Ackman Seeks Fast-Track For New Penney's CEO

Aug 9 2013 | 11:22am ET

The failure of his hand-picked CEO at J.C. Penney Corp. hasn't chastened Pershing Square Capital Management's William Ackman.

The activist hedge fund manager is pushing his fellow board members at the retailer to speed up their search for a permanent replacement for Ron Johnson, the former Apple Inc. marketing executive Ackman put at the helm of Penney's in 2011 but who was ousted in April.

Ackman acknowledged that Johnson was "very close to a disaster" and assented to the temporary return of Johnson's predecessor as CEO, Myron Ullman. The board agreed two weeks ago to begin a six-month search for a permanent replacement for Johnson, but Ackman wants that person in place by mid-September, arguing that there aren't many candidates.

"I strongly urge that we immediately put together a short list of candidates, determine their interest level, and schedule a fast-track interview process with the board," Ackman wrote to his fellow directors. He added that he had convinced former Penney's CEO Allen Questrom to return as chairman if he approves of the CEO the board selects.

This, unsurprisingly, did not sit well with the man Questrom would replace, Penney's Chairman Thomas Engibous, who issued his own letter after Ackman leaked his.

"The Board of Directors strongly disagrees with Mr. Ackman and is extremely disappointed that his letter was released to the media at the same time that it was sent to the Board," Engibous wrote. "Mr. Ackman has been integrally involved in the Board`s activities since he joined two years ago. This includes leading a campaign to appoint the Company`s previous CEO, under whose leadership performance deteriorated precipitously. His latest actions are disruptive and counterproductive at an important stage in the Company`s recovery."

"Mike is the right person to rebuild J.C. Penney by stabilizing its operations, restoring confidence among our vendors, and getting customers back in our stores," he added. "He has the overwhelming support of the board of directors, and we are confident the company is in good hands."

Pershing Square has lost about $500 million on its Penney's investment. It owns an 18% stake in the retailer.


In Depth

Change In 'Accredited Investor' Definition Could Hurt Crowdfunding Space

Jul 25 2014 | 8:14am ET

The Securities and Exchange Commission is considering changes to its 30-year-old...

Lifestyle

David Yarrow On Growing His Hedge Fund And Shooting The Animals And People Of Africa - As A Photographer

Jul 23 2014 | 6:44am ET

While he’s always been a photographer, recent expeditions to Iceland, Ethiopia...

Guest Contributor

The Truth About Track Record Portability

Jul 24 2014 | 5:55am ET

The number of private funds converting to mutual funds has increased significantly...

 

Sponsored Content

    Northern Trust Helps Hedge Funds Navigate Derivatives Regulations

    Jul 8 2014 | 10:48am ET

    The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…

Publisher's Note