When your company's in the midst of a multi-quarter decline and Wall Street vultures are beginning to circle, the last thing you want is a bunch of sniping and in-fighting between executives. Unfortunately for JCPenney (NYSE: JCP), though, that's exactly what it's getting.
Following reports on Thursday (August 8) that the retailer's biggest shareholder, and Ron Johnson backer, Bill Ackman had written a letter to the board calling for a new CEO within 45 days, the board struck back with a statement of their own.
"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," wrote board chairman Thomas Engibous. "His latest actions are disruptive and counterproductive at an important stage in the Company's recovery."
That statement also didn't pass up the chance to point out Ackman's role in leading the campaign to appoint Johnson and the company's poor performance under him.
All of this was followed up Friday with the New York Post reporting that Ackman threatened to sell his stake in JCPenney if the board didn't quickly replace Mike Ullman as the CEO of the company.
"At a tense July 22 meeting, with Penney's business still swooning, a source said Ackman demanded that Penney find a new CEO by the time it announced second-quarter results on Aug. 20—and threatened to sell his 18-percent stake if the board didn't agree," James Covert reported.
Meanwhile, former CEO Allen Questrom is considering a return to the store chain he left almost 10 years ago. If he did return, it would be to act as chairman, and Questrom has been clear that the move would be contingent on the appointment of a new CEO.
That would open a whole new can of worms. While Questrom has backed Ackman in his call for a new CEO, he was a vocal critic of the retailer during Johnson's short reign, wondering if the board was "delusional." His scoldings haven't gotten any kinder in recent weeks, meaning that if Questrom was to rejoin his old company there are probably some significant bridges he'll need to un-burn first.
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