Activist Investors Urge Removal of Target Board Director and Former CEO
A group of activist investors is urging Target shareholders to vote against the re-election of Executive Chair Brian Cornell and Lead Independent Director Christine Leahy at the retailer’s annual shareholder meeting in June, reports Yahoo Finance. Among the reasons cited is Leahy’s oversight of the decision to retain former CEO Cornell as executive chair and special adviser, per a letter to shareholders filed in a notice of exempt solicitation on Friday.
“In our view, Target has endured years of strategic and operational missteps that have led to significant underperformance compromising long-term shareholder value,” the letter from Mercy Investment Services, SOC Investment Group, and Trillium Asset Management states. “The recent CEO succession does not signal that the board is focused on the genuine reset we believe is critical to turn the company around.”
Total Retail's Take: Current Target CEO Michael Fiddelke took the helm of the retail giant in February, succeeding Cornell, who transitioned to be executive chair of the board. Target has waded through rough waters in recent years and questions arose around Fiddelke's ability to make real change with Cornell still sitting on the company's executive board. According to the group of activist investors, Target is at a critical juncture and cannot afford another year of the status quo.
The group continued in the letter to fellow Target shareholders: "Not only does retaining Mr. Cornell come at considerable financial cost to the company, but his role undermines the turnaround effort by jeopardizing the independence and effectiveness of both management and the board." Leahy is mentioned as responsible for the decision to keep Cornell on the board, which "suggests continuity without [the] correction" needed to turn the company around.
Target's upcoming Annual Meeting of Shareholders is set for June 10, where all shareholders will decide whether to join the activist investors or vote to re-elect Cornell and Leahy to the company's board of directors.
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.
