Cracker Barrel Old Country Store is extending an olive branch to disgruntled shareholder Sardar Biglari, alerting investors on Wednesday that it will now support one of the activist’s three nominees for election to the restaurant company’s board of directors.
Yet the communication noted that peace between headquarters and Biglari, a harsh critic of the company on and off for 13 years, remains a slim possibility. When concessions were offered in the past, Biglari “made it clear to us that his goal was to personally join the Board,” the letter states.
The board will not go that far, the communication continues. “We firmly believe this result would be destructive for shareholders,” it states.
Nor will it support the election of Biglari proxy Milena Alberti-Perez.
In addition to Alberti-Perez, a former CFO of photo clearinghouse Getty Images, Biglari’s three-nominee slate includes Michael Goodwin, the head of technology for the online pet-food supplier PetSmart.
Cracker Barrel said its board reviewed both of those nominees, along with two other candidates Biglari had put forth in the summer but then withdrawn. At that time, he was seeking five seats on Cracker Barrel’s 10-person board. With an ally already seated as the result of an earlier concession to Biglari, the investor’s contingent would have controlled the board.
As a result of the reviews, the board decided Alberti-Perez and Biglari would not make suitable directors. But it found that Goodwin “has the skills, experience, and knowledge about the retail, restaurant and hospitality industries and about Cracker Barrel to make him an outstanding Cracker Barrel director,” this morning’s letter states.
As “evidence of how carefully and fairly we reviewed the candidates nominated by Mr. Biglari and how strongly we believe in our conclusions,” the communication continues, existing director Tom Barr agreed not to stand for re-election. “We are taking the highly unusual step of recommending that he be replaced by Mr. Goodwin,” the board writes.
“But despite this, Mr. Biglari continues to push his unnecessary proxy contest,” it continues.
The note was sent to shareholders in response to a missive sent to the investors Tuesday by Biglari. That communication strongly criticized Cracker Barrel’s board for allowing the family dining chain to drift away from the factors for its success and blasted the three-year turnaround that new CEO Julie Masino has crafted to win back patrons and draw new customers.
In the Wednesday letter, the board noted that Masino’s plan was drafted with the approval and input of Biglari’s current proxy on the board, Jody Bilney.
Biglari has tried seven times over the last 13 years to gain seats on the board at Cracker Barrel, in which he holds a 9.3% stake.
The company’s annual shareholder meeting will be held Nov. 21, though only in virtual form. There will be no actual gathering of stakeholders.
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