Macy’s appoints new independent directors to settle proxy fight

(Source: Bigstock)

Department store chain Macy’s has appointed two new independent directors to its board with immediate effect, which an analyst believes will help end the proxy fight and allow the retailer to focus on its reinvention.

The new directors – Richard Clark and Richard L Markee – were announced after the company engaged with Arkhouse Management. Arkhouse also agreed to withdraw its director nominations among other customary provisions. 

Clark and Markee will join the board’s Finance Committee, which in addition to its existing responsibilities, will oversee the evaluation of and make recommendations to the board regarding the acquisition proposal submitted by Arkhouse and Brigade Capital Management.

The company has also implemented previously announced changes to its board, including appointing CEO Tony Spring as chairman and Douglas W Sesler as independent director. Jeff Gennette and Frank Blake from the board as previously planned.

Following these changes, the Macy’s board currently has 15 directors, 14 of whom are independent.

Neil Saunders, MD of GlobalData, said the “ending of the proxy fight” is good news as it removes uncertainty over the chain being taken over and allows management to focus on its reinvention plan. 

“The addition of two Arkhouse allies to the board is the price that had to be paid to end the fight. This is a reasonable compromise but is one that is a double-edged sword,” Saunders elaborated.

The real estate experience of the new directors could be useful as it will allow Macy’s to unlock some of the value of its stores. However, the chain will need to guard against a deep sale and leaseback arrangements which would weaken its financials, he said.

“In short, this is an early victory for Tony Spring. However, he will now need to exercise a firm hand on the tiller to keep the board fully focused on his plan to reinvent the iconic chain,” Saunders concluded.

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