So, the people who were Darden Restaurants directors yesterday are no longer Darden directors today, what with every single one of them having been handed a much-deserved ass-kicking by hedge fund Starboard Value. The activist hedge fund correctly predicted that boards which (a) produced an ill-conceived plan to sell one thing for a song to stave off a couple of activist hedge funds and then (b) refuse to allow shareholders to vote on that plan even though most of them make very clear they’d like to are rather vulnerable when it comes to annual meeting time, which time was today. And while you can prevent shareholders from voting on ill-conceived sales, it is likely to incline them against you when you cannot keep them from voting, at annual meetings, say.
“We have an epic fail, the entire board replaced, which almost never, never happens,” Steven Davidoff Solomon, a professor of law at the University of California, Berkeley, said in an interview on Bloomberg Television today….
“The Darden board had to know that the shareholder backlash from selling Red Lobster would be quite heavy,” Davidoff Solomon said.
Well, if they didn’t, they do now.