to independent Board oversight, the Board generally seeks to fill the remaining Board seats with directors who are independent as defined in the NYSE Listed Company Rules.

In making independence determinations, the Board complies with all NYSE criteria, and with respect to Board committee membership, certain SEC criteria, and considers all relevant facts and circumstances. Under the NYSE Listed Company Rules, to be considered independent:

the director must not have a disqualifying relationship, as described in the NYSE Listed Company Rules; and
the Board must affirmatively determine that the director otherwise has no direct or indirect material relationship with our company.

The Board has adopted materiality guidelines that it considers and uses to aid in the director independence determination process. While not determinative of independence, these guidelines identify the following categories of relationships that the Board has determined will generally not affect a director’s independence.

Materiality Guideline Description
Ordinary Retail
Transactions
      The director, an entity with which a director is affiliated, or one or more members of the director’s immediate family, purchased property or services from Walmart in retail transactions on terms generally available to Walmart associates during Walmart’s last fiscal year.
Immaterial
Ownership
The director or one or more members of the director’s immediate family owns or has owned during the entity’s last fiscal year, directly or indirectly, 5% or less of an entity that has a business relationship with Walmart.
Immaterial
Transactions
The director or one or more members of the director’s immediate family owns or has owned during the entity’s last fiscal year, directly or indirectly, more than 5% of an entity that has a business relationship with Walmart, so long as the amount paid to or received from Walmart during the entity’s last fiscal year accounts for less than $1,000,000 or, if greater, 2% of the entity’s consolidated gross revenues for that entity’s last fiscal year.
The director or a member of the director’s immediate family is or has been during the entity’s last fiscal year an executive officer or employee of an entity that made payments to, or received payments from, Walmart during the entity’s last fiscal year that account for less than $1,000,000 or, if greater, 2% of the entity’s consolidated gross revenues for that entity’s last fiscal year.
Immaterial
Positions
The director or one or more members of the director’s immediate family is a director or trustee or was a director or trustee (but not an executive officer or employee) of an entity during the entity’s last fiscal year that has a business or charitable relationship with Walmart and that made payments to, or received payments from, Walmart during the entity’s last fiscal year in an amount representing less than $5,000,000 or, if greater, 5% of the entity’s consolidated gross revenues for that entity’s last fiscal year. Walmart paid to, employed, or retained one or more members of the director’s immediate family for compensation not exceeding $120,000 during Walmart’s last fiscal year.
Immaterial
Benefits
The director or one or more members of the director’s immediate family received from Walmart, during Walmart’s last fiscal year, personal benefits having an aggregate value of less than $5,000.

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In April 2021, the Board and the NGC conducted their annual review of directors’ relationships that may be relevant to independence, based on the directors’ responses to questionnaires soliciting information regarding their (and their immediate family members’) direct and indirect relationships with the company and due diligence performed by management regarding any transactions, relationships, or arrangements between the company and the directors, their immediate family members, or affiliated entities.

As a result of this review, the Board has affirmatively determined that the following directors are Independent Directors under the general independence definition in the NYSE Listed Company Rules: Cesar Conde, Timothy P. Flynn, Sarah J. Friar, Carla A. Harris, Thomas W. Horton, Marissa A. Mayer, Steven S Reinemund, and Randall L. Stephenson. In addition, the Board determined that the currently serving members of the Audit Committee and the CMDC, and Mr. Stephenson, who will be appointed to the CMDC effective upon his election at the 2021 Annual Shareholders' Meeting, meet the heightened independence standards for membership on those Board committees under the NYSE Listed Company Rules, the Exchange Act, and the SEC’s rules.

In making its determination as to the independence of our Independent Directors, the Board considered whether any relationship between a director and Walmart is a material relationship based on the materiality guidelines discussed above, the facts and circumstances of the relationship, the amounts involved in the relationship, the director’s interest in such relationship, if any, and such other factors as the Board, in its judgment, deemed appropriate. In each case, the Board found all relationships between the company and each of our Independent Directors to be immaterial to the director’s independence. The types of relationships considered by the Board are noted below:

Relationship Type Director
Immaterial Ownership: The director or the director’s immediate family member directly or indirectly owned 5% or less of, but was not a director, officer, or employee of, an entity that has a business relationship with Walmart Mr. Horton
Ms. Mayer
Immaterial Transactions and Immaterial Ownership: The director was an officer and 5% or less equity owner of an entity that has a business relationship with Walmart Mr. Conde
Ms. Friar
Ms. Harris
Immaterial Transactions and Immaterial Ownership: Immediate family members of the director were employees or officers and less than 5% equity owners of entities that have a business relationship with Walmart Mr. Conde
Mr. Flynn
Ms. Friar
Mr. Horton
Ms. Mayer
Mr. Reinemund
Mr. Stephenson
Immaterial Positions and Immaterial Ownership: The director was either a director or trustee of and less than 5% equity owner of an entity that has a business relationship with Walmart Mr. Conde
Mr. Flynn
Ms. Friar
Mr. Horton
Mr. Reinemund
Mr. Stephenson
Immaterial Position: Walmart employed a member of the director’s immediate family for compensation not exceeding $120,000 during Walmart’s last fiscal year Ms. Harris

The aggregate amounts involved in each of the relationships and transactions described in the preceding table were either: (i) less than $1 million; or (ii) if greater than $1 million, then the aggregate amounts involved were less than 2% of the consolidated gross revenues for the entity’s last fiscal year, with the exception of certain relationships involving Mr. Conde and Mr. Reinemund.

Mr. Conde serves as a member of the board of directors of a Walmart supplier that received payments from Walmart during the entity’s last fiscal year that accounted for more than 5% of the entity’s consolidated gross revenues for its last fiscal year. The Board determined that this relationship was immaterial to Mr. Conde’s independence because, in his capacity as a member of the board of directors of the entity: (i) Mr. Conde is not and was not involved in any sales or marketing of products to Walmart; and (ii) he does not and has not received any material direct or indirect economic benefit from the relationship between Walmart and the entity. The payments by Walmart to the entity were for products in the ordinary course of business, and Walmart has had a relationship with this entity since a time prior to Mr. Conde’s membership on the board of this entity.

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Immediate family members of Mr. Reinemund are employed by and have a less than 5% ownership interest in (but are not executive officers of) Walmart suppliers or vendors that received payments from Walmart during each entity’s last fiscal year that accounted for more than 2% of the entity’s consolidated gross revenues for that entity’s last fiscal year. The Board determined these relationships were immaterial to Mr. Reinemund’s independence because in each case neither Mr. Reinemund nor his immediate family member: (i) is or was an executive officer of the entity; (ii) has or had a material direct or indirect economic interest in the transactions between the entity and Walmart; or (iii) had advancement within or continued employment with such entity based on the marketing or sale of the entity’s goods or services to Walmart. Further, the payments made by Walmart to each entity, or by each entity to Walmart, were for various products and services in the ordinary course of business, and Walmart has had a relationship with each entity since a time prior to Mr. Reinemund’s immediate family member’s employment with each entity.

The Board does not believe S. Robson Walton, Gregory B. Penner, or Steuart L. Walton have any relationships with Walmart that would disqualify them from being considered independent under the NYSE Listed Company Rules. However, the Board has deferred its determination as to their independence. If the Board had made such an independence determination, then 11 of 12 of our director nominees, or approximately 92%, would have been independent.

In addition, we have not and do not plan to rely on any of the exemptions from certain board independence requirements available to controlled companies under the NYSE Listed Company Rules, to the extent such exemptions are available. Our Board is committed to maintaining a majority independent Board and believes that this independence ensures robust oversight, independent viewpoints, and promotes the Board’s overall effectiveness.

The Board and the NGC concluded that each of the Independent Directors does not currently have, and has not had during any pertinent period, any direct or indirect relationship that: (i) constitutes a disqualifying relationship with Walmart under the NYSE Listed Company Rules; (ii) otherwise compromises the independence of such director; or (iii) otherwise constitutes a material relationship between Walmart and the director.

Related Person Transaction Review Policy

The Board has adopted a written policy applicable to all Walmart Executive Officers; all directors and director nominees; all shareholders beneficially owning more than five percent of Walmart’s outstanding Shares; and the immediate family members of each of the preceding persons (collectively, the “Covered Persons”). Any entity in which a Covered Person has a direct or indirect material financial interest or of which a Covered Person is an officer or holds a significant management position (each, a “Covered Entity”) is also covered by the policy. The Transaction Review Policy applies to any transaction or series of similar or related transactions in which a Covered Person or Covered Entity has a direct or indirect material financial interest and in which Walmart is a participant (each, a “Covered Transaction”).

Under the Transaction Review Policy, each Covered Person is responsible for reporting to Walmart’s Office of the Corporate Secretary any Covered Transactions of which he or she has knowledge. Walmart’s Office of the Corporate Secretary, with the assistance of Walmart’s chief audit executive, chief ethics and compliance officer, and other appropriate Walmart personnel, provides information to the Audit Committee for its consideration regarding the Covered Transaction, including: the view or opinion from the business unit desiring to enter into the transaction as to the benefits of the proposed transaction to the company; a point of view from the company’s corporate affairs department as to the reputational impact, if any, of the company entering into the transaction; the view and opinion from the global audit executive as to the fairness of the transaction to the company and its shareholders and whether the transaction was negotiated on an arm’s-length basis; and the view and opinion from the Office of the Corporate Secretary as to whether the Covered Person has otherwise complied with Walmart’s Code of Conduct as it applies to the transaction. The Audit Committee reviews each Covered Transaction and either approves or disapproves the transaction. To approve a Covered Transaction, the Audit Committee must find that:

the substantive terms and negotiation of the Covered Transaction are fair to Walmart and its shareholders and the substantive terms are no less favorable to Walmart and its shareholders than those in similar transactions negotiated at an arm’s-length basis; and
if the Covered Person is a director or Executive Officer of Walmart, he or she has otherwise complied with the terms of Walmart’s Code of Conduct as it applies to the Covered Transaction.

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Related Person Transaction Process
The following chart shows our process for identification and disclosure of related person transactions.

Related Person Transaction Determinations

     

Director Independence Determinations

     

Proxy Statement Disclosure

Walmart’s Office of the Corporate Secretary conducts an annual review and determination of related person transactions

Related person transactions are presented for Audit Committee review and approval or ratification

 

The NGC and Board conduct an annual determination of director independence, considering the directors’ (and their immediate family members’) direct and indirect relationships with the company

 

Annual disclosures are published in our proxy statement as required by SEC rules (including required related person transaction disclosures)

         

Information sources:

Annual Director, Executive Officer, and Principal Shareholder Questionnaires
Schedule 13G filings
Section 16 reporting
Management due diligence reviews

Information sources:

Annual Director, Executive Officer, and Principal Shareholder Questionnaires
Management due diligence reviews

Fiscal 2021 Review of Related Person Transactions

Our company’s Office of the Corporate Secretary has developed and implemented processes and controls for identifying and obtaining information about proposed or existing transactions between the company and our directors, Executive Officers, principal shareholders, their immediate family members (collectively, the “related persons”), or entities in which one or more of these related persons has a specified relationship or ownership interest. The Office of the Corporate Secretary analyzes each identified transaction, with the exception of ordinary course retail transactions. Based upon the facts and circumstances of each transaction, the Office of the Corporate Secretary determines whether the related person has or will have a material direct or indirect interest in the transaction. Transactions in which Walmart is a participant, the amount involved exceeds $120,000, and the Office of the Corporate Secretary has determined that the related person has a direct or indirect material interest are referred to as “related person transactions.” Each related person transaction is presented to the Audit Committee for its review and approval or ratification. As described in our “Transaction Review Policy,” the Audit Committee considers the following factors when reviewing a related person transaction:

the nature of the related person’s interest in the transaction;
the substantive terms of the transaction, including the type of transaction and the amount involved;
analyses from the company’s chief audit executive and Office of the Corporate Secretary regarding the fairness of the transaction to the company; and
any other factors the Audit Committee deems appropriate, including, but not limited to, points of view from the relevant business unit as to the benefits of engaging in the transaction and from the company’s corporate affairs department as to any potential reputational impacts of engaging in the transaction.

