Wal-Marts Scott Retiring as CEO, Duke to Succeed - Wal-Mart: Rocky Tenure for Lee Scott
(
Page 2 of 2 )
ROCKY TENURE
Scott, 59, has served as CEO since January of 2000, with much of his
tenure marked by struggles and a stagnating stock price. From 2000
through 2007, the company's stock fell 31 percent, with most of the
drop coming shortly after his promotion. The stock is up 6.7 percent
year-to-date and has outperformed a nearly 49 percent slide in the
Standard & Poor's 500 Index.
When the U.S. economy was roaring along, Wal-Mart found itself
losing out to trendier stores such as Target Corp and constantly under
attack from groups that accused it of mistreating employees and driving
competitors out of business with its massive expansion plans.
"Lee Scott has made life harder for Wal-Mart workers," said David
Nassar, executive director of Wal-Mart Watch, a union- backed group
critical of the retailer. Scott's policies have "diminished Wal-Mart's
reputation and hampered its ability to grow," he said on Friday.
A foray into fashion and higher-end merchandise failed to draw
wealthier shoppers and its profit took a hit last year when it cut
prices to clear out poor-selling merchandise. Some company-watchers
thought at the time that the missteps could cost Scott his job.
But Wal-Mart has returned to its low-cost roots and reined in U.S.
expansion, which has paid off as the economy soured and cost-conscious
consumers come back to its stores.
Scott, who joined the company in 1979 as an assistant director of
logistics, has also tried to portray Wal-Mart as a world leader
committed to tackling tough issues like soaring health-care costs and
cleaning up the environment.
Scott will remain chairman of the executive committee of the board,
receiving an annual salary of $1.1 million, and will be employed
through January 31, 2011.
MAJOR IN THE MAJORS
Duke has overseen Wal-Mart's international operations since 2005 and
is fond of saying the retailer should "major in the majors" -- focus
expansion on global markets where it can become a big player instead of
simply planting a flag.
Under that strategy, the retailer exited its business in Germany and
South Korea in 2006 and has pursued growth in countries such as China,
Mexico and Canada. Its international operations accounted for almost 25
percent of its $374.5 billion in total sales last year.
Before overseeing Wal-Mart's international unit, Duke was the head
of Wal-Mart's U.S. operations. He joined the company in 1995 as senior
vice president of logistics.
Wal-Mart will announce a new head of international operations by the end of January, when its fiscal year concludes.
(Additional reporting by Deepa Seetharaman, editing by Matthew Lewis, Andre Grenon and Bernard Orr)
© Thomson Reuters 2008 All rights reserved
