Walmart board chair Rob Walton steps down, hands off to Greg Penner

Fayetteville, Ark. -- It was the end of an era at Walmart today, as Rob Walton, son of Walmart (WMT) founder Sam Walton, stepped down as board chairman of the giant retailer, turning over the job to Greg Penner, his son-in-law. The move was announced at the company’s annual meeting this morning.

Though the timing of the move was somewhat unexpected, Penner, who is vice chairman, had been widely seen as Rob Walton’s successor. The Walton family holds a roughly 50% ownership stake in the company and the move keeps control in family hands. Rob Walton, 70, had served as chairman of the board for 23 years. Penner, 45, is married to Rob Walton’s daughter Carrie and has worked for the company on and off for 15 years. Penner started his career at Goldman Sachs and then served the company in a variety of capacities, including helping to run the business in Japan.

After the annual meeting was opened by Walmart employees singing a rousing rendition of “Let's Get It Started,” host Reese Witherspoon introduced Rob Walton, who came on stage wearing one of his late father’s trucker hats. (He noted that another one of his dad’s hats would be going to a new exhibit on the history of American business at the Smithsonian Institution.) Walton talked generally about the company’s business, history and success and then introduced family members who were sitting in front of the crowd of some 14,000 employees, shareholders and media in the Bud Walton Arena at the University of Arkansas. Walton noted his wife Melani, his sister Alice, his brother Jim, and various children, nieces, nephews and other family members.

Walton also introduced Penner, then surprised the crowd by announcing that he would be stepping down to be replaced by Penner, who then took the stage to pay tribute to his father-in-law. “It would be impossible to overstate Rob Walton’s impact on Walmart and how personally committed he has been over the years,” said Penner. In a video commemorating Walton, showing pictures of him over the years, former CEOs David Glass, Lee Scott and Mike Duke also spoke of the outgoing chairman’s contributions. “Well now you can see I wasn’t always this old,” Walton joked.

Current CEO Doug McMillon and Glass, 79, a longtime confidant of Rob’s father Sam, took the stage to tell more Rob stories. “We convinced Rob [who has a law degree from Columbia University] to join the company as our legal counsel,” Glass said. “That’s because Sam [Walton] and I couldn’t even spell ‘lawyer’ never mind knew what they did.”

Rob Walton was seen as a steady, behind-the-scenes force at the company, overseeing his family’s stake, worth some $120 billion. Though the company has grown during his tenure, it has also been beleaguered by investigations, scandals, including one in its Mexican operations, and protests about its low wages.  

And its stock has been an underperformer. So Penner will have his hands full going forward as the world’s largest company—$482 billion in annual sales—with these issues as well as what Wall Street calls the “tyranny of large numbers,” meaning it’s tough to grow when you get so big, especially with companies like Amazon (AMZN) and Whole Foods (WFM) attacking the company online and in higher growth areas.

The annual meeting bounced back and forth between Witherspoon demonstrating her “bend and snap” move from “Legally Blonde” and a performance by Ricky Martin, to serious shareholder resolutions from disgruntled employees and the Sierra Club asking for better wages and the company to act more sustainably. One employee noted the disconnect between the size of the company and the huge amount of money it makes and pays its executives and how little it pays its employees. (The company recently announced it would give raises to about 500,000 workers, or nearly 40% percent of its employees, within the next six months.)

While the thousands of employees cheered wildly during morale-boosting interludes, there was a smattering of uncomfortable clapping when some workers called for better wages and conditions. Rob Walton, who never wanted to be CEO of the company, knows how difficult and complicated the chairman’s role is. It’s something that his son-in-law Greg Penner, will now have to understand oh-so-well.