News Column

Target shareholders showed strong support for status quo

June 13, 2014

By David Fondler, Pioneer Press, St. Paul, Minn.



June 13--Shareholder vote tallies from Target Corp.'s annual meeting earlier this week show that all 10 board members were re-elected handily despite pre-meeting opposition from shareholder advisory firms and ongoing internal troubles within the corporation.

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.

The results differed from 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.

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 its 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 advised shareholders to oust seven of the 10 board members, including Austin and Johnson, Target's lead independent director.

Interim CEO John Mulligan, who also is the 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 continues to look for a permanent CEO.

Shares were down 15 cents at $57.09 in late trading Friday.

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Source: Saint Paul Pioneer Press (MN)