Four Independent Proxy Advisory Firms Unanimously Agree on Serious Deficiencies in Target's Corporate Governance Practices
23 May 2009 - 12:00AM
PR Newswire (US)
NEW YORK, May 22 /PRNewswire/ -- The Nominees for Shareholder
Choice noted today that the four leading U.S. proxy advisory
services have issued reports in connection with the on-going proxy
contest at Target that are unanimous in calling for change to
address shortcomings on Target's board. While Target has recently
challenged what it must consider inconvenient truths outlined by
the leading proxy advisory service, RiskMetrics, the company has
ignored the broader deficiencies in its corporate governance
practices identified by the four proxy advisory services. In light
of recent events, the arguments for change and fresh perspectives
on the board have become only more compelling. The Nominees for
Shareholder Choice noted the following points from the four proxy
advisory service reports: RiskMetrics -- On the need for fresh
perspectives: "[G]iven the atypical strategies of the company with
respect to credit cards and real estate, the board would benefit
from new blood with the specific skill sets and incentives to
ensure that the company is able to quickly capitalize on future
opportunities." -- In recommending AGAINST the board reduction
proposal: "By rejecting a decrease in the size of the board, Target
shareholders will ensure that at least one dissident nominee is
elected to the board. Based on the qualifications and skill sets of
the dissident nominees, we believe that the incremental addition of
any one of the dissidents to the board likely would add value." --
On lack of relevant experience of incumbent nominees: "[I]ncumbent
nominees Trujillo and Tamke, while individually highly
accomplished, have each been on the board for at least a decade,
and appear to provide the least relevant experience for Target out
of the group of incumbent directors." PROXY Governance -- On lack
of board expertise in credit cards: "[T]he enduring strategic
question, though, is not whether to sell or keep the [credit card]
business but how to mitigate the substantial risk and capital
intensity of a non-core business. To the extent the dissidents,
rather than the board, were driving that question in 2007 and 2008,
the dissident argument that director experience could be better
aligned with strategic challenges seems credible." -- On the
strength of the Nominees for Shareholder Choice: "The real strength
in the dissident campaign, however, lies in the nominees, whose
professional experience is directly relevant to certain strategic
challenges the company faces (particularly outside its core
retailing operations) yet which seem to be under-represented in the
board as currently composed." Glass Lewis -- On the compensation
committee's failure to implement effective executive compensation:
"Director [James] Johnson served as chairman of the compensation
committee in fiscal year 2007 and 2008, during which time the
Company paid more compensation to its top executives but performed
worse than its peers. The compensation committee has the
responsibility of reviewing all aspects of the compensation program
of the Company's executive officers. It appears to us that Mr.
Johnson, as chairman of the committee, has not effectively served
shareholders in this regard." -- On incumbent director Anne
Mulcahy: "Director Mulcahy currently serves on the Company's board
while also serving as chairman and CEO of Xerox Corporation, a
publicly held company, and two other public company boards... In
our view, the time commitment required by this number of board
memberships may preclude Ms. Mulcahy from fulfilling her
responsibilities to the Company's shareholders, as well as the
shareholders of Xerox Corporation." Egan-Jones -- On recommending
"WITHHOLD" for two incumbent nominees: Egan-Jones recommended
shareholders withhold their votes for incumbent nominees Richard
Kovacevich and George Tamke, both current members of Target's Audit
and Nominating Committees, nothing that "[w]e believe that key
Board committees should be comprised solely of Independent outside
directors for sound governance practice." -- On Target's insular
election process: "What [Target] terms an election of directors is,
in reality, a ratification of a single slate. The slate is chosen
by incumbent directors and management. Such a voting process fails
to provide shareholders with meaningful choices, when true
elections have been found throughout the non-corporate world (e.g.,
Federal, state and local governments, and educational institutions)
to produce successful results." -- On Target's staggered board:
"Staggered terms for directors increase the difficulty for
shareholders of making fundamental changes to the composition and
behavior of a board. We prefer that the entire board of a company
be elected annually to provide appropriate responsiveness to
shareholders." The Nominees for Shareholder Choice believe that the
proxy advisory services have provided a balanced picture that
Target's board has misleadingly excerpted to distort the facts. The
Nominees for Shareholder Choice noted that all four firms have
identified deficiencies in Target's board that can and should be
addressed in the current election. Vote Now - Vote Today The date
of Target's Annual Meeting is this coming Thursday, May 28, 2009.
