Kohl’s Corp has said it has fired its Chief Executive Officer, Ashley Buchanan, with immediate effect after an internal ethics investigation concluded. The probe found that Buchanan did not report a personal connection with someone who was associated with a vendor that was granted special treatment by the company.
As per internal investigations, Buchanan directly engaged in initiating business with a vendor who was owned by Chandra Holt, to whom he had a personal relationship. The vendor received special business terms, including a very profitable consulting agreement, which posed concerns regarding conflict of interest and corporate governance principles. Buchanan’s not disclosing this relationship was found to be a violation of company policy.
As part of the disciplinary action, Buchanan will forfeit any unvested equity compensation and must pay back part of his $2.5 million signing bonus. He also has been taken out of consideration for re-election to the company board of directors.
Meanwhile, Kohl’s has named Michael Bender, the present Chairman of the Board, acting CEO. Bender, who has decades of experience in the consumer goods and retail sector, is anticipated to maintain stable leadership while the transition is in progress.
In spite of the leadership turmoil, Kohl’s Corp. posted better-than-expected preliminary earnings for the first quarter. The retailer indicated that sales at stores open at least a year were down between 4% and 4.3%, a significant improvement from a 9.4% drop in the previous quarter. The market reacted well, with shares rising almost 8%.
Kohl’s reaffirmed its dedication to keeping leaders honest, being ethically led, and operating with excellence as it starts the process of looking for a full-time top executive.
