Oct 14, 2014 9:57 AM
Olive Garden parent company names interim CEO
The Associated Press
NEW YORK (AP) Olive Garden's parent company Darden Restaurants promoted Chief Operating Officer Gene Lee to interim CEO after a board takeover by an activist investor last week.
The company, based in Orlando, Florida, said Tuesday that Lee will replace Clarence Otis effective immediately.
The change at the top comes after Starboard Value succeeded in its bid to replace all 12 of Darden's board members with its own nominees at the company's annual meeting Friday. Under pressure from investors, Darden had announced this summer that Otis would step down by the end of this year or when a replacement was found.
Otis had been CEO since 2004.
Darden's management had been sharply criticized for years of declining sales at Olive Garden and Red Lobster, which executives have conceded failed to keep up with changing tastes.
Late last year, Darden announced it would get rid of Red Lobster and focus on fixing Olive Garden. The planned sale of the seafood chain riled up shareholders, but Darden went ahead with it anyway.
Starboard Value and another investor, Barington Capital, took issue with how Red Lobster's sale was structured. In March, Barington sent a letter to Darden's board saying it was time to consider looking for a new CEO.
Starboard CEO Jeffrey Smith, Darden's new independent nonexecutive board chairman, said the board's search committee for a permanent CEO will consider internal as well as external candidates.
Lee previously headed up Darden's specialty restaurant group, which includes smaller chains such as The Capital Grille. He was named chief operating officer last year.
Darden also said the election of Starboard's 12 nominees has been certified.