By Sabrina Escobar

Advocacy-oriented shareholders are taking the DEI fight to Walmart's annual shareholder meeting. The retailer, however, appears to want to be excluded from the narrative as it tries to avoid offending consumers on either side of the debate.

Walmart released its proxy statement Thursday evening ahead of its annual meeting on June 5. The retailer received a set of proposals tied to its diversity, equity, and inclusion $(DEI)$ policies that threaten to drag the world's largest retailer further into the debate over whether American corporations should have such policies.

Facing conservative backlash, Walmart rolled back some of its DEI initiatives last fall, including racial equity training for staff and evaluating programs meant to increase the diversity of its suppliers.

Two shareholder proposals Walmart received this year are tied to that decision.

One, filed by the organization United for Respect and several co-filers, requests that Walmart conduct an independent "racial equity study" that analyzes Walmart's adverse impacts on Black, indigenous, and other communities of color, providing recommendations.

"Shareholders worry the move [cutting DEI] clashes with the Company's stated commitment to fostering inclusion and opportunity for all and disregards evidence that DEI initiatives boost motivation and reduce attrition," the proposal reads.

On the other side of the aisle, the National Center for Public Policy Research, a conservative think tank, has requested the board issue a report explaining the length of time the company spent before changing those initiatives.

"In addition to concerns about the time it took Walmart to revise its DEI programs, a major concern for Walmart shareholders is that value-destroying DEI initiatives are merely being repackaged rather than eliminated," the proposal adds. "Corporate governance missteps revealed by the requested report would help prevent that recurrence."

The company's board is recommending shareholders reject both proposals, noting Walmart already discloses information on its employee strategies and business rationale, and that it constantly engages with stakeholders to talk about its business. The board also suggested that competing proposals such as these may be harmful to the business.

"Many proposals attempt to force Walmart to take sides on sensitive or polarizing issues, which would erode -- rather than enhance -- shareholder value," the company wrote in its proxy statement.

The response is likely a move to avoid angering consumers on either side of the issue who have been vocal about supporting or boycotting retailers they believe are doing the right thing. Target, for instance, has seen foot traffic decline for more than 10 straight weeks this year after rolling back its DEI policies. And on the flip side, Costco Wholesale may have benefited from calls to "buycott" instead of boycott after it defended its DEI policies in its proxy statement this year.

While Walmart tried to remain neutral, it did take a cue from Costco by emphasizing the importance of some degree of diversity to its business.

"We believe that the communities we serve and depend on for the success of our business are more likely to thrive if the members of the communities we serve feel connected, supported, and included," the proxy statement reads.

Write to Sabrina Escobar at sabrina.escobar@barrons.com

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April 24, 2025 18:48 ET (22:48 GMT)

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