Courtesy of Benzinga.
Darden Restaurants, Inc. (NYSE: DRI) today issued the following statement in connection with the Company’s
2014 Annual Meeting of Shareholders:
The experience, insights and objectivity of Darden’s directors have been – and
will continue to be – important drivers to the Company’s ability to enhance
shareholder value, advance its operating priorities and execute the Olive
Garden^® Brand Renaissance. The composition of our Board, including both its
independence and diversity of talent and experience, is critical to Darden’s
future success. Given the people facing nature of Darden’s business, we also
believe continuity of knowledge and relationships is important to the
engagement, retention and motivation of Darden’s management team and to the
success of the operating strategies that we are implementing.
Accordingly, we have carefully assembled a new slate of director nominees to
ensure that Darden has the right experience, insights, continuity and
perspectives that are necessary to successfully execute the Company’s
strategies, including the Olive Garden Brand Renaissance, and enhance value
for ALL Darden shareholders. We believe Darden’s new slate provides the
optimal balance of fresh perspectives from four new, highly qualified
independent nominees, continuity of experience and insight from four highly
qualified continuing independent nominees, and four seats to be filled by
Starboard Value L.P. and its affiliates (“Starboard”). The slate includes:
o Four new independent nominees unaffiliated with the Company or Starboard:
Gregory L. Burns, Jeffrey H. Fox, Steve Odland, and Enrique Silva. These
new independent nominees, all of whom are current or former Chief
Executive Officers with experience driving turnarounds, provide additional
international restaurant, franchise, consumer, real estate and operations
expertise to support the development, oversight and execution of Darden’s
operating and brand initiatives, including the turnaround of Olive Garden
and the Brand Renaissance plan. Unlike Starboard’s nominees, these new
independent nominees have not made any unilateral commitments to implement
a pre-determined agenda; they will approach opportunities with an open
mind and a singular focus on building sustainable value. Three of these
new independent nominees – Mr. Burns, Mr. Odland and Mr. Silva – were
first identified through a process that began in January 2014 in the
context of identifying highly qualified independent director candidates in
the event that Darden spun-off Red Lobster into a standalone publicly
traded company with its own Board of Directors. Spencer Stuart, a leading
director and executive search and recruiting firm, was hired in March 2014
to evaluate the director nominees. The fourth new independent nominee,
Mr. Fox, was identified by an outside advisor to the Board. Each of the
nominees for election at the Annual Meeting was recommended by the
Nominating and Corporate Governance Committee of Darden’s Board;
o Four continuing independent director nominees who provide important and
deep understanding of the Company’s operations and the shifts in industry
and consumer trends over time, who have experience and expertise relevant
to both Darden’s business and to the strategic decisions it is pursuing
and considering, and who have a record of taking proactive, decisive
action to best position Darden for continued improvement and success:
Michael W. Barnes, Christopher J. Fraleigh, Michael D. Rose, and Maria A.
Sastre; and
o Four seats to be filled by candidates proposed by Starboard so that its
nominees can directly participate in the decisions regarding Darden’s
strategic direction, including the selection of the Company’s next Chief
Executive Officer, while also avoiding the risks and disruption that we
believe would result from the control that Starboard is seeking.
As part of this reconstituted Board, eight of Darden’s 12 directors would be
new to the Board this year.
o All of Darden’s director nominees share the common goal of enhancing
shareholder value and are prepared to work collaboratively with all of the
new directors, including the Starboard nominees, to achieve this
objective.
o All of Darden’s director nominees are committed to selecting a Chief
Executive Officer who will build upon the progress we are making to
improve operations and drive shareholder value – not simply an individual
who will act according to the direction of the single minority
shareholder, like Starboard, who selected him/her.
While the Darden Board has left four seats to be filled by Starboard
candidates, the Board believes it is appropriate to consider the independence
and experience of all 12 of Starboard’s director nominees given their role in
Starboard’s efforts to take effective control of the Company.
A review of the public record shows that Starboard’s proposed slate of
directors has significant experience gaps and numerous ties to Starboard and
to each other, which raises further concerns in our view about allowing a
single minority shareholder – Starboard – to take control of Darden.
Click here for multi-media image: “Is This Starboard 12-Person Slate Really
the “Best Board” to Independently Represent ALL Shareholders and to Control a
Multi-Billion Dollar Consumer-Facing Company with 150,000 Employees?”
