The group that took control of Olive Garden’s parent company has started to exert its influence, eliminating a layer of field management, forcing changeovers in several key positions, and overhauling such fundamentals as c-suite travel privileges.
The website SeekingAlpha.com said the changes would cut the payroll of Darden Restaurants by 60 people and leave 25 additional, currently vacant positions unfilled.
Darden said the moves, undertaken at the behest of a completely new board, would “increase the focus on restaurant operations and improve the guest experience.”
Among the persons who exited the company were Chief Human Resources Officer Nancy Ng and on-staff lobbyist Bob McAdam. Darden said that longtime CFO Brad Richmond had opted to retire in March or sooner if a successor is found.
Other changes included the shutdown of Darden’s private planes.
The company noted that the moves would reduce general and administrative costs. The Orlando Sentinel pegged the savings at $20 million.
The eliminated support positions service Olive Garden, Darden’s biggest holding by far since the sale of Red Lobster, and LongHorn Steakhouse. The restructuring provides “greater visibility and accountability for restaurant leadership,” the company said in announcing the changes.
An overhaul has been expected since dissident shareholders led by the hedge fund Starboard Value led an effort to seize control of Darden’s board. The group succeeded in sweeping out all of the incumbent directors and replacing them with a hand-picked team that included industry veterans like Brad Blum, a former president of Olive Garden; Jean Birch, the former president of IHOP; and Alan Stillman, the founder of T.G.I. Friday’s and Smith & Wollensky’s.
But yesterday’s actions stopped far short of the complete recasting Starboard spelled out in a detailed plan aired before Darden’s shareholder meeting last month. The promised changes were laid out in about 300 slides, and extended to such particulars as salting the water used to cook Olive Garden’s pasta and changing the standard serving of complimentary bread sticks.
Darden’s other brands include Capital Grille, Yard House, Seasons 52, Bahama Breeze and Eddie V’s. The company has been under pressure from various shareholders to divest many of those younger, smaller brands.
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