Starbucks CEO Howard Shultz ripped into Bill Ackman over the activist investor’s aggressive letters to JCPenney’s board on CNBC’s “The Closing Bell” with Maria Bartiromo.
Ackman’s letters are calling for a new CEO within the next 30 to 45 to replace interim CEO Mike Ullman, who returned after Ron Johnson stepped down.
The activist investor also wants the board’s chairman Tom Engibous replaced with Allen Questrom.
Here’s what we’ve transcribed part of Shultz’s interview with CNBC’s Maria Bartiromo:
“…I think what we’ve all witnessed, though, the last 24 hours, is such a despicable act. Something so irresponsible that a board member of an existing public company would release and leak an email without sharing it with the board or the CEO is beyond comprehension. But the story is worst than that. Here’s the situation and this is the truth. This is not fiction. Bill Ackman was the primary engineer and architect of recruiting Ron Johnson to the company and he and Ron Johnson co-authored the strategy that fractured the company and ruined the lives of thousands of JCPenney employees and fractured shareholder value.
“My problem is…Mike Ullman graciously came back to change the company and worked tirelessly and given the time and support from the board. i’m very confident he will do just that. And there’s one other thing. Bill Ackman released an email today that said that Mike Ullman is not communicating with him and the board. When Mike decided to come back, I shared with him verbatim all the things that I did during the transformation with Starbucks and he used many of those communication tactics, including emailing and communicating with board weekly as well as with employees. So this is a tragic example of an irresponsible, despicable act. This isn’t about Mike Ullman for me it’s about financial engineering and people who do thing s for their own benefit and as a result fracture the goodwill, shareholder value and life of hardworking people…I Mike Ullman is a world class CEO and fantastic leader.”
[phone breaks up and rejoins the program]
“…What I was trying to say, Maria, is that Mike Ullman came back really to try and save the company. What’s so perverse here is that he’s trying to save the company that Bill Ackman has basically done severe damage to and for Ackman to do what he’s done in the last 24 hours is not only irresponsible but it’s destructive behaviour. If I was sitting on that board, I would be asking for Bill Ackman’s removal.”
Shultz is not a shareholder in JCPenney and he has never met Ackman.
Ackman is the largest shareholder in JCPenney with a nearly 18% stake. Since September 28, 2010, the date of his initial 13D regulatory filing on JCPenney, shares of the retailer have tumbled more than 47%.