Monday, May 11, 2009

Ackman and Target



William Ackman, the principal of Pershing Square, is hosting what he calls a "town meeting" today, to introduce his nominees for the board of big-box retailer Target.

Isn't that a wonderful name for such an anouncement? Reminds me of a Norman Rockwell painting. In fact, I think I'll post a photo of the relevant painting here. I gather that is supposed to be some ordinary townfolk telling his neighbors what he thinks about putting a stoplight in at State & Main.

Anyway, Ackman's nominees are as follows: himself, Michael Ashner, James Donald, Ronald Gilson, and Richard Vague. If they are successful, they will replace the following incumbents: Mary Dillon, Richard N. Kovacecich, George W. Tamke, and Solomon D. Trujillo.

Why is a slate with five names contesting a slate with four names? Apparently there is a dispute over the size of the board. Ackman believes the board ought to have 13 seats rather than 12, and that 5 of those 13 ought to be up for decision at the forthcoming annial meeting. The company holds ithas a 12 member classified board, with just the four seats at issue this year.

Target Corporation's retail segment includes general merchandise and food discount stores and Target.com, a fully integrated on-line business. In addition, the company operates a credit card segment that offers both store-brand credit cards and VISAs. The company, which operates 1,699 stores in 49 states (which state is excluded? -- I can't tell you) has sufered a severe stock price decline of late, which has ticked off Mr. Ackman, who seems to have bought in at the peak.

The Financial Times quotes Ackman thus: "This is not a poorly managed company. this is really just about improving the board."

It seems sensible to presume that dysfunctions at the board will also show up in the management. If they don't, how dysfunctional can they be? This one confuses me a bit.

I appreciate the excuse to steal the Rockwell image, though.

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