Wal-Mart hands chairman job to current head's son-in-law

Wal-Mart hands chairman job to current head's son-in-law
Wal-Mart CEO Doug McMillon, left, with outgoing board chairman Rob Walton at the Wal-Mart shareholder meeting in Fayetteville, Ark. (Danny Johnston / AP)

Wal-Mart is keeping it all in the family.

Wal-Mart Stores Inc. said Friday that Vice Chairman Greg Penner was replacing his father-in-law, Rob Walton, as chairman of the company's board of directors.


Walton, 70, the son of Wal-Mart founder Sam Walton, will stay on as a director. He began serving as chairman in 1992 after his father died.

"I'm deeply honored to follow in his footsteps and recognize the deep responsibility I have to our associates, all shareholders and the board," Penner said of Walton in a statement.

Penner will assume his new role at the end of Friday's annual shareholder meeting. He is only the third person to serve as Wal-Mart chairman.

Penner will face tough challenges as the company struggles to increase sales and attract new customers, said Brian Yarbrough, senior analyst at Edward Jones. In addition, Wal-Mart's plan to increase grocery offerings — now more than 50% of its business — has backfired after traditional grocery stores lowered prices and new rivals like dollar store chains moved into food.

Just as Wal-Mart disrupted the retail landscape for mom-and-pop stores, the Bentonville, Ark., company is now feeling the pressure from these new rivals and

"They've definitely got some head winds they have to figure out," Yarbrough said. "It's hard to differentiate themselves."

Wal-Mart has also faced criticism for not having an independent chairman.

Before last year's annual meeting, Institutional Shareholder Services advocated for the election of a chairman without family ties.

With Penner at the helm, Yarbrough said he didn't expect much to change in terms of corporate decision-making. The company's chief executive, Doug McMillon, came on board in 2014. Yarbrough said Penner would probably give the new management team several years to show improvement.

Penner, 45, has an MBA from Stanford. He began his career as a corporate finance analyst for investment bank Goldman Sachs and later served as a general partner at Peninsula Capital Partners in Detroit.

In 2005, he founded Madrone Capital Partners, a private investment firm that is affiliated with Rob Walton and other family members.

He also has a long history with Wal-Mart, first as a management trainee and later holding positions at and Wal-Mart Japan. He joined the company's board of directors in 2008.

Wal-Mart shares were down 72 cents, about 1%, at $73.43 in midsession trading.