NEW YORK (AP) — Target shareholders elected all 10 nominees to the company's board despite recommendations from a prominent proxy advisory firm to get rid of the majority in the wake of massive data breach.
Institutional Shareholder Services last month targeted seven members who serve on the company's audit or corporate responsibility committees because they failed to spot the security threat. Included on that list were Anne Mulcahy, former chair and CEO at Xerox, and James A. Johnson, who was once the CEO at Fannie Mae.
ISS also recommended shareholders vote to separate the roles of chairman and chief executive, but that shareholder proposal was voted down. Two other shareholder proposals which called for eliminating executive perks and changing its discrimination policies for its suppliers and its workforce were voted down as well.
Shareholders did approve another management proposal that backed its new executive compensation plan.
The meeting, which was held in Dallas and broadcast online, comes at one of the most tumultuous times in Target's history as the retailer faces challenges on all fronts ranging from a massive pre-Christmas breach to a botched-up expansion in Canada. The company said it's searching for a permanent leader after ousting its CEO Gregg Steinhafel in late April.
In an address to shareholders Wednesday, John Mulligan, the company's chief financial officer who is acting CEO, reiterated to investors three priorities: revitalizing Target's U.S. business by constantly testing new products; becoming a digital leader and catering to shoppers jumping back and forth between online and physical stores; and improving operations in Canada.
"We have the resources and ability to move beyond these challenges," said Mulligan, calling Target a "world-class brand."
Last month, Target cut its annual profit outlook and said its first-quarter earnings fell 16 percent. That followed a 46 percent plunge in fourth-quarter profits.
In the wake of the breach, Target is overhauling its security and technology departments and its systems.
Target has also been accelerating a $100 million plan to roll out chip-based credit card technology, which is considered more secure, in all of its nearly 1,800 stores. New payment terminals will appear in stores by September, six months ahead of schedule. In late April, the retailer announced that it will team up with MasterCard to issue Target-branded payment cards equipped with chip technology early in 2015. The move makes Target one of the first major U.S. retailers with its own branded chip-based cards.
However, Target will be beat by Wal-Mart. Wal-Mart's Sam's Club announced last week it teamed up with MasterCard to unveil a new credit card that features chip-enabled adoption of the technology by June 23. Wal-Mart branded cards with chip technology will be issued later this summer.
While magnetic strips transfer a credit card number, chip cards use a one-time code that moves between the chip and the retailer's terminal, resulting in data that is useless except to the parties involved. They're also regarded as nearly impossible to copy, at least for now. The technology has been standard in Europe and other regions for years.
Target also raised its quarterly dividend on Wednesday to 52 cents from 43 cents. It will pay its next dividend on Sept. 10.
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