We disclose in this proxy statement all related person transactions that are required to be disclosed under applicable SEC rules. Walmart believes the terms of the transactions described below are comparable to terms that would have been reached by unrelated third parties in arm’s-length transactions. The Audit Committee has approved each of the transactions disclosed below.


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Corporate Governance

On September 19, 2016, Walmart acquired Jet.com in a merger transaction, with Jet.com becoming a wholly-owned subsidiary of Walmart. The aggregate transaction consideration paid by the company consisted of a combination of cash of approximately $3.0 billion and restricted stock units representing the right to receive Shares determined using the closing date trading price equal to approximately $300 million. Marc E. Lore, the founder and largest stockholder of Jet.com (approximately 15.9% of the outstanding Jet.com shares on a fully-diluted basis), received the right to approximately $477 million in cash consideration payable by the company for his Jet.com shares as part of the merger transaction over the five-year period following the transaction. Mr. Lore received cash consideration payments related to the transaction of approximately $274 million in prior fiscal years and approximately $114 million in fiscal 2021. Mr. Lore retired from his position as Executive Vice President, President and Chief Executive Officer, U.S. eCommerce, of Walmart effective January 31, 2021. Pursuant to the terms of Mr. Lore’s agreement with the Company, following his departure, Mr. Lore will continue to receive the remaining approximately $89 million of cash consideration from the transaction payable over the next year. Mr. Lore’s portion of the transaction equity consideration consisted of restricted stock units for 3,554,093 Shares vesting over the five-year period following the closing date of the transaction. During fiscal 2021, Walmart issued 946,808 Shares to Mr. Lore pursuant to such restricted stock units that vested in fiscal 2021. Pursuant to the terms of Mr. Lore’s agreement with the Company regarding his retirement, following his departure, Mr. Lore will continue to vest in the remaining restricted stock units representing the right to receive 710,828 Shares in accordance with the vesting schedule.

Lori Haynie, the sister of C. Douglas McMillon, a director of Walmart and an Executive Officer, is an executive officer of Mahco, Incorporated (“Mahco”). During fiscal 2021, Walmart paid Mahco and its subsidiaries approximately $43.9 million in connection with Walmart’s purchases of sporting goods and related products. Walmart expects to purchase similar types of products from Mahco during fiscal 2022.

Greg T. Bray, a management associate in Walmart’s Finance department, is the brother-in-law of C. Douglas McMillon, a director of Walmart and an Executive Officer. For fiscal 2021, Walmart paid Mr. Bray a salary of approximately $247,700, a payment pursuant to the cash incentive plan of approximately $94,800, and other benefits totaling approximately $31,500 (including Walmart’s matching contributions to Mr. Bray’s 401(k) Plan account, Walmart’s matching contributions to Mr. Bray’s Deferred Compensation Matching Plan account, and health insurance premiums). In fiscal 2021, Mr. Bray also received a grant of 506 restricted stock units with a calculated value of approximately $60,000 at the date of grant. Mr. Bray continues to be an associate, and, in fiscal 2021, he may receive compensation and other benefits in amounts similar to or greater than those he received during fiscal 2022.

Nichole R. Bray, a management associate with the Walmart Technology team, is the sister-in-law of C. Douglas McMillon, a director of Walmart and an Executive Officer. For fiscal 2021, Walmart paid Ms. Bray a salary of approximately $157,900, a payment pursuant to the cash incentive plan of approximately $49,900, and other benefits totaling approximately $26,800 (including Walmart’s matching contributions to Ms. Bray’s 401(k) Plan account and health insurance premiums). In fiscal 2021, Ms. Bray also received a grant of 548 restricted stock units having a calculated value of approximately $65,000 at the date of grant. Ms. Bray continues to be an associate, and, in fiscal 2022, she may receive compensation and other benefits in amounts similar to or greater than those she received during fiscal 2021.

Jason Turner, a management associate in Walmart U.S., is the brother-in-law of John R. Furner, an Executive Officer of Walmart. For fiscal 2021, Walmart paid Mr. Turner a salary of approximately $95,200, a payment pursuant to the cash incentive plan of approximately $22,200, and other benefits totaling approximately $11,500 (including Walmart’s matching contributions to Mr. Turner’s 401(k) Plan account and health insurance premiums). In fiscal 2021, Mr. Turner also received a grant of 126 restricted stock units with a calculated value of approximately $15,000 at the date of grant. Mr. Turner continues to be an associate, and, in fiscal 2022, he may receive compensation and other benefits in amounts similar to or greater than those he received during fiscal 2021.

During fiscal 2020, Walmart entered into an agreement with Quibi Holdings, LLC (“Quibi”), under which Walmart agreed to pay Quibi $15 million for advertising services, payable during fiscal 2020 and fiscal 2021. In fiscal 2021, Walmart paid Quibi approximately $6.5 million for advertising services. Gregory B. Penner, the Chairman of Walmart’s Board, is a member of Quibi’s board of directors. In addition, members of the Walton family, including Mr. Penner; S. Robson Walton, a director of Walmart; Steuart L. Walton, a director of Walmart; and members of their immediate family, own an aggregate equity interest in Quibi of approximately 17%.

In early fiscal 2022, Walmart entered into an agreement with View, Inc. (“View”), under which Walmart agreed to pay View $26 million for the purchase of dynamic glass to be used in the construction of Walmart’s new Home Office buildings. Members of the Walton family, including Gregory B. Penner, the Chairman of Walmart’s Board; S. Robson Walton, a director of Walmart; and members of their immediate family, own an aggregate indirect equity interest in View of approximately 17%.


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Corporate Governance

Governance Materials Available on our Website

Our Board and Board committee governance documents, including the Board committee charters, the Corporate Governance Guidelines, and other key corporate governance documents are available to our shareholders on our corporate website at http://stock.walmart.com/investors/corporate-governance/governance-documents.

You may also access and review the following additional corporate governance documents on our corporate website:

Restated Certificate of Incorporation;
Amended and Restated Bylaws;
Corporate Governance Guidelines;
Reporting Protocols for Senior Financial Officers (formerly titled the Code of Ethics for the CEO and Senior Financial Officers);
Code of Conduct (formerly titled the Statement of Ethics) (available at www.walmartethics.com);
Procedures for Complaints Related to Accounting or Auditing Matters;
Investment Community Communications Policy;
Fair Disclosure Procedures;
Global Anti-Corruption Policy;
Government Relations Policy; and
Privacy Policy.

These materials are also available in print at no charge to any shareholder who requests a copy by writing to: Walmart Inc., Global Investor Relations Department, 702 Southwest 8th Street, Bentonville, Arkansas 72716-0100.

A description of any substantive amendment or waiver of Walmart’s Code of Conduct or Walmart’s Reporting Protocols for Senior Financial Officers granted to Executive Officers or directors will be disclosed on our corporate website within four business days following the date of the amendment or waiver (http://stock.walmart.com/investors/corporate-governance/ governance-documents) and will remain posted for a period of at least 12 months. In February 2021, Walmart posted descriptions of recent amendments to the Code of Conduct and Reporting Protocols for Senior Financial Officers. There were no waivers of Walmart’s Code of Conduct Code or Walmart’s Reporting Protocols for Senior Financial Officers granted to Executive Officers or directors during fiscal 2021.


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Corporate Governance

Director Compensation

Walmart’s compensation program for Outside Directors is intended to:

provide fair compensation commensurate with the work required to serve on the Board of a company with Walmart’s size, scope, and complexity;

align directors’ interests with the interests of Walmart shareholders; and

be easy to understand and communicate, both to our directors and to our shareholders.


Annual Benchmarking

Each June, the CMDC and Board undertake a comprehensive review of Outside Director compensation, including a comparison to director compensation at Walmart’s peer group companies. As a result of the review that was conducted last year, the CMDC and Board determined that our base director compensation and the additional fees for Board leadership positions described below were generally competitive and near the median of our peer group. Therefore, the CMDC and Board did not make any significant changes to our Outside Director compensation during fiscal 2021.

Components of Director Compensation

Our Outside Director compensation program consists of the following primary components:

Who is Eligible    Component    Annual Amount
($)
   Form of Payment
Base Compensation – All Outside Directors Annual Stock Grant 175,000 Shares
  Annual Retainer 100,000 Cash
Additional Fees – Some Outside Directors Non-Executive Chairman Retainer 225,000 50% Shares/50% Cash
Lead Independent Director Retainer 35,000 Cash
Audit Chair Retainer 25,000 Cash
CMDC, NGC, SPFC, and TeCC
Chair Retainers
20,000 Cash

In addition, each Outside Director who attends in person a Board meeting held at a location that requires intercontinental travel from his or her residence is paid an additional $4,000 meeting attendance fee.

Form and Timing of Payment

Stock grants to Outside Directors are made annually upon election to the Board at our annual shareholders’ meeting, which was most recently held on June 3, 2020. If an Outside Director is appointed to the Board during a term, he or she will receive a prorated portion of the annual stock grant. Each Outside Director may elect to defer the receipt of this stock grant in the form of stock units that are settled in Shares following the end of the director’s Board service. The other components of Outside Director compensation listed above are paid quarterly in arrears. Each Outside Director can elect to receive these other components in the form of cash, Shares (with the number of Shares determined based on the closing price of Shares on the NYSE on the payment date), deferred in stock units, or deferred into an interest-credited cash account.

Director Stock Ownership Guidelines

Each Outside Director is required to own, within five years of his or her initial election to the Board, Shares or deferred stock units with a value equal to five times the annual retainer portion of the Outside Director compensation established by the Board in the year the director was initially elected. All Outside Directors who have reached the five-year compliance date own sufficient Shares or deferred stock units to satisfy this requirement.


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Corporate Governance

Director Compensation for Fiscal 2021

Name
(a)
      Fees Earned or
Paid in Cash
($)
(b)
      Stock
Awards
($)
(c)
      Total
($)
(h)
Cesar Conde 100,000 174,984 274,984
Timothy P. Flynn 124,990 174,984 299,974
Sarah J. Friar 119,865 174,984 294,849
Carla A. Harris 99,948 174,984 274,932
Thomas W. Horton 155,000 174,984 329,984
Marissa A. Mayer 100,012 174,984 274,996
Gregory B. Penner 212,713 287,447 500,160
Steven S Reinemund 122,129 174,984 297,113
S. Robson Walton 100,000 174,984 274,984
Steuart L. Walton 119,865 174,984 294,849

Explanation of information in the columns of the table:
Name (column (a))
C. Douglas McMillon is omitted from this table because he received compensation only as an associate of our company during fiscal 2021 and did not receive any additional compensation for his duties as a director.

Fees Earned or Paid in Cash (column (b))
Certain Outside Directors elected to either receive Shares in lieu of some or all of these amounts or defer these amounts in the form of deferred stock units, as shown below. These amounts were converted into Shares or deferred stock units quarterly using the closing price of a Share on the NYSE as of the respective payment dates.

