Stock price climbs following board's termination of CEO Ashley Buchanan due to specified reasons.
Kohl's axed its CEO Ashley Buchanan due to alleged conflicts of interest and dodgy vendor dealings, according to an official statement released Thursday.
Following an investigation, it was uncovered that Buchanan pushed Kohl's to engage in some shady business with a vendor he had a personal connection with – transactions packed with terms that smacked of favoritism. Kohl's board of directors saw these allegations as enough reason for the boot-out, stating that the termination wasn't tied to the company's financial performance or results.
The investigation also revealed that Buchanan held back key details about these relationships, which violated Kohl's ethics code. His underhand dealings involved a substantial amount of money, including a multi-million-dollar consulting agreement and deals he shouldn't have been involved in given the relationship.
The Securities and Exchange Commission (SEC) filing painted a clear picture of Buchanan's undisclosed conflicts of interest, leading to the forfeiture of his equity awards and the repayment of a significant portion of his $2.5 million signing bonus.
Kohl's new interim CEO will be Michael Bender, current board chair, while the company looks to hire a top-tier search firm to help find a permanent leader. Bender will remain on the board but will step down as chair.
Shares of Kohl's were trading up nearly 5% following the news of Buchanan's termination. The stock has taken a beating this year, losing over half its value.
In a press release, Bender expressed optimism in the company's future, saying, "Kohl's has a sturdy foundation with over 1,100 stores nationwide, serving more than 60 million customers. We're gonna build on this foundation, focusing on delivering more value to our customers and setting the stage for solid operational and financial progress."
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Fun Fact: Kohl's is the largest department store chain in the United States, operating over 1,100 stores across the country.
- The termination of Kohl's former CEO, Ashley Buchanan, was allegedly due to conflicts of interest and questionable vendor dealings.
- The investigation unveiled that Buchanan was involved in hidden business relationships with a vendor, which violated Kohl's ethics code.
- The new interim CEO at Kohl's is Michael Bender, who is presently the board chair, as the company seeks a top-tier search firm to find a permanent leader.
- Following the news of Buchanan's termination, shares of Kohl's were trading up nearly 5%.
- Bender, in a press release, expressed optimism about Kohl's future, citing the company's nationwide presence with over 1,100 stores and serving more than 60 million customers.
