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Tying Pay to Compliance: Will Walmart's Plan Work?

Joe Mont | May 7, 2013

Lots of companies talk about making compliance and ethics a priority. Walmart is putting its money where its mouth is.

The retail giant announced last month that it will soon begin basing a portion of compensation for top executives, including CEO Michael Duke, on the company's ability to meet compliance goals. If top executives don't meet compliance objectives, they risk having their annual bonuses reduced.

While many companies have used language in compensation plans stating that executives must follow laws and regulations, it's rare for companies to tie pay directly to compliance efforts. “This is a very blunt instrument to use on executives who don't do things the way they should be done,” says Steven Hall, founding partner and managing director of the executive compensation consulting firm Steven Hall & Partners.

Walmart's initiative is hardly...

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