Divisive Battle Ends in Board Elections -

"Target’s Shareholders Strongly Reject Dissident Slate, Ending Divisive Proxy Battle"
by Zachery Kouwe

In one of the most contentious proxy battles in corporate history, William A. Ackman, the activist hedge fund manager, suffered a painful defeat on Thursday in his quest to install five nominees to the board of the retail giant Target.

According to preliminary tally, Target shareholders voted overwhelmingly in favor of the company’s four incumbent directors while also supporting a plan to cap its board seats at 12, defeating a proposal by Mr. Ackman to expand the board to 13 members.

Mr. Ackman, whose Pershing Square Capital Management owns 7.8 percent of Target through stock and options, failed to persuade his fellow shareholders that the company needed fresh blood in the boardroom to help it navigate the recession and compete against its main rival, Since beginning the proxy fight in March, Mr. Ackman has argued that Target’s current board lacked relevant experience in the real estate, retail and credit card business.

Mr. Ackman gave an impassioned five-minute speech on shareholder democracy at Target’s annual meeting on Thursday, invoking the Rev. Dr. Martin Luther King Jr. and John F. Kennedy as tears welled up in his eyes.

Target maintains that its stock has performed well over the long term and no board changes are needed.

The meeting, held at an unfinished store in Waukesha, Wis., was the end of one of the most notable and expensive boardroom contests in recent memory. It has added fuel to the continuing debate over how much influence big shareholders like Pershing should have over a company’s business strategy."

Taken from the New York Times online.

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