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Shareholder Activism: Proxy Statement with SEC

 A group of Kmart Corp. shareholders filed a preliminary proxy statement with the Securities and Exchange Commission (SEC). The group is proposing: (1) that Kmart explore a sale or a merger of the company, and (2) the appointment of Stephen Hester to the board of directors.

 The Kmart Independent Shareholder’s Committee is a "Union of Needletrades, Industrial and Textile Employees (UNITE) and the International Brotherhood of Teamsters," representing ownership of about 520,000 Kmart shares, according to CNNfn.

 The objective of the proxy statement is for the group to obtain shareholder proxy votes at Kmart’s annual meeting on May 21. With enough votes, the group can exert pressure on management to act in the best interest of the group. In this case, best interest means to find a potential buyer of Kmart.

 Thus, a proxy fight is one way to discipline management if they deviate from shareholder value maximization.

Story Source: CNNfn, 3/37/96