Kohl’s Fires CEO For Unethical Behavior
Buchanan fired for engaging in improper, 'highly unusual' vendor contracting.
File photo by Tara Golshan of the Wisconsin Center for Investigative Journalism.
Kohl’s Corp. announced Thursday it fired new CEO Ashley Buchanan for cause.
Buchanan, according to a Securities and Exchange Commission filing, directed the company into a relationship with a business with whom Buchanan had a personal relationship and that included “highly unusual terms favorable to the vendor.” He was hired as CEO of the Menomonee Falls-based retailer in January.
“Mr. Buchanan’s termination follows an investigation conducted by outside counsel and overseen by the Audit Committee of the Board, during which it was found that Mr. Buchanan had directed that the Company conduct business with a vendor founded by an individual with whom Mr. Buchanan has a personal relationship on highly unusual terms favorable to the vendor and that he also caused the Company to enter into a multi-million dollar consulting agreement wherein the same individual was a part of the consulting team,” says the filing.
Buchanan was required to forfeit all stock-based compensation and refund $2.5 million of a signing bonus as part of the termination. The now-former CEO’s board seat was also eliminated, shrinking the board to 11 members.
Board chair Michael Bender was appointed interim CEO. Bender was previously CEO of Eyemart Express and an executive with Walmart.
A formal search for a new CEO is planned.
“The Board has full confidence in Michael to serve our customers and associates as Interim CEO and deliver on our commitments to our shareholders,” said board member John Schlifske in a statement. Schlifske is the former CEO of Northwestern Mutual and chairs Kohl’s Nominating and ESG Committee. “We look forward to continuing to work closely with Michael as Kohl’s remains focused on operational excellence, simplification, and efficiency to improve long-term financial health and profitability.”
“Working with our talented leadership team, Board, and thousands of associates, I am committed to continuing the execution of our strategic framework to grow shareholder value. Kohl’s has a strong foundation of more than 1,100 conveniently located stores nationwide, serving over 60 million customers. We will continue to build on this foundation as we enhance the value we deliver to our customers and set the stage for meaningful operational and nancial progress,” said Bender.
“Mr. Buchanan’s termination is not related to the Company’s performance, financial reporting or results of operations, and did not involve any other Company personnel,” says the filing.
In the 4th quarter of 2024, Kohl’s saw its net sales drop 9.4% year-over-year. Its operating income from $299 million to $126 million. Kohl’s is expected to release its first quarter results later this month.
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