There will soon be a new head honcho over at Wal-Mart Stores Inc. (NYSE:WMT), the world’s largest retailer by sales, said the company on Monday.
Company insider Doug McMillon, 47, will become Wal-Mart CEO as of Feb. 1, 2014, and he joins the company’s board of directors effective immediately. He will replace Mike Duke, Wal-Mart CEO since February 2009.
Here are a few interesting things to know about McMillon.
1. He’s A Real Company Insider
McMillon began his Wal-Mart career during college as an “hourly associate," unloading trucks at a distribution center, according to an earlier Wal-Mart news release. He later became CEO of Sam’s Club, Wal-Mart’s discount club arm, from 2005 to 2009.
Sam’s Club is the nation’s eighth top retailer, according to the company website, with annual revenues of $56 billion.
Then McMillon became head of Wal-Mart International in February 2009. That unit now accounts for 6,300 stores and more than 800,000 employees in 26 countries.
In all, McMillon has been with the company since 1990. He has also worked for Wal-Mart’s U.S. business, and so has experience with all three of the company’s major segments. Outgoing CEO Mike Duke will nonetheless stay on to advise McMillon for a year, following company tradition.
McMillon’s past company experience has centered on food, apparel and merchandising.
2. He’ll Probably Be Paid Well
According to Wal-Mart’s 2013 regulatory proxy statement, McMillon earned a base salary of $929,000 in fiscal year 2013, with potential extra cash incentives and stock options worth $12.8 million, depending on his performance.
Wal-Mart’s aim is for executive compensation in base salary to stay at around the 50th percentile of its peer groups.
Current Wal-Mart CEO Mike Duke earned $1.3 million in base salary in fiscal 2013, with maximum performance bonuses of an additional $25 million. Wal-Mart executive pay is heavily weighted toward performance-based pay. McMillon received an extra $1.5 million in cash incentives for his work in fiscal 2013.
He earned $9.5 million in fiscal 2013 in all, less than half of what CEO Duke earned, at $20.6 million. McMillon earned more than six times his base salary in stock awards, though his total pay fell by almost $1.5 million from 2012.
He owned 744,937 Wal-Mart shares as of April 2013, significantly less than Duke, board director Greg Penner and the Walton family, which effectively owns Wal-Mart.
3. His Family Is In the Business Too
According to the 2013 proxy statement, McMillon’s brother- and sister-in-law also work for Wal-Mart, though they earn far less than he does.
Nichole Bray, McMillon’s sister-in-law, is a Sam’s Club senior manager earning $122,200, and Greg Bray, who works in Wal-Mart’s finance department, is McMillon’s brother-in-law, earning $160,250.
McMillon’s sister, Lori Haynie, is an executive at Mahco Inc., an outdoor-gear company from which Wal-Mart bought $13 million worth of products in fiscal 2013. In fiscal 2014, Mahco still does business with Wal-Mart, earning $9.7 million to date, according to a regulatory filing. Mahco is also based in Bentonville, Ark., where Wal-Mart is headquartered, according to Mahco’s website.
These relationships, known as “related party transactions,” are reported under securities rules.
“Walmart believes that the terms of the transactions described below are comparable to terms that would have been reached by unrelated parties in arm’s-length transactions,” said the company’s 2013 proxy statement.
Here’s McMillon's very detailed Bloomberg Businessweek corporate biography, as well as a June 2013 speech he gave to shareholders, where he touted the success of his Wal-Mart International division in growing $1.8 billion in profits over four years.
Current CEO Mike Duke first told Wal-Mart that he intended to resign on Nov. 19, according to regulatory filings.
Wal-Mart overall, however, is facing a tough time as its U.S. same-store sales remain stagnant, and as it heads into a holiday season prepared for deep promotions and discounts to keep up with rival retailers. It said in its latest quarterly earnings that it expects sales to stay flat in the 2013 holiday season vs. a year before.