Darden, the parent company of Olive Garden, said that its shareholders have elected all of activist hedge fundStarboard Value’s nominees to the restaurant group’s board.
This is a huge win for activist investor Jeff Smith’s Starboard.
Starboard has been going after Olive Garden, claiming that it’s badly run on all kinds of fronts.
“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 organisation, maintaining and strengthening the investment-grade rating and dividend, and emphasising a restaurant- and operations-centric culture built around great people,” Starboard’s Smith said in a statement.
Darden’s stock was last trading up 1.6%.
Smith’s Starboard Value made headlines last month for its epic presentation calling for changes at Darden. One of the points made in that presentation was a change to Olive Garden’s famous unlimited breadsticks and salad.
Here’s today’s press release:
ORLANDO, Fla., Oct. 10, 2014 /PRNewswire/ — Darden Restaurants, Inc. (DRI) today announced that, based on the preliminary vote count provided by its proxy solicitor following the Company’s 2014 Annual Meeting, shareholders have elected all 12 Starboard-nominated directors to Darden’s Board of Directors including: Betsy S. Atkins, Margaret Shan Atkins, Jean M. Birch, Bradley D. Blum, Peter A. Feld, James P. Fogarty, Cynthia T. Jamison, William H. Lenehan, Lionel L. Nowell, III, Jeffrey C. Smith, Charles M. Sonsteby, and Alan N. Stillman.
Speaking on behalf of Darden’s newly elected Board, Jeffrey C. Smith, Chief Executive Officer of Starboard, said, “Darden has an incredibly strong foundation that reflects its iconic and growing brands, 150,000 dedicated employees, and many loyal and passionate guests. Darden’s future is bright. 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. 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 organisation, maintaining and strengthening the investment-grade rating and dividend, and emphasising a restaurant- and operations-centric culture built around great people. The new Board wishes the departing directors well, and we thank them and their advisors for ensuring a smooth and seamless transition process that will allow us to immediately focus on the priorities at hand, including the selection of a transformational leader to be Darden’s CEO.”
Mr. Smith concluded, “Darden has all the right ingredients to regain the strength and prominence it once enjoyed. The new Board is incredibly excited by the opportunity at hand. We look forward to continuing our hard work from inside the boardroom and working with management on a shared goal of excellence for Darden.”
Speaking on behalf of Darden’s outgoing directors, Charles A. Ledsinger Jr., the former Independent Non-Executive Chairman of Darden’s Board, said, “We are extremely grateful to Darden Restaurants’ talented and dedicated management and employees who, day after day, serve our customers with distinction and are the backbone of what makes Darden the preeminent casual dining company. We give our best wishes to the incoming directors, welcome the reconstituted Board and look forward to seeing continued progress at Darden. On behalf of the outgoing Board, it has been our privilege to serve.”
Speaking on behalf of the Darden employees, Gene Lee, President and Chief Operating Officer of Darden said, “I am incredibly proud of our employees for their energy, passion and focus. Despite the recent distractions, our terrific employees remained focused on our priorities in the restaurants. We fully understand that our guests need to receive great food and great service, and we continue to deliver. We are grateful that there is clear resolution at the Board level and very much look forward to working with our new Board to continue to drive improvements throughout the organisation.”
Darden noted that the preliminary vote count following the Annual Meeting also indicates that shareholders voted FOR the approval, on an advisory basis, of the Company’s executive compensation; FOR the ratification of the appointment of KPMG LLP as Darden’s independent registered public accounting firm for the fiscal year ending May 31, 2015; FOR a management proposal to amend the Company’s bylaws to provide for proxy access; and AGAINST two shareholder proposals as described in the Company’s associated Proxy Statement.