In an unexpected move, Wal-Mart Stores appointed Michael Duke to serve as its new president and chief executive—a position that could make him one of the country’s highest-paid executives.
Duke, who has headed up Wal-Mart’s international division, will replace Lee Scott early next year as the company’s top executive. Scott is retiring at the end of January after nine years as president and CEO, but he will hold on to his role as chairman of Wal-Mart’s executive committee.
That means that Duke is in line for a substantial bump in pay. Last year, he earned $13.3 million in total compensation, about one-third of the $31.5 million that Scott took home.
Wal-Mart has not yet disclosed a new employment agreement for Duke, who had a base salary of $975,000 last year. But the company did reveal in an 8-K filing Friday, November 21, that once Scott begins to serve solely as chairman, his base salary will be reduced to $1.1 million annually, down from the $1.4 million he earned for the company’s fiscal year ended January 31.
In addition, Scott will no longer be eligible to participate in the company’s incentive plan for executives, according to the filing.
Scott apparently decided to retire now because the retailer is on firm footing. In a memo to Wal-Mart workers, chairman Rob Walton said that for a CEO transition, “the right time is now, a time of strength and momentum for our company.”
Wal-Mart’s earnings increased about 10 percent in the third quarter, making it one of the few companies to exceed expectations during the period.