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Activist Sardar Biglari has an activist investor of his own

An investor in Biglari Holdings is pressing Sardar Biglari and the rest of the company’s board to change the governance policies of the Steak ‘n Shake and Western Sizzlin’ parent.

Groveland Capital sent the board a letter that notes the public company’s low grade on governance from a third-party rating service. The communication seeks a number of remedies to raise Biglari Holdings’ score, including more input form the board on the various ways chairman and CEO Sardar Biglari is compensated.

The letter also urged the board to approve a restructuring that will give Groveland two directorships and limit Biglari and his management team to two seats.

The effort is a turn of the tables for Biglari, who has drawn headlines for demanding dramatic changes at restaurant companies in which he held a stake. Typically those demands have included seats on the board.

His efforts to wrest control of Steak ‘n Shake’s strategic direction ultimately resulted in his takeover of the family restaurant chain. He failed in his attempt to force changes at Cracker Barrel.

Groveland noted in its letter that Biglari Holdings has the lowest grade possible in the rating scale of an outside assessor, ISS Governance QuickScore. Among the issues that ISS cited as a concern is the misalignment of Sardar Biglari’s compensation with the company’s strategic direction, Groveland said.

It urged the board to make changes voluntarily to avert a proxy fight, a tool Biglari unsuccessfully tried in his efforts to gain more control at Cracker Barrel.

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