Target shareholders should vote on the Internet (for instructions,
please go to http://www.tgttownhall.com/), by telephone, or by
signing, dating and returning the GOLD proxy card as soon as
possible to vote FOR the Nominees for Shareholder Choice and
AGAINST Target's proposal to limit the board to 12 directors. If
you have already voted on the white proxy card, you can change your
vote by submitting a later dated GOLD proxy card. If you have
submitted both a white and GOLD proxy card, only your latest
arriving proxy card will count, so please vote again on the GOLD
proxy card to ensure your vote is counted accurately. For more
information on how to vote, as well as other proxy materials,
please visit http://www.tgttownhall.com/ or call Pershing Square
Capital Management, L.P.'s proxy solicitor, D. F. King & Co.,
Inc., at 1 (800) 290-6427. About Pershing Square Capital
Management, L.P. Pershing Square Capital Management, L.P., based in
New York City, is an SEC registered investment advisor to private
investment funds. Pershing Square manages funds that are in the
business of trading - buying and selling - securities and other
financial instruments. Funds managed by Pershing Square have long
positions in stock, options and other financial instruments tied to
the performance of Target Corporation's stock. Pershing Square has
and in the future may increase, decrease, dispose of, or change the
form of its investment in Target Corporation for any or no reason.
Additional Information In connection with Target's 2009 Annual
Meeting of Shareholders, Pershing Square Capital Management, L.P.
and certain of its affiliates (collectively, "Pershing Square")
have filed a definitive proxy statement on Schedule 14A with the
Securities and Exchange Commission (the "SEC") containing
information about the solicitation of proxies for use at the 2009
Annual Meeting of Shareholders of Target Corporation. The
definitive proxy statement and the GOLD proxy card were first
disseminated to shareholders of Target Corporation on or about May
2, 2009. SHAREHOLDERS OF TARGET ARE URGED TO READ THE PROXY
STATEMENT CAREFULLY BECAUSE IT CONTAINS IMPORTANT INFORMATION. The
definitive proxy statement and other relevant documents relating to
the solicitation of proxies by Pershing Square are available at no
charge on the SEC's website at http://www.sec.gov/. Shareholders
can also obtain free copies of the definitive proxy statement and
other relevant documents at http://www.tgttownhall.com/ or by
calling Pershing Square's proxy solicitor, D. F. King & Co.,
Inc., at 1 (800) 290-6427. Pershing Square and certain of its
members and employees and Michael L. Ashner, James L. Donald,
Ronald J. Gilson and Richard W. Vague (collectively, the
"Participants") are deemed to be participants in the solicitation
of proxies with respect to Pershing Square's nominees. Detailed
information regarding the names, affiliations and interests of the
Participants, including by security ownership or otherwise, is
available in Pershing Square's definitive proxy statement.
Cautionary Statement Regarding Forward-Looking Statements This
letter contains forward-looking statements. All statements
contained in this letter that are not clearly historical in nature
or that necessarily depend on future events are forward-looking,
and the words "anticipate," "believe," "expect," "estimate,"
"plan," and similar expressions are generally intended to identify
forward-looking statements. These statements are based on current
expectations of Pershing Square and currently available
information. They are not guarantees of future performance, involve
certain risks and uncertainties that are difficult to predict and
are based upon assumptions as to future events that may not prove
to be accurate. Pershing Square does not assume any obligation to
update any forward-looking statements contained in this letter.
Contact: Global Strategies Group Julie Wood (212) 260-8813
DATASOURCE: Pershing Square Capital Management, L.P. CONTACT:
Global Strategies Group, Julie Wood, +1-212-260-8813 Web Site:
http://www.tgttownhall.com/
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