The top five officers at Wal-Mart Stores, Inc (NYSE: WMT) made $65 million in aggregate in the company’s fiscal year ending January 31. Shareholders did not do quite as well. Wal-Mart shares rose only 10% over the same period. The DJIA was up 40%, and the stock of Wal-Mart’s smaller competitor Target Corporation (NYSE; TGT) was higher by 51%.

Wal-Mart’s lack of success is primarily because of two weaknesses in the firm’s operation. Sales at its largest division, Wal-Mart US, which is 63% of the company’s revenue, have flat lined. Revenues at the unit were $258.2 billion in the last fiscal and $255.3 billion the year before. The part of the Wal-Mart that has been growing rapidly for the last decade, its international operations, is not growing at all any more. For the year ending January 31 overseas revenues were $100.1 billion compared to$98.8 billion in the same period last year.

Wal-Mart is concerned enough about its lack of growth in America that it has begun a period of significantly discounting merchandise to help its faltering “Everyday Low Prices” image. Analysts are worried that the middle class customers Wal-Mart picked up during the recession can afford to move back up to big box retailers for the more affluent, companies like Costco (NASDAQ: COST).

In April, Wal-Mart decided to lower prices on about 10,000 items. The goal of the cuts is to get customers back into its 3,700 US stores. Shareholders in Wal-Mart are concerned about the move because some believe  it could cut the retailer’s margins even though the company says it can make up that difference by getting better terms for suppliers and better managing it supply chain.

New Wal-Mart CEO Michael Duke made $19.2 million last year. That was down from $28.4 million the year before, but he received a special stock grant of $23.7 million for the earlier period. Thomas M. Schoewe, Wal-Mart’s CFO, made$7.2 million. Vice Chairman Eduardo Castro-Wright made $13.9 million, and Executive Vice Presidents C. Douglas McMillon and Brian C. Cornell made $11.5 million and $14.3 million respectively.

As former Wal-Mart CEO Lee Scott found, family member Jim C. Walton, who sits on the company’s board ,does not have a great deal of patience when the firm is growing slowly.

Douglas A. McIntyre

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