Director       Amount
($)
      Number of Shares
Received in Lieu
of Cash
     Number of
Deferred Stock
Units in Lieu of Cash
Timothy P. Flynn 124,990 0 976
Sarah J. Friar 119,865 0 936
Carla A. Harris 49,948 390 0
Marissa A. Mayer 100,012 0 781
Gregory B. Penner 212,713 0 1,661
Steuart L. Walton 119,865 0 936

Stock Awards (column (c))
In accordance with SEC rules, the amounts in this column are the aggregate grant date fair value of stock awards granted during fiscal 2021, computed in accordance with GAAP stock-based accounting rules (as set forth in Financial Accounting Standards Board’s Accounting Standards Codification Topic 718). Other than Mr. Penner, each Outside Director that was elected to the Board at the 2020 Annual Shareholders’ Meeting received a stock award of 1,433 Shares ($175,000 divided by $122.11, the closing price of a Share on the NYSE on the grant date, and rounded to the nearest Share). Mr. Penner received a stock award of 2,354 Shares ($287,500 divided by $122.11, rounded to the nearest Share). Mr. Flynn, Ms. Friar, Ms. Mayer, Mr. Penner, Mr. Rob Walton, and Mr. Steuart Walton elected to defer these Shares in the form of deferred stock units. None of our Outside Directors held any outstanding stock options or unvested restricted stock awards as of January 31, 2021.

Option Awards and Non-Equity Incentive Plan Compensation (columns (d) and (e))
We do not issue stock options to our Outside Directors and do not provide our Outside Directors with any non-equity incentive plan compensation. Therefore, we have omitted these columns from the table.

Change in Pension Value and Non-Qualified Deferred Compensation Earnings (column (f))
While directors are permitted to defer cash retainers into an interest-credited account under the Director Compensation Deferral Plan, none of our current directors have elected to do so and do not have any balances in any such account. Therefore, we have omitted this column from the table.

All Other Compensation (column (g))
We have omitted this column because our directors did not receive any other compensation during fiscal 2021.

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PROPOSAL NO. 2
ADVISORY VOTE TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION
                                                 

     
FOR
     
The Board recommends that shareholders vote FOR this proposal.

What am I voting on?

We are asking our shareholders to approve, on a non-binding, advisory basis, under Section 14A of the Exchange Act, the compensation of our NEOs as disclosed in this proxy statement. We have held a similar shareholder vote every year since 2011 and expect to hold a similar vote at future annual shareholders’ meetings.

As described in the CD&A, our executive compensation program is designed with an emphasis on performance and is intended to closely align the interests of our NEOs with the interests of our shareholders. The CMDC regularly reviews our executive compensation program to ensure that compensation is closely tied to aspects of our company’s performance that our Executive Officers can impact and that are likely to have an impact on shareholder value.

Our compensation program is also designed to balance long-term performance with shorter-term performance and to mitigate any risk that an Executive Officer would be incentivized to pursue good results with respect to a single performance measure, company segment, or area of responsibility to the detriment of our company as a whole.

In the CD&A, we discuss why we believe the compensation of our NEOs for fiscal 2021 was appropriately aligned with our company’s performance during fiscal 2021. The CD&A also describes feedback we received regarding our executive compensation program during our shareholder outreach efforts and is intended to provide additional clarity and transparency regarding the rationale for and philosophy behind our executive compensation program and practices. We urge you to read carefully the CD&A, the compensation tables, and the related narrative discussion in this proxy statement when deciding how to vote on this proposal.

The vote on this proposal is advisory, which means that the vote will not be binding on Walmart, the Board, or the CMDC. However, the Board and CMDC value our shareholders’ opinions, and the CMDC will consider the results of the vote on this proposal when making future decisions regarding executive compensation and when establishing our NEOs’ compensation opportunities.

In view of the foregoing, shareholders will vote on the following resolution at the 2021 Annual Shareholders’ Meeting:

RESOLVED, that the company’s shareholders hereby approve, on an advisory basis, the compensation of the Named Executive Officers of Walmart as disclosed in Walmart’s proxy statement for the 2021 Annual Shareholders’ Meeting in accordance with the SEC’s compensation disclosure rules.


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EXECUTIVE COMPENSATION
                                                 

Compensation Discussion and Analysis

In this section, we describe our executive compensation philosophy and program that support our strategic objectives and serve the long-term interests of our shareholders. We also discuss how our CEO, CFO, and other Named Executive Officers (our NEOs) were compensated in fiscal 2021 and describe how their compensation fits within our executive compensation philosophy. For fiscal 2021, our NEOs were:

      C. Douglas McMillon
President and Chief
Executive Officer
     
M. Brett Biggs
Executive Vice President and
Chief Financial Officer
     
Suresh Kumar
Global Chief Technology Officer and
Chief Development Officer
     
John R. Furner
Executive Vice President,
President and CEO, Walmart U.S.
     
Judith McKenna
Executive Vice President, President
and CEO, Walmart International
 
Kathryn McLay
Executive Vice President,
President and CEO, Sam’s Club U.S.

Disclosure regarding Mr. Furner’s fiscal 2021 compensation is not required under SEC rules. Nevertheless, we have voluntarily included his compensation information in this proxy statement on the same basis as our other NEOs. We included this disclosure because we believe it is helpful to provide shareholders with information about how our compensation plans are designed to incentivize and support each of our operating segments.


Table of Contents
This CD&A is organized as follows:

      2021 Compensation Overview Provides an overview of our executive compensation philosophy, framework, and practices, and how our pay program emphasizes performance.       41
         
NEO Compensation Components and Pay Mix Describes the primary components of our NEO compensation packages and how our NEO compensation is heavily weighted towards performance-based components that we believe are aligned with the interests of our long-term shareholders. 44
         
Executive Compensation Governance and Process Explains who sets executive compensation at Walmart, the process for setting executive compensation, and how strategic considerations, peer benchmarking, shareholder feedback, and other factors are considered when making compensation decisions. 45
         
Fiscal 2021 Performance Metrics Describes the performance metrics used in our incentive programs and why the CMDC selected these metrics. 51
         
Incentive Goal Setting Philosophy and Process Provides insight into how the CMDC seeks to set performance goals that are aligned with our long-term strategy and with our annual operating plan. 53
         
Fiscal 2021 Performance Goals and Performance Describes the specific goals used in our incentive programs for fiscal 2021, how we performed compared to those goals, and how that performance impacted our incentive plan payouts. 55
         
Fiscal 2021 NEO Pay and Performance Summaries Describes how our NEOs performed during fiscal 2021 and how that performance impacted each NEO’s compensation. 59
         
Other Compensation Programs and Policies Describes the limited perquisites available to our NEOs, as well as our practices regarding employment contracts, clawbacks, stock ownership guidelines, insider trading policy, tax considerations, and other matters. 65

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Executive Compensation

2021 Compensation Overview  
 

Our Executive Compensation Philosophy and Framework

Our executive compensation programs are intended to motivate and retain key executives, with the goal of generating strong operating results and creating alignment with our shareholders. We have developed our compensation programs to support our enterprise strategy and to align our leadership team with our culture, strategy, and organizational structure.

Our executive compensation program is built upon our global compensation framework:

Pay for performance by tying a majority of executive compensation to pre-established, quantifiable performance goals.
Use performance metrics that are understandable, that are tied to key performance indicators, and that our executives have the ability to impact.
Provide competitive pay to attract and retain highly-qualified talent at all levels.
Align management interests with the long-term interests of our shareholders by providing long-term incentives in the form of equity, combined with robust stock ownership guidelines.
Establish performance goals that are aligned with our long-term strategy and financial and operating plans.
Encourage leadership accountability by tying a higher percentage of compensation to performance at higher levels.

Impacts of COVID-19

The COVID-19 pandemic and related economic disruptions have created challenges for Walmart and for the entire world. During these times, we have worked hard to help our communities respond to COVID-19 while prioritizing the health and safety of our associates, especially those serving our customers on the front line. We are proud of how our associates have responded, and our associates were key contributors to our successful fiscal 2021. You can read more about how we are responding to COVID-19 and keeping our associates and customers safe at https://corporate.walmart.com/here-for-you.

Cash bonuses and enhanced benefits for U.S. associates. To appreciate our associates’ support of our communities across the country and to support our associates’ financial well-being, we paid our associates in the U.S. four special cash bonuses in addition to our regular quarterly incentive payments. The total special cash bonuses paid during calendar 2020 exceeded $1.5 billion. The special cash bonuses paid to date total $1,200 for each full-time hourly associate and $600 for each part-time hourly associate, assuming associates were employed on the qualifying dates for each bonus.

Also in support of our associates’ safety and financial well-being, we have enhanced our paid time off and leave policies during the pandemic. We encourage associates who are unable to work or uncomfortable working due to COVID-19 to stay home. In addition to the paid time off we offer to associates, we implemented a COVID-19 Emergency Leave Policy, which waives our normal attendance requirements for those missing work for reasons associated with COVID-19. The policy also provides full- and part-time associates with up to two weeks of pay should they need to stay home for COVID-related reasons, including mandated quarantines, symptoms, or illness. If an associate is not able to return to work after that time, additional pay replacement may be provided for up to 26 weeks for associates with a confirmed case of COVID-19. Absences associated with an approved COVID-19 leave are not counted against associates for attendance policy purposes. This special leave policy will remain in effect at least through July 5, 2021. We also introduced a program to help educate associates on coping skills for stress and anxiety in conjunction with an awareness campaign of other available resources that support associates’ physical, emotional, and financial wellbeing.

No modified goals or COVID-19 adjustments under our incentive plans for fiscal 2021. We experienced significant tailwinds and headwinds related to COVID-19 during fiscal 2021, with increased sales as well as incremental expenses. We did not adjust our incentive goals or exclude any pandemic-related expenses when calculating our incentive results in fiscal 2021. We also did not make any special awards to our named executive officers during fiscal 2021 related to COVID-19. Our management team oversaw a successful fiscal 2021, with strong operating performance yielding above target payouts under our annual incentive plan and long-term performance equity program.

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Executive Compensation

How Our Executive Compensation Aligns with Our Enterprise Strategy

We have designed our executive compensation program—metrics, goals, structure, mix, etc.—to be aligned with our strategy while also being highly motivational for our leadership team. Here are some specifics:

Our performance metrics and goals are aligned with our ongoing strategic transformation

We believe that our continuing strategic investments in our people, our stores, lower prices, eCommerce, and technology are resulting in a better shopping experience for our customers. In addition, we believe our focus on improving career paths for our associates through robust training, competitive wages, new ways of working, and opportunities for advancement has improved turnover in the U.S. over the past few years. Delivering solid results in the near term allows us to fund the investments necessary to continue to transform our business, drive sustainable long-term growth, and deliver on our commitments to all of our stakeholders. For this reason, our incentive plans emphasize key indicators of retail success that can be impacted by our executives:

Sales – we use sales because it is a key indicator of retail performance encompassing both physical and digital channels.
Operating Income – also a key retail performance indicator, including operating income as a performance metric incentivizes discipline as Walmart continues to grow.
ROI – ROI measures how effectively we are deploying our assets. We include it as a performance equity metric to promote balance between long-term strategic initiatives and our near-term financial performance.

As described on page 53 below, we seek to set sales, operating income, and ROI goals that are aligned with our annual operating plan, which in turn is informed by our long-term strategic plan.

