Moment of truth arrives in Darden battle

Staff Writer
Columbus CEO

NEW YORK (AP) — Olive Garden's parent company Darden Restaurants could lose control of its board at its annual meeting Friday.

Activist investor Starboard Value is seeking to replace Darden's board with its own slate of nominees.

Last month, Starboard issued a 294-page presentation detailing its criticisms of Darden's management, including Olive Garden's failure to salt its pasta water and lack of discipline in controlling costs. Starboard also took issue with how Darden handled its sale of Red Lobster earlier this year.

Darden Restaurants Inc., based in Orlando, Florida, has noted it's already making changes to improve results at Olive Garden, which has seen sales at established locations decline in each of the past three years. The company agreed to give Starboard four of its 12 board seats, but says handing over all the seats would upend its turnaround efforts.

Starboard nevertheless wants all the seats.

Complete board turnovers are rare, but Bernstein analyst Sara Senatore says it seems likely Starboard will at least get a majority of the seats. She noted two large advisory firms backed the hedge fund's push and that Starboard's list of nominees have respectable experience.