- A board member at Kohl’s resigned because she said there were governing issues and a lack of transparency at the beleaguered retailer. The company denies Day’s statements, and its SEC filing regarding Day’s resignation said her decision was “not due to any disagreements with the company.”
The drama at Kohl’s continues. Just days after CEO Ashley Buchanan was fired over striking a “highly unusual” deal with a vendor he had a personal relationship with, a board member has resigned. Christine Day, who previously served as CEO of athletic wear company Lululemon, filed her resignation letter on May 5, just four days after Buchanan’s booting.
According to a May 9 8-K SEC filing, Day emailed Kohl’s directors Jonas Prising and John E. Schlifske—as well as Jennie Kent, Kohl’s chief legal officer and corporate secretary—to let them know she wouldn’t be joining a May 5 “comp call” because she decided to resign from the board effective immediately. Later that morning, Day followed up with a direct email to Schlifske formalizing her resignation. She had served on the board of directors since April 2021, an SEC filing shows.
In further emails dated May 9, Day said she was “continually disappointed with the level of governance process” and a lack of transparency.
Kohl’s, however, had pre-empted Day’s detailed resignation emails with an 8-K filing of its own just one day prior on May 8, which said “Ms. Day’s decision was not due to any disagreements with the company on any matter relating to the company’s operations, policies or practices.”
It’s also important to recognize Day had sent two resignation letters to Kohl’s simply stating she was leaving the board. It wasn’t until after Kohl’s released its initial 8-K filing that Day had elaborated on the reasons for her resignation.
However, Day wrote in one of the emails released in the May 9 filing: “There is simply no way the board could have interpreted my resignation as having no conflict issues.”
“This was a deliberately selective edit. So you will have to correct the filing as a misstatement. Not an after-the-fact email,” she continued.
In that 8-K filing, Kohl’s said it “strongly disagrees” with the assertions in Day’s emails.
Kohl’s declined to provide further statement about Day’s resignation.
According to the emails released in the 8-K, Day was specifically concerned about how the company handled a report by proxy-advisory firm Institutional Shareholder Services (ISS), in which ISS was against a vote to ratify the new CEO’s compensation because of concerns about its size, disclosure, and structure of Buchanan’s awards.
When Buchanan was fired after only 100 days in the post, he was told he had to reimburse Kohl’s for part of his $2.5 million signing bonus. However, ISS said in the report shared with Fortune that even though Buchanan had to pay back part of his bonus, “there remains concern with the company’s prior decision to originally grant these large awards, which entirely lack performance criteria.”
In the emails shared in the 8-K filing, Day alleges Kohl’s didn’t respond to ISS and shared “material information with only select shareholders,” while also accusing interim CEO Michael Bender of not disclosing this information to all board members.
“As directors, we all get sued together—so transparency with risks is a requirement for trust and accountability,” Day wrote. “To place other directors in [the] position of making a decision without full disclosure of risks is unacceptable. And it has been going on far too long.” She was also originally expected to become chair of the compensation committee, according to the ISS report.
Day didn’t address other instances in which directors were placed in a similar situation, and she could not be reached for comment.
The emails shared in the 8-K filing allude to “several other issues” about a lack of disclosures, but some of the information is redacted.
“ There is no delegation to committees or chairs, Michael ‘handles’ everything, maybe speaks to one person or 2, then ‘tells’ everyone what the decision is,” Day wrote. “Some people know more than others leading to board members feeling alienated, out of the loop, and worse—developing a culture where real discussions rarely occur.”
Aside from Buchanan’s firing and Day’s resignation, Kohl’s has been struggling financially for a while. The company’s fourth-quarter net sales dropped 9.4%, it had to cut its dividend, and changed its guidance for a 5%-to-7% decline in 2025. Plus, the company announced store closures and layoffs this year.
“Itʼs a hot mess,” Carol Levenson, chief research officer and director of U.S. investment grade research at Gimme Credit, told Fortune in a statement. “Poor sales performance, the threat of the resumption of paused Asian tariffs, and governance turmoil combined with strained liquidity requiring last-minute financial maneuvers” all led Gimme Credit to dub Kohl’s with a “deteriorating” credit score.
