After some contentious back-and-forth between J.C. Penney's (JCPN.Q) executive management and its largest shareholder, board member Bill Ackman, the two sides have opted to part ways, at least partly, as Ackman resigned from the J.C. Penney board effective yesterday, the company announced today. Ackman's Pershing Square Capital Management owns approximately 18% of J.C. Penney's shares.
Replacing Ackman on the board will be Ronald Tysoe, former vice chairman of Federated Department stores, which is now Macy's, along with "another highly qualified new director in the near future," Penney said.
Commenting on his decision to resign from J.C. Penney's board, Ackman was quoted in the company press release as saying, "At this time, I believe that the addition of two new directors and my stepping down from the Board is the most constructive way forward for J. C. Penney and all other parties involved."
J.C. Penney also reaffirmed its support of current CEO Myron Ullman and chairman Thomas Engibous, both targets of recent letters from Ackman outlining what he deemed to be shortcomings in J.C. Penney's current leadership. Ackman called for a quicker search to replace Ullman and also called for Engibous to be replaced as board chairman.
In regards to Ullman and Engibous, J.C. Penney said in today's release that both "have been working tirelessly to position the Company for future success."
CNBC quoted Ackman as saying that he had no immediate plans to sell his shares. He had joined Penney's board in February 2011 and was a supporter of former CEO Ron Johnson. Today's announcement caps several days of boardroom drama where Ackman went public with two scathing letters to the board, saying the board has "ceased to function effectively." He also questioned the board's hiring and firing practices and "aggressive" inventory purchases.
Engibous fired back in a pair of press releases saying that Ackman's comments were "misleading, inaccurate and counterproductive."
-- Material from The Associated Press was used in this report.
