Wal Mart, the nation’s largest single employer after the Federal government, made the surprise announcement that Rob Walton, Chairman of the Board since 1992, was stepping down.
He will be replaced with vice-Chairman Greg Penner, grandson of founder Sam Walton and son-in-law of Rob. Penner started his career at Goldman Sachs before joining the retailer as a management trainee.
Penner’s notable accomplishment at Wal Mart is being Chairman of their Technology and eCommerce Committee since it was formed in 2011. His blend of finance, technology and international business expertise were all cited as reasons for the move.
He’s also young, at just 45 years old, showing Wal Mart is thinking to the future and wanting someone who is going to stay in the role awhile.
The established retailer is currently in a dogfight with rival discount retailer Amazon, with the difference being Amazon doesn’t sell in stores, only online.
Wal Mart both wants and fears this business. They’re clearly looking to strengthen their talent base in the online sector and so the move to Penner makes sense. In addition to his finance and tech chops, he also worked in Japan for a number of years, which should help him steer Wal Mart to oversees success.
The sudden decision also indicates the board felt the need for a change, now. Usually such changes in leadership occur over a long period but in this case its pretty sudden.
On the whole, its a surprising yet rational transition.
Make no mistake, though, that the stakes are high. The chart below shows the market cap of both Amazon and Wal Mart over the last decade. You can clearly see the market is betting on Amazon and its online strategy rather than Wal Mart and its brick and mortar retail network.
