Kohl’s Corp., in its latest response in the battle with activist investor Macellum Advisors, issued a letter to shareholders touting the qualifications of the retailer’s current board members.
In response to Macellum complaints about the actions of the retailer’s management and directors, Kohl’s has reiterated that it has the expertise necessary to drive the business, evaluate offers to purchase the company and deliver value to shareholders, but in this letter, it particularly emphasized the qualifications of its board members.
The Kohl’s letter begins:
The value of your investment is at stake at Kohl’s Annual Meeting this year. Macellum Advisors GP, LLC is seeking to replace your board with a far less qualified slate. In contrast to Macellum’s nominees, your board has the right skills and expertise to drive our strategy forward while evaluating any value-creating opportunities.
Your board has the necessary skills to oversee Kohl’s evolving strategy and to contribute top-tier financial and governance direction as retail trends change. In addition, we have recently refreshed our board, adding six new directors in the last three years, three of whom joined last April as part of a settlement with Macellum and other investors.
Your Board, composed of 13 independent directors and our CEO, has leading experience in areas critical to our growth. Every member of your board has extensive retail or consumer-facing industry experience from such companies as Walmart, Kroger, Burlington and lululemon. Ten of our directors have technology, e-commerce, or digital experience from their roles as senior executives at leading retailers, making them attuned to changes in the omnichannel retail space. Additionally, twelve of our directors have marketing or brand management experience, and eight of our directors are current or former CEOs.
Your board has the right experience to oversee the ongoing review of expressions of interest to acquire the company, and to measure any proposal against the value-creation potential of a compelling stand-alone plan. Ten of our 13 directors have experience in M&A, making them well-suited to support a robust process. Our incoming chair has over 30 years of experience leading deals encompassing over $25 billion in transaction value.
Our finance committee, which became a standing committee in May 2021, is leading the process and is comprised entirely of independent directors, including a Macellum designee. The finance committee is chaired by John Schlifske, who has significant M&A and investment management experience as chair and CEO of Northwestern Mutual. Collectively, our finance committee’s members have overseen several dozen M&A transactions.
Your board is committed to choosing the path that maximizes value for all shareholders.
Kohl’s made a point of briefly profiling each of the board members it back for election to the board, including current position in supervising the retailer’s operations:
- Michael Bender, sits on nominating and ESG committee, president and CEO of Eyemart Express
- Peter Boneparth, incoming chair; sits on compensation, finance, nominating and ESG committees, former senior advisor, The Blackstone Group
- Yael Cosset, sits on audit committee, senior VP and chief information officer at Kroger
- Christine Day, sits on audit and compensation committees, CEO of LR&C
- Charles Floyd, sits on compensation committee, global president of operations at Hyatt
- Michelle Gass, CEO of Kohl’s
- Margaret Jenkins, sits on audit committee, former senior vp, CMO of Denny’s Corp.
- Thomas Kingsbury, sits on audit and finance committees, former president, CEO and chair of Burlington Stores
- Robbin Mitchell, sits on audit, nominating and ESG committees, senior advisor at The Boston Consulting Group
- Jonas Prising, sits on compensation committee, chair and CEO of ManpowerGroup
- John Schlifske, sits on finance, nominating and ESG committees, chair and CEO of Northwestern Mutual
- Adrianne Shapira, sits on the finance, nominating and ESG committees, managing director of Eurazeo Brands
- Stephanie Streeter, sits on the audit and compensation committees, former CEO of Libbey
Beyond promoting its board member qualifications, Kohl’s further asserted that the director nominees that Macellum has assembled are underqualified to oversee company strategy or run a strategic review process as six of the 10 nominees have never served on a public company board. Kohl’s added that only one Macellum nominee has M&A experiences compared with 10 Kohl’s directors that have a background in mergers and acquisitions.
On April 4, Macellum Advisors issued its own shareholder letter complaining that Kohl’s had been pursuing “a flawed and opaque review of strategic alternatives. In all of our years investing in the public market, we have never seen a corporate leadership team operate in a more defensive and insular manner when many shareholders seem very supportive of a sale and various suitors have expressed interest.”