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Walmart CTO Tops Executive Compensation List

5 min read
Executive Compensation 2020 132409 Suresh Kumar
<p>Suresh Kumar, executive vice president, global chief technology officer and chief development officer of Walmart Inc.</p> ()

It was big news in the tech world when Walmart announced its new chief technology officer last year. “Walmart poaches ex-Google, Amazon exec Suresh Kumar for new CTO role,” the CNBC headline said.

Kumar’s experience — 15 years in executive roles at Amazon, then five years split between Microsoft and Google — explains why his total compensation for the first seven months he spent at Walmart made him the highest-paid executive among Arkansas’ public companies.

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Public Companies’ Executive Compensation – Named executive officers of public companies ranked by total compensation.

But the $45.9 million that Walmart’s proxy statement attributed to Kumar in the fiscal year that ended Jan. 31 includes $43.6 million in stock awards that vest over time if he remains employed by Walmart.

Kumar started work at Walmart last July, but his hiring was announced in April 2019, shortly after Jeremy King resigned as CTO to join the social media site Pinterest as head of engineering. King, in turn, replaced Vanja Josifovski, who left Pinterest to become CTO for Airbnb, the online vacation rental marketplace.

What the trade publication VentureBeat called “a game of musical chairs” explains Kumar’s hefty compensation mix of salary, signing bonus and stock. The Walmart board of directors’ Compensation & Management Development Committee “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,” the proxy said.

Kumar, 55, who started his career at IBM, has a doctorate in engineering from Princeton University and a bachelor’s degree in technology from the Indian Institute of Technology Madras. While King reported to Marc Lore, president and chief executive officer of e-commerce for Walmart U.S., Kumar reports directly to Walmart CEO C. Douglas McMillon.

Kumar’s total pay package is roughly twice that of his boss. McMillon’s total compensation for the most recent fiscal year was $22.1 million, down a mere $1.5 million from the pay that put him on top of our executive compensation list last year.

Last year’s No. 2, Gregory S. Foran, resigned as executive vice president in October to return to his native country as CEO of Air New Zealand Ltd. He was succeeded by John R. Furner, who is No. 8 on this week’s list of highest paid executives.

The Roster

Executive Compensation 2020 132409 Murphy Oil
Murphy Oil Corp. completed this headquarters building in El Dorado five years ago but announced in May that it will relocate its corporate offices to Houston. ()

The roster of publicly traded companies headquartered in Arkansas remains stable this year at 18 — four of them financial institutions. But, barring an unforeseen IPO, that will change next year as Murphy Oil Corp. completes the relocation of its headquarters from El Dorado to Houston and Windstream emerges from bankruptcy as a private company

Both the list of public company financial performance and the list of executives ranked by compensation are compiled using information reported to the U.S. Securities & Exchange Commission in annual reports and proxy statements.

White River Bancshares Inc. of Fayetteville, the holding company for Signature Bank of Arkansas, is included on the list of public financial institutions because its shares are traded over the counter and its financial results are public. But it is not included in the executive compensation research because it does not report to the SEC.

Proxy statements typically list compensation for five “named executive officers,” but some companies report fewer and some more, especially if there has been turnover in upper management during the fiscal year.

Dillard’s Inc., the Little Rock department store chain, reported a complete compensation breakdown for six named executives, including four members of the Dillard family and the “co-principal financial officers.” It also includes less complete compensation information for five more members of the Dillard family who are employed by the company, which was also reported in the proxy.

All 11 are ranked on the list.

Arkansas Business’ list breaks down total compensation into salary, the calculated value of stock and stock options awarded, bonuses or other cash performance pay, plus any other compensation reported to the SEC. Such “other compensation” may include profit-sharing, contributions to stock ownership plans or retirement plans, life insurance premiums paid by the company, above-market earnings on deferred compensation, the calculated value of personal use of corporate aircraft, executive allowances or any other benefit reported by the corporation.

Any value realized from exercising stock options is noted on the list but is not included in total compensation. Only 12 of the 86 executives exercised stock options in their most recent fiscal years. The biggest value realized that way was $4.8 million by Sally Grimes, group president of prepared food for Tyson Foods Inc. of Springdale, who otherwise earned $4.14 million in the fiscal year that ended Sept. 28, 2019.

Pay Ratio

For the third year, Arkansas Business’ executive compensation list reflects the median pay for all other employees of the company, a metric the SEC began requiring in proxies for the 2017 fiscal year.

As the chart below shows, Arkansas’ publicly traded retailers reported the lowest median employee pay: Dillard’s, Walmart and Murphy USA.

In the three years, Walmart’s median employee compensation has risen more than 17%, from $19,177 to $22,484. Median pay for a “full-time store associate” at Dillard’s has risen 10.4%, from $22,316 to $24,631. The “part-time store employee” who is Murphy USA’s median employee has seen a slight decrease in compensation, from $16,831 in 2017 to $16,435 in 2019.

Median Employee Pay
Arkansas public companies ranked by median employee compensation

ArcBest Corp., Fort Smith $153,395
Murphy Oil Corp., El Dorado* $136,024
Uniti Group Inc., Little Rock $78,767
Windstream Holdings Inc., Little Rock $71,778
J.B. Hunt Transport Services Inc., Lowell $65,663
Simmons First National Corp., Pine Bluff $50,463
America’s Car-Mart Inc., Rogers $46,500
Home BancShares Inc., Conway $45,100
Bank OZK, Little Rock $41,167
USA Truck Inc., Van Buren $38,401
Tyson Foods Inc., Springdale $36,681
Dillard’s Inc., Little Rock $24,631**
Walmart Inc., Bentonville $22,484
Murphy USA Inc., El Dorado $16,435#
*Relocation of headquarters from El Dorado to Houston announced on May 6
**Identified as a “full-time store associate”
#Identified as a “part-time store employee”
Sources: Proxy statements filed with the U.S. Securities & Exchange Commission. P.A.M. Transport Inc. of Tontitown and Inuvo Inc. of Little Rock are identified as “smaller reporting companies” exempt from the median compensation reporting requirement. BSR Real Estate Investment Trust of Little Rock is traded on the Toronto Stock Exchange and subject to different reporting requirements.
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