Friday brings the much-anticipated resolution of one of the more interesting and genuinely headline-generating issues to hit the not-especially thrill-a-minute world of pensions: the Wal-Mart voting blockade.
As you may remember, two particularly weighty pension systems, the consolidated New York City employees, teachers, police and fire pension groups and the California State Teachers’ Retirement system, just happen to hold considerable Wal-Mart stock as part of their holdings – 4.7 million and 5.3 million shares, respectively, though each of those numbers is still less than 1 percent of the company’s total shares.
A New York Times article a month ago created a serious credibility issue for the mega-retailer when it revealed that the company had long known about alleged, widespread bribery in its Mexican operations, but had kept its own internal investigation into the issue on the down-low.
The pension systems and their managers have been roiling for a month with a much-publicized effort to ding the company for this and other presumed acts of malfeasance – destroying the Mom and Pop stores of America, which we would assume would fall under that category – and voting the Wal-Mart board members present at the time of the 2005 bribery scandal out of their positions.
Wal-Mart CEO Mike Duke is also eyed to get the boot, in addition to former CEO Lee Scott.
In a way, it’s like the ultimate town hall meeting, with the disenchanted rabble gathering to oust the bad guys – though, as mentioned, all of the pension plans’ collective resources are quite literally a drop in the bucket when it comes to the overall mass and largesse of Wal-Mart’s holdings.
Is it a pure activist ploy, as one of our columnists contends – something he noted has no place in the financial advisory world – or are these genuinely concerned efforts to make things right and provide some important group pressure on the gigantic retailer?
Whatever the case, it does demonstrate a rare unified moment in the pension universe, especially when most news related to pensions seems to focus on their ongoing unraveling.
But considering the weight that can still be thrown around, especially with well-padded (though, grossly underfunded) pension resources like those in troubled Illinois, the funds definitely have the potential to make their voices heard.
That said, I’ll be interested to see if all of the hubbub even measures on the Richter scale during Friday’s annual general meeting for Wal-Mart shareholders.
And on an unrelated note, I was watching the following last night with the sound off and I wondered, just what is causing Illinois Rep. Mike Bost to literally lose his marbles in front of the camera?
Turns out it's his borderline psychotic reaction to the proposed pension reforms in Illinois, one of the most fantastic and viral-worthy videos I've seen in a while. Maybe there is more drama to the world of pensions than we thought.
His talk radio explanation of the event is also quite charming.