All Target Directors Elected to Board Despite Some Opposition -- Update
By Paul Ziobro
Target Corp. shareholders approved all 10 nominees to the company's board, shrugging off calls from a prominent advisory firm to throw out a majority of the candidates for their handling of last year's data breach.
Target's interim chairwoman, Roxanne Austin, said Wednesday at the company's annual meeting that all nominees won a majority of the vote. Shareholders also supported the company in an advisory vote on executive pay. All three shareholder proposals, including one calling for an independent chairman, failed.
The tallies of the votes weren't immediately available.
Target faced stiff criticism ahead of the annual meeting. Institutional Shareholder Services Inc., which advises large shareholders how to vote on corporate ballots, recommended that shareholders vote out seven of the 10 directors for failing to manage risks and protect the company from the massive data breach that hit the retailer during the holiday shopping season.
It was an unusual recommendation from ISS, which only rarely calls for overthrowing a majority of a company's board nominees. But the firm argued that the members targeted for defeat, who sit on the audit and corporate responsibility committees, "set the stage for the data breach" by inadequately managing the risks.
Another proxy advisory firm, Glass, Lewis & Co., said there wasn't enough information yet about the data breach to draw conclusions about board responsibility, but it did recommend that shareholders vote out Target's two longest serving board members, former Xerox Corp. Chief Executive Anne Mulcahy and former head of Fannie Mae James Johnson, primarily for their track record on other corporate boards.
The annual meeting was straightforward, with around 100 attendees gathering at Union Station in downtown Dallas. The setting allowed the small group of shareholders to hear for the first time from Ms. Austin, a longtime director who was elevated to interim chairwoman after Chairman and Chief Executive Gregg Steinhafel resigned last month.
Ms. Austin and John Mulligan, Target's interim CEO, spoke of the company's challenges during the past year, including the theft of millions of customer credit-card numbers, a money-losing expansion into Canada and the inability to attract more shoppers to stores, and the company's plan to move forward by being more nimble and willing to test new ideas.
"We need to aggressively move Target forward," Ms. Austin said.
One longtime shareholder, Aaron Epstein, whose father, Louis, sold Pickwick bookstore chain to Target's predecessor corporation in 1968, put Alan Mulally, the soon-to-be-retired CEO of Ford Motor Co., on his wish list of someone to consider for the next CEO.
"Word has it that he wishes to return to Seattle, but perhaps we can explain to him that Minnesota has more lakes that are more beautiful than does Washington state," said Mr. Epstein, one of two shareholders who spoke during the meeting.
Mr. Epstein offered to send a book, "American Icon," about how Mr. Mulally turned around Ford, to anyone who presented him a business card, as well as a gift for taking the time to read the book: a jar of Target's Market Pantry peaches.
Ford didn't immediately respond to a request for comment from Mr. Mulally.
Separately, the retailer raised its quarterly dividend by 21% to 52 cents a share. The boost brings the dividend yield for the company, whose stock has declined 9.5% this year, to about 3.7%.
Write to Paul Ziobro at email@example.com
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