Target Corp. has carefully tended its image for corporate benevolence while competitor Wal-Mart Stores Inc. has been cast as penurious, a behemoth and mom-and-pop shop killer.

This story first appeared in the June 8, 2011 issue of WWD. Subscribe Today.

Now Target is under scrutiny for its decision, which came to light in July 2010, to use shareholder money for a $150,000 donation to Minnesota Forward, a political group supporting the election of gubernatorial candidate Tom Emmer, who opposes same-sex marriage rights.

Four Target shareholder groups — Common Cause; Bill de Blasio, New York City Public Advocate and Trustee of the New York City Employees Retirement System, a $40 billion pension fund; United Steel Workers, and the Delta Foundation of Pittsburgh — on Tuesday held a telephone press conference criticizing Target’s policies on political contributions. The groups said they would gather today outside Target’s annual shareholders’ meeting in Pittsburgh to urge the company to end the practice. Affiliated institutional investors who own stock in Target will attend the meeting and question executives about political spending. The action is intended to urge corporations not to spend treasury money on politics in the 2012 election cycle.

“We are aware of the press conference and potential protests” at the annual meeting, a Target spokeswoman said.

Target in 2011 was ranked 22nd on Fortune’s list of “World’s Most Admired Companies” and 44th on Diversity Inc.’s list of “Top 50 Companies for Diversity.” “We have always appreciated the way Target has always acted in support of our communities,” said Thomas Waters, Delta Foundation of Pittsburgh, which supports the gay, lesbian, bisexual and transgender communities. “When a store we count on and a corporation whose brand has set itself up as a progressive leader that respects all of its customers acts in this way, it disempowers us even more.”

New York City pension fund holds about one million Target shares. De Blasio said the retailer’s stock suffered as a result of the Minnesota Forward contribution. “In the week after the news broke, Target stock plunged 3.5 percent,” he said. “Over the same six trading days when that occurred, the stock price of rivals such as Wal-Mart, rose. Clearly, this was a response to Target’s misstep. We saw our investment decline.”

“It’s clear [the political donation] violated Target’s own code of conduct and created a huge reputational risk,” said Michael Dean of Common Cause Minnesota. “It could work against the goodwill Target has built up in our community.” Dean said Lady Gaga in March cut ties with Target, killing an exclusive deal for a special edition of her upcoming album. The reason was said to be her disapproval of Target’s political policies.

Target said following the 2010 election, it conducted a thorough evaluation of its processes and established a policy committee to review and provide greater oversight to future corporate political giving. “Moving forward, we will evaluate our giving based on business, team member and stakeholder objectives,” a spokeswoman said. “Engaging in civic activities is an important part of operating a national retail business. We operate best when working with policy makers on both sides of the aisle.”

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