Our pay mix is aligned with our enterprise strategy

The ultimate success of our strategy will be measured in our ability to deliver solid returns to our shareholders and deliver on our commitments to all stakeholders over the long term. For those reasons, our NEO pay mix is heavily weighted toward equity with a three-year vesting period. Beginning in fiscal 2018, we began shifting an even larger percentage of total direct compensation (“TDC”) toward performance equity.
Our robust stock ownership guidelines for executive officers further promote alignment between our leadership and our independent shareholders.

Our Executive Compensation Program Emphasizes Performance

As shown in the charts below, a substantial majority of our NEOs’ fiscal 2021 target TDC was performance-based.*

* May not total 100% due to rounding.

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Executive Compensation

Our Executive Compensation Practices are Aligned with Shareholders’ Interests

Performance-Based Framework      
72%-75% of NEO TDC is performance-based and a majority is in the form of equity
No employment contracts with our NEOs
No change-in-control benefits
No executive pension or similar retirement plans in the U.S.
No excessive perquisites
Pay and Performance Alignment
Direct link between pay and performance as fiscal 2021 incentive payments are aligned with our performance
CMDC’s independent compensation consultant evaluates rigor of performance goals and has consistently found target goals to be challenging
CMDC annually reviews a realizable pay-for-performance analysis by its independent compensation consultant and has determined that CEO pay is appropriately aligned with performance
Significant percentage of TDC in the form of equity, which aligns the interests of our executives with those of our shareholders
Equity Ownership Best Practices
Maintain robust stock ownership guidelines
No hedging or short sales of Walmart stock permitted
No unapproved pledging of Walmart stock as collateral
No recycling of Shares used for taxes or option exercises
No dividends or equivalents paid on unvested performance-based restricted stock units
Shareholder Accountability
Conduct extensive shareholder outreach on executive compensation
Hold annual shareholder say-on-pay vote
Mitigate risk by using a variety of financial performance measures
Subject annual and long-term incentives to recoupment and forfeiture provisions

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Executive Compensation

NEO Compensation Components and Pay Mix  
  

What are the primary components of our fiscal 2021 NEO compensation?

Our executives’ total direct compensation, or TDC, is heavily weighted towards performance and appropriately balances executive focus on our short- and longer-term priorities with annual and long-term rewards.

There are three components of our executives’ fiscal 2021 TDC: base salary, annual cash incentive, and long-term equity.

Component       Description/Objective Performance Rewarded Form and Timing of Payout
 
Base Salary       Fixed base of cash compensation commensurate with job responsibilities and experience Subject to annual adjustment based on individual performance Paid in cash bi-weekly
 
 
Annual Cash
Incentive

Variable pay intended to incentivize performance against key operational metrics aligned with our strategy

Goals are set at the beginning of the fiscal year and aligned with operating plan and public guidance

Sales
Operating Income
Paid in cash after the end of the fiscal year
 
 
Long-Term
Equity

PERFORMANCE
EQUITY
Variable pay intended to incentivize performance against metrics aligned with our long-term strategic goals
ROI
Sales
Stock performance
Paid in Shares; one-year performance period followed by an additional two-year vesting period
RETENTION
STOCK
Intended to align executives’ long-term interests with our shareholders’ interests and promote retention Value realized depends on long-term stock price performance Paid in Shares after the end of a three-year vesting period

How our incentive metrics and goals support our strategy
Strong financial performance is what allows us to invest in our associates, technology, and innovation, which are key to our long-term strategy. Therefore, the CMDC seeks to drive strong performance with respect to traditional measures of success in the retail industry. Our incentive metrics of sales, operating income, and ROI are traditional measures of retail success and are commonly used by retailers in their incentive plans. Moreover, they are broadly correlated with share price in the retail industry and aligned with our historical stock performance. For more information, see “What financial performance metrics are used in our incentive programs, and why did the CMDC select these metrics?” on page 51 below.

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Executive Compensation

Executive Compensation Governance and Process  
  

At Walmart, we are committed to the highest standards of governance, including governance around our compensation programs. We design and administer our executive compensation to motivate, retain, and focus key executives to drive our strategy, generate strong operating results, and deliver solid returns. Our compensation programs are also intended to align the interests of our leadership team with our shareholders and to promote our pay-for-performance culture and philosophy.

Who sets executive compensation at Walmart?

The CMDC, which consists entirely of independent directors, is responsible for establishing and approving executive compensation for all Executive Officers, including the CEO and other NEOs, and for overseeing our executive compensation program (see page 24 for more information about the CMDC).

For our CEO. Our CEO has no role in determining his own compensation, which is set by the CMDC in consultation with our Chairman and with input from the CMDC’s independent compensation consultant and Walmart’s Global People Division.

For other Executive Officers, including our NEOs. Our CEO makes recommendations to the CMDC regarding the compensation of our NEOs and other Executive Officers. The CMDC reviews these recommendations and sets individual NEO TDC values as it deems appropriate.

Role of the CMDC’s independent compensation consultant
Since early 2010, the CMDC has engaged Pay Governance LLC (“Pay Governance”) as its independent executive compensation consultant. Under the terms of its engagement, Pay Governance reports directly and exclusively to the CMDC; the CMDC has sole authority to retain, terminate, and approve the fees of Pay Governance; and Pay Governance may not be engaged to provide any other services to Walmart without the approval of the CMDC. Other than its engagement by the CMDC, Pay Governance does not perform and has never performed any other services for Walmart. The CMDC’s independent consultant attends and participates in CMDC meetings at which executive compensation matters are considered, and performs various analyses for the CMDC, including:

peer group benchmarking;
realizable pay analyses;
analyses regarding the alignment of pay and performance;
analyses of the correlation between incentive plan performance measures and total shareholder return; and
assessments of the difficulty of attaining performance goals.

The CMDC annually reviews the independence of Pay Governance in light of SEC rules and NYSE Listed Company Rules regarding compensation consultant independence and has affirmatively concluded that Pay Governance is independent from Walmart and has no conflicts of interest relating to its engagement by the CMDC. The CMDC also periodically reviews the performance of Pay Governance.

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Executive Compensation

What is the compensation setting process?

This chart summarizes the process and analyses the CMDC considers when setting executive compensation and validating our pay targets. The CMDC’s independent compensation consultant, Pay Governance, performs various pay-for-performance analyses for the CMDC.

Data Source/Responsibility Purpose How it’s Used
 
         SEP–JAN
Review of Annual
and Long-term
Business Plans
Board
SPFC
CMDC
Management
Establish performance metrics aligned with annual operating plan and long-term objectives To review choice of incentive metrics and ensure they support our long-term strategic transformation and drive results tied to shareholder value
 
NOV
Pay for Performance
Alignment
Independent compensation consultant
Publicly available compensation information
Evaluate pay-for-performance alignment of CEO compensation with performance relative to peers

To assess the reasonableness of CEO pay, Pay Governance conducts:

Realizable pay analyses;
Analyses regarding the alignment of CEO pay and performance;
Analyses of the correlation between performance measures and shareholder return; and
Assessments of the difficulty of attaining performance goals
 
JAN
Peer Group
Benchmarking
Independent compensation consultant (for CEO)
Publicly available compensation information for peer group
Setting pay and establishing Target TDC opportunity

Benchmarking data is used as a general guide to setting appropriately competitive compensation consistent with our emphasis on performance-based compensation

To set our NEOs’ target TDC at competitive levels relative to our peer groups

 
Individual
Performance
Assessments
Board
CMDC
CEO (for other NEOs)
Global People Division
Evaluate individual performance for purposes of pay decisions To determine merit increases (if any) and adjust individual award opportunities for the next award cycle
 
Tally Sheets
Global People Division
Evaluating total compensation and internal pay equity

Tally sheets:

Summarize the total value of the compensation realizable by each NEO for the upcoming fiscal year;
Quantify the value of each element of that compensation, including perquisites and other benefits; and
Quantify the amounts that would be owed to each NEO upon separation from our company

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Data Source/Responsibility

     

Purpose

     

How it’s Used

                 

FEB–MAR Company Achievement of Prior Year Performance Goals and Setting of Current Year Incentive Goals

Independent compensation consultant (for goal difficulty)
CMDC
Management

Assess current year company performance against financial and operating metrics

To determine award payments for the recently completed fiscal year and set target levels for following year

To assess the ease or difficulty of attaining performance goals and whether adjustments need to be made to incentive metrics for the following award cycle

To establish incentive goals for current year that support our strategic transformation and are aligned with operating plan and financial guidance

   

 

 

   
ONGOING Shareholder Outreach
 
Board
Management
 
Obtain investor feedback on our executive compensation program
 
To understand investor expectations and monitor trends in executive compensation; used to evaluate compensation policies, practices, and plans
Shareholder feedback helps inform our executive compensation program design

What factors are considered in setting Total Direct Compensation for our NEOs?

In addition to the factors described above, the CMDC considers a variety of factors in setting Total Direct Compensation for our NEOs, including:

the overall financial and operating performance of our company and its operating segments and/or areas of responsibility;
each NEO’s job responsibilities, expertise, historical compensation, and years and level of experience; and
our overall succession planning and the importance of retaining each NEO and each NEO’s potential to assume greater responsibilities in the future.

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How is peer group data used by the CMDC?
The CMDC reviews publicly available compensation information from peer companies when establishing TDC for our executives. In constructing our peer group, we aim to reflect a cross-industry sample of the largest U.S.-based companies, including large retailers and companies with significant and complex international operations. These peer group companies were selected using the following multi-step screening process, which is reviewed annually:

Compensation Peer Group Screening Methodology

         

Geography Screen
U.S.-headquartered companies

 

Ownership Screen
Publicly traded

Excluded private companies

                               

Scope & Industry Screen
Revenue: >$75B, or
Market Cap: >$75B (with revenues >$50B), or
Retailer:
>$50B revenues

Founder Screen
Excluded companies whose current CEO is the founder

 

41 Peer Companies

Applying this methodology, our peer group consisted of the following 41 companies when setting fiscal 2021 compensation:

       
AmerisourceBergen Corporation Costco Wholesale Corporation Johnson & Johnson Target Corporation
Anthem, Inc. CVS Health Corporation JPMorgan Chase & Co. UnitedHealth Group
Apple Inc. DuPont de Nemours, Inc. The Kroger Co. Incorporated
AT&T Inc. Exxon Mobil Corporation Lockheed Martin Corporation United Technologies Corporation
Bank of America Corporation Ford Motor Company Lowe’s Companies, Inc. United Parcel Service, Inc.
The Boeing Company General Electric Company McKesson Corporation Valero Energy Corporation
Cardinal Health, Inc. General Motors Company Microsoft Corporation Verizon Communications Inc.
Caterpillar Inc. The Home Depot, Inc. PepsiCo, Inc. Walgreens Boots Alliance, Inc.
Chevron Corporation International Business Pfizer Inc. The Walt Disney Company
Citigroup Inc. Machines Corporation Phillips 66 Wells Fargo & Company
Comcast Corporation Intel Corporation The Procter & Gamble Company

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While we believe that this peer group provides a simplified and more straightforward comparison to a broad range of companies with complex, international operations, Walmart is still significantly larger than the peer group median by a variety of measures, as shown in the following chart:

Walmart Positioning Relative to Compensation Peer Group (as of fiscal year end 2020)

The CMDC uses benchmarking data as a general guide to appropriately set competitive compensation consistent with our emphasis on performance-based compensation.

While the benchmarking data generally are used for comparable positions, the CMDC also reviews peer group data for retail CEO positions for purposes of benchmarking the compensation of our executives who lead our operating segments. These executives have significant responsibilities and lead organizations that, considered separately from the rest of our company, are larger than many of the other retailers in the peer group, and we believe that these positions are often comparable to or carry greater responsibilities than CEO positions at many of our peer group companies. In addition, from a competitive standpoint, we believe that it is more likely that these leaders would be recruited for a CEO position in the retail industry or elsewhere, rather than for a lateral move to lead an operating segment of a company.

