J.C. Penney Company, Inc. (NYSE:JCP) said on Tuesday that hedge fund manager Bill Ackman, who has been pushing the struggling retailer to hasten the pace of its search for a new CEO, has resigned from the board.
J.C. Penney named Ronald W. Tysoe, formerly vice chairman at Federated Department Stores Inc., which became Macy's, Inc.(NYSE:M), to the board to fill the seat vacated by Ackman, whose resignation became effective Monday. J.C. Penney will also add another director to the board.
Ackman's investment firm, Pershing Square Capital Management, owns nearly 18 percent of J.C. Penney and an additional 7 percent through derivatives. He has already lost about $600 million on his investment in the company, according to the Wall Street Journal.
Ackman has been a J.C. Penney director for two years and has publicly pressured the board to speed up its search for a successor to CEO Myron E. Ullman, who remains in his post, with clear board support.
"The board today also reaffirmed its overwhelming support for Chief Executive Officer Myron E. (Mike) Ullman, III and for Chairman Thomas Engibous, both of whom have been working tirelessly to position the company for future success," J.C. Penney said in a statement. "This important work has included stabilizing the company's operations and financial position, restoring confidence among vendors, and taking steps to get customers back into stores."
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Ullman was brought in to run the company in April, on an interim basis, after former CEO Ron Johnson's failed bid to revive the giant department store chain by eliminating discounts and overhauling its inventories cost the company $1 billion in his first year on the job. Ullman had preceded Johnson, a former Apple Inc. (Nasdaq:AAPL) executive, who became CEO at Ackman's urging in 2011.
Ackman clashed with the board three months after Ullman's return to the CEO post, and last week he made his fight public, releasing to the media two letters criticizing the board for what he characterized as its slow pace in finding a new chief executive. Ackman also has called publicly for the ouster of Chairman Thomas Engibous.
Shares in the Plano, Texas, company have fallen about one-third so far this year.