Do Striking Walmart Workers Have the Power to Make Shareholders Divest?

Will the protests against the retail giant this week have any effect on the company’s policies or bottom line?

Do Striking Walmart Workers Have the Power to Make Shareholders Divest?
Photo via Walmart's Flickr feed.

On Thursday, organizers say that more than 100 Walmart workers and activists were arrested in a mass protest across 15 US cities. This wasn’t the first time workers have called for the retail giant to reform its labor practices–on Black Friday in 2012, organizers say they brought out 30,000 protesters to demonstrate outside Walmart stores (the company says the number was much lower, as well as the number of arrests on Thursday). Still, some have claimed that labor group OUR Walmart’s latest round of protests this past week, this time directed at the firings of Walmart employees involved in organizing actions, were less coordinated than those in the past–largely because employees now actively fear retaliation.


But Walmart employees aren’t the only stakeholders demanding better standards. Earlier this summer, around the time of Walmart’s annual shareholder conference, two of its Dutch pension fund investors, PGGM and Mn Services, grew fed up with Walmart’s lack of reform and divested. Divestment’s a last ditch option (and, given the steady rise of the company’s stock over the last two years, a bold one), but according to investor information services involved with Walmart clients, it’s on several shareholders’ minds.

GES, for example, a responsible investment services group based out of Stockholm, has been engaging with Walmart for more than a decade. They’re not direct shareholders, but instead serve a community of Walmart shareholders, as well as those interested in sustainable and ethical business. Tytti Kaasinen, senior engagement manager at GES, says that her company has been trying to get Walmart to comply with the UN’s International Labor Organization standards, increase transparency, and address discrimination and harassment, but that doing so has been a struggle.

“If Walmart doesn’t show appropriate improvement in performance, and if it doesn’t become more responsive to concerns, then we would consider the exclusion option as well,” she said. “But we are still recommending the engagement option at the moment.”

Kaasinen adds that while yesterday’s labor protests may not have a direct impact on investors’ willingness to pressure Walmart from within, they certainly play an ongoing role in contributing to bad publicity in aggregate–and that could affect material investments.

“I think many [shareholders] are now losing patience,” Kaasinen said. “Many have been giving Walmart the benefit of the doubt and really waiting and hoping it will take practical measures in response to pressure that it is constantly under, and really reacting to the bad publicity that it unfortunately keeps getting,” she added. “I think that was the message from PGGM, that it’s been trying to engage with Walmart, but it was tired of trying.”

There are other ways of measuring shareholder sentiment. At Walmart’s annual shareholder conference in June, Bangladeshi garment worker activist Kalpona Akter presented inside a Fayetteville, Arkansas stadium of 14,000 shareholders, and proposed on behalf of shareholder James McCritchie that Walmart convene a special meeting on corporate governance. “Forgive me, but for years every time there’s a tragedy WalMart officials have made promises to improve the terrible conditions in my country’s garment factories, but the tragedies continue,” she said. “With all due respect, the time for empty promises is over.” Her speech was met with whoops and applause—in May, investors controlling $1.35 trillion of Walmart assets penned a letter to the retailer demanding increased transparency and supply-side accountability regarding Bangladesh.


At that same shareholder meeting, another speaker, OUR Walmart’s Janet Sparks, criticized CEO Mike Duke’s $20 million executive pay and compared it to the $26.17 quarterly bonus one of her colleagues received. Her speech also received applause, but both her suggestions as well as Akter’s were voted down.

“I think part of the decision that these global investors have taken to divest from the company was based on the input they got from workers themselves,” John Marshall, an analyst in the capital stewardship department of the United Food and Commercial Workers, said. “Unfortunately, once these investors took these concerns to the company, the company was apparently not really willing to address those concerns,” he added. Marshall, however, still advocates for active engagement rather than divestment.

It’s not just ethics on the line. Walmart’s regressive labor policies effectively exclude the retailer from urban markets–an estimated loss of $80-$100 billion in additional sales. By comparison, last year, Walmart made $260 billion in sales. Still, the power that shareholders can wield in these decisions is basically nonexistent–as of September 5, the Walton Enterprises and estates own more than 50% of Walmart stock.

Meanwhile, Walmart is insisting that despite these high-profile labor conflicts, their employees are more chipper than ever–and that’s why the protests were underwhelming. “You see so few current associates participating because they understand the unparalleled opportunity Walmart provides,” David Tovar, vice president of Walmart corporate communications, said in an emailed statement to Co.Exist. “For example, 75% of our store management teams started as hourly associates, we have more than 300,000 associates who have been with the company for 10 years or more and every year we promote 160,000 associates to jobs with higher pay and more responsibility.”

“We have millions of shares that are traded each day,” Walmart spokesperson Dan Fogleman added. “And we don’t have a comment on divestment. That is an individual decision.”

No matter what, the Walton slice of the pie puts a significant limit on input from other stakeholders. “Ultimately, since they control a lot of the voting shares, there’s not going to be a lot of change until the Walton kids decide that there’s another path,” Marshall said. “Hopefully they will listen to what these other investors are saying.”

About the author

Sydney Brownstone is a Seattle-based former staff writer at Co.Exist. She lives in a Brooklyn apartment with windows that don’t quite open, and covers environment, health, and data.