NEW YORK (AP) - Darden Restaurants CEO and Chairman Clarence Otis is stepping down as the company fights to fix its flagship Olive Garden chain following its contested sale of Red Lobster.
NEW YORK (AP) — Darden Restaurants CEO and Chairman Clarence Otis is stepping down as the company fights to fix its flagship Olive Garden chain following its contested sale of Red Lobster.
The company, based in Orlando, Florida, also said Monday that it's changing its corporate policies to split the chairman and CEO roles.
Otis joined Darden in 1995 and ascended to the CEO spot in late 2004. The chairman position was added a year later.
The departure of Otis isn't entirely a surprise, given Darden's troubles. The company has been pressured for years to turn around declining sales at Olive Garden and Red Lobster.
Late last year, Darden Restaurants Inc. said it would hold onto Olive Garden but separate from Red Lobster. Despite objections from activist investors Barington Capital and Starboard Value about the nature of the breakup, Darden pushed ahead with its sale of Red Lobster to investment firm Golden Gate Capital and announced Monday that the deal had been finalized.
Barington had said in March that it was time for Darden to start looking for a new chief executive, citing the company's "rapidly deteriorating financial performance." Last week, Starboard said it was suing Darden for documents related to Red Lobster's sale.
Darden said Monday that it expects to nominate nine of its independent directors for its board, which ensures at least three nominees proposed by Starboard would be elected. But Darden said it failed to reach an agreement with Starboard over the investment firm's pending proxy contest after settlement discussions.
Calls and emails to Barington and Starboard were not immediately returned.
Darden is appointing current lead independent director, Charles Ledsinger, Jr., as independent non-executive chairman, effective immediately.
Otis will serve as CEO until a successor is named or Dec. 31, whichever comes first. The company said it will start looking for a replacement for him.