March 25, 2005

Thomas Coughlin Fired (UPDATED)

This adds a new dimension to our previous report on the executives being fired:

Wal-Mart Stores Inc. said on Friday it had asked former Vice Chairman Thomas Coughlin to resign as a director in connection with an internal investigation into unauthorized use of corporate-owned gift cards and personal reimbursements.

Coughlin, who sat on three board committees, including the one for strategic planning and finance, resigned from the board on Friday in a disagreement with the company over the matter, Wal-Mart said in a filing with the Securities and Exchange Commission (news - web sites).

Wal-Mart said it had reported the matter to the U.S. Attorney for the Western District of Arkansas based on the findings of the investigation, including Coughlin's response to questions about his knowledge of certain transactions.


UPDATE: Matt at Overtaken by Events has a better summary:
I'm not sure that the significance of this can be overstated. Tom Coughlin, probably more than any other leader in the company, WAS Wal-Mart. He was a personality, and the regular employees loved him. I met him several times and heard him speak at various meetings and the guy was absolutely dynamic.

UPDATE 2: Mr. Coughlin had previously agreed to join the board of Alien Technology (pr):

Coughlin, former vice chairman, Wal-Mart Stores, is widely recognized as a pioneer in leading the adoption of advanced information technologies, including RFID, to transform business processes and operational efficiency in retail. After 28 years with Wal-Mart, he retired from his executive management role with the company in January 2005.

"We are extremely pleased that Tom has joined our board," said Tom Baruch, chairman of the board, Alien Technology, and managing partner and founder of CMEA Ventures. "His vast industry experience and vision for the adoption of RFID in the retail industry will be valuable for Alien as the company continues to pioneer development and implementation of RFID."

Perhaps the others on the board are rethinking this... The press release (same document as above, different link) provides an accurate summary of Mr. Coughlin's WM duties and elsewhere:
As Vice Chairman of the Board of Directors of Wal-Mart Stores, Inc, Coughlin was responsible for the U.S. operations of Wal-Mart Discount Stores, Supercenters, Neighborhood Markets, and SAM�S CLUBS, as well as Walmart.com. Prior to this position, he served as Executive Vice President and President and Chief Executive Officer of the Wal-Mart Stores Division and SAM�S CLUB (USA). Since joining Wal-Mart Stores in 1978, he served as Vice President of Loss Prevention, Vice President of Human Resources, Executive Vice President SAM�S Club Operations, Executive Vice President of Specialty Groups, and Executive Vice President and Chief Operating Officer of Wal-Mart Store Operations. In the fall of 2001, he was elected to the Wal-Mart Board of Directors.

Mr. Coughlin is affiliated with numerous boards and organizations including Wal-Mart Stores, California State Hayward Educational Foundation, ChoicePoint, Inc., Cleveland Clinic Foundation Board of Trustees, MD Anderson Advance Team, National Association of Chain Drug Stores, Northwest Arkansas Community College Foundation, St. Edwards High School, and Students in Free Enterprise. He was recently honored by the Bentonville Library Foundation with the announcement that he and his wife Cynthia will be the namesakes for the new �Coughlin Library� in Bentonville, Arkansas, a new facility under development as a result of a $4 million gift from the Walton Foundation. Coughlin received his Bachelor of Science degree in Political Science from California State University.

UPDATE 3: Wal-Mart's press release has been fully reported by Reuters.

UPDATE 4: The Left Coaster's December article on Coughlin is absolutely punishing:

Coughlin, 55, was treated a year ago for arterial blockage, but company officials did not attribute his departure to his health. They say he returned to work fully recovered and kept a hectic travel schedule.

"He had an incredible sense of urgency. He taught people that the center of the company is in stores, not at headquarters, because there are no cash registers ringing at headquarters," says Jay Allen, head of executive affairs at Wal-Mart.

And that in a nutshell defines Thomas Coughlin and the minions he's created. Some of these men will decide that there are greener pasture elsewhere (for them!), and others will continue to rise in Wal-Mart's ranks. But none of these men will leave behind what Coughlin taught them about running a retail business. As these men make their career moves, the Wal-Mart philosophy about so many things will travel with them, and as their successes happen, other executives will want to model themselves after these men in the hops of matching their achievements.

UPDATE 5: The Arkansas Democrat Gazette has more:

Coughlin announced his retirement just days before Wal-Mart fired seven executives in December. The company said the executives were terminated for breaking company rules, though it never elaborated beyond that.

Coughlin supervised two of the most senior executives who were fired: former executive vice president Jim Haworth and former senior vice president Terry Pharr.

Haworth and Pharr both discussed their relationship with Coughlin when they gave depositions to attorneys suing Wal-Mart over alleged sexual discrimination at the company. Haworth was deposed in 2003 and Pharr in 2002.

Both men said Coughlin interviewed them before they were promoted to their respective positions. Haworth said that Coughlin gave him his annual performance review.

In his letter to employees Friday, Scott said he could not tell them if December�s firings were related to Wal-Mart�s investigation of Coughlin because of the federal criminal investigation.

Wal-Mart said in its filing that the expenditures under investigation involved "corporate-owned gift cards" along with "third party invoices and Company expense reports."

Posted by Kevin on March, 25 2005 at 08:43 PM