With roughly two weeks until its shareholders meet on March 7, Kohl’s Corp. is fighting against activist investor Macellum Capital Management for the future of the company.
On Friday, Macellum filed a preliminary proxy statement in which the company is urging shareholders to vote for the 10 candidates it nominated to the Kohl’s board of directors. Macellum is also urging shareholders to vote against the current compensation plan for executives.
One of the nominees to the board is Macellum CEO Jonathan Duskin.
Macellum, which owns nearly 5% of Kohl’s stock, sent a white proxy card to Kohl’s shareholders. Shareholders have until March 7 to submit their vote.
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Kohl’s has been fighting off activist investors for months, including adopting a shareholder rights plan often referred to as a “poison pill,” allowing shareholders with 10% or more of company stock to purchase additional shares at a 50% discount.
In January, activist hedge fund Starboard Value LP offered Kohl’s $9 billion but the company rejected the offer, saying it was too low.
In its filing with the Securities and Exchange Commission on Friday, Macellum stated, “The board’s recent and quick rejection of at least two offers to buy the company, at a material premium to the then stock price, and the board’s decision to implement an onerous poison pill, forces us to conclude that the only way for shareholders to realize a reasonable return on their investment is with a majority of the board refreshed.”
Kohl’s Corp. says current offers to buy the Menomonee Falls-based retail chain are too low and fail to take into account the company’s long-term growth potential.
After successfully getting Kohl’s to add two board members in 2021, Macellum is advocating for the reelection of those board members but noted it only needs a minimum of seven of its nominees to be elected for them to get control of the board.
The firm also took a shot at the top five Kohl’s executives saying in 2010 they took in a combined $21 million but in 2019 they took in $30 million after operating income declined more than 40% during that time.
Macellum took aim particularly at Kohl’s CEO Michelle Gass saying her total compensation was $12.86 million in 2020, up from $8.98 million the year before.
Gass has taken the majority of her earnings in stock and her salary was roughly $1.25 million in 2020.
Macellum is advising shareholders to vote against any resolutions that would continue the current compensation plan for executives.
