William Ackman, head of Pershing Square Capital Management and activist investor, has wanted to shake things up at Target. In the past year, he has pushed for the company to sell its credit card operations, spin off its real estate assets and forced a shareholder vote to expand Target's board and elect directors who shared his vision for the retailer's future.
Unfortunately for Mr. Ackman, he has not made the case for change with the majority of Target's shareholders. At the company's annual meeting yesterday, shareholders voted to maintain the board size at 12 instead of the 13 he sought. It also reelected four incumbent board directors rather than those backed by Mr. Ackman.
"Today's outcome demonstrates the confidence Target shareholders have in our Board's qualifications, diversity and experience to provide effective and independent oversight and direction to the company, contributing to the creation of one of the most recognized brands in the United States," said Gregg Steinhafel, Target's chairman, president and chief executive officer, in a press release. "We remain dedicated to serving the interests of all shareholders by sustaining Target's competitive advantage, driving continued profitable growth and generating substantial shareholder value over time."
"I believe that Target's board has shown a strong purpose and direction, and I think it would have been disruptive if Ackman would have had these people," Walter Loeb, a retail consultant, told The Associated Press.
Discussion Questions: What do you think of the vote by Target shareholders to side with the company's board over William Ackman? In general, are activist investors such as Mr. Ackman a positive or negative force when it comes to the long-term health of the companies they invest in?