The world’s largest retailer, family-controlled Walmart, announced on 3 June that it will buyback company shares, a move that will increase the Walton family’s stake in the business.
At the Arkansas-based group’s 41st annual shareholders meeting, the company announced that it will buyback $15 billion shares from investors – a continuation of last year’s $13 billion share repurchase.
This will potentially increase the Walton family’s ownership of Walmart to over 50% by next year, which would allow the company to be free from board independence requirements under the New York stock exchange rules.
According to the NYSE, a “controlled” company does not require a majority of independent directors on its board. But reports say that Walmart does not intend to use these exemptions.
A spokesman was quoted in Bloomberg: “Walmart and the Walton family believe an independent board is an important part of our corporate governance.”
The family currently holds around 48% of Walmart through the Walton Family Foundation. Only two family members form a part of the company’s 15-member board.
Walmart has recently witnessed a decline in sales in its home market but has seen growth in its other markets. Charley Holley, executive vice president and chief financial officer of Walmart said in a statement: “The combination of our annual dividend and share repurchase program indicates the strength of our company and its commitment to returning value to Walmart shareholders.”
Founded in 1962 by brothers Sam and Bud Walton, Walmart was incorporated in 1969 and the shares were listed in 1972. Considered the world’s third-largest employer, second-generation Rob Walton is the current chairman of the company – he has an estimated fortune of $19.8 billion according to Forbes.
His younger brother Jim Walton is a board member and was also featured on the Forbes 2010 billionaire list with an estimated wealth of $20.7 billion.
Walmart had 2011 fiscal revenues of $419 billion, up from $405 billion the year before.