Is This Starboard 12-Person Slate Really the “Best Board” to Independently
Represent ALL Shareholders and to Control a Multibillion Dollar
Consumer-Facing Company With 150,000 Employees?
According to Starboard’s proxy statement, each of its director nominees “is
committed to the implementation of [Starboard’s] comprehensive turnaround plan
for Darden. Therefore, in the event that [Starboard’s] director nominees
comprise a majority of the Board following the Annual Meeting, we expect that
the Board will implement [Starboard’s] comprehensive turnaround plan for
Darden.” Through this statement, it appears that each of Starboard’s nominees
has reached a conclusion on the merits of Starboard’s plan – and devoted
themselves to following it – without having full knowledge of the Company’s
operations, financial performance or actions underway. We believe this
underscores the devotion of Starboard’s handpicked nominees to Starboard,
rather than to the best interests of all Darden shareholders. This has
implications too for Darden’s executive leadership and for objective oversight
and stewardship of your company. Indeed, we believe that recruiting an
exceptional Chief Executive Officer for Darden would be difficult if all
decisions about running the Company were pre-determined and micro-managed by a
Board that is lockstep committed to one shareholder’s plan – Starboard’s
plan.
We believe that decisions critical to Darden’s success and its ability to
maintain its industry-leading $2.20 per share annual dividend – including
decisions regarding capital allocation, strategic direction and the
identification of Darden’s next Chief Executive Officer – should be made by a
truly independent, well-rounded Board. This is the case with Darden’s director
nominees who are committed to representing the interests of all Darden
shareholders, not just one.
In considering the vote at the Annual Meeting, we urge Darden shareholders to
carefully consider that Starboard’s slate is comprised ONLY of nominees
hand-picked directly by Starboard.
We urge shareholders to vote ONLY on the BLUE proxy card “FOR ALL” of Darden’s
highly qualified, experienced and independent director nominees: Michael W.
Barnes, Gregory L. Burns, Jeffrey H. Fox, Christopher J. Fraleigh, Steve
Odland, Michael D. Rose, Maria A. Sastre and Enrique Silva. Shareholders may
vote by mail, phone or internet following the instructions on the BLUE proxy
card.
CAUTION: Any vote on the white card is a vote for Starboard’s control slate as
it could revoke any previous proxy you submitted using the BLUE proxy card.
Only your latest?dated proxy counts. We urge shareholders – DO NOT SIGN OR
RETURN ANY WHITE CARD. SIMPLY DISCARD IT.
Innisfree M&A Incorporated is serving as the Company’s proxy solicitor and can
be contacted toll-free at (877) 825-8631.
About Darden’s Four New Independent Nominees
Gregory L. Burns is a 26-year veteran of the restaurant industry having led
O’Charley’s Inc., a multi-concept restaurant company, as Chief Executive
Officer for 14 years and serving as its Chairman for 13 years. Mr. Burns’
expertise focuses on brand management through high-quality food and beverage,
and service execution. Mr. Burns also has a track record of successfully
developing long-term strategic business plans that encompass and balance
operations and new unit growth with capital requirements.
Under Mr. Burns’ leadership, O’Charley’s grew from a single to multi-brand
platform with 371 company-owned restaurants and franchises in 28 states
operating under the O’Charley’s, Ninety Nine Restaurant and Stoney River
Legendary Steaks brands with almost 25,000 employees. Mr. Burns also oversaw
the acquisition, development and expansion of a full service manufacturing,
distribution and commissary operation, which the Company sold in 2006.
Mr. Burns currently serves as President and Chief Executive Officer of The
Gregory Burns Consulting Group, LLC, and is a member of the Board of Directors
of Pinnacle Financial Partners, Inc. Previously, he was the founder,
President and Chief Executive Officer of NeighborMD Management, LLC, developer
of branded retail urgent care centers, which was sold to a JV between HCA and
CareSpot Express Healthcare in 2013.
Jeffrey H. Fox brings significant leadership, executive management, strategic
planning, investment and operations experience to the Darden Board. Mr. Fox
serves as non-executive Chairman of the Board of Convergys Corporation, a
market-leading customer management company with $3 billion in revenue, $350
million in EBITDA, and 125,000 global employees. Prior to becoming Chairman,
Mr. Fox served as President and Chief Executive Officer of Convergys and led
the Company’s transformation from a multi-line business services supplier into
a market leader in the customer management business. This transformation
involved divesting approximately $900 million of non-core assets while
improving the operating performance of the core customer management business.
