Walmart's executives are supposed to get incentive pay when Walmart is doing well. This should count as a time when Walmart is not doing so well. It turns out, though, that the company can make "adjustments" to the actual financial results to make it look like things are going better for the purposes of calculating incentive pay. That's routine. What's not routine is the number of adjustments made this year—11, when, Gretchen Morgenson reports, "In each of the four previous years, the number of adjustments never exceeded five." And the adjustments have big effects:
Consider the case of William S. Simon, president and C.E.O. of Walmart’s United States unit. Under Walmart’s pay plan, he would receive some incentive pay if sales grew more than 2 percent.If you're not entirely disgusted by the general overview that Walmart, notorious for the low wages in its stores, is adjusting its results to give millions of dollars in extra pay to executives already making millions of dollars a year, consider this: One of the adjustments made to give Bill Simon his $1.5 million in incentive pay was to pretend Walmart's sales didn't shrink after Supplemental Nutrition Assistance Program benefits were cut in November. Literally, explicitly, this multimillionaire was protected from the negative outcome of taking food out of the mouths of millions of poor and near-poor Americans.
The trouble was, Walmart’s United States sales rose only 1.8 percent in fiscal 2014. That meant Mr. Simon would miss his threshold.
Enter the adjustments.
After adjusting for certain items relating to the company’s sales, the Walmart unit eked out a growth rate of 2.03 percent in 2014. On the strength of that “adjusted” performance, Mr. Simon received $1.5 million, the proxy noted. His total compensation was $13 million last year.
Now, cutting food stamps wasn't a decision anyone at Walmart made. But it's a perfect example of how people at the top are protected from the things that hit people at the bottom. And if people at the top weren't protected—if their fates were linked to people at the bottom in the most basic ways capitalism suggests they should be—do you think maybe people at the bottom would fare just a tiny bit better?