Bed Bath & Beyond Shakes Up Its Board -- WSJ
April 23 2019 - 3:02AM
Dow Jones News
By Kimberly Chin
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (April 23, 2019).
Bed Bath & Beyond Inc. is overhauling its board of directors
and pledged to review operations amid a proxy battle with a group
of activist investors who have called for changes to the company's
management ranks and business.
The home-goods retailer said Monday that five independent
directors will step down and be replaced. The transformed board,
which will comprise 10 directors instead of the 12 currently on the
panel, will reflect significant diversity across race, gender, and
ethnicity, the company said.
Among those retiring from the board are Bed Bath & Beyond
co-founders Warren Eisenberg and Leonard Feinstein, who
collectively control roughly 2.3% of the company, according to
FactSet. Messrs. Eisenberg and Feinstein will move into the roles
of co-chairmen emeriti as of May 1.
Of the 10 directors, Chief Executive Steven Temares will be the
only one who isn't independent.
The company also said it would form a strategic-review committee
to evaluate the whole business.
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 Mr. 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 discussions regarding board
members and about improving the business. The group has so far
declined the invitation, the company said, adding that it would
remain open to talks.
In a written statement Monday, the group of investors said Bed
Bath & Beyond's latest moves don't go far enough to address
issues and the company didn't provide details on how it plans to
enhance shareholder value.
"We will therefore continue to move forward with our campaign to
install fresh, experienced and independent oversight and management
at the Company," the group said, adding that the new directors
proposed by Bed Bath & Beyond don't have the skills and
experience needed to execute meaningful change.
The group has offered a slate of 16 director candidates,
including former Gap Inc. executive Jeffrey A. Kirwan, former Pier
1 Imports Inc. CEO Alexander W. Smith and Macellum founder Jonathan
Duskin, according to filings.
Shares in Bed Bath & Beyond, known for its bedding, towels
and kitchen items, were off 4.3% on Monday afternoon. Its shares
have risen 20% 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 Practices.
Patrick Gaston, current lead independent director, will be named
independent chairman, effective immediately, Bed Bath & Beyond
said.
The company will also 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., company said it would create a new
executive-compensation plan that it said 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 as a public
company.
Bed Bath & Beyond was founded in 1971 and has more than
1,500 stores. When it went public in 1992, it had 34 stores.
Write to Kimberly Chin at kimberly.chin@wsj.com
(END) Dow Jones Newswires
April 23, 2019 02:47 ET (06:47 GMT)
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