WMT » Topics » REPORT ON EXECUTIVE COMPENSATION

This excerpt taken from the WMT DEF 14A filed Apr 14, 2006.

REPORT ON EXECUTIVE COMPENSATION

The Company’s executive compensation program is designed to:

 

    Provide fair, competitive compensation to Executive Officers based on their performance and contributions to the Company,

 

    Provide incentives to attract and retain key executives,

 

    Instill a long-term commitment to the Company, and

 

    Develop a sense of Company ownership,

all in a manner consistent with shareholder interests.

Committee:    The four members of the CNGC, during fiscal 2006, were Douglas N. Daft; John D. Opie; José H. Villarreal, the chair of the CNGC; and Linda S. Wolf (appointed on June 3, 2005). The CNGC is governed by a written charter adopted by the Board. A copy of the current CNGC charter is available on Wal-Mart’s corporate Web site at www.walmartstores.com in the Corporate Governance section of the Investors Web site. The CNGC met eight times in fiscal 2006 to fulfill the functions under its charter.

The members of the CNGC have each been determined by the Board to be Independent Directors under the standards of the NYSE Listed Company Manual. The members are also “non-employee directors” for purposes of Section 16 and “outside directors,” as defined in Section 162(m) of the Internal Revenue Code.

Review of compensation:    The CNGC is responsible, according to its charter, for annually:

 

    Reviewing and approving corporate goals and objectives relevant to the compensation of Wal-Mart’s CEO, Chairman, and the other Executive Officers who are directors; evaluating their performance in light of those goals and objectives; and based on this evaluation, establishing their total compensation;

 

    Evaluating and approving, in consultation with the CEO, the compensation of the Executive Officers who are not directors; and

 

    Reviewing the compensation of the members of the Executive Committee of the Company who are not Executive Officers.

The compensation package of all Executive Officers consists of three main components, which are reviewed and approved by the CNGC at least annually:

 

    Base salary,

 

    Annual incentive payments, and

 

    Equity-based compensation.

The Company’s executive compensation package also includes the Deferred Compensation Plan, the Profit Sharing/401(k) plan, the SERP, the Stock Purchase Plan, a post-termination and non-compete agreement, and other perquisites and supplemental benefits. The CNGC considers the total compensation of each Executive Officer, including the CEO, as well as the allocation of compensation among base salary, annual incentive payments, and equity-based compensation.

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