- The Washington Times - Monday, April 20, 2009

NEW YORK (AP) - Lee Scott, who retired as the president and CEO of Wal-Mart Stores Inc. effective Jan. 31, 2009, received compensation valued at $7.93 million in 2008, down 73 percent from the previous year, according to an Associated Press calculation of figures disclosed in a regulatory filing late Monday.

Scott received a base salary of $1.45 million last year leading the world’s largest retailer, up 4 percent from $1.4 million the year before.

He received a performance-based cash bonus of $5.82 million, down about 30 percent from the $8.4 million he received in 2007. And he received perks that totaled $652,485 in 2008, up more than 50 percent from $431,446 in 2007.

According to the filing, as part of his retirement pact, Scott, who will continue leading the board’s executive committee until January 2011, forfeited 25 percent of the 208,508 performance-based shares he received on Jan. 22, 2007, 25 percent of the 55,608 performance-based shares he received on March 26, 2007, and 50 percent of the 299,496 performance-based shares he received on Jan. 21, 2008, when he retired.

Scott and Wal-Mart also agreed that 407,792 shares of restricted stock that were scheduled to vest upon Scott’s retirement on or after age 65 would instead vest Feb. 1, 2011, after his retirement from all positions with the company.

Scott’s successor, Mike Duke, who had been vice chairman of the company’s international division, received compensation valued at $6.49 million in 2008. The executive changes were announced in late November.

Duke received a base salary last year of $1.05 million and a performance-based cash bonus of $3.06 million. He also received perks that totaled $380,343, which included about $107,000 for the use of the corporate jet.

A chunk of Duke’s compensation came in the form of restricted stock worth about $2 million on the day it was granted. Not included in AP’s overall compensation figure was a performance-based restricted award of 39,216 shares that is scheduled to vest on Jan. 31, 2012, if Wal-Mart meets certain revenue growth during 2010 and Duke remains employed through the vesting date.

The Associated Press formula is designed to isolate the value the company’s board placed on the executive’s total compensation package in the last fiscal year. It includes salary, bonus, performance-related bonuses, perks, above-market returns on deferred compensation and the estimate value of stock options and awards granted during the year.

The calculations don’t include changes in the present value of pension benefits, and they sometimes differ from the totals companies list in the summary compensation table of proxy statements filed with the SEC, which reflect the size of the accounting charge taken for the executive’s compensation in the previous fiscal year.

Wal-Mart has been among few standout performers in retailing the past year. Its re-emphasis on low prices and its overhaul in merchandising came together as the economy began to sour. Wal-Mart has been pulling business from competitors as consumers focus on necessities and switch to cheaper stores.

Wal-Mart’s fourth-quarter profit fell 7.4 percent to $3.79 billion, or 96 cents per share, in the quarter ended Jan. 31, dragged down by the strong dollar and a charge from settling labor lawsuits. The company made $4.096 billion, or $1.02 per share, a year earlier.

Excluding the impact of the labor lawsuits, however, Wal-Mart earned $1.03 per share, which beat Wall Street estimates. And its total sales rose to $109.12 billion from $107.34 billion.

Sales at stores open at least a year, a key indicator of a retailer’s health because it excludes stores that opened or closed during the year, rose 2.8 percent in the quarter.

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