Target Corp said last week that at next year's annual meeting it will ask its shareholders to approve a measure declassifying the board of directors, i.e. henceforth requiring that every member of the board seek re-election each year.
The rules change will require approval of those who hold 75% of the shares. Nonetheless, approval of such a request will likely be granted. After all, this is a classic bone of contention between activists and incumbent, with the incumbents stereotypically seeking a staggered board, for the sake of self-preservation but in the name of continuity.
If the board itself is giving up the continuity flim-flam, no 26% of shareholders will insist upon it on their behalf.
Earlier this year, Pershing Square Capital made an issue of the staggered board in its proxy contest against Target.
I see a Reuters story on the subject quotes William Ackman, founder of Pershing Square, thus: "We applaud Target's decision to declassify the board and we believe it will contribute to stronger corporate governance in the future."
Target's incumbents won re-election in late May, as my readers may remember.
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