Wall Street investor Bill Ackman is calling for changes at Target, having proposed a slate of five new directors that he hopes shareholders will elect at the end of the month. According to the Wall Street Journal, Ackman and his hedge fund group, Pershing Square Capital Management, are lobbying for change at the retailer after prolonged stock losses in the past year.
Target shares are down about 39 percent from their peak price of $70 in July 2007; Ackman lost $1.6 billion in investor money due to the stock’s poor performance. Ackman’s funds possess about 3.3 percent of Target, with call options for an additional 4.5 percent.
One of Ackman’s arguments for director change cites the positive performance of fellow retail giant Wal-Mart through the recession. “Since the fourth quarter of 2007, Wal-Mart has outperformed Target on key operating metrics, including growth in retail revenues, same-store sales, and earnings per share,” said Ackman in a letter to shareholders.
Ackman has a history of disruptive proxy moves, including a successful bid in 2006 for fast-food chain Wendy’s to sell its Tim Horton’s branch. His new slate of directors at Target will include himself.