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Retail proxy season comes into focus

Michael Flaherty
May 23, 2022

Since we published the calendar for AGMs of note earlier this month, a few meetings have happened, and the results give a mixed picture when it comes to activist shareholders versus management teams and boards.

Why it matters: Activist investors are built to force changes at companies. Activist campaigns that go all the way to a vote can change the construct of a board and change the direction of a company.

Details: Kohl's handed a defeat to its activist investor (Macellum) in a clear sign from investors that they were not interested in shaking up the board at a time when the company is fielding bids from buyers.

  • Shareholders also may have felt that the CEO and her turnaround plan are worth backing even if the company doesn't get sold.

Yes, but: Activist hedge fund Sachem Head succeeded in its effort to shake up US Food's board and management team. Ancora also struck a truce with IAA, which appointed a new director and expanded its board.

What's next: Big Lots hosts its AGM tomorrow. Mill Road, a fund with very little activist history, said it owns a 5.1% stake in the company and wants it to seek a sale.

  • The fund has been quiet since news broke in March of its Big Lots stake and intentions. Management or directors could address this agitation on Tuesday or leave it be.

The bottom line: Kohl's showed that shareholders want long-term outperformance, not short-term shakeups right now.

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