Kohl's wins proxy battle against activist investor Macellum, stock falls

© Reuters. A shopper pulls a shopping basket at a Kohl’s department store in the Brooklyn borough of New York, U.S., January 25, 2022. REUTERS/Brendan McDermid

By Svea Herbst-Bayliss and Uday Sampath Kumar

BOSTON (Reuters) -Kohl's Corp investors on Wednesday rejected all of activist Macellum Advisors' director nominees in one of the year's most hotly contested boardroom battles that occurred as the company began trying to sell itself.

The U.S. department store chain announced the preliminary voting results at its annual meeting on Wednesday.

An executive said all 13 Kohl's (NYSE:KSS) directors have been re-elected and that none of Macellum's 10 candidates received enough votes to gain board seats.

Kohl's share price was down 3.47% at $47.64 in early morning trading.

Macellum, led by veteran investor Jonathan Duskin, criticized Kohl's for not doing enough to improve its business and pushed the company to put itself up for sale. The process of evaluating bids is continuing, the company has said.

The company countered by saying that its high caliber board has the right experience and expertise to execute on the company's strategy and urged shareholders to back its nominees. Some investors argued that the current board should be in place to complete the job of evaluating offers to buy the company.

"We would like to thank our shareholders for their support throughout this proxy contest," said Peter Boneparth, Chairman of the Board in a statement. "While we have had differences with Macellum, this Board is committed to serving the interests of all our shareholders."

The results deal a blow to Macellum after it had received support from a key proxy advisory firm that often guides investor votes. Institutional Shareholder Services recommended that Kohl's investors elect two of the 10 board nominees suggested by Macellum.

A year ago Macellum, along with two partners, pushed for changes at Kohl's but decided to drop that challenge when Kohl's expanded the size of its board by three directors.