UPDATE: This story has been updated with additional information from the proxy reports.
Sardar Biglari is getting some help in his long-running fight against Cracker Barrel.
Three proxy advisory firms have come out in support of some of the activist investor’s latest calls for change at the floundering family-dining chain.
On Monday, Institutional Shareholder Services (ISS) and Glass Lewis, the two largest proxy advisory firms in the U.S., recommended that shareholders unseat board member Gilbert Dávila in a vote on Nov. 20.
Glass Lewis also called for the ouster of board member Jody Bilney, and a third firm, Egan-Jones, urged shareholders to vote against the re-election of Cracker Barrel CEO Julie Masino as well as other members of the 10-person board.
Biglari had called on shareholders to oust Masino and Dávila in September in the wake of consumer outcry over the chain's new logo and remodel plan.
However, ISS and Glass Lewis also noted Cracker Barrel's improvements under Masino prior to the logo change in August. Both recommended that shareholders vote to keep her in place as CEO, defying Biglari's campaign.
In a letter to shareholders Friday, Cracker Barrel said management and the board "are working diligently in the best interests of all shareholders to position the Company to return to the momentum and positive trajectory of fiscal 2025." It added, "In contrast, Mr. Biglari is amplifying false and misleading claims to further disrupt the business and destroy shareholder value for his own ends."
The brewing proxy battle comes as Cracker Barrel’s stock price continues to decline following backlash to the new logo and remodels. The company has since scrapped both initiatives, and has outlined a long road to recovery from the fallout, which has impacted sales and traffic at its restaurants.
Biglari is the CEO of Steak n Shake and also owns about 3% of Cracker Barrel. He has long viewed Cracker Barrel as mismanaged and undervalued, and has used its recent troubles as an opportunity to once again push for reform, in part by using Steak n Shake as a megaphone.
Biglari’s previous eight attempts to gain influence over Cracker Barrel failed. This time, though, he appears to be getting some traction.
In their reports, ISS and Glass Lewis criticized Cracker Barrel’s recent rebrand strategy and the repercussions it has had for the company.
Glass Lewis called the logo fiasco a “near peerless disaster in modern retail” and noted that the company’s stock has lost 46.6% of its value since the new logo first appeared, bringing it near its lowest point in 16 years.
The firms also cast doubt on Cracker Barrel’s ability to rebound quickly from the situation. In September, the chain significantly dimmed its outlook for fiscal year 2026 as it works to recover.
Both ISS and Glass Lewis laid blame for the issues on board director Gilbert Dávila for his role in shaping the chain’s marketing strategy and encouraged shareholders to vote against his re-election. Dávila is the CEO of marketing firm DMI Consulting and has been on the board since 2020.
While ISS noted that Masino’s responsibility for the logo controversy “is no less than Dávila’s,” it recommended shareholders vote to re-elect her. "Removing Masino would likely create disruption, which the dissident [Biglari] has not fully addressed,” ISS wrote.
Glass Lewis also called for a no vote for director Jody Bilney for proposed bylaw amendments that it argues would make it more difficult for shareholders to effect change at the company. Bilney, a former Humana and Bloomin’ Brands executive, has been on the board since 2022. (ISS recommended shareholders vote yes on these amendements.)
Overall, ISS recommended that shareholders vote yes on nine of Cracker Barrel's 10 board members; Glass Lewis endorsed eight of 10.
But both firms also highlighted Cracker Barrel's broader improvement under Masino outside of the logo issue. ISS noted that the company's shareholder returns began to improve in mid-May and exceeded peers by 15.6 percentage points prior to the logo change, citing Bloomberg data.
Glass Lewis also pointed to gains in Cracker Barrel revenue, adjusted EBITDA and net income in the period before the logo rollout.
“If we step back from the heated polemic surrounding Cracker Barrel’s rebrand, we do believe there was adequate cause to conclude the remaining elements of the plan were beginning to yield some operational upside and materially superior trading performance,” the firm wrote.
Egan-Jones, the third firm, recommended on Friday that shareholders vote against Masino, board chair Carl Berquist and directors Dávila, Gisel Ruiz and Darryl Wade. It highlighted the company’s lagging performance since 2020 and warned of a “death spiral” if current management is allowed to continue as-is.
Proxy advisory firms provide research and recommendations for investors on how to vote their shares in public companies. ISS and Glass Lewis dominate the market.
Masino, the former president of Taco Bell, joined Cracker Barrel in 2023 and spearheaded a $700 million, three-year turnaround plan intended to revive the slumping brand. A renewed focus on the menu, value, pricing and operations had shown signs of success, including five consecutive quarters of same-store sales growth through July. But much of the recent progress was erased by the logo blowup.
In September, the company said it will double down on the food and customer experience elements of the plan while also recommitting to its heritage by going back to its old logo and reversing remodels.
Cracker Barrel stock was down more than 6% Monday afternoon.
Members help make our journalism possible. Become a Restaurant Business member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.