We Think Some Shareholders May Hesitate To Increase Walmart Inc.'s (NYSE:WMT) CEO Compensation

Key Insights

• Walmart will host its Annual General Meeting on 5th of June
• Total pay for CEO Doug McMillon includes US$1.51m salary
• The overall pay is 148% above the industry average
• Walmart's total shareholder return over the past three years was 44% while its EPS grew by 18% over the past three years

CEO Doug McMillon has done a decent job of delivering relatively good performance at Walmart Inc. (NYSE:WMT) recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 5th of June. However, some shareholders may still want to keep CEO compensation within reason.

See our latest analysis for Walmart

Comparing Walmart Inc.'s CEO Compensation With The Industry

Our data indicates that Walmart Inc. has a market capitalization of US$524b, and total annual CEO compensation was reported as US$27m for the year to January 2024. That's a fairly small increase of 6.6% over the previous year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.5m.

On comparing similar companies in the American Consumer Retailing industry with market capitalizations above US$8.0b, we found that the median total CEO compensation was US$11m. Hence, we can conclude that Doug McMillon is remunerated higher than the industry median. Moreover, Doug McMillon also holds US$301m worth of Walmart stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2024	2023	Proportion (2024)
Salary	US$1.5m	US$1.5m	6%
Other	US$25m	US$24m	94%
Total Compensation	US$27m	US$25m	100%

Talking in terms of the industry, salary represented approximately 12% of total compensation out of all the companies we analyzed, while other remuneration made up 88% of the pie. Walmart pays a modest slice of remuneration through salary, as compared to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Walmart Inc.'s Growth

Walmart Inc.'s earnings per share (EPS) grew 18% per year over the last three years. Its revenue is up 5.7% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Walmart Inc. Been A Good Investment?

We think that the total shareholder return of 44%, over three years, would leave most Walmart Inc. shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 1 warning sign for Walmart that you should be aware of before investing.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.