What other information does the CMDC consider when setting executive pay?

Individual performance assessments
The CMDC considers the individual performance of each NEO, including each NEO’s contributions to our key strategic priorities and operational goals, diversity and inclusion, and sustainability and shared value, as described under “Fiscal 2021 NEO Pay and Performance Summaries” beginning on page 59.

CEO pay and performance alignment
The CMDC reviews an assessment by Pay Governance regarding the alignment of our CEO’s pay with our company’s performance, including the appropriateness of our CEO’s pay opportunity compared to peers and the alignment of our CEO’s realizable pay and our performance relative to our peer group companies. This assessment concluded that our CEO’s most recent fiscal year (fiscal 2021) and three-year (fiscal 2019-2021) pay opportunity and realizable pay are aligned with Walmart’s performance over the same time periods.

Tally sheets
The CMDC also reviews “tally sheets” prepared by our company’s Global People Division. These tally sheets summarize the total value of the compensation realizable by each NEO for the upcoming fiscal year and quantify the value of each element of that compensation, including perquisites and other benefits. The tally sheets also quantify the amounts that would be owed to each NEO upon separation from our company.

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How does shareholder feedback impact executive compensation?

Our Board actively seeks and values feedback from shareholders. Over the past several years, in addition to our day-to-day interactions with investors, we have expanded our shareholder engagement to include an annual outreach program focused on strategy, governance, executive compensation, sustainability, diversity, equity and inclusion, and other topics suggested by our shareholders. Since our 2020 Annual Shareholders’ Meeting, we invited more than 50 institutional shareholders representing approximately 520 million Shares, including many of our largest investors, to participate in our outreach program. We ultimately engaged with shareholders representing approximately 470 million Shares, or about 33% of our public float. We also had conversations with the leading proxy advisory firms.

These engagements gave us an opportunity to discuss our strategy, our commitment to corporate governance and executive compensation best practices, how our governance and compensation practices help to support our strategy, and our commitment to sustainability, economic opportunity, diversity and inclusion, and shared value. We also discussed our efforts to keep associates and customers safe during COVID-19, and the steps we have taken for our associates on pay and benefits during this crisis. While our shareholders expressed a wide range of perspectives in these meetings, we received generally positive feedback on our strategy, our Board and committee structure, our executive compensation program, and our approach to sustainability and human capital management. The feedback we have received from our shareholders, including the results of our say-on-pay proposal, is regularly communicated to the CMDC, the NGC, and the Board. We believe that the results of our say-on-pay proposals over the past several years, shown in the chart to the right, also indicate that shareholders generally are supportive of our executive compensation program, and therefore the CMDC made no material changes to our executive compensation program as a result of this vote.



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Fiscal 2021 Performance Metrics  
  

What performance metrics are used in our incentive programs, and why did the CMDC select these metrics?

Our NEOs’ performance-based pay for fiscal 2021 was based on achieving objective, pre-established financial goals for the following metrics:

Fiscal 2021 Performance Metrics*
Annual Cash Incentive   Long-Term Performance Equity
     

* For purposes of our incentive programs, total company and International sales, operating income, and ROI are calculated on a constant currency basis and exclude certain items, such as revenue from fuel sales and Sam’s Club tobacco sales. See page 58 for more information.

The CMDC concluded that the metrics described above are aligned with our larger enterprise strategy and appropriate and effective in driving results tied to shareholder value. In reaching this conclusion, the CMDC considered the following factors:

These performance metrics are aligned with our enterprise strategy and can be impacted by our executives. Unlike metrics tied to stock price or shareholder return, our executives can have a direct impact on our sales, operating income, and ROI. Furthermore, unlike earnings per share and other share-based metrics, sales, operating income, and ROI are not materially impacted by our share repurchases.

These metrics are important for judging retail performance. Sales, operating income, and ROI measures historically have been, and continue to be, important indicators of retail performance, and we believe that our performance in these areas is important to our shareholders.

The CMDC believes that success with respect to these metrics will support shareholder value over the long-term. We believe that strong performance with respect to these key retail metrics should translate into shareholder value creation over time.

The CMDC believes that relative TSR and other relative performance metrics are not the best way to incentivize our executives. There are several key differences in our business compared to other publicly-traded retailers in the U.S., including our size, our significant international operations, our product mix, our variety of formats, and our growing eCommerce and omni-channel offerings. While the CMDC closely monitors Walmart’s performance relative to that of our peers when making compensation decisions, the CMDC believes that the best approach for Walmart is to tie our executive compensation to performance metrics that are aligned with our strategy and operating plans and that provide clear line-of-sight to our leaders. Additionally, because a significant portion of TDC is in the form of equity awards and our executives are subject to robust stock ownership guidelines, the CMDC believes that our executives’ interests are appropriately aligned with the interests of our shareholders.

The combination of these performance metrics mitigates risk. Using a combination of performance metrics mitigates the risk that our executives could be motivated to pursue results with respect to one metric to the detriment of our company as a whole. For example, if management were to prioritize increasing sales by pursuing strategies that would negatively impact profitability, resulting increases in incentive pay based on sales should be offset by decreases in incentive pay based on operating income and ROI.


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Does non-financial performance impact NEO pay?

Yes, while non-financial metrics are not directly included in our incentive plans, non-financial performance can impact NEO pay in two key ways. First, our NEO annual performance evaluations include non-financial metrics such as sustainability and culture, diversity, equity and inclusion. As described on page 49, the CMDC considers performance evaluations, along with other factors, when making pay decisions. Second, any associate who engages in behavior inconsistent with our discrimination and harassment policies may have their annual cash incentive payment reduced by up to 30%.

For more information about Walmart’s commitment to diversity, equity and inclusion and key diversity, equity and inclusion initiatives, please see Walmart’s most recent Culture, Diversity, Equity and Inclusion Report, which can be found on our corporate website under the section titled “ESG Investors.”

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Incentive Goal Setting Philosophy and Process  
 

How does the CMDC set performance goals?

Performance goals are established in the context of, and consistent with, the company’s enterprise strategy, financial operating plans, and financial guidance each fiscal year. This process begins with the Board’s review of the company’s overall enterprise strategy and long-term financial plan beginning in the spring and culminating at an annual Board strategic planning meeting. Following the strategic planning meeting, the annual operating plans of the company and each of its operating segments are established with SPFC and Board input. The CMDC then establishes performance goals under our annual and long-term incentive programs that are consistent with these operating plans:

Incentive Plans Informed by Strategic and Financial Planning Process

 

Long-Range Planning
April - September

Assess competitive landscape and macro trends
Refine enterprise strategy and segment-specific initiatives

Annual Operating Plan
September - January

Develop annual operating plan in light of long-range planning and strategic initiatives
Review strategy and planned capital expenditures

Incentive Plans
September - March

Review choice of incentive metrics to ensure that they support enterprise strategy
Establish performance goals aligned with annual operating plan and guidance

Following this process, in March of 2020, the CMDC established sales, operating income, and ROI goals for fiscal 2021 under our incentive plans. Like many companies, Walmart withdrew its financial guidance early in fiscal 2021 as a result of the COVID-19 pandemic. Nevertheless, the fiscal 2021 incentive plan sales, operating income, and ROI goals established by the CMDC were consistent with Walmart’s initial financial guidance.

The CMDC establishes incentive goals with the intent that performance in line with our operating plans and expectations should result in payouts approximately at target. In order to achieve maximum payouts, our performance should exceed our operating plans and expectations to a significant degree. Threshold performance goals are set at a level that is attainable and below which a payout would not be justified. The CMDC’s independent compensation consultant annually evaluates the difficulty of our target performance goals and has consistently found that these goals are challenging. Additionally, over the past 10 years, under both our annual and long-term incentive plans, our total company performance has exceeded target in six years and fallen short of target in four years. We believe this is further evidence of the effectiveness of this process in establishing performance goals that are appropriately challenging.

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Why does the CMDC set goals each year under our long-term equity incentive program?

The CMDC has found that setting long-term equity performance goals each year, with awards having a three-year vesting period, is the most effective approach for our long-term equity incentive program for the following reasons:

As the largest global retailer, Walmart’s operating results are significantly impacted by macroeconomic and regional economic factors that may change drastically and that are outside of management’s control. These economic factors, the rapidly evolving retail industry, and our own ongoing strategic transformation make it difficult to forecast accurately over a three-year period. Unlike some companies, we did not revise our incentive goals mid-year or make any adjustments related to COVID-19 for fiscal 2021.

We believe that performance goals cease to be an effective tool in motivating performance if the goals either become unrealistic or too easy to achieve due to macroeconomic factors beyond the control of our executives or due to changes in our strategy and related investments. While some companies attempt to address the impact of macroeconomic factors by using relative goals in their long-term incentive plans, the CMDC has determined that relative goals are not the right approach for Walmart for the reasons described on page 51.

The CMDC regularly reviews Walmart’s performance relative to peers and the relative alignment of pay and performance to ensure that our incentive programs are operating as intended.

Another advantage of this approach is that it is more easily understandable and results in performance goals that are better aligned with our strategic transformation; the CMDC believes this approach is more effective in motivating performance. Our incentive goals are aligned with our enterprise strategy, business plan, and expectations regarding financial performance. These expectations necessarily change from year-to-year based on macroeconomic conditions, strategic investments, and other factors.

For example, if we were to set three-year sales goals, this would result in a situation in which our leaders have three differing sales goals at any one time – one for each outstanding tranche of performance equity. We believe this approach would potentially be confusing and could undermine the effectiveness of our performance equity program as a tool for incentivizing performance.

We also chose this structure to balance focus on our long-term transformation with short-term performance. The CMDC believes that combining annual performance goals with a three-year vesting period effectively balances long-term focus with clear, understandable, and aligned performance goals. We believe this approach has contributed to our performance and to solid shareholder returns.

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Fiscal 2021 Performance Goals and Performance  
 

What were the fiscal 2021 financial goals under our annual and long-term incentive plans?

Our NEOs’ performance-based pay for fiscal 2021 was based on achieving objective, pre-established financial goals for the following weighted metrics:

                     
Annual Cash Incentive Long-Term Performance Equity

*

For purposes of our incentive programs, total company and International sales, operating income, and ROI are calculated on a constant currency basis and exclude certain items, such as revenue from fuel sales. See page 58 for more information.

How did we perform in comparison to those goals?

Fiscal 2021 annual cash incentive goals and results

          

Constant Currency Operating Income (excluding certain items*)

*

In order to make results comparable from year-to-year, we exclude the impact of currency exchange rate fluctuations and the effects of certain other items from our reported results of operations for incentive plan purposes. See page 58 for more information.


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Constant Currency Sales (excluding certain items*)
(in millions)

*

In order to make results comparable from year-to-year, we exclude fuel sales, the impact of currency exchange rate fluctuations, Sam’s Club tobacco sales, and the effects of certain other items from our reported results of operations for incentive plan purposes. See page 58 for more information.

Fiscal 2021 long-term performance equity goals and results

          

Constant Currency Sales (excluding certain items*)

*

In order to make results comparable from year-to-year, we exclude fuel sales, the impact of currency exchange rate fluctuations, Sam’s Club tobacco sales, and the effects of certain other items from our reported results of operations for incentive plan purposes. See page 58 for more information.


