Shareholder trying to replace Target board membersby Martin Moylan, Minnesota Public Radio
Hedge Fund manager Bill Ackman is spending millions of dollars to try to get himself and four allies seated on Target's board, but history seems to be against him.
Ackman is not happy with some decisions Target has made in recent years, especially in regard to the retailer's real estate holdings and credit card business.
St. Paul, Minn. — Ackman hopes to replace some current board members with new directors. Ackman said they'll give Target's board much-need expertise and experience in the retail, real estate and credit card businesses.
But efforts to throw out incumbent board members generally fail, said Espen Eckbo, director of the Center for Corporate Governance at Dartmouth College.
"It's very hard to win these proxy contests for the dissident shareholders, and especially if there's no particular crisis situation," Eckbo said.
Ecko said shareholders tend to go with management's recommendations for corporate boards.
Targets said shareholders should re-elect incumbent board members because they are the best candidates. But Ackman says shareholders shouldn't buy that argument.
"If we don't have a competitive process for who gets on boards it's bad for the country," Ackman said. "We think this will benefit not just Target, but will set a model for other corporate elections and will cause other boards to take a very hard look at their slates and make sure before they just reelect the same nominees year after year that they reach out for the best people with the most relevant experience."
Ackman has about an eight percent stake in Target. Voting is going on now and results will be disclosed May 28.