Kohl’s shareholders vote to keep directors despite pressure from activists

Kohl’s logo is displayed outside a Kohl’s store on January 24, 2022 in San Rafael, California.

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by Kohl Shareholders voted to re-elect the current list of 13 directors to the company’s board of directors, as the retailer faced increasing pressure from activists for a review, the company announced Wednesday.

Kohl’s annual shareholder meeting was held as an activist firm Macellum Advisors prompted Kohl’s to renew its list of directorsclaiming that the company has underperformed in recent years compared to other retailers.

Macellum said the efforts of Kohl’s chief executive Michelle Gass, such as partnering with beauty retailer Sephora or creating models with Amazon on a returns program, they weren’t enough.

In February Macellum appointed 10 directors, including its CEO Jonathan Duskin. The activist also pushed Kohl’s to sell himself and sell some of his properties and let them back for additional capital.

Kohl’s objected to the sale and leaseback transactions, but the dealer contacted Goldman Sachs bankers to evaluate the offers. by Kohl confirmed in March that it had received multiple preliminary purchase offers after turning down an offer from Acacia Research, backed by Starboard, at $ 64 per share, which was deemed too low.

Kohl’s stock closed Tuesday at $ 49.39, up from a 52-week high of $ 64.80. The stock fell more than 1% at the start of trading on Wednesday.

Ahead of Wednesday’s vote, major proxy consulting firms were split in their recommendations. Institutional Shareholder Services, or ISS, argued Macellum, while Glass Lewis said shareholders would be better served by supporting Kohl’s current advice.

This isn’t even the first time that Macellum has put pressure on Kohl. The two reached an agreement in April 2021 to add two directors from a list that a group of activists, including Macellum, were pushing. Kohl’s has also appointed an independent director, with the support of activists.

Kohl’s board “remains focused on executing a solid and intentional review of strategic alternatives,” said President Peter Boneparth.

“While we have had differences with Macellum, this board is committed to serving the interests of all of our shareholders,” he said.

And while Macellum didn’t win the vote, the activist firmly says he won’t shut up.

“I think the vote was a referendum on a sale and the people who voted for the company believed that any board change in the middle of this process ran the risk of disrupting the process,” Duskin told CNBC.

“The vote for the company was a vote to sell a company,” he said. “Let’s not go away”.

—Courtney Reagan of CNBC contributed to this report.