United States Securities and Exchange Commission
Washington, DC 20549
NOTICE OF EXEMPT SOLICITATION
Pursuant to Rule 14a-103
Name of the Registrant: Walmart Inc.
Name of persons
relying on exemption: Clean Yield Asset Management
Address of persons relying on exemption: 16 Beaver Meadow Road, Norwich, VT 05055
Written materials are submitted pursuant to Rule 14a-6(g) (1) promulgated under the Securities Exchange Act of 1934. Submission is not
required of this filer under the terms of the Rule but is made voluntarily in the interest of public disclosure and consideration of these
important issues.
PROXY MEMORANDUM
TO: |
Walmart Inc. Shareholders |
RE: |
Proposal No. 6, Shareholder Proposal on Reproductive Health Care Legislation |
DATE: |
May 18, 2022 |
CONTACT: |
Molly Betournay, Clean Yield Asset Management (molly@cleanyield.com) |
This is not a solicitation of authority to vote your proxy. Please
DO NOT send us your proxy card. Clean Yield Asset Management is not able to vote your proxies, nor does this communication contemplate
such an event. Clean Yield Asset Management urges shareholders to vote for Item No. 6 following the instructions provided on management's
proxy mailing. The cost of disseminating the foregoing information to shareholders is being entirely borne by Clean Yield Asset Management.
The foregoing information should not be construed as investment
advice.
Vote Yes: Proposal No. 6 – Report on Impacts
of Reproductive Health Care Legislation
Annual Meeting: June 1, 2022
About Clean Yield Asset Management
Clean Yield Asset Management (“Clean Yield”) is an investment
firm based in Norwich, VT, specializing in socially responsible asset management. We have filed this shareholder proposal on behalf of
our client, Julie Kalish, a long-term shareholder in Walmart Inc. because of concerns that Walmart Inc. may be negatively impacted by
enacted or proposed state policies restricting reproductive health care, thus putting shareholder value at risk.
THE RESOLUTION
RESOLVED: Shareholders request that the Walmart Board of Directors
issue a public report prior to December 31, 2022, omitting confidential and privileged information and, at a reasonable expense, detailing
any known and any potential risks and costs to the Company caused by enacted or proposed state policies severely restricting reproductive
rights, and detailing any strategies beyond litigation and legal compliance that the Company may deploy to minimize or mitigate these
risks.
SUPPORTING STATEMENT: Shareholders recommend that the report evaluate
any risks and costs to the Company associated with new laws and legislation severely restricting reproductive rights, as well as similar
restrictive laws proposed or enacted in other states. At its discretion, the Board’s analysis may include any effects on employee
hiring, retention, and productivity, as well as decisions regarding closure or expansion of operations in states proposing or enacting
restrictive laws and strategies, such as any public policy advocacy by the Company, related political contributions policies, and
human resources or educational strategies.
WHY IS A VOTE IN FAVOR WARRANTED?
| 1. | Legislative and judicial developments have weakened access to abortion care in states where Walmart has operations, with more restrictions
likely. |
Reproductive rights are under siege in the United States. States have
passed more than 1,300 restrictions on abortion access since the Roe v. Wade Supreme Court ruling in 1973 that legalized the procedure
(https://bit.ly/3F00HCt). The Supreme Court is expected to overturn or gravely weaken Roe v. Wade, perhaps within weeks. Should
Roe v. Wade be overturned or greatly weakened, 26 states are “certain or likely” to ban abortion outright (https://bit.ly/3EY3hcp).
Arkansas, where Walmart is headquartered, has numerous restrictions that make it difficult to access abortion care (https://bit.ly/3EKrphC).
If Roe vs. Wade is weakened or overturned, Arkansas is likely to outlaw abortion entirely.
Walmart has stores in all 50 states. As of
this date, Texas, Florida, Arizona, Florida, Kentucky, Oklahoma, and Idaho have passed legislation directly challenging the Roe
framework by limiting abortions past six or 15 weeks. In a post-Roe environment, additional states where Walmart has operations
are expected to ban abortion entirely, including Montana, Michigan, Utah, Arizona, Iowa, Missouri, Louisiana, Indiana, Ohio, Kentucky,
West Virginia, Tennessee, Alabama, Mississippi, Georgia, and South Carolina (https://bit.ly/3vPKgEU).
| 2. | Walmart provides health care coverage to as many as 935,000 women in the U.S.
|
The enactment of state laws restricting abortion care may conflict
with the Company’s health care coverage of its employees. However, the proponent believes that continuing to provide comprehensive
reproductive health care coverage should be a priority for Walmart. Walmart has 1.7 million employees in the United States, and 55% are
women, or about 935,000. They work in 5,342 stores across the United States (https://www.sec.gov/ix?doc=/Archives/edgar/data/104169/000010416922000012/wmt-20220131.htm
and https://corporate.walmart.com/esgreport/esg-issues/diversity-equity-inclusion).
In a 2019 survey, nearly 9 in 10 women said that controlling if and
when to have children has been important to their careers (Hidden Value: The Business Case for Reproductive Health, Rhia Ventures,
2020 at https://bit.ly/37RkV5e). Abortion is a common medical procedure, experienced by 1 in 4 women in the U.S. by the end of her reproductive
years (https://doi.org/10.2105/AJPH.2017.304042).
The loss of access to abortion care
may disrupt or prevent employees from remaining in the workforce. Women who cannot access abortion when needed are three times
more likely to be unemployed
and four times more likely to have a household income below the federal
poverty level (https://bit.ly/37qrmMw).
