Pressured by activist investor groups and its recent financial results, Bed Bath & Beyond is shaking up its board. The board will now comprise 10 directors, nine of whom are independent.
Specifically, the company announced that five current independent directors will step down; co-founders Warren Eisenberg and Leonard Feinstein have transitioned to the role of co-founders, co-chairmen emeriti and will retire from the board; and current lead independent director, Patrick Gaston, has been named independent chairman, effective immediately.
The board will also form a business transformation and strategy review committee to review all aspects of the company’s business transformation, strategy and structure. The audit and compensation committees of the board will be reconstituted, including the appointment of committee chairs. And a new executive compensation plan that increases the at-risk component of executive compensation and further aligns compensation with company performance and long-term shareholder value creation will be adopted. The company will provide details on its new executive compensation plan in connection with the filing of its proxy statement.
The five newly appointed independent directors, effective May 1, 2019, are:
- Harriet Edelman, current vice chairman, Emigrant Bank and former svp/chief information officer, business transformation, and svp/global supply chain of Avon Products.
- Harsha Ramalingam, current senior advisor at Boston Consulting Group, current president and owner, Ramalingam Consulting and former global vice president, e-commerce platform at Amazon.com.
- Andrea Weiss, current founding partner, The O Alliance Consulting Services and CEO and founder of Retail Consulting Inc., and former senior executive at Delia’s, The Limited, Guess, Ann Taylor Stores and The Walt Disney Company.
- Mary Winston, current president and founder, WinsCo Enterprises Consulting Services and former evp/CFO at Family Dollar Stores.
- Ann Yerger, current corporate governance specialist, Spencer Stuart North American Board Practice and former executive director of the Council of Institutional Investors.
The four continuing independent directors, three of whom have been appointed in the past two years as part of the board’s ongoing refreshment program, are: Stephanie Bell-Rose, Patrick Gaston, Johnathan Osborne and Virginia Ruesterholz. In connection with the new director appointments, Dean Adler, Stanley Barshay, Klaus Eppler, Jordan Heller and Victoria Morrison will step down from the company’s board, effective May 1, 2019.
Patrick Gaston, who was named independent chairman, stated, “As we have communicated to Bed Bath & Beyond shareholders, the board has been undertaking a comprehensive review of its composition, governance structure and compensation practices. The changes announced today reflect significant shareholder input and underscore our commitment to ensuring we have best-in-class governance. This board transformation and refreshed governance structure is rooted in accountability, transparency and collaboration, and as we provide oversight and move the company forward, we are committed to continuing to act in the best interest of our shareholders.”
The company noted it has had multiple discussions with members of an activist group, which is composed of Legion Partners, Macellum Capital Management and Ancora Advisors, and has invited them to participate in the board transformation process and to offer their ideas for business and operational improvement. The investor group responded to the board changes here.