Wal-Mart Links Pay To Diversity Goals

William Spain, MarketWatch, Jan. 11, 2006

CHICAGO—Under fire for its record on promoting women along with a recent, racially charged controversy over movie selections on its Web site, Wal-Mart told regulators Wednesday that it will begin penalizing executives who fail to meet diversity targets.

In a filing with the Securities and Exchange Commission, Wal-Mart said that it has established “objective diversity initiatives as a performance measure” under its management-incentive plan for fiscal 2007.

The world’s largest retailer has “set diversity goals to motivate officers to achieve [its] diversity initiatives, while adhering to the company’s commitment to select the most qualified individual for each position,” the filing read.

Incentive payments for executives who participate in the plan but fail to achieve the targets could be reduced by up to 15%, the company indicated.

Wal-Mart is currently facing an $11 billion gender-discrimination lawsuit that was certified for class-action status by a federal district court in 2004. That certification is now under appeal. At various times, the company has settled claims relating to the hiring (or not hiring) of people with disabilities, pregnant women and illegal aliens.

Last week, the company apologized after its Web site randomly linked a “Planet of the Apes” DVD to films about prominent African-Americans. Wal-Mart shut down the automated system and said it was “heartsick that this happened.”

Shares of Wal-Mart ended up 1.6% to $46.57 Wednesday.

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