Wal-Mart Names A New Chairman Of The Board...Yet Another Family Member

Retail giant Wal-Mart Stores, Inc. WMT has elected a new chairman of the board, replacing Wal-Mart legend Rob Walton, who has served for 23 years. Walton, who is the eldest son of Sam Walton, is being replaced by son-in-law Greg Penner, keeping the business in the family.

Rob Walton, with a whopping net worth of nearly $38 billion, is considered to have co-founded the world's largest retailer. He was ranked the 9th richest person in the world by Forbes in 2013. He surpassed his father as the chairman of the board back in 1992, after the death of his father.

Wal Mart shareholders have expressed concerns about Walton’s leadership; At Walmart's shareholder meeting in 2013, more than 25 percent of shareholders, not in the Walton family, voted in opposition to re-electing Rob as chairman of the board. A few of these shareholders included:

• New York City Pension Funds.
• CalSTRS.
• The State Of Wisconsin Investment Board.
• CalPERS (Nation’s largest pension fund, withheld its vote due to reputational risks).

Also, 36 percent of non-Walton shareholders supported a resolution to name Wal Mart's chairman of the board to be an independent director.

Greg Penner, who was previously vice chairman of the board, has been with the retailer for 15 years (last seven years as a board member). Before joining Wal Mart, Penner received an MBA from Stanford and became an analyst for Goldman Sachs. Penner also manages Madrone Capital Partners, an investment firm associated with the Walton family.

The Waltons are betting that the technology experience Penner has will help to guide the company into a new era of e-commerce alongside format stores.

The Walton family alone own more than 50 percent of Wal Mart’s shares outstanding. Many shareholders believe it is unfair for the Waltons to have such control in the company, and believe that an independent director will better associate shareholders.

The retailer giant’s shares have declined nearly 5 percent in the past month, down 14 percent year-to-date.