J.C. Penney’s Board Enraged at Ackman’s Decision To Fire CEO

J.C. Penney’s Board Enraged at Ackman’s Decision To Fire CEO
By J.C. Penney (Brand New design website See article here) [Public domain], via Wikimedia Commons

Bill Ackman received a blow from J.C. Penney Company, Inc. (NYSE:JCP) board members, when the members did not agree with Ackman’s decision to fire the CEO, according to a report from Bloomberg. Though shares of J.C. Penney surged after the Ackman decision,  board members see removing of CEO Mike Ullman after just four months of his term as “disruptive and counterproductive”.

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J.C. Penney's Board Enraged at Ackman's Decision To Fire CEO

According to a report from Bloomberg, the rest of the board members are not with Ackman over his statement and are showing their defiance in the matter. “His latest actions are disruptive and counterproductive at an important stage in the company’s recovery,” said the rest of the board in their statement.

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Mike Ullman enjoys the backing of J.C. Penney Company, Inc. (NYSE:JCP)’s board

Thomas Engibous, Chairman of the Board of Directors of J.C. Penney Company, Inc. (NYSE:JCP), said on behalf of the board members that the company has improved materially under the supervision of Mike Ullman, who has taken the retailer out from under some difficult situations and cleared up errors  by previous management in order to put the company back on track to sustainable profits and growth.

He added that Ullman is the appropriate person to lift J.C. Penney Company, Inc. (NYSE:JCP) and return it to its previous status by restoring its operations, confidence among the vendors and retaining customers. He indicated that Ullman has the backing of the board of directors.

Ullman will continue until a new CEO is found

Further, Engibous said that after Ullman returned it was obvious that there will be some reshuffling in the management team along with finding his successor. The new CEO search process started three weeks ago, and according to Engibous, it will be careful and deliberate. He said that until a successor is found, Ullman along with his team will take care of company’s business and will work on enhancing the performance of the company.

Engibous said that members of the board do not agree with Ackman’s decision and are disappointed that his letter was shown to media. Ackman has held an important position in board activities since he joined two years back. Ackman was involved during the campaign that was launched to appoint the company’s previous CEO who failed to improve the performance of the company from further decline. Bill Ackman owns 17.74 percent of the J.C. Penney Company, Inc. (NYSE:JCP).

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Aman is MBA (Finance) with an experience on both Marketing and Finance side. He has worked as a Risk Analyst for AIR Worldwide, and is currently leading VeRa FinServ, a Financial Research firm. Favorite pastimes include watching science fiction movies, reviewing tech gadgets, playing PC games and cricket. - Email him at amanjain@valuewalk.com
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