Ashley Buchanan‘s tenure as CEO of Kohl’s Corp. lasted less than four months.
The Menomonee Falls-based retailer announced Thursday that its board of directors fired Buchanan over conflicts of interest involving a consultant. Board chair Michael Bender has been appointed interim CEO, effective immediately.
“An investigation conducted by outside counsel and overseen by the Audit Committee of the board determined Mr. Buchanan violated company policies by directing the company to engage in vendor transactions that involved undisclosed conflicts of interest, which the board determined to be cause,” according to an SEC filing.
A separate filing provides the additional context that the “vendor” Buchanan wanted to do business with was founded by an individual with whom Buchanan has a “personal relationship.” The terms of their relationship are described as “highly unusual” and “favorable to the vendor.” In addition, Buchanan guided Kohl’s into a “multi-million dollar consulting agreement” in which the aforementioned, unnamed individual was a part of the consulting team, according to the filing.
“It also found that in neither case did Mr. Buchanan disclose this relationship as required under company’s code of ethics. The board determined that Mr. Buchanan’s conduct in both instances constituted cause as defined in the executive compensation agreement.”
The Wall Street Journal reported Thursday morning that Buchanan was involved romantically with the individual, identified as Chandra Holt, consultant and the founder of New Hampshire-based coffee company Incredibrew. The two met while working for Walmart. The WSJ article cited “people familiar with the matter.”
Due to his termination, Buchanan will forfeit all equity awards he received from the company, including recruitment awards. He also needs to reimburse Kohl’s for a $2.5 million pro rata portion of his signing incentive.
Kohl’s noted in the filing that Buchanan’s termination is not related to company performance, financial reporting or results of operations, and did not involve any other company personnel.
Buchanan took the helm at Kohl’s on Jan. 15. He previously was CEO of Irving, Texas-based The Michaels Companies Inc. since 2020. Prior to that, he was with Walmart and Sam’s Club for a collective 13 years, serving in a variety of senior executive roles.
Kohl’s board will now launch a search for its next permanent CEO, with plans to hire a “leading search firm to assist with this process.”
Interim CEO Bender has served on Kohl’s board since 2019 and was named board chair last May. He will step down as board chair and the board will appoint an independent director to take on that role. He will step down as a member of the board’s Audit, Compensation and Nominating and ESG Committee.
“The board has full confidence in Michael to serve our customers and associates as interim CEO and deliver on our commitments to our shareholders,” said John Schlifske, chair of the board’s Nominating and ESG Committee, and former CEO of Northwestern Mutual. “Michael brings over three decades of leadership experience across retail and consumer goods companies, having served as CEO of Eyemart Express and in senior roles at Walmart, L Brands and PepsiCo. We look forward to continuing to work closely with Michael as Kohl’s remains focused on operational excellence, simplification, and efficiency to improve long-term financial health and profitability.”
“I am honored to assume the role of interim CEO at this important time for the company,” sad Bender. “Working with our talented leadership team, the board, and thousands of associates, I am committed to continuing the execution of our strategic framework to grow shareholder value. Kohl’s has a strong foundation of more than 1,100 conveniently located stores nationwide, serving over 60 million customers. We will continue to build on this foundation as we enhance the value we deliver to our customers and set the stage for meaningful operational and financial progress.”
More articles about Kohl’s:
- Kohl’s chief technology and digital officer departs company
- Here’s how Kohl’s new CEO plans to execute a long-term turnaround
- Kohl’s saw sales, earnings fall in 2024
- Kohl’s cuts 10% of its corporate positions