Mr. Fox first joined Convergys as a director in February 2009 in connection
with an agreement with Convergys’ then largest shareholder, JANA Partners LLC.
Prior to joining Convergys, Mr. Fox founded the investment and advisory firm
Circumference Group. As founder, Mr. Fox assembled a team of seasoned
operators and led the team through a sector-focused public and private
investing platform. Mr. Fox is actively involved in Circumference Group as
its majority owner.
Mr. Fox also provides experience leading consumer facing companies, including
serving as a current Director of Avis Budget Group, Inc., and previously as
Chief Operating Officer of Alltel Corporation. Prior to Alltel’s acquisition
by Verizon Wireless in January 2009, Alltel was the fifth largest wireless
company in the United States with over $10 billion in revenues, $3.5 billion
in EBITDA and 16,000 employees.
Prior to Alltel, Mr. Fox worked in investment banking for 10 years with
Stephens Inc., preceded by two years with Merrill Lynch; he specialized in
merger and acquisition advisory services for public and private companies.
Steve Odland has an extensive background in business and corporate governance,
successfully leading major companies, including two Fortune 500 companies,
through highly challenging environments. He has led multiple companies in
industries directly related to Darden, such as the food and consumer
industries, reinvigorating brands, growing sales through new marketing and
merchandising programs, expanding margins and improving customer service
metrics. In addition, he has many years of experience in multi-unit retail,
including overseeing real estate site optimization, selection, development and
expansion.
Previously Mr. Odland served as Chairman and Chief Executive Officer of Office
Depot; Chairman, President, and Chief Executive Officer of AutoZone; Chief
Operating Officer of Ahold USA; President and Chief Executive Officer of Tops
Markets, Inc.; President of the Foodservice Division of Sara Lee Bakery; and
was employed in various executive positions by The Quaker Oats Company. He
currently serves as a Director of General Mills and previously served on the
Board of Directors of Peapod, Inc.
Mr. Odland also possesses a strong policy background. He currently serves as
President and Chief Executive Officer of The Committee for Economic
Development. Previously, he was Chairman of the Business Roundtable’s
Corporate Governance Task Force; a U.S. Presidential appointee as a
Commissioner on the National Surface Transportation Policy and Revenue Study
Commission; a member of the Committee on Capital Markets Regulation; a U.S.
Presidential Appointee on the Council on Service and Civic Participation; a
member of the Advisory Council of the Institute for Corporate Ethics; a member
of the Advisory Council, University of Notre Dame Mendoza College of Business;
and a member of the Florida Council of 100.
Previously, Mr. Odland was also an Adjunct Professor at the Lynn University
and Florida Atlantic University graduate schools of business.
Enrique Silva, President, Chief Executive Officer and a member of the Board of
Directors of Checkers Drive-In Restaurants, Inc., brings more than 20 years of
international restaurant experience and a successful track record of
partnering with private equity owners to drive strategic growth and turnaround
initiatives. Checkers is the #1 operator of double drive-through fast-food
restaurants, operating approximately 800 units across 30 states under two
brands: Checkers and Rally’s. Over 40% of the restaurants are owned and
operated as company restaurants and the balance of the restaurants are
franchised.
Since joining the Company in 2007, Mr. Silva has led a comprehensive
restructuring and expansion of the Checkers/Rally’s business. He recruited
industry-leading talent to the management team, led the development of a new
brand strategy, directed the implementation of best-in-class operating and
performance management systems, and implemented a set of core values that have
become the foundation of the brands’ culture. These actions have resulted in
category-leading sales growth, with almost four straight years of consecutive
comp sales increases every quarter largely driven by traffic, and substantial
improvements across all aspects of operations, including restaurant-level
profitability, menu and guest satisfaction.
Prior to Checkers, Mr. Silva served in a number of leadership roles at Burger
King Corporation for more than 13 years. As President of their Latin American
region, he grew the Burger King brand across South & Central America, Mexico
and the Caribbean. Mr. Silva also ran their U.S. Company Operations, where he
oversaw more than 600 company restaurants with a team of 15,000 employees and
led the financial, operational and cultural turnaround of those restaurants.
