Kohl's fired its CEO Ashley Buchanan last week over an undisclosed personal relationship he had with a vendor on a consulting team that made a multimillion dollar deal with the retailer under his leadership. Buchanan had only been in the role since January. The board appointed board director Michael Bender as the interim CEO.
An investigation by an outside law firm found that Buchanan had violated the company's policies by directing Kohl's to enter into “vendor transactions that involved undisclosed conflicts of interest.”
Basically, he entered into a multimillion-dollar deal that had very favorable terms for the consulting company, and it turns out, the firm was connected to someone who Buchanan had a personal relationship with — leading to speculation that there may have been favoritism, kickbacks, or both involved in the deal.
Kohl's did not disclose who the consulting agreement was with, but The Wall Street Journal revealed that it was Boston Consulting Group, where Buchanan's romantic partner, Chandra Holt, was an adviser.
Buchanan will have to forfeit all equity awards and bonuses he received from Kohl's when he was hired, as well as reimburse the company on a pro-rated basis for a $2.5M signing bonus.
Boston Consulting said it was “shocked to learn of the relationship” and that the company has “strict guidelines for our senior advisors to disclose any conflicts of interest.” The company also said it had terminated Holt's contract for nondisclosure.
If you're interested in this story, you've got to read Brittain Ladd's LinkedIn post where he drills into Buchanan and shares how he previously tried to warn Kohl's about his character:
“Ashley has a history of bending and breaking the rules. He believes there is no reason why he should be restricted from doing anything that he wants. He exhibited this behavior at Sam’s Club and especially at Michaels Stores. I’m convinced that Buchanan will break every rule that he can as the CEO of Kohl’s.”