BJ’s Restaurants is adding a former Darden Restaurants finance chief to its board as part of an agreement with an activist investor.
Brad Richmond was Darden’s CFO from 2006 to 2015 and held other finance roles with the company dating back to the early 1980s, including time at Olive Garden and Red Lobster. He brings BJ’s board to 12 members.
“We are pleased to welcome Brad, an accomplished public company executive, to the Board,” said Chairman Gerald Deitchle in a statement. “His addition reflects our commitment to ensuring the Board has the right mix of skills and experiences.”
BJ’s agreement with Fund 1 Investments also calls for the board to form a new committee geared toward improving shareholder value at the publicly traded brewpub chain.
Puerto Rico-based Fund 1, also known as Pleasant Lake Partners, has amassed an 11% stake in the 216-unit BJ’s and is pushing for changes, including a potential sale, that would maximize shareholder returns.
“We are pleased to have reached an agreement with the Board on the appointment of Brad, a highly qualified independent director, and the formation of the Shareholder Value Initiatives Committee," said Jonathan Lennon, managing member of Fund 1, in a statement. “We believe that BJ’s is well positioned to navigate a dynamic market environment, and we are confident that Brad can help the company drive shareholder value.”
The move came about a week after another BJ’s investor, PW Partners, said the chain should shrink its board to seven members who would focus solely on boosting shareholder value. It also recommended cutting expenses by $50 million and buying back $100 million worth of stock. PW owns about 5% of BJ’s outstanding shares.
The maneuvering mirrors the situation at Outback Steakhouse parent Bloomin’ Brands, where the company and activist investor Starboard Value have agreed to put former Darden operations chief Dave George on the board and create a special committee focused on improvements at Bloomin’.
The investor pressure on BJ’s comes after a year in which the chain reported total revenues of $1.2 billion, a 3.8% year-over-year increase; net income of $19.7 million, up from $4.1 million; and adjusted EBITDA of $103.8 million, compared to $77.9 million.
Its stock has risen more than 30% over the past six months, to $37 a share. But it is still trading well below its all-time high of more than $75 in 2018.
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