As Senior Vice President, Franchise Operations, he was responsible for more
than 3,300 franchise restaurants in the U.S. and Canada.
Mr. Silva has received numerous awards and recognitions for his business
achievements, including being named by Nation’s Restaurant News as one of the
2014 “10 Restaurant Executives to Watch,” being a 2013 Ernst & Young
Entrepreneur of the Year finalist, and being recognized as one of the “100
Most Influential Hispanics” in the US by Hispanic Business Magazine.
About Darden’s Four Continuing Independent Nominees
Michael W. Barnes brings to Darden experience as Chief Executive Officer,
Chief Operating Officer and as a director of other consumer branded and retail
companies, including Signet Jewelers and Fossil. In these roles, he has
developed, implemented and overseen growth strategies like those underway at
Darden, built on superior customer service, compelling product offerings,
technology and digital initiatives, and targeted advertising and promotion
campaigns.
The success of these strategies is reflected in the value created by the
companies in which Mr. Barnes has led. For example, since becoming Chief
Executive Officer of Signet Jewelers, the nation’s largest specialty jeweler
and parent of Kay Jewelers and Jared, in January 2011, Signet’s stock price
has increased over 177%[1], the Company has achieved substantial gains in
revenue and earnings per share, and expanded its footprint, including the
recent $1.4 billion acquisition of Zale Corporation. Signet Jewelers’ value
creation reflects its successful strategic growth initiatives, including
creating an outstanding customer experience, delivering compelling
merchandise, heightening awareness through advertising investment, and
offering customer finance programs to support its customers’ purchases and
drive sales.
Mr. Barnes was also part of the management team that took Fossil public in
1993 and contributed to the continuing financial success and growth of the
business as President and Chief Operating Officer. In his roles, he oversaw
Fossil’s state-of-the-art international sourcing and supply chain operations,
led business development, and managed the relationships with many of Fossil’s
retail and licensing/brand partners. In addition, he helped the Company
diversify into other businesses and categories outside of its wholesale
branded and licensed watches.
Christopher J. Fraleigh brings to Darden 25 years of experience in consumer
products, retail and food services, including serving as Chairman and Chief
Executive Officer of Shearer’s Foods, a global manufacturer of snack foods,
where he has doubled the business in the last two years through both organic
growth and acquisitions. In his previous role as Chief Executive Officer of
Sara Lee North America, Mr. Fraleigh built a global retail and food-services
business around brands such as Jimmy Dean, Ball Park, Sara Lee and Hillshire
Farms, and helped lead Sara Lee’s 2011 decision to split into two publicly
traded companies.
In addition to his strategic achievements as CEO of the $7 billion Sara Lee
North America, Mr. Fraleigh’s record of value creation is reflected in the
Company’s financial and operating performance. In particular, during his 6 ½
year tenure:
o Operating profit more than doubled with significant gains across operating
segments, including Retail, Foodservice and Fresh Bakery;
o Supply chain was enhanced with improvements in innovation, pricing and
plant automation, which resulted in significant cost reductions and
increased efficiencies;
o Sara Lee increased share in 11 of 12 categories, realized 25% growth in
key items carried in-store, increased shelf space by 35%, and expanded
strategic relationships with top retailers; and
o The Company restructured all divisions and optimized its brand portfolio
through the acquisition of new brands and the sale or shutdown of non-core
assets.
Mr. Fraleigh’s experience also includes his executive roles at General Motors
Corporation’s GMC-Buick-Pontiac division and at PepsiCo, where he accelerated
both revenue and earnings growth for brands including Cadillac, Pepsi and
Mountain Dew. As a result of his collective experience, Mr. Fraleigh provides
Darden with valuable insight in consumer marketing/brand building,
franchising, and supply chain management and distribution.
Michael D. Rose brings extensive knowledge of the restaurant, food and
consumer industries, gained serving as a director of Darden and as General
Mills’ current independent Lead Director. Mr. Rose also has extensive
experience executing spin-offs and divestitures. Darden also benefits from
his finance and accounting expertise, as well as the considerable executive
management and corporate governance experience he has gained through his years
of service on the boards and leadership teams of other public companies,
including REITs and other hospitality- and restaurant-focused companies.
