At the insistence of many shareholder groups, more companies are eliminating staggered terms for board members and instead mandating annual terms.
Target is the latest company to agree to reduce directors’ term limits to one year. The move follows a heated proxy battle with activist investor William Ackman’s Pershing Square Capital Management, which ended during the company’s annual meeting in May when Ackman’s attempt to capture five director seats was unsuccessful. “I think the change in term limits is a result of Ackman’s proxy fight,” says Ken Squire, founder and president of 13D Monitor, a research and advisory service specializing in shareholder activism.
Governance experts say it’s not uncommon for companies to revamp governance practices after activist investors attempt to take over board seats. “The timing might seem atypical,” says Patrick McGurn of RiskMetrics. “But it’s not unusual to see companies make over their governance practices after they go through a proxy fight.”
Yet Target’s recent decision is not expected to touch off an increase in the trend toward eliminating staggered board terms. “Companies aren’t going to unilaterally make this decision,” says Squire. “I think Target did this for [its] shareholders because shareholders pushed for it.” Target’s high approval rating from investors, who re-elected Target’s entire slate, provided a stable foundation for the company’s decision.
Switching to a yearly director election can make takeovers easier. And, with the change in how broker votes will be cast and the potential for proxy access to become a reality, more directors could find themselves at risk of losing their board seats. Timothy Smith of Walden Asset Management cautions that while the term limit may ignite concern, companies with yearly term limits often hold elections without incident. “Directors could argue that yearly elections make them vulnerable, but you can’t receive 51 percent of the vote against you unless you’re doing a really bad job.”
Kevin Martin joined Xtera Communication’s board. Martin served as chairman of the U.S. Federal Communications Commission from 2005 to 2009.
Cisco appointed Arun Sarin to its board. Arun previously served as CEO of Vodafone Group. Sarin also served on Cisco’s board from 1998-2003. He currently sits on the board of Safeway.
William C. Kunkler, executive vice president of CC Industries, was elected to Sears Holdings’ board. Kunkler also sits on the boards of Envestnet Asset Management, a financial services company, and NIBCO, a manufacturer of valves and fittings.
Roger D. Williams, former president of Bob Evans Farms, has been elected to the board at LecereTM, a developer of restaurant-management tools.
Coldwater Creek’s co-founder Dennis Pence will replace Daniel Griesemer, who has stepped down from his role as CEO after two years.
Iron Mountain named Per-Kristian Halvorsen, senior vice president and chief innovation officer at Intuit, to its board, bringing the number of directors of the company from nine to ten.
MSCI, a global provider of investment decision support tools, named Catherine R. Kinney to its board. Kinney retired from NYSE Euronext in March 2009 after 35 years in a variety of managerial positions with the company.
Richard Markee has been appointed CEO of Vitamin Shoppe. Markee has served as non-executive chairman of the board since 2007. He previously served as president of Babies “R” Us.
Shutterfly elected Brian Swette to its board. Swette, former chief operating officer at eBay, serves as non-executive chairman of Burger King and on several other boards.
David Ebersman, CFO of Facebook, has been appointed to Ironwood Pharmaceutical’s board. Ebersman previously was with Genentech from 1994-2009.
Bringing a wide range of experience from positions at DuPont Chemicals, UniRoyal, Applied Digital Solutions, and The Bay Group, Garrett Sullivan was recently named to EGPI Firecreek’s board. He is also the past president of Granada Hospital Group.
Steven Holtzman has joined Satori Pharmaceutical’s board. Holtzman is CEO and co-founder of Infinity Pharmaceuticals.
Premera Blue Cross elected Robert C. Wallace to its board. Wallace is CEO of Wallace Properties, a full-service commercial real estate company.
ZAGG, a publicly traded mobile and electronics company, has elected Ed Ekstrom to its board. Ekstrom is a founding partner of vSpringCapital. Prior to his work at vSpringCapital, he served as vice president of Intel Communications Products Group.
Fiona Dias, executive vice president, partner strategy and marketing for GSI Commerce, has been appointed to Advance Auto Parts’ board.
American Shared Hospital Services elected Ray Stachowiak to its board. Stachowiak is founder, president, and CEO of Shared Imaging, a provider of fixed-site and mobile magnetic resonance imaging systems.
UTi Worldwide has appointed Donald W. Slager to its board. Slager, who is CEO of Republic Services, will join the company’s compensation, nominations and corporate governance committees, and the recently established risk committee. UTi Worldwide is an international non-asset-based supply chain company that provides air and ocean freight forwarding.
MGM Mirage named Joseph H. Sugerman to its board. Sugerman is an otolaryngologist and an attending physician at Cedars-Sinai Medical Center in California.
Timothy R. Franson was elected to Myriad Pharmaceutical’s board. Franson was with Eli Lilly for more than 20 years and most recently served as vice president of global regulatory affairs.
BJ’s Restaurants appointed William L. Hyde to its board. Hyde is a 35-year veteran of the national restaurant business and has managed both private and publicly held restaurant companies during his career.
North Arrow Minerals appointed Blair Murdoch to its board, increasing the number of directors to five. Murdoch is chairman of Option-NFA.
Walter Energy has named Victor Patrick CEO. Patrick most recently served as vice chairman, CFO, and general counsel. George Richmond, formerly CEO of the company’s Jim Walter Resources subsidiary, has been named president and chief operating office of Walter Energy. Richmond has been with the company since 1978.
Acucela has appointed Glen Y. Sato to its board. Sato is a partner in the life sciences and corporate practice groups of law firm Cooley Godward Kronish LLP. Acucela is a clinical-stage biotechnology company that focuses on developing new treatments for blinding eye diseases.
Marc N. Casper has been appointed president, CEO, and a director of Thermo Fisher Scientific. Casper has been with the company in a variety of senior management capacities since 2001, most recently as executive vice president and COO. He succeeds Marijn E. Dekkers, who resigned to become CEO of Bayer AG, based in Germany.
Richard M. Smith, president and COO of BioScrip, has been named to the company’s board.
BackOffice Associates elected David Peterschmidt to its board. Peterschmidt was most recently CEO of Openwave Systems. He also serves on the boards of Savvis and LimeLight Networks.
Innospec, an international specialty chemicals company, has appointed Robert I. Paller to its board. He will serve on the nominating and governance commitee. Paller is currently of counsel to the law firm of Smith, Gambrell & Russell.