Kohl’s has terminated CEO Ashley Buchanan following an investigation that revealed undisclosed conflicts of interest related to vendor transactions. Chairman Michael Bender has been named interim CEO, effective immediately.
Termination of CEO Ashley Buchanan
Kohl’s terminated Ashley Buchanan as CEO after discovering that he directed the company to engage in vendor transactions involving undisclosed personal relationships and conflicts of interest. These findings came from an investigation led by outside counsel and overseen by the board’s audit committee.
Interim CEO Appointment
Following Buchanan's termination, Kohl’s appointed Chairman Michael Bender as interim CEO effective immediately. To avoid conflicts, Bender will step down from several board committees including audit, compensation and governance during his interim CEO role.
Investigation Findings and Ethical Violations
The investigation found Buchanan had a personal relationship with a vendor founder and arranged business deals for Kohl’s on unusually favorable terms to the vendor. Additionally, Kohl’s entered into a multimillion-dollar consulting agreement with an individual related to this vendor, again without proper disclosure, violating Kohl’s code of ethics.
Financial and Legal Repercussions for Buchanan
As part of his termination, Buchanan is required to forfeit all equity awards from Kohl’s, including recent recruitment incentives, and reimburse $2.5 million of his signing bonus. The board also withdrew Buchanan’s nomination for election as a company director at the upcoming shareholders’ meeting.
Kohl’s Leadership and Business Context
Buchanan was Kohl’s third CEO in three years, formerly leading the Michaels arts and crafts chain. His firing comes amidst ongoing struggles with sluggish sales, strong competition from Walmart and Amazon, and challenges related to tariffs imposed under President Donald Trump’s administration.
Company's Financial Outlook
Kohl’s provided preliminary first-quarter sales and profit guidance indicating continued weakness but still expecting to outperform Wall Street estimates. It predicted a comparable sales decline between 4% to 4.3% and a loss of 20 to 24 cents per share, less severe than analysts’ projections.