Over the course of his executive leadership career as Chairman and Chief
Executive Officer of other companies, Mr. Rose has overseen and directed:
o The successful turnaround of a leading regional financial institution
through recruiting a new management team, the sale of non-core businesses,
completing significant debt refinancings and capital raises, and employee
and community engagement;
o The growth of The Promus Companies (an owner of hotels operating under the
Embassy Suites, Hampton Inn and Homewood Suites brands), including its
merger with Doubletree Corporation and subsequent sale for $3.7 billion to
Hilton Hotels Corporation in 1999;
o The growth and spin-off of Harrah’s Entertainment Inc. from Promus. Under
his leadership, Harrah’s became one of the largest casino companies in the
world. Promus Companies was created following the divestiture of the
Holiday Inn brand for over 13x EBITDA. During his tenure, Promus was
named as the highest performing large cap stock of the NYSE for the decade
of the 1980s by Fortune Magazine;
o The growth and expansion of Holiday Inns Hotel Brands, which was sold in
two transactions for more than $3 billion. Mr. Rose served as Chief
Executive Officer of Holiday Inns Inc. when it was the largest hotel chain
in the world; and
o Holiday Inns, Inc.’s acquisition of Perkins Cake & Steak, a national chain
of family restaurants. Perkins was formulated on the same successful
strategy as Holiday Inn – identical establishments with similar menus and
uniform quality standards.
In light of his many accomplishments and track record in the hospitality
industry, Mr. Rose was selected to receive the Lifetime Achievement Award at
the inaugural Americas Lodging Investment Summit. Mr. Rose was also elected
to the Lodging Hospitality Hall of Fame, the Gaming Hall of Fame and was named
by Corporate America’s Outstanding Directors Top 10 Directors of the Year in
2000.
Maria A. Sastre brings to Darden a record of accomplishment leading companies
and serving on boards that have been category leaders in the hospitality,
retail (supermarkets), transportation, and aviation industries. Her expertise
in North American and International Operations, Supply Chain and Distribution,
Customer Service, Mergers and Acquisitions, Corporate Finance, Marketing and
Real Estate Management have supported Darden and its brands across numerous
strategic business initiatives.
Ms. Sastre has been President and Chief Operating Officer of Signature Flight
Support Corporation (Signature), the premier fixed based operations network
for private aviation services, since January 2013. She served as Chief
Operating Officer of Signature from May 2010 until January 2013.
Ms. Sastre also served as Vice President of International Sales and Marketing,
Latin America and Caribbean, for Royal Caribbean International, Celebrity
Cruises and Azamara Cruises, all units of Royal Caribbean Cruises, Ltd., a
global cruise line company, from January 2005 to September 2008. In this role,
she led strategic growth in emerging markets. She held additional Executive
roles with Royal Caribbean International, as Vice President of Hotel
Operations from 2000 to 2004, managing all aspects of Hotel Operations, Food &
Beverage, Entertainment and the Guest Experience for the entire fleet.
Prior to Royal Caribbean, Ms. Sastre was with United Airlines, where she held
Executive positions in North America and Global Customer Services. At United
Airlines, she was also responsible for International Operations and
International Expansion and the launch of e-technology systems, completely
changing and improving the customer service experience.
In addition to serving on the Board of Darden Restaurants, Ms. Sastre serves
on the Board of Publix Super Markets, renowned as a category leader in
customer satisfaction. She also served on the Board of Laidlaw International
through its emergence from bankruptcy, its turnaround and ultimate sale. Ms.
Sastre has been recognized as a Top 10 Hispanic American Leader by Hispanic
Executive in 2013 and a Top 100 Most Influential Hispanic by Hispanic Business
in 2011.
About the Connections Among Starboard’s Nominees
Starboard Directors Have A Number of Historical Relationships That May Bias
Decision Making
About Darden Restaurants
Darden Restaurants, Inc., (NYSE: DRI), owns and operates more than 1,500
restaurants that generate approximately $6.3 billion in annual sales.
Headquartered in Orlando, Fla., and employing 150,000 people, Darden is
recognized for a culture that rewards caring for and responding to people. In
2014, Darden was named to the FORTUNE “100 Best Companies to Work For” list
for the fourth year in a row. Our restaurant brands – Olive Garden, LongHorn
Steakhouse^®, Bahama Breeze^®, Seasons 52^®, The Capital Grille^®, Eddie V’s^®
and Yard House^® – reflect the rich diversity of those who dine with us. Our
brands are built on deep insights into what our guests want. For more
information, please visit www.darden.com.
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