After a widely publicized report regarding the current state of affairs of company strategies like Olive Garden's breadsticks policy, the powerful hedge fund Starboard Value won a highly-publicized internal battle with Darden Restaurants, and now the company will be occupying all seats of Darden's board.
A report released by Starboard Value by late September criticized just about every aspect of the restaurant chain, even going so far as to say Olive Garden's breadsticks strategy was bad for business, as customers were easily satisfied with the unlimited breadsticks and ate less actual food at the restaurant.
Starboard Value has been going after Darden Restaurants for a while now, claiming that their Olive Garden restaurants are badly managed on all accounts, according to The Business Insider. Starboard owns a small part of Darden Restaurants, and it's been using its power within the company to look after the interests of the restaurants - even if they don't approve of Olive Garden's breadsticks policy.
Darden Restaurants recently held its annual meeting, and they announced the preliminary results of their reconstituted board of directors - all of which were Starboard Value candidates. According to Yahoo News, these include: Betsy S. Atkins, Margaret Shan Atkins, Jean M. Birch, Bradley D. Blum, Peter A. Feld, James P. Fogarty, Cynthia T. Jamison, William H. Lenehan, Lionel L. Nowell, III, Jeffrey C. Smith, Charles M. Sonsteby, and Alan N. Stillman.
This means a big win for activist investor Starboard Value, which had been going after the company's business strategies for quite a while - most famously, criticizing in a long and highly publicized report just about everything going on in the restaurants, including Olive Garden's breadsticks policy.
Olive Garden's breadsticks are one of the company's signatures, as could be the Big Mac for McDonald's. The fact that the company has unlimited free breadsticks has often been seen as one of its pluses, as it's one of the restaurant's trademarks.
Recently, as a means to savage the company from further problems, Olive Garden released a $100 Unlimited Pasta Pass, allowing 1,000 patrons to eat as much of the restaurant's pasta as they desired for a period of 7 weeks.
