After a week of silence following the firing of founder George Zimmer, the board of Men's Wearhouse (NYSE:MW) issued a detailed explanation of why Zimmer had to go on Tuesday (June 25). The board's bottom line: Zimmer didn't want someone else to be running the company he built.
"Mr. Zimmer had difficulty accepting the fact that this is a public company with an independent Board of Directors and that he has not been the Chief Executive Officer for two years," the board's statement said. "He advocated for significant changes that would enable him to regain control, but ultimately he was unable to convince any of the Board members or senior executives that his positions were in the best interests of employees, shareholders or the company's future."
According to the board's statement, Zimmer specifically objected to selling off the K&G chain (which brings in about 15 percent of the company's revenue), wanted to take the company private, and objected to ballooning executive compensation since he stepped down as CEO.
But the problem with airing boardroom dirty laundry is that it rarely satisfies anyone. For example, the statement doesn't explain why Zimmer's firing was apparently so unexpected—only hours before the annual company meeting, which had to be postponed because of the firing. Did Zimmer threaten to force the issues by taking them directly to shareholders at the meeting? (That might have created an even bigger embarrassment if a big pay hike for executives was the issue Zimmer made a stink over at the meeting.)
Meanwhile, customers aren't likely to care whether the company is public or private or owns K&G. They are likely to side with the guy who guaranteed they'd like the suits they bought.
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