DEF: Walmart Seeks Shareholder Approval for New Stock Incentive Plan

Walmart is asking shareholders to approve a new stock incentive plan to attract and retain talent and align executive interests with shareholder value.

Summary

• Walmart is seeking shareholder approval for the Walmart Inc. Stock Incentive Plan of 2025, which includes authorizing an additional 135.5 million shares for issuance.
• The plan aims to attract, motivate, and retain associates and non-management directors.
• If approved, the 2025 Stock Incentive Plan will extend the term of the 2015 Stock Incentive Plan for ten years and make certain other amendments.
• As of March 31, 2025, 611.9 million shares had been issued under the 2015 Stock Incentive Plan, with 60.6 million shares subject to outstanding awards and 107.5 million shares remaining available for grant.
• The three-year average burn rate from fiscal years 2023 through 2025 was 0.60%.
• The company estimates that the additional shares will cover awards for three to five years.
• The fully diluted overhang as of March 31, 2025, giving effect to the approval of the amended plan, is estimated to be 3.65%.

Sentiment

Score: 7

Explanation: The document is neutral in tone, presenting facts and figures related to the stock incentive plan. The request for shareholder approval is a standard corporate procedure.

Positives

• The stock incentive plan is designed to attract, motivate, and retain key personnel.
• Equity grants are a key component of the compensation program and enable the company to attract and retain a broad range of talent across all levels of management.
• The plan aligns management interests with the long-term interests of shareholders through equity ownership.
• Walmart has not requested shareholder approval of additional Shares under an equity incentive plan since 2010.

Negatives

• If the plan is not approved, the company believes it will negatively affect its ability to recruit and retain highly qualified associates.
• The fully diluted overhang is estimated to be 3.65% if the plan is approved.

Risks

• If the 2025 Stock Incentive Plan is not approved by our shareholders, the 2015 Stock Incentive Plan would remain in effect and available for additional grants until its expiration.
• If the 2025 Stock Incentive Plan is not approved by our shareholders, and as a consequence we are not able to continue to grant equity awards at competitive levels, we believe it will negatively affect our ability to recruit and retain highly qualified Associates, which could have a negative effect on our business.

Future Outlook

The company expects the additional shares to cover awards for three to five years, based on the historical burn rate.

Management Comments

• The Board of Directors believes that adoption of the 2025 Stock Incentive Plan is necessary to continue to enable our company to attract, motivate, and retain Associates and Non-Management Directors with appropriate experience and to increase the alignment of the interests of participants with the interests of our shareholders.

Industry Context

The document does not provide specific industry context beyond the general need to remain competitive in attracting and retaining talent.

Stakeholder Impact

• Shareholders: The plan aims to align management interests with shareholder value.
• Associates: The plan provides incentives to attract, motivate, and retain talent.
• Non-Management Directors: The plan provides equity compensation to align their interests with the company's success.

Next Steps

• Shareholder vote on the approval of the Walmart Inc. Stock Incentive Plan of 2025 at the Annual Shareholders Meeting on June 5, 2025.
• If approved, the company will file a registration statement with the SEC.

Key Dates

Keywords

stock incentive plan, equity compensation, shareholder approval, executive compensation, talent retention, stock options, restricted stock units, performance shares, burn rate, dilution