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Constant Currency ROI (excluding certain items)*

 

*

In order to make results comparable from year to year, we exclude certain items from our reported results of operations for incentive plan purposes. See page 58 for more information.

How were these results used to determine fiscal 2021 award payouts?

Fiscal 2021 performance compared to each of the annual cash incentive goals shown above was then weighted according to each NEO’s performance measure weightings to determine payout percentages, as shown below:

Fiscal 2021 annual cash incentive payouts

Total Company Walmart U.S. Sam’s Club International
Component        Weighting        Payout        Weighting        Payout        Weighting        Payout        Weighting        Payout
Total Company – OI 75.00% 125.00% 25.00% 125.00% 25.00% 125.00% 25.00% 125.00%
Total Company – Sales 25.00% 125.00%
Divisional – OI 50.00% 125.00% 50.00% 125.00% 50.00% 125.00%
Divisional – Sales 25.00% 125.00% 25.00% 125.00% 25.00% 125.00%
Payout (% of target) 125.00% 125.00% 125.00% 125.00%

See “Fiscal 2021 NEO Pay and Performance Summaries” for more details about each NEO’s fiscal 2021 annual cash incentive payout.

Fiscal 2021 performance equity payouts
Our NEOs received performance-based RSUs with a one-year performance period followed by a two-year vesting period (see illustrations below).

Fiscal 2018 Grant

Segment FY19
Performance
Time-based vesting through
FY20 and FY21
Fiscal 2021
Payout
Walmart U.S. 150.00% Vested on Jan. 31, 2021
based on continued employment
150.00%
Sam’s Club 150.00% 150.00%
International 129.75% 129.75%
Total Company 150.00% 150.00%
                                                                                                                                                                                                                                                
Fiscal 2019 Grant
Segment FY20
Performance
Time-based vesting through
FY21 and FY22
 
Walmart U.S. 113.12% Scheduled to vest on
Jan. 31, 2022 based on

continued employment
 
Sam’s Club 141.11%  
International 108.43%  
Total Company 113.34%  
 
Fiscal 2020 Grant
Segment FY21
Performance
Time-based vesting through
FY22 and FY23
Walmart U.S. 150.00% Scheduled to vest on
Jan. 31, 2023 based on

continued employment
Sam’s Club 150.00%
International 150.00%
Total Company 150.00%

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Why do the results used in our incentive plans differ from our reported results of operations for fiscal 2021?

The CMDC’s objective in administering our incentive plans is to ensure that incentive awards are calculated on a comparable basis from year-to-year, and to ensure that plan participants are incentivized and rewarded appropriately for performance within their control. The CMDC undertakes a rigorous oversight and certification process to determine the items to exclude from our reported results of operations for purposes of our incentive plans. This process is not outcome-driven and includes both positive and negative adjustments to reported results of operations. Even absent any adjustments (other than the exclusion of fuel and Sam’s Club tobacco sales, which were excluded at the time goals were established), our fiscal 2021 constant currency operating income and sales performance exceeded maximum goals under our incentive plans. As noted above, we did not make any adjustments related to the COVID-19 pandemic when calculating fiscal 2021 performance under our incentive plans.

For these reasons, the following types of items are excluded from our incentive goals and/or our incentive calculations:

Items excluded by the terms of the incentive plans. Like many other companies, our shareholder-approved incentive plans specify that incentive payouts be calculated by excluding the impact of recent divestitures, restructurings, and items that similarly impact our operating results. For fiscal 2021, these items represented the majority of the difference between our reported operating income and our operating income as calculated for incentive plan purposes. The largest single operating income exclusion was the exclusion of certain losses and expenses related to a business restructuring charge resulting from changes to Walmart U.S. support teams to better support its omni-channel strategy.

Items excluded at the time incentive goals are established. When the CMDC sets incentive goals, it typically excludes the impact of certain items from the performance goals. For example, because as a matter of policy we generally do not hedge for currency exchange rate fluctuations, the CMDC sets incentive goals on a constant currency basis excluding the impact of currency exchange rate fluctuations. Similarly, sales goals exclude the impact of fuel sales because fuel prices are volatile and subject to significant fluctuation, which is out of our management’s control. Sales goals also exclude Sam’s Club tobacco sales. For fiscal 2021, items excluded at the time incentive goals were established represented the only difference between our reported sales and our sales as calculated for incentive plan purposes.

Items excluded so that operating results are calculated on a comparative basis from year-to-year. Consistent with the terms of our incentive plans, the CMDC may exclude certain other items so that results can be calculated on a comparative basis from year-to-year. During fiscal 2021, these included, among others, the impact of store closures due to civil unrest and hurricanes.

Impact of excluded items on fiscal 2021 performance for incentive plan purposes
As described above and shown below, by a significant margin, the largest items excluded from our fiscal 2021 reported results of operations consisted of (i) items automatically excluded by the terms of our plans, such as the impact of acquisitions, divestitures, restructurings, and severance; and (ii) items pre-determined to be excluded at the time incentive goals were set, such as the impact of currency exchange rate fluctuations on operating income and sales, and the impact of fuel sales and Sam’s Club tobacco sales on sales.

$ in millions

Operating Income Sales
Metric      Total
Company*
($)
     Walmart
U.S.
($)
     Sam’s
Club
($)
     International
($)
     Total
Company*
($)
     Walmart
U.S.
($)
     Sam’s
Club
($)
     International
($)
As Reported 22,548 19,116 1,906 3,660 555,233 369,963 63,910 121,360
Plan and pre-determined items 1,051 532 15 319 (6,959 ) (1,946 ) (7,225 ) 2,213
Comparative items 294 235 13 46 170 167 1 0
Performance for Incentive Plan Purposes 23,893 19,883 1,934 4,025 548,444 368,184 56,686 123,573
*

Divisional numbers may not sum up to Total Company numbers due to rounding and corporate-level expenses.

2021 ROI Adjustments for Long-Term Performance Equity Purposes. When calculating ROI for long-term performance equity purposes, we used the adjusted operating income shown in the table above in the row titled “Performance for Incentive Plan Purposes.” As a result of applying these adjustments, our ROI was 14.27% for purposes of our long-term performance share plan, compared to a reported ROI of 14.0%.

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Fiscal 2021 NEO Pay and Performance Summaries  
  

How did our fiscal 2021 performance impact our NEOs’ compensation?

Doug McMillon  President and CEO

Fiscal 2021 Highlights
In addition to the solid financial performance, during fiscal 2021 Mr. McMillon continued to accelerate Walmart’s transformation strategy to become the primary destination for customers by integrating our retail stores and eCommerce into a seamless customer experience.

We continued to serve our customers, deliver excellent financial performance, and accelerate our key strategic priorities during an unprecedented year.
We accelerated innovation to enhance a seamless, digital customer experience and deepen our customer relationships by building out our ecosystem.
We continued to invest in and create opportunities for our associates, raising wages for 165,000 and announcing wage increases for an additional 425,000 in early fiscal 2022.

Key Compensation Decisions for Fiscal 2021
The CMDC relies on the factors described on page 47 in establishing the target TDC of Mr. McMillon and our other NEOs. After considering those factors, the CMDC made no changes to Mr. McMillon’s target TDC for fiscal 2021. When compared to similar positions within our peer group companies, Mr. McMillon’s fiscal 2021 target TDC was at approximately the 75th percentile.

Substantial Stock Ownership
Mr. McMillon is significantly invested in Walmart common stock, owning Shares valued at more than 100 times his annual base salary, well in excess of our stock ownership guidelines requirement of 7 times his annual base salary. We believe that Mr. McMillon’s significant interest in Walmart stock serves to align his interests with those of our shareholders.


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Brett Biggs  EVP and CFO

Fiscal 2021 Highlights

Mr. Biggs’ integrated financial framework, business perspective, and guidance has continued to help Walmart build trust with customers, investors, and other stakeholders.
We maintained discipline while actively managing our portfolio and accelerating key strategic investments in people, supply chain, and technology.
We generated $36.1 billion in operating cash flow.
We returned $8.7 billion to shareholders in the form of dividends and share repurchases.

Key Compensation Decisions for Fiscal 2021
The CMDC relies on the factors described on page 47 in establishing the target TDC of our NEOs. For fiscal 2021, the CMDC increased Mr. Biggs’ salary by 2.5%, which resulted in Mr. Biggs’ target TDC increasing by less than 1%. The CMDC approved this increase in light of Mr. Biggs’ competitive positioning and his integrated financial framework, business perspective, and guidance which has helped Walmart build trust with customers, shareholders and other stakeholders. When compared to comparable positions within our peer group companies, Mr. Biggs’ fiscal 2021 target TDC was between the 50th and the 75th percentiles.


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Suresh Kumar  Global Chief Technology Officer and Chief Development Officer
Fiscal 2021 Highlights
Continued to develop our long-range plan for a modernized technology stack, investing to upgrade both legacy enterprise systems and customer- and associate-facing technology.
Developed Walmart’s enterprise-wide data and analytics strategy, including migrating to a hybrid cloud platform.
Developed our technology talent plan and added talent in key technology roles.
Expanded ship-from-store by leveraging our ability to ship directly from approximately 3,000 stores.

Additionally, as is our customary practice for recently hired officers, Mr. Kumar received an additional performance equity grant for fiscal 2021. This additional grant was based on the same fiscal 2021 performance goals as his annual award described above, and paid out in March 2021. Mr. Kumar received a payout of 112,617 Shares upon the vesting of this award.

Key Compensation Decisions for Fiscal 2021
The CMDC relies on the factors described on page 47 in establishing the target TDC of our NEOs. For fiscal 2021, the CMDC increased Mr. Kumar’s salary by 2.5%, which resulted in Mr. Kumar’s target TDC increasing by less than 1%. Mr. Kumar also received two special performance-based restricted stock unit awards each valued at $2 million, based on achievement of qualitative goals related to technology modernization, building a best-in-class technology organization, enterprise technology risk management, and developing an enterprise-wide data and analytics strategy. These awards were contemplated in Mr. Kumar’s initial offer of employment, and the CMDC believes these special awards were appropriate based on Mr. Kumar’s role, experience, and peer comparisons, and necessary to recruit a Global Chief Technology Officer of Mr. Kumar’s caliber. Based on its consideration of the achievements outlined above under “Fiscal 2021 Highlights,” the CMDC determined that the qualitative goals applicable to the second installment of Mr. Kumar’s special performance-based restricted stock unit award were satisfied.


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John Furner  EVP, President and CEO, Walmart U.S.
Fiscal 2021 Highlights
Walmart U.S. increased comparable sales by 8.7%, with net sales of $370 billion.
Walmart U.S. eCommerce sales grew 79%, with continued improvement on contribution profit.
Guided the business successfully through an unpredictable environment.
Continued to invest to provide customers with more access to high-quality, preventative, and affordable healthcare.

Key Compensation Decisions for Fiscal 2021
The CMDC relies on the factors described on page 47 in establishing the target TDC of our NEOs. For fiscal 2021, the CMDC increased Mr. Furner’s salary by 2.5% in light of his peer group positioning and his continuing strong performance. This base salary increase resulted in an increase in Mr. Furner’s target TDC of less than 1%. The CMDC believes that Mr. Furner, as the head of our largest operating segment, has responsibilities comparable to many CEO positions within our peer group companies, and it is likely that he would be recruited for a CEO position in the retail industry or elsewhere. When compared to both COO and CEO positions within our peer group, Mr. Furner’s target TDC is below the median.


