Target shareholders' support for status quo waning [Pioneer Press, St. Paul, Minn. :: ]
(Saint Paul Pioneer Press (MN) Via Acquire Media NewsEdge) June 14--Shareholder vote tallies from Target Corp.'s annual meeting earlier this week show that all 10 board members were re-elected by significantly lower margins than last year, after pre-meeting opposition from a shareholder advisory firm and a year that saw a disastrous data breach, a money-losing Canadian expansion and resulting wholesale executive changes.
The company said in a filing Friday that votes represented 88 percent of outstanding shares, or about 557 million shares casting ballots.
Interim Chairwoman Roxanne Austin was re-elected with 78 percent of the vote. All of the sitting board members received at least 60 percent approvals, with the lowest total going to independent board member James Johnson, who was re-elected with 62 percent approval.
An advisory say-on-pay proposal, backed by the Target board, passed with 78 percent of the vote. And a proposal to split the roles of chairman and chief executive officer and have an independent chairman, which was opposed by the board, failed with 54 percent voting against.
In conjunction with the meeting, held Wednesday in Dallas, Target's board announced a 21 percent dividend hike, raising the quarterly payment to 52 cents a share.
The results differed from votes at last year's annual meeting, when most board members were re-elected by much greater margins, say-on-pay passed with a smaller margin and more people voted against splitting off the chairman role.
Some of the board vote differences from last year were dramatic, perhaps reflecting how satisfaction with the status quo has dwindled. Austin was re-elected last year with about 5 percent in opposition; this year, it was 22 percent; 13 percent voted against Johnson last year; this year, 37 percent. Johnson was once the CEO at Fannie Mae.
And across the board, members like Calvin Darden, Henrique De Castro and Derica Rice, who last year saw single-digit percentage opposition or less, this year survived "against" votes pushing or exceeding 20 percent.
Over the past year, the Minneapolis-based discounter has undergone significant changes. It opened 124 stores in Canada in the largest single-year expansion in the chain's history, and took a $1 billion hit from those operations. It also suffered a huge data breach during the past holiday shopping season, with 40 million customer credit and debit card accounts compromised by data thieves. The costs related to that are still unknown.
In May, CEO and chairman Gregg Steinhafel was fired. Also ousted in recent months were the company's data chief and its head of Canada operations.
Also last month, citing the data breach, advisory service Institutional Shareholder Services suggested shareholders oust seven of the 10 board members, including Austin and Johnson, Target's lead independent director.
Interim CEO John Mulligan, who also is chief financial officer, said at the meeting in Dallas that the company will "shift away from square-footage growth" and adopt expansion goals that are more digital and better link Target's online capabilities with its physical stores.
Austin, in a statement accompanying Friday's release, said, "We continue to focus on the following three priorities for Target: increasing U.S. traffic and sales; improving Canadian operations; and accelerating the company's digital transformation to become a leading omnichannel retailer."
The company also continues to look for a permanent CEO.
Shares closed flat Friday at $57.23.
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