April 28 (Bloomberg) -- Bob Evans Farms Inc., facing criticism from shareholder Sandell Asset Management Corp. that its management has been ineffective, replaced three board members with new independent directors.
Norwegian Cruise Line Chief Executive Officer Kevin Sheehan, former TJX Cos. Chief Information Officer Kathy Lane and Compass Marketing co-CEO Larry McWilliams were appointed to the board on April 25, Bob Evans said today in a statement. Three current directors -- Gordon Gee, Larry Corbin and Robert Lucas -- will be stepping down.
Bob Evans, a restaurant chain and seller of packaged supermarket foods, had said in January that it would seek more independent directors. Sandell, which owns about 6.8 percent of Bob Evans, has been pushing for more dramatic changes. It proposed its own slate of director candidates last week, calling the current board “stale and entrenched.”
The Columbus, Ohio-based company, which sold the underperforming Mimi’s Cafe chain last year, has been remodeling and modernizing some of its more than 550 restaurants. Still, same-store sales have dropped for the past two quarters and the casual-dining chain is struggling with price competition and shaky consumer confidence.
“Kevin Sheehan, Kathy Lane and Larry McWilliams will bring new perspectives and special expertise in their respective fields to the board’s deliberations,” Michael Gasser, the company’s lead independent director, said in the statement. “We continue to fulfill our fundamental commitment to serve the best interests of and maximize value for Bob Evans shareholders.”
Gee, 70, is leaving the board immediately, following his decision to become president of West Virginia University. The other two departing directors, both in their 70s, will retire by the company’s annual meeting this year.
Sandell responded to the board changes by saying the move was “too little, too late.”
“Today’s announcement is a half measure taken as a knee-jerk reactionary step once the company felt the pressure of shareholders and the spotlight of public opinion trained on them,” Tom Sandell, CEO of the New York-based investment firm, said in a statement. “The problems at Bob Evans, including the underperformance of its stock price over the past five years by 130 percent relative to the company’s own proxy peers, are the direct result of the failed policies.”
Bob Evans shares fell 0.7 percent to $46.49 today in New York. The stock has declined 8.1 percent this year.
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