Kohl’s announced on Thursday that CEO Ashley Buchanan has been terminated for cause, after an internal investigation found that Buchanan had arranged vendor deals that involved undisclosed personal relationships, violating company ethics policies. Buchanan had served as chief executive for only five months prior to his dismissal.
In an official statement, the retailer said, “An independent investigation led by external legal counsel and supervised by the Board’s Audit Committee found that Mr. Buchanan instructed the company to enter into vendor agreements that involved undisclosed conflicts of interest. The Board concluded these actions warranted termination for cause.” Kohl’s emphasized that no other employees were implicated in the matter, with the board also clarified that Buchanan’s termination was not connected to the company’s business performance, financial reporting, or operational results.
According to a filing with the Securities and Exchange Commission, Buchanan’s dismissal stems from an investigation led by outside legal counsel and monitored by the board’s audit committee. The probe revealed that Buchanan had pushed for Kohl’s to do business with a vendor started by someone with whom he had a personal relationship. The deals were made on “highly unusual terms” that favored the vendor. Buchanan also arranged a multimillion-dollar consulting contract with the same individual, who was involved with the consulting team. In both cases, he failed to disclose the relationship, violating the company’s code of ethics. The company did not disclose the identities of the vendors involved or provide details about the nature of the conflict of interest, but as a result, Buchanan will forfeit all equity awards and repay part of his $2.5 million signing bonus
Buchanan had replaced former CEO Tom Kingsbury, who had taken on the role in an interim capacity in December 2022 before being officially named CEO in February 2023. Kingsbury continues to serve on the board and will remain in an advisory role until he retires next month. Prior to joining Kohl’s, Buchanan had served as the chief executive of arts and crafts retailer Michaels.
Effective immediately, Kohl’s Chairman Michael Bender has stepped in as interim CEO. As part of his new role, Bender will leave his positions on several board committees, including the audit, compensation, and ESG committees, according to a recent regulatory disclosure. Bender brings with him over 30 years of leadership experience in the retail and consumer goods sectors, having previously served as CEO of Eyemart Express and held senior roles at Walmart, L Brands, and PepsiCo. The board also said they have launched a formal search for a new permanent CEO and plans to announce a new chairperson in due time.
John Schlifske, chair of Kohl’s Nominating and ESG Committee, said in a statement that “we are confident in Michael’s ability to guide the company during this transition.” Bender also expressed his commitment to the company’s strategic direction, stating, “together with our leadership team, board, and dedicated associates, I’m focused on advancing our long-term plan to deliver value to shareholders.”
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