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Watch Out, Wal-Mart Execs–Next Year, Bonuses Will Depend on Compliance

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Bonuses for Wal-Mart executives will now depend at least partially on the success of new compliance operations, with regard to the company’s report and investigation of “allegations of wrongdoing worldwide.” Last year, Wal-Mart was accused of violating the Foreign Corrupt Practices Act when it allegedly bribed government officials to approve Wal-Mart store openings in Mexico.

Wal-Mart, understandably, is eager to prevent such accusations in the future. Federal investigations into the allegations cost Wal-Mart $157 million in the fiscal year ending this January 31st, and the company has already predicted that its continued cooperation with the U.S. Justice Department, the Securities Exchange Commission, and Mexican authorities will result in a company-wide financial loss.

In response to these unprecedented expenses, Wal-Mart is in the process of overhauling its compliance process, merging its compliance, ethics, investigations, and legal offices. Top execs are now required to report their compliance progress to Wal-Mart’s internal audit committee, and in the coming fiscal year, the committee will have the power to reduce or eliminate bonuses for these execs if the new objectives aren’t met.

In the fiscal year ending in January, Chief Executive Mike Duke’s bonus was $20.7 milliona 14% raise over last year.

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