New York (HedgeCo.Net) – Two hedge funds are looking to oust William Dillard II, CEO of Dillard’s Inc., after poor performance and lagging stock prices. <\/p>\n
Barington Capital Group LP and Clinton Group Inc sent a letter to the SEC that was released yesterday, which asked the company to start to an immediate search for a new CEO. <\/p>\n
"In our opinion, a management team with a comparable record of poor performance at any other company would have been fired long ago," the hedge funds said in the letter. <\/p>\n
In addition to sales declining over the course of the year, Moody’s Investors Service warned last week that it may cut Dillard’s credit ratings to junk status.<\/p>\n
The hedge funds are also looking to replace some of the other family members who work for the company, saying they are "overpaid and under-qualified for the positions they hold and can be readily replaced with more talented retailers."<\/p>\n
The hedge funds claim that William Dillard II makes far more than other CEOs at similar companies. According to a report they cite from advisory firm Proxy Governance, William makes 54 percent above the average, while other executives at Dillard’s make 185 percent above the median. <\/p>\n
Dillard’s, in an attempt to avoid a proxy battle with the aggressive hedge funds, agreed to place four candidates from the fund onto the Board of Directors in April. <\/p>\n
The hedge funds own almost 6 percent of Dillard’s class A stock. Dillard’s stock is divided into two shares, a move that William made almost four decades ago to guard against takeovers.<\/p>\n
Julie Scuderi
Senior Editor for HedgeCo.Net
Email: julie@hedgeco.net<\/p>\n
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