Updated, 7:32 a.m. | The activist investor William A. Ackman has resigned from the board of J.C. Penney, the retailer said on Tuesday, days after starting an unusually public rebellion against his fellow directors over the future of the company.
In a statement, Penney said it had appointed Ronald W. Tysoe, a former vice chairman of Federated Department Stores. It plans to name another director in the near future.
“During my time on the J.C. Penney board of directors, I have always advocated for what I believe to be in the best interests of the company â€" its stockholders, employees and others,†Mr. Ackman said in a statement. “At this time, I believe that the addition of two new directors and my stepping down from the board is the most constructive way forward for J.C. Penney and all other parties involved.â€
The resignation of Mr. Ackman, whose Pershing Square Capital Management is the retailer’s biggest investor with a 17.7 percent stake, ends a surprising fight over the top leadership. The hedge fund manager publicly disclosed two letters that he had sent to fellow directors, ultimately calling for the departures of the interim chief executive, Myron E. Ullman III, and the chairman, Thomas J. Engibous.
Mr. Ackman was unhappy with a series of management changes that Mr. Ullman had made, purportedly outside of the normal managerial processes. And the hedge fund manager accused Mr. Engibous of freezing out some directors and running a dysfunctional board, ultimately suggesting that he be replaced with Allen Questrom, a former chief executive of Penney.
The board responded by essentially accusing Mr. Ackman of playing a role in the retailer’s ongoing woes, notably by bringing in Ron Johnson, Penney’s last chief. Though widely hailed as the head of Apple Inc.’s retail arm, Mr. Johnson introduced a sweeping set of changes that alienated the company’s core customers, including disposing of discounted sales.
The two sides then began extensive negotiations that culminated Monday night with Mr. Ackman’s resignation.
In its statement on Tuesday, the Penney board reiterated its support of both Mr. Ullman and Mr. Engibous. It also praised Mr. Tysoe as an experienced retail veteran with over 20 years of experience.
Penney had actually been interviewing Mr. Tysoe for several weeks, before Mr. Ackman began his insurrection at the board, according to a person briefed on the matter. Mr. Tysoe spoke with several retail directors at the company’s headquarters in Plano, Tex., on July 22, though Mr. Ackman had not expressed interest in meeting with him, this person added.
“The company is extremely fortunate to have the benefit of Ron Tysoe’s judgment and experience at this important time,†Mr. Engibous, the Penney chairman, said in a statement.
Mr. Engibous added, “I would like to thank Bill Ackman for his service on the board over the past two years.â€
Even though he is off the board, Mr. Ackman cannot sell his shares immediately. Because he served as a director, he is privy to confidential information that prohibits him from selling stock until at least Penney’s next earnings release, scheduled for next week.
