War of the PowerPoints: Darden vs. investor

Who has the better turnaround plan for Olive Garden, its parent company or a disgruntled shareholder? More important, who has the time to click through the arguments they’ve put forth in A-V form for their respective plans?

We’re talking about nearly 325 slides, addressing such nitpicky management issues as whether salt should be added to a pot of boiling water before the pasta is added. And don’t even raise the issue of over or under-dressing salads. 

If all the ideas had come from Olive Garden’s parent, Darden Restaurants, the packet would have merited a new high in micro-management. But most (294, to be exact) were provided without solicitation from a company outsider, the investment fund Starboard Value, which owns about 8.5 percent of Darden’s stock. 

Fortunately for you, we risked a near-terminal case of clicker’s thumb to bring you the highlights of the PowerPoint-a-palooza. Here are the highs and lows from both slide decks. 

Most daring suggestion: Starboard’s call for franchising Olive Garden.  The investor asserts on Slide #238 that “large, successful franchise operators have expressed serious interest” already in adding the Italian godfather to their portfolios.  Alabama, Ohio, Pennsylvania, North Carolina, South Carolina and Missouri should be the initial targets, Starboard asserted.

Runner up: Selling Yard House, Eddie V’s, Wildfish Grill, Seasons 52 and Bahama Breeze, another recommendation of Starboard.

Most audacious assertion: Starboard’s contention that Darden’s board and management leadership “have forgotten the ways of [founder] Bill Darden and [longtime CEO] Joe Lee, true restaurant operators and leaders.” Outgoing CEO and board member Clarence Otis was handpicked by Lee as his successor—reputedly over one of Starboard’s star board nominees.

Runner up: The assertion that Olive Garden could save as much as $5 million by reducing the standard serving of breadsticks.

Pettiest point of dispute: Attributes of Olive Garden’s takeout containers and carrier. Starboard blasted management for spec’ing custom takeout bags instead of opting for an off-the-shelf variety, and dismissed the use of microwaveable and dishwasher-safe carryout food containers as nearly ludicrous. Darden countered that Olive Garden’s takeout packages weren’t engineered to be dishwasher-safe, and that the containers are more sustainable than standard polystyrene boxes.

Runner up: The criticism from Starboard that Olive Garden should use standard-sized straws instead of exceptionally long ones. Darden did not respond in its counterpoint presentation.

Closest moment to a swap of “yo’ mama” insults: The bickering over who’s the better cook. Starboard slammed Olive Garden for no longer salting its pasta water, a change attributed to extending the warranty on the chain’s pots. Darden countered that it has a Cooking Institute in Tuscany and buys Olive Garden’s ingredients from Italy.

Point most likely to anger my mother: The "extreme portion size" of Olive Garden's buy one/take one home promo is "inconsistent with authentic Italian values," Starboard asserted. Clearly none of the principals ever ate at my house, the home of a Venetian mother and a Calabrian father. 


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