Gene Lee is now officially CEO of Darden Restaurants — which means national restaurant chains Olive Garden, LongHorn Steakhouse, The Capital Grille and more are in his hands.
Lee, who was chosen in a unanimous vote, was appointed interim CEO back in October.
He’ll be expected to continue presiding over a big turn around at Darden. The company started changing dramatically back in September after hedge fund Starboard Value, which has an 8.8% stake in the company, published a 294-slide take down of Darden’s business practices.
Since then Darden’s stock has risen 25%.
In its presentation, Starboard argued that Darden was wasteful, and put a special spotlight on how Olive Garden’s never ending (and beloved) breadsticks should be more efficiently distributed to customers.
“… we believe lapsed discipline around Darden’s renowned unlimited salad and breadsticks offering has lead to both high food waste and a worse experience,” said the presentation.
Here’s the key slide:
Darden also said Olive Garden was being cheap where it shouldn’t be.
“According to Darden management, Darden decided to stop salting the water to get an extended warranty on their pots. Pasta is Olive Garden’s core dish and must be prepared properly.”
Olive Garden hit back, but it wasn’t enough. Within a month the company’s entire board was ousted, and Lee was named interim CEO. Darden then started an executive search to hire someone externally, but Lee kept exceeding the new board’s expectations.
“I have worked closely with Gene during his Interim CEO role and have been incredibly impressed by his clear thinking, openness to new ideas, passion for winning, and wonderful leadership style,” said Darden Chairman Jeffrey C. Smith, who also serves as Starboard’s CEO. “Gene has already done a terrific job improving the energy and attitude inside Darden and we expect the reinvigorated culture to continue to improve. Gene brings the perfect combination of restaurant-level operating experience, brand- and corporate-level management expertise, and thoughtful, focused, hands-on leadership.”
Lee joined Darden back in 2007 when the company acquired RARE Hospitality International, the company that owned LongHorn Steakhouse. He was named President of RARE in 2001.
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