A Wall Street Journal Roundup
J.C. Penney Co. said Tuesday that hedge-fund manager William Ackman had resigned from the company's board, in the wake of an unusually public dispute over the embattled retailer's future.
Mr. Ackman had been pushing to immediately remove Myron "Mike" Ullman as J.C. Penney's chief executive.
The department-store chain's board said Tuesday it reaffirmed its overwhelming support for Mr. Ullman and for Chairman Thomas Engibous.
The conflict erupted last week, when Mr. Ackman took the unusual step of publicly releasing two letters he had sent to the board criticizing directors for not moving fast enough to replace Mr. Ullman. Mr. Engibous had shot back in a pair of news releases calling Mr. Ackman's comments "misleading, inaccurate and counterproductive."
"During my time on the J. C. Penney board of directors, I have always advocated for what I believe to be in the best interests of the Company—its stockholders, employees and others," Mr. Ackman said in a statement. "At this time, I believe that ... my stepping down from the Board is the most constructive way forward for J. C. Penney and all other parties involved."
The company also announced that Ronal Tysoe, a retail industry executive who spent 16 years at Federated Department Stores Inc. —now Macy's, Inc.— has been elected to the board.
The dispute between the department store chain and its largest shareholder—Mr. Ackman owns nearly 18% of the company—came as the company was struggling to stop a slide in sales ahead of the crucial year-end holiday season.
It presented a possibly crippling distraction to Penney's main task: recovering from the botched strategy implemented by former CEO Ron Johnson, whose decision to do away with discounts and overhaul the chain's inventory produced a $1 billion loss and a 25% drop in sales in his first full year on the job.
Mr. Ullman, who had preceded Mr. Johnson as CEO, returned to the top job on an interim basis in April. Mr. Ackman agreed to bring back Mr. Ullman, provided that the board immediately begin to look for a permanent successor, a person familiar with his thinking said.
Matters came to a head at the July board meeting when Mr. Ackman threatened to sell his stock and leave the board unless directors moved more rapidly to find a permanent CEO. The board has since appointed Heidrick & Struggles International Inc. to handle the search, which will continue.
Mr. Ackman, who owns stock in Penney through his hedge fund, Pershing Square Capital Management LP, told the board he favored bringing back former Penney Chairman and CEO Allen Questrom as chairman. Another hedge fund, Perry Capital LLC, which owns 7.3% of the company's stock, called on the board to hire Ken Hicks, Penney's former president and chief merchandising officer and the current CEO of Foot Locker Inc., to replace Mr. Ullman in the corner office.
J.C. Penney Co. said Tuesday that hedge-fund manager William Ackman had resigned from the company's board, in the wake of an unusually public dispute over the embattled retailer's future.
Mr. Ackman had been pushing to immediately remove Myron "Mike" Ullman as J.C. Penney's chief executive.
The department-store chain's board said Tuesday it reaffirmed its overwhelming support for Mr. Ullman and for Chairman Thomas Engibous.
The conflict erupted last week, when Mr. Ackman took the unusual step of publicly releasing two letters he had sent to the board criticizing directors for not moving fast enough to replace Mr. Ullman. Mr. Engibous had shot back in a pair of news releases calling Mr. Ackman's comments "misleading, inaccurate and counterproductive."
"During my time on the J. C. Penney board of directors, I have always advocated for what I believe to be in the best interests of the Company—its stockholders, employees and others," Mr. Ackman said in a statement. "At this time, I believe that ... my stepping down from the Board is the most constructive way forward for J. C. Penney and all other parties involved."
The company also announced that Ronal Tysoe, a retail industry executive who spent 16 years at Federated Department Stores Inc. —now Macy's, Inc.— has been elected to the board.
The dispute between the department store chain and its largest shareholder—Mr. Ackman owns nearly 18% of the company—came as the company was struggling to stop a slide in sales ahead of the crucial year-end holiday season.
It presented a possibly crippling distraction to Penney's main task: recovering from the botched strategy implemented by former CEO Ron Johnson, whose decision to do away with discounts and overhaul the chain's inventory produced a $1 billion loss and a 25% drop in sales in his first full year on the job.
Mr. Ullman, who had preceded Mr. Johnson as CEO, returned to the top job on an interim basis in April. Mr. Ackman agreed to bring back Mr. Ullman, provided that the board immediately begin to look for a permanent successor, a person familiar with his thinking said.
Matters came to a head at the July board meeting when Mr. Ackman threatened to sell his stock and leave the board unless directors moved more rapidly to find a permanent CEO. The board has since appointed Heidrick & Struggles International Inc. to handle the search, which will continue.
Mr. Ackman, who owns stock in Penney through his hedge fund, Pershing Square Capital Management LP, told the board he favored bringing back former Penney Chairman and CEO Allen Questrom as chairman. Another hedge fund, Perry Capital LLC, which owns 7.3% of the company's stock, called on the board to hire Ken Hicks, Penney's former president and chief merchandising officer and the current CEO of Foot Locker Inc., to replace Mr. Ullman in the corner office.