Ackman loses in Target proxy battle

New York Target Corp. shareholders on Thursday rejected an alternate slate of directors put up by activist shareholder William Ackman. They also sided with the company in approving a measure that sets the board’s size at 12 members.

In a battle that had grown increasingly heated in recent weeks, Ackman, the head of Pershing Square Capital Management, sought to have his own slate of directors, which included him, replace the existing board. Thursday’s preliminary vote count, provided by proxy solicitors, shows that Target shareholders gave the company the nod and voted to keep the four incumbents on the retailer’s board.

Ackman had argued that Target needed new perspective, especially in the areas of retail and real estate so it can better compete with rival Wal-Mart Stores.

Despite a tearful appeal at Target’s shareholder meeting Thursday, in which he invoked Martin Luther King Jr.’s famous “I Have a Dream” speech in a final effort to win votes, Ackman did not come close to gaining any seats on the board.

Target, which spent roughly $11 million defending itself during the proxy contest, said that based on a preliminary total each of its four nominees received support from more than 70% of the shares voted.

The four incumbents who appear to have been re-elected at the 2009 annual meeting of shareholders are Mary N. Dillon, Richard M. Kovacevich, George W. Tamke and Solomon D. Trujillo.

“Today’s outcome demonstrates the confidence Target shareholders have in our board’s qualifications, diversity and experience to provide effective and independent oversight and direction to the company, contributing to the creation of one of the most recognized brands in the United States,” said Gregg Steinhafel, Target’s chairman, president and CEO.

Once the meeting was over and the preliminary results were announced, Steinhafel said he would now be able to refocus on the company’s retail and credit operations, and spend more time in its stores, Reuters reported.

“It’s a challenging environment and there are a lot of retail companies that are struggling and our same-store sales are not where we’d like them to be,” he said.

IVS Associates, the independent inspector of elections, has indicated that it expects to issue a preliminary tabulation of the vote results in three-to-four weeks. Final results of the election will be announced once they are certified by the inspector.