Corporate Rent Seeking

Here is an interesting piece on the corporate umbrella of Target and the attention it is receiving from one of its large scale investors. The following passage highlights that rent seeking is an issue in governance, not just government.

Yet Target's actions suggest otherwise: Far from treating Ackman like a mere irritant, it is spending some $11 million to promote its own candidates -- money, Steinhafel notes, that would be better spent improving its business. "This is a very challenging economic environment," he says, "and it's unfortunate that we are having to invest our time in [fighting] a proxy contest."

As a side note-- I was unaware that Target was apparently competing well with Wal-Mart and the stats in the article are, upon a second reading, a bit misleading. The only fundamentals-related information shows Wal-Mart up on 2008 and Target down, and the bit on Target's relative edge in stock price gains likely benefits from a favorable choice in start and end dates. All in all, I think that's about as favorable a reading of the retail tea leaves as Target could hope for.