The past year has seen radically increased focus on racial injustice, following protests over police killings of black people and the recognition that the COVID-19 pandemic is having a disproportionate impact on people of color. Racial justice in the workplace has received substantial attention: Workers of color make up a larger proportion of essential workers and they have been more likely to lose their jobs as a result of the pandemic.

CEO Douglas McMillon articulated a broad goal of "help[ing] replace the structures of systemic racism, and build[ing] in their place frameworks of equity and justice that solidify our commitment to the belief that, without question, Black Lives Matter." He described Walmart's commitments to "create a more diverse and inclusive team at Walmart at every level," including retention and development and create the Center for Racial Equity, which will support initiatives addressing structural racism.[1] As chair of the Business Roundtable, Mr. McMillon established a special committee of the board to advance racial equity and justice[2].

Walmart's workforce, which has stayed on the job as essential workers during the pandemic, has enabled Walmart to post record financial results.[3] Same-store sales and earnings have beaten analyst expectations.[4] The share price is up 30% in the first 11 months of 2020.[5]

Walmart acknowledges the critical role played by its Associates--McMillon has stated, "We simply won't be here if we don't take care of the very things that allow us to exist: our associates, customers, suppliers and the planet."[6] By December 24th, Walmart will have paid out four rounds of bonuses to Associates.[7] But Walmart has acknowledged that "the overwhelming majority [of Associates] say their hourly wages are the most important part of their pay, well ahead of quarterly bonuses," and has raised wages for certain positions.[8] Walmart's starting wage, USD11 an hour, is below many competitors' USD15 minimum wage;the extra pandemic bonus pay is far less than the additional pay that frontline retail associates will have earned at many of Walmart's closest competitors.[9]

Ford Foundation President Darren Walker recently urged companies to pay a living wage in order to address racial inequality. "Raising the pay of the workers at the bottom of your scale," he argued, "would disproportionately help people of color." [10] People of color make up a substantial proportion of Walmart's workforce. According to Walmart's mid-year FY21 Culture Diversity & Inclusion Report, 46.44% of hourly workers are people of color.[11]

Walker warned that the "usual corporate playbook" of statements and philanthropy is inadequate to meet the challenge of racial injustice. Accordingly, we encourage shareholders to vote for this proposal.