Abortion restrictions are already
interfering with women’s ability to work and reducing the talent pool. The Institute for Women’s Policy Research
estimates that 505,000 more women ages 15–44 would enter the workforce nationally if all state-level abortion restrictions were
eliminated; in Arkansas, the figure is just shy of 14,000. The Institute estimates that such restrictions cost state economies $105 billion
per year by reducing labor force participation and increasing turnovers and time-off rates (https://iwpr.org/costs-of-reproductive-health-restrictions
and https://iwpr.org/project_states/arkansas/).
| 3. | Employees expect and desire comprehensive reproductive health care coverage. |
A national survey of 3,500+ college-educated workers conducted in 2021
produced the following findings:
| · | Most workers (73%) want their employee health insurance benefit to cover
the full range of reproductive health care, including abortion. For women in their child-bearing years, this number is 83%.
|
| · | Learning that a company covers some reproductive health care, but not abortion
care, is much more likely to turn off top talent than attract them (47% would feel less positively toward the company versus 19% more
positively). |
| · | About 7 in 10 (69%) say that access to reproductive health care, including
abortion, should be part of the issues companies address around gender equity efforts in the workplace.
|
| · | Majorities across gender, age, race, and ethnicity would be discouraged from
taking a job in states that ban abortion, such as Texas, with its recently passed SB 8. |
(Source: https://bit.ly/3F0JusI)
By a 2:1 margin, employed adults would prefer to live in a state where
abortion is legal and accessible, according to a national survey of 2,210 adults conducted by Morning Consult. The results skew higher
for millennials and Gen Z (https://bit.ly/3Mn9z81). This has implications for Walmart’s ability to recruit workers to work in states
with restrictive laws.
Given the geographic scope and sample sizes of these studies, the Proponent
believes it is reasonable to infer that the views of Walmart’s employees generally align with these findings.
RESPONSE TO STATEMENT OF OPPOSITION
| 1. | A central argument of Walmart’s opposition to our proposal seems to be reflected in its statement that the proposal is
“framed so broadly that we believe it would be extremely difficult for the company to fulfill this objective to a degree that would
be of value or utility for our shareholders, associates, and other stakeholders.”
|
As a practical matter, Walmart could satisfy the concerns
expressed in the proposal by approaching its reporting as providing answers to a series of questions that arise from these concerns:
| · | How might impending changes in the reproductive health care environment affect
our employees? |
| · | How might impending changes in the reproductive health care environment affect
the talent pool in the states where we conduct business? |
| · | How might our ability to meet the reproductive health care needs of our employees
change in the near future? |
| · | Does Walmart need to improve any aspects of its reproductive health care
insurance or benefits to respond to the dramatically changing environment for women’s health care? |
| · | Do new laws that provide for civil enforcement of state abortion bans expose
Walmart to legal liability? |
| · | Would our company benefit by advocating for less restrictive public policies
concerning access to reproductive health care? |
Walmart states that “we
believe it would be extremely difficult for the company to fulfill this objective to a degree that would be of value or utility for our
shareholders, associates, and other stakeholders.” To the contrary, shareholders will benefit from knowing how the Company
is assessing the impact of a known and highly likely risk to full reproductive health care options that will have direct and indirect
impacts upon employees, their families, work colleagues, and the Company as a whole.
| 2. | The statement of opposition also reads as follows: |
We believe the company’s resources are better focused
on its day-to-day review and design of our benefits plans and programs in order to remain competitive in our industry and in compliance
with all applicable regulatory requirements in the jurisdictions where we operate.
Our proposal is consistent with the view that Walmart should
seek to offer benefits plans that are competitive and compliant with regulatory requirements. Our request identifies that there is already
a patchwork of state laws related to reproductive health care with which Walmart must comply. Our request calls on the Board to review
and consider where compliance with these myriad state laws could undermine Walmart’s goal of remaining competitive, particularly
in the context of employee recruitment and retention.
Shareholders may also find it of interest that Walmart sought
to exclude this proposal from the proxy ballot, arguing before the Securities and Exchange Commission (SEC) that the proposal did not
pertain to a significant social policy issue and sought to interfere with the Company’s ordinary business operations. The SEC rejected
the Company’s arguments.
CONCLUSION
A “Yes” vote is warranted. For all the reasons discussed,
we believe that the requested report will motivate Walmart to monitor and respond to imminent threats to its ability to provide the highest-quality
reproductive health care to its employees, a clear need for attracting and maintaining a qualified and stable workforce.
A post-Roe environment would present Walmart with new challenges
related to hiring, retention, productivity, site location, public policy positions, and other matters. The Company may experience higher
turnover (with its associated costs) in states with extreme abortion restrictions, as well as more difficulty in recruiting—or relocating—talent
to those states. As a large employer with workers across the country, Walmart will face these challenges more keenly than most. The
proponent believes it would be in Walmart’s best interest to anticipate likely disruptions to its ability to provide comprehensive
reproductive health care to all of its employees and take steps to minimize the impact and reach of these disruptions. These steps
may include (but need not be limited to) examining the comprehensiveness of reproductive health care coverage across geographies and provider
networks, committing to providing insurance that covers all forms of contraceptive care, studying the feasibility of covering travel expenses
incurred to obtain out-of-state abortion care, and reviewing whether the Company should take public policy positions on proposed reproductive
health care legislation. The requested report is best viewed as a transparency and accountability mechanism to produce this internal
review.
A “wait and see” approach is insufficient and not helpful
to shareholder assessment of risk and management quality. Intertwining threats are present now—to employee well-being, health, and
morale; to corporate reputation and brand; to consumer loyalty; to women’s ability to advance within the Company; and to the attainment
of diversity and inclusion goals.
Vote “Yes” on Proposal No. 6.
For questions, please contact Molly Betournay, Clean Yield Asset Management
at molly@cleanyield.com.
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