Ackman reveals his candidates

In a proxy contest that is becoming more highly charged by the day, activist shareholder William Ackman on Monday introduced his nominees for Target Corporation's board, saying his slate would bring fresh ideas to an insular board with an average member tenure of 10 years.

"This board reminds me of a 'Friends of Bob' -- Bob Ulrich -- board," said Ackman, referring to Target's legendary CEO and board chair who retired in January after 41 years with the company.

"What's missing is people who can challenge the CEO, people that can add value to the CEO, people who can contribute to creating strategic value in the company," he said. "We think that's a key omission on the board."

Ackman and his four other nominees took to the stage in a New York auditorium for a two-hour presentation and webcast in which shareholders, the media and an online audience asked questions ranging from Ackman's contentious real estate plans to Target's credit card operations and grocery stores.

Ackman is pushing a slate of five candidates, which he calls "shareholder choice," that he believes will boost the board's experience in retailing, credit cards, real estate and corporate governance. Minneapolis-based Target backs the re-election of four members, saying they have experience as well as Target's long-term interests at heart.

The high-profile contest between the nation's second largest discount retail chain and the billionaire hedge fund manager is heating up as both sides lobby for votes before the May 28 shareholders meeting. Ackman said his Pershing Square Capital Management will spend $10 million pushing his slate, while Target estimates an outlay of $11.1 million.

Ackman blamed Target's board for strategic mistakes -- including not selling off all of its credit card receivables and being late to the grocery business -- that has led the retailer to lose ground to Wal-Mart during the recession.

Despite Ackman's insistence that his proxy fight is much larger than real estate, the discussion turned time and again to his proposal that Target sell the land under its stores -- which he said is worth $40 billion -- and put it into a real-estate investment trust.

Target has rejected the plan as too risky because it would put its credit rating at risk at a time of economic uncertainty, when the company wants to keep its balance sheet strong.

Ackman sought to portray himself and his candidates as flexible and open-minded, saying that his real estate plan may not be the best one, but that it deserves a full hearing, something he said Target's board refused to give it. He also called it significant that Target's directors own less than 0.3 percent of company stock.

Ackman has a 7.8 percent stake in Target, making him the third-largest investor, although much of that is in the form of riskier options. When he began the proxy fight, his fund, which only has Target shares, had lost more than 90 percent of its value, though the stock has recovered from a multiyear low in March, when it was $25.37. It closed Monday at $42.73.

Target never had faced a proxy battle, but it is matching Ackman's strikes with its own guns blazing.

Ackman's slate also includes Michael Ashner, CEO of Winthrop Realty; Jim Donald, former CEO of Starbucks; Ron Gilson, a law professor and expert in corporate governance; Richard Vague, CEO, Energy Plus Holdings.

Target is backing Mary Dillon, executive vice president of McDonald's Corp., Richard Kovacevich, Chairman of Wells Fargo & Co.; George Tamke, Partner, Clayton, Dubilier & Rice Inc.; and Solomon Trujillo, CEO of Telstra Corp.,