Bed Bath & Beyond has reshuffled its management. After facing tremendous pressure from a trio of activist investors, the home furnishing retailer announced that it has appointed five new independent members to its Board, and also replaced some directors.
The company has had multiple discussions with members of the activist group, which includes Legion Partners Asset Management, Macellum Capital Management and Ancora Advisors, and has invited them to participate in the Board transformation process and to offer their ideas for business and operational improvement. To date, the activist group has declined this invitation, but the company remains open to engaging in constructive dialogue with them.
Last month, the activist investors urged Bed Bath & Beyond to replace its entire board and oust CEO Steven Temares, citing the company’s inability to grow sales and margins. The company’s latest board shake-up, however, did not please the trio, which declined an invitation to participate in the transformation of the board. The Board will form a Business Transformation and Strategy Review Committee to review all aspects of the company’s business transformation, strategy and structure.
Co-Founders Warren Eisenberg and Leonard Feinstein have transitioned to the role of Co-Founders, Co-Chairmen Emeriti and will retire from the Board. Current Lead Independent Director Patrick Gaston has been named Independent Chairman, effective immediately. The Board will comprise 10 directors, nine of whom are independent and six women, the company said.
“The changes announced reflect significant shareholder input and underscore our commitment to ensuring we have best-in-class governance,” said Patrick Gaston, who was named an independent chairman.
The Audit and Compensation Committees of the Board will be reconstituted, including the appointment of committee chairs. A new executive compensation plan that increases the at-risk component of executive compensation and further aligns compensation with company performance and long-term shareholder value creation will be adopted.
The company will provide details on its new executive compensation plan in connection with the filing of its proxy statement.