New York (HedgeCo.Net) – Three Dillard’s Inc board members rejected a plea from hedge funds to have the company’s CEO, William Dillard II, booted from the chair.
Barington Capital Group LP and Clinton Group Inc. had been calling for the board to start an immediate search for a new CEO in addition to ousting other family members due to the company’s poor performance and lagging stock prices.
However, in a letter obtained by Reuters yesterday, directors Peter Johnson, Warren Stephens and Robert Connor said the current management team “has an appropriate strategy for dealing with the new environment.”
The board members also failed to side with the hedge funds on their claim that William Dillard II along with other family members make far more than the same executives at similar firms. Going a step further, they cited reports from the Institutional Shareholder Services and stated that the CEO’s salary is “far below the median in its peer group in 2007.”
The hedge funds original complaint mentioned a report by advisory Proxy Governance while claiming William Dillard II makes 54 percent above the median. The board fired back, pointing out that the peer group selected by the hedge funds “included companies in totally dissimilar industries to Dillard’s.”
Together, the hedge funds own nearly 6% of Dillard’s class A stock. The Dillard family owns nearly all of the class B stock, a move originally designed by the current CEO in order to make ceding control virtually impossible.
Senior Editor for HedgeCo.Net
HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership on www.hedgeco.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds!
Be sure to check out our sister sites. www.hedgefundlounge.com, www.hedgefundtools.com, and www.hedgefundemployment.com