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Judith McKenna  EVP, President and CEO, Walmart International
Fiscal 2021 Highlights
Drove strong performance, with Walmart International net sales increasing 1.0%, or 5.2% on a constant currency basis.
Continued strength in key markets including Mexico, Canada, and India.
Accelerated growth in eCommerce sales.
Operated with discipline and leveraged expenses as we continued to reshape our portfolio.

Key Compensation Decisions for Fiscal 2021
The CMDC relies on the factors described on page 47 in establishing the target TDC of our NEOs. For fiscal 2021, the CMDC increased Ms. McKenna’s salary by 2.5%, in light of her peer group positioning and her continued strong performance. This base salary increase resulted in an increase in Ms. McKenna’s target TDC of less than 1%. The CMDC believes that Ms. McKenna, as the head of our International operations, has responsibilities comparable to many CEO positions within our peer group companies, and it is likely that she would be recruited for a CEO position in the retail industry or elsewhere. When compared to COO positions within our peer group, Ms. McKenna’s target TDC is slightly above the median; however, when compared to CEO positions within our peer group companies, Ms. McKenna’s target TDC is below the median.


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Kathryn McLay  EVP, President and CEO, Sam’s Club U.S.
Fiscal 2021 Highlights
Sam’s Club performed well, with 8.7% growth in comparable sales.
Continued to accelerate eCommerce growth, with Sam’s Club eCommerce increasing 40%.
Sam’s Club continued to serve its members in innovative ways through direct-to-home shopping, curbside pickup, and Scan & Go.
Drove significant membership growth, with membership income increasing 9.4%.

Additionally, as is our customary practice for recently hired officers, Ms. McLay received an additional performance equity grant for fiscal 2021. This additional grant was based on the same fiscal 2021 performance goals as her annual award described above, and paid out in March 2021. Ms. McLay received a payout of 54,890 Shares upon the vesting of this award.

Key Compensation Decisions for Fiscal 2021
Fiscal 2021 was Ms. McLay’s first full year in her role as she was promoted to her current position in November 2019. The CMDC relies on the factors described on page 47 in establishing the target TDC of our NEOs. After reviewing these factors, the CMDC made no changes to Ms. McLay’s target TDC for fiscal 2021. The CMDC believes that Ms. McLay, in her new role, has responsibilities comparable to many CEO positions within our peer group, and it is likely that she would be recruited for a CEO position within the retail industry or elsewhere. When compared to COO and CEO positions within our peer group, Ms. McLay’s target TDC is below the median.


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Other Compensation Programs and Policies  
  

What perquisites and other benefits do our NEOs receive?

Our NEOs receive a limited number of perquisites and supplemental benefits. We cover the cost of annual physical examinations for our NEOs and provide each NEO with personal use of our aircraft for a limited number of hours each year. Our NEOs also receive company-paid life and accidental death and dismemberment insurance. Additionally, our NEOs are entitled to benefits available to our officers, such as participation in the Deferred Compensation Matching Plan, and benefits available to associates generally, including a Walmart discount card, a limited 15% match on purchases of Shares through our Associate Stock Purchase Plan, participation in our 401(k) Plan, medical benefits, and foreign business travel insurance. We provide these perquisites and supplemental benefits to attract talented executives to our company and to retain our current executives, and we believe their limited cost is outweighed by the benefits to our company.

What types of retirement and other benefits are our NEOs eligible to receive?

Our NEOs are eligible for the same retirement benefits as our officers generally, such as participation in our Deferred Compensation Matching Plan. They may also take advantage of other benefits available more broadly to our associates, such as our 401(k) Plan. With the exception of Ms. McKenna, who has interests in pension plans related to her prior employment with our former U.K. subsidiary, our NEOs do not participate in any pension or other defined benefit retirement plan. Ms. McKenna is not eligible to make any further contributions to this U.K. pension plan.

What are our practices for granting equity awards?

Timing of Equity Awards. The CMDC meets each January to approve and grant annual equity awards to our Executive Officers, including our NEOs, for the upcoming fiscal year. Because of the timing of these meetings, these equity grants are reported in the executive compensation tables appearing in this proxy statement as granted during the most recently completed fiscal year. The CMDC meets again in February or March to establish the performance goals applicable to the performance equity and any other performance-based equity granted at the January meeting.

Any special equity grants to Executive Officers during the year are approved by the CMDC at a meeting or by unanimous written consent.

Option Exercise Prices. We have not granted stock options to our Executive Officers since 2007, and stock options are not currently a part of our executive compensation program. If and when we grant stock options in the future, the exercise price will be equal to the fair market value of our common stock on the date of grant.

Does the CMDC take tax consequences into account when setting executive compensation?

Section 162(m) of the Internal Revenue Code generally places a $1 million limit on the amount of compensation a company can deduct in any one year for certain executive officers. While the CMDC considers the deductibility of awards as one factor in determining executive compensation, the CMDC also looks at other factors in making its decisions and retains the flexibility to award compensation that it determines to be consistent with the goals of our executive compensation program even if the awards are not deductible by Walmart for tax purposes.

Historically, our annual cash incentive opportunities and performance-based equity awards granted to our Executive officers were designed in a manner intended to be exempt from the deduction limitation of Section 162(m) because they were paid based on the achievement of pre-determined performance goals established by the CMDC pursuant to our shareholder-approved incentive plans. Additionally, the CMDC had adopted a policy requiring our “covered employees” subject to Section 162(m) to defer annual restricted stock grants until after they separate from employment from Walmart, subject to certain exceptions.

Federal legislation signed into law on December 22, 2017, referred to as the Tax Cuts and Jobs Act (the “Tax Act”), repealed the exemption from Section 162(m)’s deduction limit for performance-based compensation, effective for taxable years beginning after December 31, 2017. In addition, the Tax Act expanded the group of covered employees under Section 162(m) to include the chief financial officer and mandated that once an individual is treated as a covered employee for a given year, that individual will be treated as a covered employee for all subsequent years. Accordingly, any compensation paid to our covered Executive Officers in excess of $1 million in any one year, regardless of employment status, will not be deductible unless it qualifies for transition relief applicable to certain arrangements in place as of November 2, 2017.

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Despite the CMDC’s efforts to structure incentive compensation in a manner intended to be exempt from Section 162(m) and therefore not subject to its deduction limits, because of ambiguities and uncertainties as to the application and interpretation of Section 162(m) as revised by the Tax Act, including the uncertain scope of the transition relief applicable to certain outstanding arrangements, no assurance can be given that compensation intended to satisfy the requirements for exemption from Section 162(m) will in fact be exempt. Further, the CMDC reserves the right to modify compensation that was initially intended to be exempt from Section 162(m) if it determines that such modifications are consistent with the objectives of our executive compensation program.

Do we have employment agreements with our NEOs?

We do not have employment agreements with any of our NEOs. Our NEOs are employed on an at-will basis.

Do we have severance agreements with our NEOs?

We have entered into a non-competition agreement with each NEO. As described in more detail under “Potential Payments Upon Termination or Change in Control” on page 77, these agreements provide that, if we terminate the NEO’s employment for any reason other than his or her violation of company policy, we will generally make limited severance payments to the NEO.

Under these agreements, each NEO has agreed that for a period of time following his or her termination of employment, he or she will not participate in a business that competes with us and will not solicit our associates for employment. For purposes of these agreements, a competing business generally means any retail, eCommerce, wholesale, or merchandising business that sells products of the type sold by Walmart with annual revenues in excess of certain thresholds.

These agreements reduce the risk that any of our former NEOs would use the skills and knowledge they gained while with us for the benefit of one of our competitors during a reasonable period of time after leaving our company. We do not have any contracts or other arrangements with our NEOs that provide for payments or other benefits upon a change in control of our company.

Does our compensation program contain any provisions addressing the recovery or non-payment of compensation in the event of misconduct?

Yes. Our MIP and our Stock Incentive Plan both provide that we will recoup awards to the extent required by Walmart policies. Furthermore, our MIP provides that, in order to be eligible to receive an incentive payment, the participant must have complied with our policies, including our Code of Conduct, at all times. It further provides that if the CMDC determines, within 12 months following the payment of an incentive award, that prior to the payment of the award, a participant has violated any of our policies or otherwise committed acts detrimental to the best interests of our company, the participant must repay the incentive award upon demand. Similarly, our Stock Incentive Plan provides that if the CMDC determines that an associate has committed any act detrimental to the best interests of our company, he or she will forfeit all unexercised options and unvested equity awards. In addition, both the MIP and the Stock Incentive Plan provide that all awards under these plans, whether or not previously paid or deferred, will be subject to the company’s policies and applicable law regarding clawbacks in effect from time to time.

Furthermore, we will publicly disclose the circumstances of any recoupment from any executive officer to the extent the underlying event has already been publicly disclosed, and the disclosure would not violate applicable law, violate legal privilege, breach contractual obligations or be likely to result in or exacerbate litigation, investigation, or proceedings against Walmart.

Are our NEOs subject to any minimum requirements regarding ownership of our stock?

Yes. Our senior officers have been subject to stock ownership guidelines since 2003. In June 2013, our Board enhanced the stock ownership guidelines applicable to our CEO and senior officers, as follows:

Our CEO must maintain beneficial ownership of unrestricted Shares having a market value equal to seven times his current annual base salary; and
Our other NEOs and certain other senior officers must maintain beneficial ownership of unrestricted Shares having a market value equal to five times his or her current annual base salary.

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The CEO and other senior officers must satisfy these stock ownership guidelines no later than the fifth anniversary of his or her appointment to a position covered by the stock ownership guidelines. If any covered officer is not in compliance with these stock ownership guidelines, he or she may not sell or otherwise dispose of more than 50 percent of any Shares that vest pursuant to any equity award until such time as he or she is in compliance with the guidelines and such sale would not cause the covered officer to cease to be in compliance with the guidelines. Further, as noted below, any pledged Shares would not be counted when determining whether the officer is in compliance with the guidelines. Currently, each of our NEOs is in compliance with our stock ownership guidelines.

Are there any restrictions on an NEO’s ability to engage in transactions involving Walmart stock?

Yes. Our Insider Trading Policy contains the following restrictions:

Our directors and Executive Officers may trade in our stock only during open window periods, and then only after they have pre-cleared such transactions with our Office of the Corporate Secretary.
Our directors and Executive Officers may not enter into trading plans pursuant to SEC Rule 10b5-1 without having such plans pre-approved by our Corporate Secretary.
Our directors, Executive Officers, and associates may not, at any time, engage in hedging transactions (such as swaps, puts and calls, collars, and similar financial instruments) that would eliminate or limit the risks and rewards of Walmart stock ownership.
Our directors and Executive Officers may not at any time engage in any short selling, buy or sell options, puts or calls, whether exchange-traded or otherwise, or engage in any other transaction in derivative securities that reflects speculation about the price of our stock or that may place their financial interests against the financial interests of our company.
Our directors and Executive Officers are prohibited from using Walmart stock as collateral for any margin loan.
Before using Walmart stock as collateral for any other borrowing, our directors and Executive Officers must satisfy the following requirements:
The pledging arrangement must be pre-approved by Walmart’s Corporate Secretary; and
Any Walmart Shares pledged will not be counted when determining whether the director or Executive Officer is in compliance with our stock ownership guidelines.

Currently, none of our directors or Executive Officers has any pledging arrangements in place involving Walmart stock.

Compensation Committee Report

The CMDC has reviewed and discussed with our company’s management the CD&A included in this proxy statement and, based on that review and discussion, the CMDC recommended to the Board that the CD&A be included in this proxy statement.

