Global Chief to Lead Wal-Mart

"As a business choice it makes a lot of sense because [Duke] knows the international market," said Glenn Prickett, senior vice president at Conservation International, who recently attended the summit with Duke for Wal-Mart suppliers in China. "That's really where the future growth of the company is."

The international division is the fastest-growing segment of Wal-Mart's business. Sales have grown nearly 17 percent during the first three quarters of the year to $74 billion compared to the same period last year. The domestic business grew at less than half that rate at 7 percent, though it accounted for $184.3 billion in sales, not including its Sam's Club stores.

There have been road bumps along the way. Wal-Mart sold its operations in Germany and South Korea in 2006 when its stores failed to take off. The Japanese division, Seiyu, shut 20 stores and cut 350 jobs in September, and Wal-Mart is trying to lower prices to drive traffic as the country slips into recession. Critics have also accused it of squeezing its suppliers and providing lax oversight, particularly during last year's spate of toy recalls.

Duke's promotion "shows that the board believes that the future for Wal-Mart is overseas and not here at home, further demonstrating how seriously the company regards the challenges it will face to its business model in the years to come," said David Nassar, executive director of Wal-Mart Watch, a frequent critic funded by the Service Employees International Union.

Walton noted Duke's team-building ability and broad experience throughout the company in a statement released yesterday. He also said that Scott led the company "with humility and grace" and that "my dad would have been proud."

Joe Carideo, retail partner at executive search firm Battalia Winston Amrop, said he had attempted to recruit Duke from Wal-Mart several times to no avail. Duke joined Wal-Mart in 1995 as senior vice president of logistics and later moved to administration before heading the U.S. division. Carideo said that background in operations made him a logical choice as a successor for Scott, who also began his career at Wal-Mart in logistics 30 years ago.

"What drives the success at Wal-Mart is getting the goods into the store efficiently and effectively," Carideo said. "Merchandising is not what drives the success at Wal-Mart."

Duke received $975,000 in base pay last fiscal year, not including stock and other options. According to the SEC filing, he will also receive a performance-based restricted stock award that will vest in 2012.

Scott earned $1.4 million in base pay last year and will receive $1.1 million annual salary after he steps down to continue as an adviser and public representative of the company through Jan. 31, 2011.

Wal-Mart's stock closed yesterday at $52.92, up 4 percent or $2.26.