Maverick Sears Shareholder Makes Point With Challenge

Robert A. G. Monks concedes that his bid for a seat on the Sears, Roebuck & Co. board is a long shot, but even if he loses today’s proxy contest, he hopes that his campaign won’t have been in vain.

Monks says he wants people to remember his campaign “as the point when owners recognized the need for genuinely independent directors.”

The former Labor Department official heads Institutional Shareholder Partners Inc., a Washington-based company that advocates replacing management’s handpicked yes-men with independent directors to make corporate boards more responsive to shareholders.

Monks has the support of the California Public Employees Retirement System, which owns 2.3 million Sears shares.

Monks meant to set an example when he began his quest for a Sears board seat late last year.

But he has taken a harder line in recent weeks, telling institutional investors that if elected, he would press the board to retain an investment banker other than Sears’ longtime financial adviser Goldman, Sachs & Co. to study ways of increasing the price of Sears stock.

The options would likely include one that some institutional investors have long recommended: dismantling Sears to separate its weak-sister retailing division from its financial services subsidiaries--Allstate insurance, Coldwell Banker real estate and Dean Witter Reynolds brokerage. Analysts say Sears is worth about $90 a share broken up, more than double its current stock price.

Sears Chairman Edward A. Brennan insists that the company is most valuable as a retail and financial services conglomerate.

He has cited a 91% increase in first-quarter earnings as evidence that the retailing division, though still unprofitable, is turning around as a result of a 10% work force cut and a merchandising strategy emphasizing low prices and brand names that Sears began in 1988.

Meanwhile, a federal judge in Philadelphia on Wednesday denied a petition by two Sears shareholders to postpone today’s meeting until the company provided more information about a decision to restructure the company, including an overhaul of the retail division.

The two shareholders, S. N. Isquith and C. Oliver Burt Jr., who together hold 500 shares of Sears stock, filed suit in Philadelphia on Monday.

The delay was sought on grounds that Sears had failed to disclose in material made public for the meeting the existence of a 1988 shareholder suit against the company.

Sears called the complaint frivolous and without merit.