Billionaire hedge fund manager, William Ackman has asked the board of directors of struggling retailer, J. C. Penney to replace CEO Myron Ullman.
Ackman is himself a member of the board as his Pershing Square hedge fund is the biggest shareholder in the company with an 18 per cent stake in the company. He warned that if the board does not move to remove Ullman from the top job, he would sell his 18 per cent stake in the company.
The spat between the investor and the board become public after a letter sent by Ackman to the board asking them to replace Ullman soon, found its way to the media. Ullman was brought back into the company to help revive the troubled retailer. Ackman has bought in Ron Johnson, a former Apple employee to push Ullman to a corner. However, the retailer was not able to revive its business under Johnson.
As a response Thomas Engibous, chairman of J. C. Penney’s board said that rd “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.” The board described his behaviour disruptive and counterproductive at a time that is important for the company. Ackman has now said that the board has ceased to function properly and he has lost confidence in board chairman Engibous.
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