Wal-Mart

(WMT) - Get Report

shares declined 20% in its last fiscal year, but you wouldn't know it from the compensation the company paid its executives.

Company CEO H. Lee Scott Jr. saw his compensation package jump 33% to $28.96 million. Thomas Coughlin, who heads the company's Wal-Mart stores and Sam's Club divisions, saw his compensation swell 44.5% to $12.48 million.

Scott and Coughlin weren't alone. All five of Wal-Mart's top executives received big raises last year, the company revealed in its proxy statement filed Tuesday. The pay increases came despite the fact that at the end of the company's fiscal year on Jan. 31, its stock had fallen to $47.80 from $59.98 at the close of its previous fiscal year. Amid a poor year for retailers, slowing sales helped to drag down Wal-Mart shares.

Like Wal-Mart, other retailers gave their executives nice raises despite poor share-price performance last year. Among the retail executives who didn't share in their shareholders' pain were those at

Office Depot

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,

Sears

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and

CVS

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.

At Wal-Mart, Scott's salary increased by just 1.7% to $1.14 million last year. But his bonus swelled 77% to $3.16 million. Meanwhile, Scott saw a huge increase in the amount of restricted stock Wal-Mart awarded him; the value of such stock grants increased to $13.1 million from $5 million the previous year.

In addition to the restricted stock grant, Wal-Mart granted Scott 605,327 stock options, up from 521,634 the year before, although the fair value of the option grants decreased from a $13.6 million grant in fiscal 2001 to an $11.3 million grant last year.

Scott's other compensation, which includes profit-sharing and retirement-plan contributions and interest on deferred compensation, increased to $167,604 last year from $133,328 the previous year.

In the proxy statement, Wal-Mart's compensation committee defended Scott's salary, saying it was set using "objective factors," including the company's performance and shareholder return and salaries paid to the heads of comparable companies.

"The committee also considered certain subjective factors, including Mr. Scott's general knowledge of the retail business, his contribution to the company's past business success and the committee's belief that Mr. Scott has the vision and managerial capability to oversee the company's continued growth into the foreseeable future," the compensation committee said in the proxy.

Coughlin saw similar increases to Scott's. While his salary increased only incrementally to $907,308 from $885,769 the year before, his bonus more than doubled to $2.3 million. Wal-Mart awarded him $4.2 million worth of restricted stock in fiscal 2002, compared to just $875,000 worth of such stock the year before. And while the fair value of his option grant declined, the total number of stock options Wal-Mart gave him increased to 261,832 from 220,175 the year before.

Big increases in bonuses and restricted stock grants also helped swell the compensation packages of John Menzer, head of Wal-Mart's international division; Thomas Schoewe, the company's CFO; and Michael Duke, executive vice president of administration.

Menzer, for instance, saw his total compensation package increase 23.5% to $9 million. Excluding the value of their option grants, Schoewe and Duke saw their compensation packages jump 71.9% to $3.4 million, and 77.7% to $3.2 million, respectively.

Including their options packages, Schoewe and Duke last year were paid $5.6 million and $5.2 million, respectively. Wal-Mart did not calculate the value of their options packages in fiscal 2001.

In addition to the compensation disclosures, Wal-Mart revealed in its proxy that it faces seven shareholder proposals, most of which deal with governance issues and executive compensation practices. Among the proposals are:

Recommending that two-thirds of the company's board be independent directors;

Urging the company to not seek consulting or other services from its auditors;

Requesting that the company index the number of options granted to executives to the company's stock performance; and

Urging the company to report to shareholders on its efforts to promote women and minorities into management positions.

In the wake of the

Enron

,

Worldcom

and other corporate scandals, companies' governance policies have been under increasing scrutiny from investors. Public companies are facing a wave of shareholder proposals on issues ranging from the

expensing of stock options to the awarding of generous retirement plans to executives.

Like those of most companies facing such suggestions from shareholders, Wal-Mart's board opposes each of the proposals, saying they are unnecessary.