Wal-Mart Taps Asia Chief as New CEO of U.S. Division
Foran, a 53-year-old New Zealander, will replace Simon as U.S. chief executive officer on Aug. 9, the Bentonville, Arkansas-based company said today in a statement. Foran had only served in his current role as head of the Asia business since June, when he was elevated from CEO of Wal-Mart China.
Simon, 54, had been a contender to be CEO of the whole company before Wal-Mart picked Doug McMillon as its next leader. McMillon, who took the top job in February, was closer to the Walton family, which controls most of Wal-Mart’s shares, people familiar with the situation have said. Simon will remain available as a consultant for the next six months to help with the transition, Wal-Mart said today.
“This felt like the right time to move on and focus on my next opportunity,” Simon said in the statement.
Today’s move was set in motion by Simon being passed over for the CEO job and shoudn’t be interpreted as a change in strategy, said Bryan Gildenberg, an analyst at Kantar Retail. Wal-Mart first announced plans to elevate McMillon, 47, to the position in November. He replaced Mike Duke, 64, who retired.
McMillon previously ran the international business, where he worked with Foran.
“Simon’s leaving is a natural completion of the McMillon/Duke CEO transition process rather than representative of a new shift in Wal-Mart’s direction,” Gildenberg said. “Foran is one of the many talented executives McMillon recruited and hired while running international that have taken on broader responsibility since his ascension.”
In taking over the U.S. division, Foran will oversee a much larger piece of the world’s largest retailer -- though one that’s contending with sluggish growth. The U.S. performance contributed to lower-than-projected sales and profit in Wal-Mart’s most recently reported quarter, which ended April 30. At the time, Wal-Mart also forecast second-quarter profit that missed estimates. Earnings will be $1.15 to $1.25 a share, compared with the $1.28 predicted by analysts.
Foran will be tasked with continuing Wal-Mart’s push into smaller-format stores -- an effort begun under Simon. The U.S. division also is trying to integrate its e-commerce business with brick-and-mortar sales.
For the new job, Foran will receive a salary of $950,000, along with an incentive plan earning him as much as 300 percent of that pay, or about $2.9 million. He also is eligible for an annual equity award with a target value of about $4.9 million, plus $1.63 million in restricted shares, and a $500,000 one-time cash payment.
Wal-Mart shares have declined 3 percent this year. The stock fell almost 1 percent to $76.35 at the close today in New York.
Foran has more than 30 years of retail experience in operations, merchandising and marketing. He previously ran Woolworths Ltd. (WOW)’s supermarket division and held other senior roles at the Sydney-based company, including general manager of the Big W chain of discount stores.
Woolworths in Australia has a similar approach to retail as Wal-Mart, which made it easy for Foran to fit in at his current company, Gildenberg said.
Foran joined Wal-Mart in 2011 and became head of the China business in 2012. Foran was tapped for the Asia CEO job after revamping operations, pricing and product assortment in the Chinese stores. Wal-Mart said today it will announce its new Asia chief at a later date.
The reshuffling follows the appointment of a new chief for Walmart.com last month and the promotion of Canadian CEO Shelley Broader to a job overseeing Europe, the Middle East and sub-Saharan African in May.
Last month, Wal-Mart also named board member Greg Penner to the new role of vice chairman, putting him in position to be a successor to Chairman Rob Walton. Penner, 44, is Walton’s son-in-law and has served on the board since 2008.
Simon, who ran the U.S. operation since June 2010, first joined Wal-Mart in 2006 from Brinker International Inc. (EAT), the restaurant chain that owns Chili’s. He also had served as secretary of the Florida Department of Management Services, appointed by then-Governor Jeb Bush.
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