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Investors target Target over Emmer donations

Target Corp. continues to deal with headaches over its financial support for the Tom Emmer for Governor campaign. My buddy Tom Hamburger of the L.A. Times breaks has the latest scooplet in the Friday editions, reporting that several institutional investors — which together hold more than $50 million worth of Target shares — are sponsoring a shareholders’ resolution asking for a review of the policy for making political contributions to avoid future problems.

Target’s CEO GreggSteinhafel has already called for a review of the policy, but, perhaps since Steinhafel was responsible for the donation that caused all the trouble, the investors are asking for a review by Steinhafel’s bosses — the Board of Directors.

A correction and an addendum: This post originally said that the investors who are demanding the review owned more than 50 million shares of Target. My mistake. Should have said 50 million shares. Thanks to commenter Joseph Skar for pointing out the error which is now corrected above.

Also, MinnPost teammate David Brauer notes that the investor groups demanding this review are all in the category of “socially responsible investors” that incorporate human rights, diversity, environmental and other moral stands into their investment decisions. Brauer suggests — as neither my post, the Strib story, nor the L.A. Times story that the Strib and I followed note — that the reaction to the Target-Emmer kerfuffle by socialy responsible funds may not be a reliable guide to the reaction of other investors who are just trying to maximize return.

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Comments (8)

  1. Submitted by Joseph Skar on 08/20/2010 - 08:12 am.

    Where did you see 50 million shares? I see 57.5m of market cap at $52 a share gets to approx 1.1m shares. So 1.1 million over 736 million equals 0.15% what will Target do…the horror, the horror.

  2. Submitted by Jon Kingstad on 08/20/2010 - 08:29 am.

    Your point is well taken that even institutional investors don’t have much clout over the management of a publicly traded corporation. But where do you get 736 million and 0.15%.

  3. Submitted by Joseph Skar on 08/20/2010 - 08:46 am.

    Jon – Per Google the 736m is the total shares outstanding so the 1.1m share held by the disgruntled investors represent 0.15%, less than a quarter of one percent of the outstanding shares.

  4. Submitted by Paul Brandon on 08/20/2010 - 10:06 am.

    While I don’t like the whole idea of corporate contributions to politicians, it has just become constitutional.
    What I fail to see is what’s unusual about Target in this case.
    A business made a (modest as such things go) contribution to a ‘pro-business’ Republican who has espoused (allusion intended) the GOP party line on the definition of marriage.
    So what’s new? Emmer is no more homophobic that most Republicans; probably less than many.
    The cuts in public services that would result from his election would have a lot more effect on the average low income Target employee than his stance on gay marriage.

  5. Submitted by John E Iacono on 08/20/2010 - 11:52 am.

    Can’t wait to see the outcry when some company contributes to the dem party, and thus offends those who disagree with it.

    Not.

  6. Submitted by ruby hunt on 08/20/2010 - 03:01 pm.

    I will not boycott Target because their employees should not suffer from the effects of reduced earnings. I have a young friend, gay, graduate of Macalester and employed in their business office for the last three years. He is being funded by Target to attend the Carlson School of Management in order to improve his skills and move up in the corporation. Will reduced earnings put in jeopardy his job and that of other long time well qualified employees? Criticize actions of management but don’t hurt the employees.

  7. Submitted by Jon Kingstad on 08/21/2010 - 12:13 am.

    Every so often, stockholders do succeed in making their voices heard. It seems to me that Target really crossed a line by making a political contribution. Rather, its CEO crossed a line by making such a contribution and I really wonder if shareholders might not even have a legal basis for action against the Target Corp. and him for spending the corporation’s money in such a fashion. I mean, if Steinhafel can do this, why can’t any employee working a cash register take out a $20 or $50 or $100 and contribute to their favorite candidate?

  8. Submitted by John E Iacono on 08/24/2010 - 01:26 pm.

    Jon,

    I’ve been thinking about your comment, and looking for corroboration, but I can find no indication that the protestors were stockholders, or that this objection was raised in the context of a stockholders’ meeting.

    Am I in error here?

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