Activist Investor Pushes Kohl’s to Oust its CEO and Chairman
Activist investor Ancora Holdings is pushing Kohl’s to remove its chief executive and its chairman, reports CNBC. Ancora sent a letter to the board Thursday asking for the replacement of CEO Michelle Gass and Chairman Peter Boneparth. The firm, which has a 2.5 percent stake in Kohl’s, wants new leadership so the company can revamp its business.
“Kohl’s needs new leadership with demonstrated experience in cost containment, margin expansion, product catalog optimization and, most importantly, turnarounds,” states the letter. Shares of Kohl’s are down about 43 percent so far this year.
Total Retail's Take: It's unsurprising that Kohl's is in the news yet again, as it's been a tumultuous few years for the retailer. In 2021, Kohl's was forced to add three new directors to its board following uproar from a group of activist investors. The department store chain confirmed takeover interest from multiple buyers in January 2022. Pressure returned in February when activist group Macellum again moved to take control of the board and nominated 10 directors, forcing Kohl's to adopt a "poison pill" shareholder rights plan.
Ancora is now taking aim at CEO Michelle Gass, who entered the role in 2018, and Chairman Peter Boneparth, who has been a director at the company since 2008 and became chairman this year. The letter calls out Kohl's recent rejection of a bid from the Franchise Group after seeking a buyer to revive its business for more than a year.
"The Board’s decisions to reject multiple indications of interest in the $64-$65 per share range in the winter and then proceed with an opaque strategic review throughout the spring — as financing markets gradually deteriorated — have destroyed billions of dollars in equity value and painted the company into a corner," Ancora stated.
Ancora also expressed dissatisfaction over the compensation awarded to Gass, which reached nearly $60 million between fiscal year 2017 and fiscal year 2021 while Kohl's produced "years of poor returns." Citing ineffective leadership and poor execution by management, Ancora believes "shareholders’ capital should be utilized to compensate a new chairman and CEO that possess operating expertise and turnaround pedigree."
Kristina Stidham is the digital content director at Total Retail and sister brands Women in Retail Leadership Circle and Women Leading Travel & Hospitality at NAPCO Media. She is passionate about digital media and handles video, podcast and virtual event production for all brands. You can often find her at WIRLC, TR, WLT&H or industry events with her camera and podcasting equipment—or at home on Zoom—recording interviews with thought leaders and business executives.
Kristina holds a B.A. in Media Studies and Production from the Temple University Klein College of Media and Communication in Philadelphia. Go Owls! When she's not in the office, she loves to go on long walks, sing around the house, hangout with her family and two pet guinea pigs, and travel to new places.