Activist investor Starboard Value has gained full control of the 12-member board of Darden Restaurants at the company’s shareholder meeting after a nine-month proxy battle focused on the company’s management.
Investors voted to replace all 12 members of the board of directors on Friday, Darden Restaurants says in a press release. The vote followed a 300-page presentation by Starboard, the second-biggest shareholder in the company with an 8.8 percent stake, which sought to persuade investors to back calls for asset sales, changes to restaurant management, cost cuts and a series of other moves.
The new board includes Starboard CEO Jeff Smith and Bradley Blum, former president of the Olive Garden restaurant chain, which is owned by Darden Restaurants. The Starboard nominees received the support of proxy advisory firms Glass Lewis and ISS last month. The proxy advisers also back the activist investor’s turnaround plan, which includes the sale of real estate assets, menu changes, the spin-off of chains including the Capital Grille, Bahama Breeze and Yard House chains, and a series of other measures.
Investor dissatisfaction with Darden Restaurants heightened after the sale of the Red Lobster chain in July for $2.1 bn to Golden Gate Capital Group, which many investors claimed sacrificed too much value.
‘The new board is prepared and excited to immediately begin working alongside Darden’s management team to put Darden on track for long-term value creation for all shareholders,’ Smith says in the press release, speaking on behalf of the newly elected board.
‘My fellow board members and I share a common goal for Darden: to enhance value for all of Darden’s stakeholders, including its shareholders, employees and guests, by focusing on excellence throughout the organization, maintaining and strengthening the investment-grade rating and dividend, and emphasizing a restaurant/operations-centric culture built around great people.’
