Darden Restaurants, Inc. (NYSE:DRI) announced that its newly-elected board of directors implemented several reforms including the cancellation of its shareholder rights plan or poison pill.
Darden says reforms align with shareholder interests
The board of directors of the restaurant chain operator implemented reforms after conducting a comprehensive review of its corporate governance policies. Darden Restaurants, Inc. (NYSE:DRI) said the reforms were designed to ensure that its policies are aligned with shareholder interests and corporate governance practices.
Last month, the shareholders of Darden Restaurants, Inc. (NYSE:DRI) replaced its 12-member board by electing the nominees of activist investor Starboard Value. The new board includes Starboard’s CEO Jeffrey Smith and Bradley Blum, the former president of Olive Garden and CEO of Burger King Worldwide Inc (NYSE:BKW).
In a statement, Jeffrey Smith, chairman of Darden Restaurants, Inc. (NYSE:DRI) emphasized that the company’s board has a responsibility to be responsive to its shareholders and align with corporate governance best practices.
According to him, the board already implemented a number of changes and would seek the approval of shareholders for additional changes particularly to increase transparency, improve accountability and enhance shareholder engagement.
Changes adopted/recommended by Darden’s board
The board of directors of Darden Restaurants, Inc. (NYSE:DRI) recommended the termination of its poison pill by amending its rights agreement to expire earlier on November 28, 2014. The poison pill was set to expire on May 25, 2015.
The board also adopted a majority voting standard for directors in uncontested elections.
Darden Restaurants, Inc. (NYSE:DRI) also changed its political engagement and disclosure policy and disclosure policy to provide more details regarding its political contributions and lobbying efforts.
In addition, board recommended the amendment of its charter to provide a 10% voting threshold to call a special meeting and to eliminate the requirement for a supermajority vote for certain charter amendments. These recommendations require the approval of shareholders during its next annual meeting.
Furthermore, Darden Restaurants, Inc. (NYSE:DRI) adopted a revised peer group for compensation bench marking to help the board to better align its compensation practices with shareholder interests.