Kohl’s Corporation has announced the dismissal of its CEO, Ashley Buchanan, following an investigation that revealed significant breaches of company policy. This decision comes just months after Buchanan assumed the role in January of this year.

Details of Termination

The board of directors made the announcement on Thursday, stating that Buchanan directed the company to engage in transactions with vendors that posed undisclosed conflicts of interest. This inquiry was carried out by external counsel and overseen by the audit committee of the board, as outlined in a filing with the Securities and Exchange Commission.

Key findings of the investigation included:

• Buchanan authorized business dealings with a vendor whose founder is a personal acquaintance, emphasizing “highly unusual” terms favorable to the vendor.
• Kohl’s entered into a multimillion-dollar consulting agreement with the same individual without appropriate disclosure, in violation of the company’s code of ethics.

Repercussions for Buchanan

As a result of his termination, Buchanan will forfeit all equity awards he received from the company, including recruitment-related bonuses issued on January 15. Furthermore, he is required to reimburse Kohl’s a pro-rata portion of his signing incentive amounting to $2.5 million.

Kohl’s clarified that his dismissal was unrelated to the company’s financial performance or the involvement of other employees.

Background Information

Ashley Buchanan took over as CEO from Tom Kingsbury, who remained as an adviser on the board until his planned retirement next month. This leadership change marks the third executive transition for Kohl’s in a span of three years as the retailer faces declining sales amid increased competition and changing consumer spending habits.

Looking Ahead

Kohl’s is set to report its first-quarter financial results at the end of May, during a time when the company is seeking to enhance profitability by consolidating operations and closing underperforming stores.