Egan-Jones backs 4 of Macellum's dissident board director candidates at Kohl's
Reuters
Published May 09, 2022 02:49PM ET
Updated May 09, 2022 04:16PM ET
By Svea Herbst-Bayliss
NEW YORK (Reuters) -Proxy advisory firm Egan-Jones recommended that Kohl Corp shareholders elect four of the 10 board candidates nominated by activist investment firm Macellum Advisors as the department store considers selling itself.
Kohl's (NYSE:KSS) stock dropped 9.15% in a broad market sell-off but climbed 1.32% in after-hours trading.
Egan-Jones said shareholders should back Jeffrey Kantor, Pamela Edwards, Francis Ken Duane and Jonathan Duskin, Macellum's founder and portfolio manager, arguing that the retailer has failed to properly address its underperformance.
"The board's lack of commitment to value creation hinders the opportunities for growth and consideration of strategic alternatives that could be in the best interests of the Company and its shareholders," according to the report seen by Reuters.
"There is an urgent need for change in the board room to cease the trend of underperformance and instead, focus on unlocking shareholder value."
Kohl's shareholders are set to vote for directors at the company's annual meeting scheduled for Wednesday.
A Kohl's representative welcomed the "broad support (the company) has received from shareholders" and said the current board will ensure the review of alternatives will not be "disrupted or hindered."
A Macellum representative said the hedge fund hopes "shareholders see through Kohl's spin about 'unintended consequences' and recognize the only way to ensure incremental board change is to vote" for the activist.
Previously Institutional Shareholder Services (ISS), Egan-Jones' significantly larger rival, recommended that investors back two Macellum nominees - Jeffrey Kantor and Pamela Edwards.
This vote comes after Macellum and several partners last year reached a settlement to drop a similar fight. In return the hedge funds got two of their nominees board seats. The company added a third independent director to the board at the same time.
Macellum has argued that Kohl's has done too little to turn its business around, and is pressing the board to sell the company. The company said it has met with more than 20 potential buyers.
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Written By: Reuters
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