The CMDC submits this report:
Steven S Reinemund, Chair

Carla A. Harris
Marissa A. Mayer

Risk Considerations in our Compensation Program

The CMDC, pursuant to its charter, is responsible for reviewing and overseeing the compensation and benefits structure applicable to our associates generally, including any risks that may arise from our compensation program. We do not believe that our compensation policies and practices for our associates give rise to risks that are reasonably likely to have a material adverse effect on our company. In reaching this conclusion, we considered the following factors:

Our compensation program is designed to provide a mix of both fixed and variable incentive compensation.
Our performance-based compensation is balanced between an annual incentive and a long-term incentive program. We believe this design mitigates any incentive for short-term risk-taking that could be detrimental to our company’s long-term best interests.

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Our incentive compensation programs reward performance based on a mix of operating income-based metrics, sales-based metrics, and return on investment. We believe that this mix of performance metrics mitigates any incentive to seek to maximize performance under one metric to the detriment of performance under other metrics. For example, our long-term performance share plan is based equally on sales and ROI performance. We believe that this structure mitigates any incentive to pursue strategies that would increase our sales at the detriment of ROI performance. The CMDC regularly reviews the mix and weightings of the performance metrics used in our incentive compensation programs and has concluded that they are aligned with our strategy and provide appropriate incentives to encourage sustainable shareholder value creation.
Maximum payouts under both our annual cash incentive plan and our performance equity program are capped at 125% and 150% of target payouts, respectively. We believe that these limits mitigate excessive risk-taking, since the maximum amount that can be earned in a single cycle is limited.
A significant percentage of our management’s incentive compensation is based on the performance of our total company. This is designed to mitigate any incentive to pursue strategies that might maximize the performance of a single operating segment or area of responsibility to the detriment of our company as a whole.
Our senior executives are subject to robust stock ownership guidelines, which we believe motivate our executives to consider the long-term interests of our company and our shareholders and discourage excessive risk-taking that could negatively impact our stock price.
Our performance-based incentive compensation programs are designed with payout curves that are relatively smooth and do not contain steep payout “cliffs” that might encourage short-term business decisions in order to meet a payout threshold.
Our Executive Officers’ cash incentive payments are subject to reduction or elimination if compliance objectives are not satisfied.

Finally, our cash incentive plan and our Stock Incentive Plan both contain robust “clawback” provisions under which awards may be recouped or forfeited if an associate has not complied with our policies, including our Code of Conduct, or has committed acts detrimental to the best interests of our company.

Compensation Committee Interlocks and Insider Participation

None of the directors who served on the CMDC at any time during fiscal 2021 were officers or associates of Walmart or were former officers or associates of Walmart. Further, none of the members who served on the CMDC at any time during fiscal 2021 had any relationship with our company requiring disclosure under the section of this proxy statement entitled “Fiscal 2021 Review of Related Person Transactions.” Finally, no Executive Officer serves, or in the past fiscal year has served, as a director of, or as a member of the compensation committee (or other board committee performing equivalent functions) of, any entity that has one or more of its executive officers serving as a director of Walmart or as a member of the CMDC.

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EXECUTIVE COMPENSATION TABLES
                                                 

Summary Compensation

Name and
Principal Position
(a)
   Fiscal
Year ended
Jan. 31
(b)
   Salary
($)
(c)
   Bonus
($)
(d)
   Stock Awards
($)
(e)
   Non-Equity
Incentive Plan
Compensation
($)
(g)
   Change
in Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
($)
(h)
   All Other
Compensation
($)
(i)
   Total
($)
C. Douglas McMillon
President and CEO
2021 1,272,000 0 15,827,794 3,816,000 1,375,580 282,984 22,574,358
2020 1,276,892 0 15,709,953 3,516,817 1,191,597 410,091 22,105,350
2019 1,276,892 0 15,592,404 5,088,000 1,090,984 569,953 23,618,233
M. Brett Biggs
Chief Financial Officer
2021 934,721 0 5,795,779 1,752,637 333,199 306,767 9,123,103
2020 915,358 0 5,752,910 1,575,710 292,100 262,413 8,798,491
2019 892,948 0 5,710,085 2,223,926 269,005 324,450 9,420,414
Suresh Kumar
Global Chief
Technology and
Development Officer
2021 1,021,154 0 8,399,795 2,297,643 0 18,389 11,736,981
2020 576,923 515,100 43,603,360 1,181,665 0 21,603 45,898,651
 
John Furner
President and CEO,
Walmart U.S.
  2021 944,567 0 7,724,121 2,125,320 191,454 346,420 11,331,882
2020 847,895 0 6,712,550 1,855,198 133,248 325,933 9,874,824
2019 799,425 0 6,275,780 1,791,903 92,800 326,869 9,286,777
Judith McKenna
President and CEO,
Walmart International
2021 1,088,769 0 7,241,218 2,449,781 979,174 253,977 12,012,919
2020 1,066,214 0 7,323,601 1,843,658 1,682,061 290,755 12,206,289
2019 1,044,210 0 9,186,749 2,267,949 140,460 282,956 12,922,324
Kathryn McLay
President and CEO,
Sam’s Club U.S.
2021 780,000 0 10,225,189 1,755,000 3,415 194,067 12,957,671
2020 640,409 0 11,887,177 960,741 2,479 17,901 13,508,707
 

Explanation of information in the columns of the table:
Name and principal position and fiscal year ended Jan. 31 (columns (a) and (b))
Mr. Kumar and Ms. McLay were NEOs for the first time in fiscal 2020. Accordingly, only information relating to their fiscal 2020 and fiscal 2021 compensation is included.

Salary (column (c))
Represents salaries earned during the fiscal years shown. Mr. McMillon and Mr. Furner elected to defer $130,000 and $52,000 of their fiscal 2021 base salaries, respectively, under the Deferred Compensation Matching Plan.

Bonus (column (d))
The amount in this column for Mr. Kumar for fiscal 2020 represents a sign-on bonus paid at the time of his initial hire.

Stock awards (column (e))
In accordance with SEC rules, the amounts included in this column are the grant date fair value for awards granted in the fiscal years shown, computed in accordance with the stock-based compensation accounting rules that are a part of GAAP (as set forth in Financial Accounting Standards Board’s Accounting Standards Codification Topic 718), but excluding the effect of any estimated forfeitures of such awards. The values in this column reflect the full grant date fair value of all equity awards granted during the year, although the awards are subject to vesting periods based on continued employment.

The number of performance-based restricted stock units that vest, if any, depends on whether we achieve certain levels of performance with respect to certain performance measures. The grant date fair values of the performance-based restricted stock units included in this column are based on payouts at target, which we have determined, in accordance with the stock-based compensation accounting rules, to be the probable levels of achievement of the performance goals related to those awards. The table below shows the grant date fair value of the performance-based restricted stock units granted to each NEO during fiscal 2021, assuming that: (i) our performance with respect to those performance measures will be at target levels (i.e., probable performance); and (ii) our performance with respect to those performance measures will be at levels that would result in a

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maximum payout. The grant date fair value of each performance-based restricted stock unit was determined based on the closing price of a Share on the NYSE on the grant date discounted for the expected dividend yield for such Shares during the vesting period:

Name       Fiscal Year
of Grant
      Grant Date Fair Value
(Probable Performance)
($)
      Grant Date Fair Value
(Maximum Performance)
($)
C. Douglas McMillon 2021 11,985,354 17,978,102
M. Brett Biggs 2021 4,355,726 6,533,659
Suresh Kumar 2021 6,399,762 9,599,712
John Furner 2021 5,884,061 8,826,161
Judith McKenna 2021 5,516,263 8,274,465
Kathryn McLay 2021 8,725,164 13,087,888

Option awards (column (f))
We have omitted this column because we did not grant any option awards to NEOs during fiscal 2021 or any of the other fiscal years covered by this table, and stock options are not currently part of our executive compensation program.

Non-equity incentive plan compensation (column (g))
These amounts represent annual cash incentive payments earned by our NEOs for performance during fiscal 2021, fiscal 2020, and fiscal 2019, respectively, but paid to our NEOs during the following fiscal year. Certain of our NEOs elected to defer a portion of their annual cash incentive payment for fiscal 2021, as follows:

Name       Amount of Fiscal 2021
Annual Cash Incentive Deferred
($)
M. Brett Biggs 150,000
John Furner 1,706,542
Judith McKenna 2,388,155
Kathryn McLay 114,000

Change in pension value and nonqualified deferred compensation earnings (column (h))
The amounts shown in this column represent above-market interest credited on deferred compensation under our company’s nonqualified deferred compensation plans, as calculated pursuant to Item 402(c)(2)(viii)(B) of SEC Regulation S-K. In addition, Ms. McKenna participates in pension plans administered by ASDA Group Limited (“ASDA”), the company’s former U.K. subsidiary. During fiscal 2021, the actuarial present value of Ms. McKenna’s accumulated benefit in these plans increased by $691,928 (converted from British Pounds using an average exchange rate during fiscal 2021 of 1 GBP = 1.2881 USD). Ms. McKenna’s defined benefits under these pension plans did not change. These pension plans were closed to further accruals in 2011, but participants’ accrued pension balances are adjusted for inflation until they begin to receive distributions from the plan. See the Pension Benefits table on page 74 for more information.

All other compensation (column (i))
“All other compensation” for fiscal 2021 includes the following amounts:

Name       401(k) Plan Matching
Contributions
($)
      Personal Use
of Company Aircraft
($)
      Company Contributions to
Deferred Compensation Plans
($)
C. Douglas McMillon 17,100 102,414 158,557
M. Brett Biggs 17,100 129,577 156,544
Suresh Kumar 13,404 0 0
John Furner 17,100 115,638 204,002
Judith McKenna 0 39,787 195,213
Kathryn McLay 0 56,448 114,000

The value shown for personal use of Walmart aircraft is the incremental cost to our company of such use, which is calculated based on the variable operating costs to our company per hour of operation, which includes fuel costs, maintenance, and associated travel costs for the crew. Fixed costs that do not change based on usage, such as pilot salaries, depreciation, insurance, and rent, are not included.

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“All other compensation” for fiscal 2021 also includes tax gross-up payments for each of our other NEOs in amounts less than $10,000. The amounts in this column for fiscal 2021 also include the cost of term life insurance premiums for each of our NEOs, and includes the cost of tax preparation services for Mr. Furner, Ms. McKenna, and Ms. McLay, in each case related to their prior expat service for the company. The values of these personal benefits are based on the incremental aggregate cost to our company and are not individually quantified because none of them individually exceed the threshold set forth in Instruction 4 to Item 402(c)(2)(ix) of Regulation S-K.

Fiscal 2021 Grants of Plan-Based Awards

Estimated Future Payouts Under
Non-Equity Incentive Plan Awards



Estimated Future Payouts Under
Equity Incentive Plan Awards
All Other
Stock Awards:
Number of
Shares
of Stock
or Units
(#)
(i)
Grant Date
Fair Value of
Stock and
Option Awards
($)
(l)
Name    Grant
Date
   Threshold
($)
(c)
   Target
($)
(d)
   Maximum
($)
(e)
   Threshold
(#)
(f)
   Target
(#)
(g)
   Maximum
(#)
(h)
     
C. Douglas McMillon 1,144,800 3,052,800 3,816,000
1/8/21 42,787 85,573 128,360 11,985,354
1/8/21 26,205 3,842,439
M. Brett Biggs 562,500 1,500,000 1,875,000
1/8/21 15,550 31,099 46,649 4,355,726
1/8/21 9,821 1,440,053
Suresh Kumar 709,172 1,891,125 2,363,906