The Sears/ESL Investments CEO has chosen to antagonize his former investors rather than his continuing investors, paying out the former’s redemption requests with shares of a company he owns rather than in the cash they wanted, so as to avoid having the latter face a higher tax bill. Unfortunately, there were so many of the former, and he had to give away so many shares, that it is now no longer accurate to say that Lampert owns Sears. He now merely owns most of it.
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The hedge fund billionaire will become CEO at the struggling department store chain Sears Holdings Corp, succeeding Lou D’Ambrosio, who headed up the company for around two years. Mr. D’Ambrosio’s departure was influenced by a close family member’s medical condition, people familiar with the matter said…”There’s a very big difference between being a CEO of a company and a shareholder or chairman of a company,” said Mr. Lampert, whose hedge fund ESL Investments Inc. controls 56.2% of Sears shares. But, he said, his longtime board seats at Autozone and AutoNation have taught him a lot about retailing. [WSJ]
Word is there’s some strange stuff going down on Mr. ESL’s watch. Five high up people have left just to go to Bloomberg alone in the past few months. He has in his head what a unit’s numbers should be, and if they come in better or worse he tells the unit head “You’re wrong, that’s not what I think it should be” and micro-manages based on his (false) sense of the numbers. Very strange, not trusting accountants’ numbers, no? Many people there are seriously questioning what’s going on.