Retailer Reduces Size of Board of Directors
CHICAGO (AP) _ Sears, Roebuck and Co. is cutting its board of directors from 15 to 10 - a move that will make it more difficult for a dissident shareholder to win election to the board.
Sears announced the move Wednesday, saying a smaller board would give outside directors a greater voice in the troubled retailer’s future. In so doing, it will jettison all Sears officers except for one: Sears chairman and chief executive Edward A. Brennan.
″Increasing the percentage of outside directors on the boards of American companies has been a developing corporate trend, and Sears has been prudently moving in this direction,″ Brennan said.
Shareholder Robert Monks, who owns 100 shares, asked late last year to be nominated to the board but was rejected. Monks then vowed to edge his way onto the board, announcing plans to solicit shareholder votes before the company’s May 9 annual meeting.
By trimming the board, only three seats will be up for election May 9 instead of the usual five, making it necessary for Monks to receive 25 percent of the votes cast at the meeting instead of the 16 percent he would have needed.
Monks, 57, president of Institutional Shareholder Partners, has been an outspoken proponent of shareholder rights and has encouraged investors to become more active in running companies in which they hold stock.
The move comes as the company continues to combat sagging sales and a weak financial performance.
Sears officials leaving the board effective May 9 are James M. Denny, vice president and chief financial officer; Wayne E. Hedien, chairman and chief executive of Allstate Insurance; Arthur J. Hill, chairman and chief executive of Coldwell Banker Real Estate Group, and Philip J. Purcell, chairman and chief executive of Dean Witter Financial Services Group.
Edward R. Telling, former chairman of Sears, will retire from the board April 1.
Brennan will be the only Sears official who remains on the board, while two outsiders will be nominated for re-election, the statement said.