Entire Darden Board Voted Out

Starboard Value won a big victory for investors. Their slate of candidates completely swept out the current board of Darden Restaurants ($DRI).

The election of Starboard’s 12-director slate, announced Friday at Darden’s annual meeting, was a feather in the cap for the New York hedge fund, Darden’s second-largest investor with an 8.8 percent stake.

It was a stinging defeat for Darden, which this year alienated investors by brushing off their vote requesting a special meeting to debate the company’s then-proposed sale of its struggling Red Lobster chain.

The “extraordinary” and “totally self-inflicted” loss for Darden comes as no surprise given Darden’s “tone deafness” to investor wishes regarding the Red Lobster sale, said Charles Elson, director of the Weinberg Center for Corporate Governance in Delaware.

“It was kind of a done deal, wasn’t it?” agreed Karl Sooder, a Darden investor and University of Central Florida marketing professor, who attended Darden’s annual meeting in Orlando.

The board sweep, which is based on a preliminary vote count, is notable because of Darden’s size, experts said. Darden is the largest U.S. operator of full-service restaurants with $8.55 billion in 2013 sales.

I don’t have a dog in this fight, but I’m glad to see boards get fired. This should happen much more often.

Posted by on October 13th, 2014 at 12:22 pm


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