Darden Restaurants has tapped a company insider to take the helm of the Olive Garden parent just four months after an activist investor replaced its entire board.
Darden Restaurants, the parent company of Olive Garden, Bahama Breeze, LongHorn Steakhouse, and a number of other casual dining chains, announced Monday it had appointed Eugene Lee as CEO. The move comes just more than four months after an activist hedge fund won control of the company’s entire board in one of the most stunning proxy battle victories in the history of activism.
Lee has spent the last seven years at Darden, most recently as president and Chief Operating Officer and then as interim CEO following former Chairman and CEO Clarence Otis’ resignation last summer after Darden’s then-management sold off Red Lobster despite calls for a shareholder vote on the matter beforehand.
That set activist investor Jeff Smith and his hedge fund Starboard Value, which was already gunning for change at Darden, to launch a campaign to replace every member of Darden’s board and install himself as chairman. Starboard won the proxy contest by a wide margin in October, and immediately set to work trying to find the right person to fill the company’s top spot.
A board source told BuzzFeed News that Lee’s selection of a Darden insider signifies stability and board harmony in working with legacy Darden leadership to bring about change at the company.
Since Smith’s board slate took over, Darden’s stock has risen more than 30% and currently trades around $61 per share.
In a statement Monday, Smith said Lee was the board’s unanimous choice after it conducted a thorough search of quality candidates.
“Gene has already done a terrific job improving the energy and attitude inside Darden, and we expect the reinvigorated culture to improve,” Smith said in a statement.
No word on whether Olive Garden will now salt its pasta water.