Investor support for Target chairman Brian Cornell hits record low

Target has promised investors that it’s pursuing an aggressive turnaround with a new CEO at the helm, but its longtime former top executive Brian Cornell still leads the retailer’s board of directors — and some major investors are signaling they’re hungry for change.

Shareholder backing for Target’s former CEO and current executive chairman Cornell fell to its lowest level ever during the company’s annual general meeting this month.

While Cornell, 67, was comfortably reelected to his position on Target’s board of directors, he saw the steepest drop in support since he joined the retailer’s board more than a decade ago, when he was hired as its CEO. 

In all, 87.2% of shareholders voted to re-elect him to the board — a 4% decline from the year-ago period and a material drop from his historical average of 95% support. It’s also well below the average level of support directors have received across the S&P 500 this year, which Harvard Law puts at 96.6%. 

“Getting over 95% is normal. Getting under 95% is poor, and getting under 90 is very poor. It means people are going out of their way to say they don’t want you there anymore,” said Kevin Kaiser, an adjunct full professor of finance at The Wharton School of the University of Pennsylvania who teaches a course on shareholder activism. 

Given how many investors automatically approve what major proxy firms or boards suggest they vote for, “anything below 90 is considered a very bad result” and is rare to see, Kaiser said. 

Cornell’s drop in support comes after he stepped down from his CEO role and transitioned to be Target’s executive chairman in February as the company contended with dwindling profits, a falling share price and three straight years of annual sales declines.

Neil Saunders, retail analyst and GlobalData managing director, said some analysts and investors viewed Cornell’s appointment to executive chair as a “reward for failure” and wanted a clean break from the management team that oversaw so many of Target’s issues. 

“If you don’t do a good job as CEO, then arguably you should be cleared out of the boardroom and I think that’s how most people view it,” Saunders said. “I don’t think that that is unreasonable. To get rewarded for delivering a decline in the share price and causing problems for the company, it just doesn’t sit well with a lot of people.” 

A Target spokesperson declined to comment and instead referred CNBC to its 2026 proxy statement and a press release it issued announcing the voting results of its annual general meeting. In its proxy statement, the company said keeping the roles of board chair and CEO separate “is appropriate given the company’s immediate strategic and operational priorities” as the positions have “distinct roles and responsibilities.”

“The separated structure allows [CEO Michael Fiddelke] to focus on the business, including implementation of key initiatives, during the initial phase of his CEO tenure, while Mr. Cornell’s service as Executive Chair allows the Board to continue to leverage his in-depth knowledge of our business and industry during this transitional phase,” the statement reads.

Since joining Target as the retailer’s CEO in 2014, Cornell grew sales by more than 44% and helped transform it into a $100 billion-plus juggernaut as he oversaw the expansion of its digital presence, grew stores and steered the company through the Covid-19 pandemic.

But over the past few years, he’s faced rising criticism as the company has underperformed expectations and lost share to competitors like Costco, Walmart and Amazon. Target has been criticized for mismanaging inventory, under-investing in stores and falling behind on the trendy, eye-catching merchandise the retailer built its name on. 

Target has also been the subject of backlash over its actions on a number of social justice issues, and the brunt of that has fallen on Cornell. The retailer reduced certain LGBTQ-themed pride merchandise in stores several summers ago and rolled back diversity, equity and inclusion programs, which led to nationwide boycotts and preceded weeks of foot traffic declines. 

Combined, these issues have contributed to a precipitous drop in Target’s share price, which is up about 33% year to date but still down by about 50% since its all-time high in 2021.

When the company announced that Cornell would be stepping down as CEO earlier this year, Wall Street had favored an outside candidate to replace him, according to a June survey of 51 investors by Mizuho Securities, an equity research firm.

When it said two insiders would continue to lead the company — Cornell as executive chair and company veteran Fiddelke as CEO— the same day that it forecast another annual sales decline, investors were disappointed, leading shares to fall. However, since then, it appears as if analysts and investors are warming up to Fiddelke, who received 99% of the vote during the company’s meeting.

“It feels like they’re doing a lot of things better in terms of merchandising,” Michael Baker, a senior research analyst at investment bank D.A. Davidson, said in an interview. “To me that would be a sign of continued progress under Michael Fiddelke.” 

During the company’s fiscal first quarter, which ended May 2, Target saw comparable sales grow 5.6% — its first positive same-store sales number in five quarters, with strength across all six of its core merchandising categories. While Target said its turnaround efforts are showing signs of early progress, finance chief James Lee acknowledged higher tax refunds helped to fuel spending, a benefit he expects to fade over the rest of the year.

The exact investors that voted against Cornell, and their reasons, aren’t clear since complete voting records haven’t been released yet, but two of the nation’s largest public pension fund managers turned against him. 

The Florida State Board of Administration, which manages the Florida Retirement System Pension Plan, the sixth largest pension plan in the nation with about $277 billion assets under management, voted against Cornell after supporting him for the past nine years, proxy records show. 

The fund manager didn’t return CNBC’s request for comment, but voting records show it voted against Cornell because of “poor long-term company performance.” 

New York’s comptroller, which manages the $295 billion New York State Common Retirement Fund, supported Cornell from 2017 through 2024 but voted against him at the last two meetings, state records show. 

In a statement to CNBC, State Comptroller Thomas DiNapoli said “Cornell and others should not be rewarded for poor performance.”

“Investors are not supporting Target’s leadership because it mismanaged the company’s workforce, hurt the brand, and damaged shareholder value,” DiNapoli said. “It’s why New York state’s pension fund and other shareholders voted against board directors and Target’s executive pay plan.” 

While influential, the pension funds are not among Target’s top 50 shareholders. It’s not clear how Target’s largest investors voted at the meeting.

A number of left-leaning activists — including SOC Investment Group, Trillium Asset Management and Mercy Investment Services — called on investors to vote against Cornell. The activists have also urged investors to vote against lead independent director Christine Leahy, who received 88.5% of the vote during the most recent meeting, an 8% decline in support from last year. 

“Let’s suppose somebody is being criticized and it’s damaging our reputation with our customers and our employees, and as a solution to that, we promote this person to the executive chair role at the board level,” said Wharton’s Kaiser. “It just doesn’t smell right, and the person who would have had the primary role in stopping that from happening would have been the lead independent board member.” 

In its proxy statement, Target called Leahy a strong director “supported by a governance structure designed to further promote independence” as it recommended shareholders vote in her favor.

It’s unclear whether or not the investor pressure will have an impact on Target’s board, but Kaiser said change at that level typically happens when directors see such dramatic drops in support during annual meetings. 

“It means there’s a lot of pressure now on the board and on the individuals on the board and they clearly are losing the support of the shareholders,” Kaiser said. “If they don’t do something, the next [annual general meeting] won’t go well for them.”