On Thursday, shareholders of Walmart (WMT) and PayPal (PYPL) voted down proposals that aimed to alter the companies’ approaches to diversity, equity, and inclusion (DEI). These issues remain a hot topic as corporations navigate political and cultural pressures.
At Walmart, investors rejected proposals targeting the company’s DEI programs. The National Center for Public Policy Research’s Free Enterprise Project (FEP) had urged Walmart’s board to explain why it delayed revising its DEI policies until public pressure from DEI opponent Robby Starbuck arose. FEP also questioned whether Walmart was simply “repackaging” its DEI efforts instead of eliminating them.
PayPal shareholders similarly dismissed a proposal from FEP, which called for the company to disclose potential risks tied to its charitable donations. FEP raised concerns about PayPal’s relationships with organizations like the Human Rights Campaign, warning that these connections might expose the company to discrimination claims based on speech or religious beliefs.
Background: Controversies Surrounding DEI Policies
Walmart has faced criticism from some investors over its DEI policy changes. Earlier this year, more than 30 shareholders managing $266 billion in assets voiced frustration to CEO Doug McMillon over the company scaling back diversity initiatives and dropping the DEI acronym late last year.
The shareholder advocacy group Unite for Respect urged others to support a measure to strengthen racial and equal inclusion at Walmart, arguing the retailer was falling short of meeting the needs of a diverse workforce.
In response, Walmart Corporate Secretary Rachel Brand urged shareholders to reject the proposal. She emphasized that hiring decisions are not based on race or gender and pointed to the company’s broad recruitment efforts backed by publicly available data.
Wider Corporate Context: DEI Debates and Reactions
Many major corporations have faced DEI-related shareholder proposals this year. Companies like Alphabet (GOOG, GOOGL), Meta (META), McDonald’s (MCD), Amazon (AMZN), JPMorgan Chase (JPM), Target (TGT), and Tractor Supply (TSCO) have all announced shifts in their diversity policies.
This week, Netflix (NFLX) and Alphabet are expected to present further DEI proposals. Meanwhile, Tractor Supply seeks to sidestep the issue, with CEO Hal Lawton recently stating their policy changes aim to avoid any speech seen as politically or socially biased.
Consumer Impact and Retail Traffic Trends
For physical retailers, the debate over DEI policies affects more than just shareholder votes; consumer behavior also reflects these tensions. According to Placer.ai, Walmart’s store traffic dropped 0.1% year-over-year in the week ending May 26, while Target experienced a sharper decline of 2.8%.
In contrast, Costco’s traffic grew 3.8% over the same period. Costco supports DEI initiatives and participates in the NAACP’s Black Consumer Advisory program.
Target’s sales results also showed signs of strain, with a 3.8% year-over-year drop in same-store sales for the first quarter. CEO Brian Cornell attributed some of this to consumer reactions to the company’s “January Sense of Belonging Update,” as well as broader economic pressures including tariff uncertainty.
Walmart CEO Reaffirms Commitment to Inclusion
During Walmart’s shareholder meeting, CEO Doug McMillon was asked whether the company continues to support the LGBTQ community and plans to participate in Pride month merchandise sales.
McMillon responded, “We’re going to continue to work hard to be the Walmart for everyone. We want everyone who works for the company to be excited to work here, and that’s what we’re going to continue to work on.”
