Posted 4/28/2014 12:00 am
Updated 6 months ago
It’s proxy statement season for most publicly traded companies, and those releases are packed with nuggets of Whispers readers’ No. 1 interest: Other People’s Money.
The compensation packages for top executives are typically most newsworthy, but “related person transactions” can also be enlightening.
For instance, last week’s proxy from Wal-Mart Stores Inc. revealed that the company paid about $1.5 million to the University of Arkansas in fiscal 2013, including $860,500 for using university facilities for meetings and events — primarily for the Really Big Show known as the annual shareholders meeting.
The rest was spent on academic studies and educational services and for contributions and sponsorships.
Wal-Mart has to disclose its dealings with the UA because of the Gearhart Factor: G. David Gearhart, chancellor of the UA, is the brother of Jeffrey J. Gearhart, executive vice president of global governance for Wal-Mart.
Another related party transaction disclosed in the Wal-Mart proxy concerns the amount of business the retailer does with Cheyenne Industries, which designs household products that are then manufactured in China and imported.
Back in 2010, when Cheyenne was still owned by its founder, Frank Fletcher, Wal-Mart bought an estimated $27.5 million worth of merchandise from the southwest Little Rock company and its subsidiaries. (Specifically, $25.3 million between Feb. 1, 2010, and the end of the year, when Fletcher sold the design-and-import business.)
The next fiscal year, which ended in January 2012, Wal-Mart’s business with Cheyenne had dropped to $23.5 million. But it bounced up to $29.4 million in the year that ended in January 2013 and was up again — to $32 million — in the most recent fiscal year.
The only reason Wal-Mart discloses this bit of business is because the ownership group that bought Cheyenne from Fletcher at the end of 2010 includes Eric S. Scott.
And this particular Eric Scott is the son of Wal-Mart director (and former CEO) H. Lee Scott.
Eric Scott was CEO of Cheyenne for a time after the purchase, but he’s now identified as chairman and an “indirect equity owner” of the supplier company.
We may never get this kind of insight into Cheyenne’s sales to Wal-Mart again: Lee Scott is leaving the Wal-Mart board in June.
Wal-Mart spent $9 million last year on advertising with Yahoo! Inc.
The proxy tells us that because Marissa A. Mayer, a member of the Wal-Mart board of directors, is CEO of Yahoo!