Bed Bath & Beyond Overhauls Board Amid Activist Pressure -- Update
April 22 2019 - 8:55AM
Dow Jones News
By Kimberly Chin
Bed Bath & Beyond Inc. has announced a series of changes to
its board, including the appointment of five new independent
directors, amid a proxy battle with a group of activist investors
seeking to overhaul the board and turn around its operations.
The home-goods retailer said Monday the board will now comprise
10 directors, instead of 12, that will vary in race, gender,
ethnicity, and experience level, with an average tenure of less
than four years. Nine of those directors will be independent and
six will be women, the company said.
The changes also call for five of its current independent
directors to step down. Co-founders Warren Eisenberg and Leonard
Feinstein, who collectively control roughly 2.3% of the company,
according to FactSet, will retire from the board and will move into
the role of co-chairmen emeriti. The changes are effective May
1.
Bed Bath & Beyond has faced criticism from activist
investors Legion Partners Asset Management LLC, Macellum Advisors
GP LLC and Ancora Advisors LLC, which control a combined stake in
the company of about 5%, according to a securities filings. The
investors have said the company failed to adapt over time and
allowed costs to increase, eroding value for shareholders. They
also called for Chief Executive Steven Temares to be replaced, and
they nominated a slate of directors for the board.
Bed Bath & Beyond has long countered the group's public push
for these changes. The retailer said Monday it had invited the
investor group to participate in its plans to bring new members to
its board. To date, the investors have declined the invitation. The
company will remain in open dialogue with them, Bed Bath &
Beyond said.
Shares of the retailer, known for its bedding, towels and
kitchen items, rose 1.7% in premarket trading. Its shares have
risen 26% since The Wall Street Journal first reported the activist
group's intentions.
The new directors will include Harriet Edelman, vice chairman of
Emigrant Savings Bank, Harsha Ramalingam, senior adviser at Boston
Consulting Group Inc., Andrea Weiss, founding partner of the O
Alliance Consulting Services LLC and CEO and founder of Retail
Consulting Inc., Mary Winston, president and founder of WinsCo
Enterprises Inc., and Ann Yerger, a corporate governance specialist
at Spencer Stuart North American Board Practice.
Patrick Gaston, current lead independent director, will be named
independent chairman, effective immediately, Bed Bath & Beyond
said.
The company also said it would form a committee and undergo a
strategic review of the whole business. The company will appoint
committee chairs to its board audit and compensation committees,
which will be reconstituted. Bed Bath & Beyond will also
reconstitute its nominating and corporate governance committee.
The Union, N.J., based company will create a new executive
compensation plan that it says better aligns compensation with the
company's performance and long-term shareholder value creation.
Earlier this month, the company reported its first annual loss
and sales decline in its nearly three decades of being a public
company.
Bed Bath & Beyond was founded in 1971 by Mr. Feinstein and
Mr. Eisenberg. When it went public in 1992, it had 34 stores. It
now has more than 1,500.
Write to Kimberly Chin at kimberly.chin@wsj.com
(END) Dow Jones Newswires
April 22, 2019 08:40 ET (12:40 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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