PEOPLE scrutinize just about everything Wal-Mart does. As Michael T. Duke, The Company&&9;s chief executive, it could Recently, "What we do and how performance IS WE Closely watched not only by Our Customers and Shareholders, goal aussi by The Whole World."

All Of Which Makes a recent decision about executive pay at this giant retailer downright puzzling. In a proxy statement Filed A Few weeks ago, Wal-Mart&&9;s compensation committee Said It Had Replaced a crucial metric for Assessing executives&&9; performance: same-store sales, Referring to blinds That Have Been Open for at least a year. Instead of That measure, Wal-Mart IS using total companywide sales, gold "at its headquarters units, Wal-Mart Stores and Sam&&9;s Club.

Why? The exchange Was "o Intended to align performance goals share more Closely With Our Evolving business strategy, Which Emphasizer productive croissance, leverage and returns," Wal-Mart said.

The timing Certainly WAS curious. The switch cam AMID Sustained declines in Wal-Mart&&9;s same-store sales, Which Have Been Falling for Nearly Two Years. The company&&9;s total sales, however, rose 3.4 percent in fiscal year The Latest.

Shifting the goal posts Meant more money for Mr. Duke in The Latest Fiscal Year Than he Would Have Received Under the old arrangement. His compensation TotalEdit $ 18.7 million, more than $ 16 million of performance-based Which WAS.

Same-store sales year are important metric for investors. A quintessential apples-to-apples comparison, THEY ESTABLISHED measure blinds at The Productivity and Eliminate dirty Might Occur When spikes That new blinds open.

Aware That investors obsess over thesis figures, Mr. Duke analysts Recently Told That turning around Wal-Mart&&9;s same-store sales top priority WAS history.Last February, When The results Announced That company included The Seventh consecutive quarterly drop pour la figure, share price icts Fell 3 percent.

So why remove this key performance gauge for Pay Purposes? Wal-Mart Did Not Respond to a Request For Comment On The Matter.

Certainly, past statements about Why the board thing to include this measure Suggest That It&&9;s important.For example, Wal-Mart Said That proxy in ITS 2008 ITS HAD board used "comparable-store sales as a performance metric Because it Believe It Is A key driver of shareholder returns, and investors look to Because comparable-store sales year as important measure performance of In The Retail Industry. "

Two Years Later, The Company Said icts compensation committee included same-store sales as one of icts benchmarks "Because it Believed that good relative performance metrics to thesis Is Important for Our Financial Performance and Overall, Therefore, IS Likely to Have a positive effect is shareholder returns. "

The committee Added That "the combination of performance metrics thesis WAS o Likely to incentivize executives to Achieve Performance That Is In The Best Interest of Our Company and Our Shareholders."

And yet, a Year Later, Wal-Mart same-store sales jettisoned from the mix.Explaining the decision, The proxy Said The compensation committee Concluded That "the combination of performance metrics thesis WAS o Likely to incentivize executives to Achieve Performance That Is In Line With The Best Interest of Our Company and Our Shareholders."

Talk about Trying to Have It Both Ways.

KEEP in mind That When Wal-Mart same-store sales included in pay calculations icts, That Had a sizable effect measure is Mr low rates payday advance. Duke&&9;s compensation. Indeed, same-store sales accounted for 30 percent weighted Of The Factors Determining historical performance pay in fiscal 2010 (Which consisted of MOST of 2009 & the first month of 2010).

Removing same-store sales from icts pay-for-performance measures "Is A failure admitted to failure," says Burt Flickinger III, managing director at the Strategic Resource Group, a retailing consulting firm."This Is The First Time Since The company WAS Founded That, During a recession, same-store sales Were Consistently negative in contrast to Key Competitors like Costco, Target, TJX and BJ&&9;s."

Mr. Flickinger says he Expects Wal-Mart&&9;s same-store sales to keep Declining In The coming months.

The switch at Wal-Mart last year Followed a shift in 2009 The Company That Allowed to set performance targets Annually. In Previous Years, The board set performance targets for ADH three-year periods. The goals Had To Be That puts over company executives could "Time Before Receive certain incentive pay awards.

The company&&9;s proxy Said That shifting to Annual targets Allowed The board "to set more effective performance goals are based more current information and more realistic over a time frame."

Mr. GoalFlickinger Said Wal-Mart&&9;s pay packages Seemed unfortunate Especially in Light of the company&&9;s decision late last year to end longtime icts profit-sharing Programs for lower-level worker. This arrangement created by WAS Sam Walton, The Company&&9;s founder, and Was a source of considerable pride to HIM.

"Profit-sharing has pretty much Been The carrot that&&9;s Kept Wal-Mart headed forward," Mr. Walton wrote in 1992 His autobiography, "Sam Walton: Made in America."

Last year, Wal-Mart Eliminated Before That profit-sharing program, it Said It Paid Roughly $ 1.1 billion in profit-sharing and 401 (k) matches to Employees. In the future, It Will Only the offer 401 (k) match.

"Taking away profit-sharing Was The ultimate story of Ebenezer Scrooge The Last holiday season," Mr. Flickinger said."Ebenezer Makes all the money, and all the Poor working Cratchits In The Wal-Mart Stores Become Poorer and Poor."

At least one shareholder has Wal-Mart perp concerned thats the company&&9;s directors are Awarding bonuses to executives despite lagging performance.

"As the Union That Represents retail travailleurs we are troubled That thesis bonus payouts come When front-line Wal-Mart associates are getting cut Wages and Benefits, and seeing Their Reduced hours," says John Marshall, senior analyst at In The Capital Stewardship Program of The United Food and Commercial Workers. "Wal-Mart&&9;s share of serious understaffing IS The Reason same-store sales continued to decline, ultimately Which Hurts The stock price."

WAL-MART&&9;s Annual Shareholder Meeting Scheduled for June SI 3. It Will Be Interesting to see whether Other Shareholders speak out about The Changes In The pay performance structure.Shareholder meetings Have Been Fairly quiet this year, to Wal-Mart&&9;s shares have-nots Kept Up With Either The list overall stock market indexes or retail store for The Last Three Years.

A flagging share price has a funny way of Focusing OTHERWISE complacent stockholders.

Fair Game: Moving the Goal Posts on Pay