Tuesday, 31 March 2015
Last updated 41 min ago
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.
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