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AIPROPX ReportFortune · 1h ago
Target’s missteps have alienated consumers and shaken investors. Executive Chair Brian Cornell should step down
Target’s annual shareholder meeting in June was a referendum on the company’s leadership, and the story is bleak: nearly 13% of shareholders opposed the reelection of Executive Chair and former CEO Brian Cornell. Combined with nearly 40% support for a shareholder proposal calling for an independent Board Chair, this level of opposition makes clear that some shareholders are dissatisfied with the decision to retain Cornell on the Board after he stepped down as CEO early this year.
At first glance Cornell’s reelection margin may look comfortable, but votes like these typically show approval levels of 90% or higher. The average support for S&P 500 directors in the 2026 proxy season was 96.6% . Compare that to Cornell’s fall to 87.2%, and it signals that shareholders like us have lost faith in Cornell’s leadership and demand a change to Target’s management.
Cornell’s fortunes have dropped precipitously. For nearly a decade, his nay votes never once rose above 6.3%. In 2025, after three straight years of sales declines, the opposition to Cornell rose slightly higher. But then he stepped down as CEO in February, only for the Board to retain him as Executive Chair. At this year’s AGM, opposition increased threefold from a decade ago, from 4.2% in 2016 to 12.8% in June.
Those of us who follow the company understand how we got here: a steady erosion of Target’s brand from years of poor management decisions, including a series of operational missteps that have repeatedly put it at odds with the public.
Once an industry leader for championing inclusion, in recent years Target has caved to political pressure — slashing its Pride merchandise collection in 2024, rolling back DEI initiatives in 2025, and most recently its muted response to ICE after federal agents shot and killed Renee Good and Alex Pretti and detained two of its employees in the company’s home city of Minneapolis.
The backlash has been fierce. Black, Latino, LGBTQ+, and progressive shoppers — some of Target’s core customer base — have mounted boycotts and national protests. Twin Cities Pride threw Target out of its hometown parade after 18 years as a sponsor. The daughters of Target co-founder Bruce Dayton called the company’s retreat on inclusion “a betrayal.”
In recent years, Cornell fundamentally misread what set Target apart from other big box retailers, eroding years of hard-earned good will by moving away from the qualities customers once trusted: a genuinely welcoming environment for all, a sense that the company balanced profit with people, and a brand identity that reflected the values many shoppers believed it shared with them.
Along with all this are the everyday consumer experience concerns: in-store standards have been slipping for years. Customers report messier aisles, out-of-stock products, longer checkout lines, and fewer employees available to help — all of this leads to families’ shopping trips taking longer, shoppers not finding what they need, and consumers who once looked at “Tarjay” as a fancy shopping destination no longer feeling any of the whimsy they once felt when walking through stores.
For the first time since 2001, Target fell off Fortune Magazine’s World’s Most Admired Companies All-Star list this year. And nearly half of Target’s workforce say they have no faith in the retailer’s future. But instead of investing in stronger operational support, employee retention, or product supply chains, Cornell engaged in years of stock buybacks that failed to generate shareholder value, while neglecting the company’s serious problems. Recently, the company has stepped back from repurchasing shares and increased investment, but it is unclear if this is a temporary change or represents a recognition that a sustainable turnaround requires ongoing improvements to the in-store experience.
Inflation and tariff pressures have intensified these challenges. Yet Target’s largest rivals have demonstrated that those headwinds do not fully explain its struggles: Walmart continued to attract more in-store shoppers even as e-commerce expanded, while Costco has been winning on price without sacrificing its durable profit margins. Conversely, during Cornell’s tenure as CEO, Target’s foot traffic in U.S. stores decreased significantly from 2022 to 2025, and net sales shrank year-over-year for seven of the last twelve fiscal quarters.
Since Fiddelke took the reins, Target’s turnaround is showing early signs of taking hold: traffic and comparable sales are rising, digital growth is strong, and management has lifted its underlying outlook. Still, the durability and quality of the earnings recovery remain unproven, particularly in apparel and home and after removing a large, one-time tariff refund.
That makes its latest cultural misstep especially costly. Just as Target appears to be regaining traction with the customers it lost from its past, self-inflicted, reputational setbacks, it was forced to pull and apologize for a children’s Halloween costume that drew viral comparisons to blackface and minstrel imagery. Target conceded that the product was offensive and “should never have been part of our assortment.”
The Board’s decision to retain Cornell as Executive Chairman, rather than appoint an independent chair, undermines its claim to a genuine management reset—particularly given that new CEO Michael Fiddelke is a 20+ year Target insider and former COO. We at SOC Investment Group haven’t been shy about our own point of view: retaining Cornell as Executive Chair and Special Advisor preserves the influence of the executive most responsible for Target’s prolonged underperformance, undermining Fiddelke’s turnaround efforts.
It’s time for Board members to prove they understand the gravity of the issues the company is facing. Greater oversight, stronger transparency, and a better governance structure are no longer suggestions — they’re necessary next...
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