Retail

Walton Family Sells Walmart Shares

walmart-truck
courtesy of Wal-Mart Stores Inc.
Last Friday the Walton family, heirs of Wal-Mart Stores Inc. (NYSE: WMT) founder Sam Walton, announced that the family business, Walton Enterprises LLC, would would distribute about 6% of its holdings to a newly created Walton Family Holdings Trust. The Walton family’s stake in Wal-Mart has risen to about 50% as a result of share buyback programs, and the family is satisfied to control the company’s biggest stake without actually owning enough stock to give them actual control.

In the press statement Walton Enterprises said:

Given the prospect that Walmart may continue to buy back shares, the Walton family has informed Walmart that it currently expects to sell Walmart shares from time to time in order to help offset possible further increases in its ownership percentage and to help fund charitable contributions. The family believes that this is consistent with an appropriate balance of family and non-family ownership that supports the goals of all Walmart shareholders and long term business success.

This was inevitable given the share buyback programs at Wal-Mart, and for the Walton family to act as if it just noticed is disingenuous. The share buybacks, all along, have provided outsized benefits to the Walton family and the distribution of shares to a charitable trust doesn’t really change anything.

Earlier this year when Wal-Mart announced that it was raising employees’ wages to $10 an hour, CNBC estimated that the move would cost the company $1.5 billion a year.Walton Enterprises currently owns 1.42 billion shares of Wal-Mart stock, of which 6% is about 85 million shares. At Friday’s closing price of $80.65 a share, the Walton Family Holdings Trust is receiving about $6.5 billion in Wal-Mart stock.

Wal-Mart got a lot of positive reaction to its wage increase, but there is little question that the company could do more for its rank-and-file employees. And the Walton family could lead that effort. But it won’t.

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