Darden’s newest board member is an old board member.
The Orlando, Fla.-based casual-dining giant named Bill Simon to its board of directors today, less than a week after shareholders overhauled the board during the chain’s annual meeting. Smith, the former CEO of WalMart U.S., gives the company 13 board members.
He also gives Darden a potentially important link to its past. Simon had been a director with the company for two years, but was among the directors who didn’t run for re-election this year.
Last week, the activist Starboard Value L.P. won a proxy contest for all 12 seats on Darden’s board of directors. That kind of turnover, coupled with the fact that Darden is looking for a new CEO, has already led to concerns about uncertainty surrounding the company. While a number of board members have previous Darden ties, like former Olive Garden president Brad Blum, that’s a lot of new faces.
Indeed, earlier this week, Moody’s Investors Service downgraded $1.3 billion in Darden debt to Ba1 from Baa3, citing in part the “unprecedented changes” in leadership.
“Wholesale change in Darden’s leadership at a time of significant operating challenges adds risk to an already difficult turnaround of Olive Garden,” senior credit officer Bill Fahy said in a statement.
Darden’s stock hasn’t quite rallied since the board turnover was announced last Friday — it’s down slightly since opening that day — but then again the stock market has been particularly volatile over that same period, with the S&P 500 down 5.7 percent over the last week, entering today.
Simon’s elevation to the board comes the same week that Darden named Gene Lee its interim CEO. Lee had been Darden’s president and chief operating officer, but had taken on an increasingly public role with the company since July, when former CEO Clarence Otis announced his retirement.
Simon is a notable former director. He spent more than a year as senior vice president of global business development for Brinker International before moving onto WalMart Stores, where he eventually led the company’s U.S. operations since 2010, before resigning in August.
In a statement, Jeffrey Smith, the Starboard CEO who this week was named non-executive chairman of Darden, indicated that the activist has been open to the possibility of placing an existing director on the board.
“We were willing to consider the right former director with the skill sets, experience and perspectives that would best complement the new board members,” Smith said. “Given Bill’s extensive experience leading global consumer retail companies as well as his experience with companies in the restaurant, food and beverage industries, he certainly fits the criteria.”
Contact Jonathan Maze at [email protected].
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