A June 22nd report from FactSet Insight provides some interesting insights into Starboard’s slate of new board members at Darden Restaurants. FactSet Account Executive Anthony Garcia argues that the proxy fight between Starboard and former Darden management will soon become a textbook example of modern activism.
Garcia notes: “The proxy fight led by Starboard Value against Darden Restaurants included 32 press releases, a nearly 300-page Starboard white paper discussing the inefficiencies of Darden Restaurants, a sweep of all 12 board seats by the activist at the annual meeting, the appointment of a new CEO, and a stock price that went from $49.63 on May 1, 2014 (the day prior to Starboard’s filing of a preliminary proxy statement to call a special meeting) to $68.87 as of June 19, 2015.”
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The FactSet report points out that six of the nominees on the Starboard slate had appeared on a dissident slate in another proxy fight, and all six were on the board of directors of at least one other firm when nominated. The four previously involved in Starboard Value proxy fights include Cynthia Jamison, James Fogarty, and Starboard Value founders Jeffrey Smith and Peter Feld. Of note, Jamison was a Starboard nominee in the proxy battle at Wausau Paper, as well as at Office Depot, where she is still on the BoD. Fogarty was on the slate in the Office Depot action, but did not win. He was elected as a part of Starboard’s dissident slate at Regis in 2011 and is still serving on the board.
Betsy Atkins and William Lenehan are the other two Starboard nominees that had appeared on a dissident slate earlier. Betsy Atkins was on the Pershing Square slate in its campaign against Allergan and on the Exelon slate at NRG Energy as well. Somewhat remarkably, Betsy Atkins serves on the board of directors of 12 companies (a very busy lady!). William Lenehan is on the board of Lakewood Capital’s Select Income REIT and is also on the board of directors of Stratus Properties via an earlier activist slate. William Lenehan also serves on the BoD of Gramercy Property Trust.
In terms of the Starboard founders that are now on the Darden board, Jeffrey Smith and Peter Feld both have notable director experience. Jeffrey Smith was a dissident director nominee in 21 activist campaigns, all initiated by either Starboard Value or Ramius. Smith has been elected as a dissident director nominee in eight activist actions. Feld was nominated on a dissident slate eight times by either Starboard or Ramius, and was elected to the board of Tessera Technologies, where he is still a director. Feld was also given a seat on the Insperity BoD as part of the settlement agreement between Starboard and the firm.
The six candidates that appeared on a dissident director slate for the first time in the Darden proxy fight are Alan Stillman, Bradley Blum, Charles Sonsteby, Jean Birch, Lionel Nowell III and Margaret Shan Atkins. All bring several years of director experience, including in well known restaurant firms including Smith & Wolensky, New York Restaurant Group, Leon Restaurants, AmRest Holdings, Papa Murphy’s and Cosi.