By Wendy Lee
• THE TENNESSEAN
• December 24, 2008
Nashville-based O'Charley's Inc. said Tuesday that Gregory L. Burns,
its longtime chairman and CEO, will retire early next year after an
agreement that cedes more control to an activist shareholder group on
the restaurant chain's board.
The move comes as the casual dining
sector sees fewer guests and weaker sales amid crashing consumer
confidence and reduced spending. O'Charley's stock closed on Friday at
$2.22 a share — far off its 52-week high of nearly $16 a share.
One of the company's largest shareholders, New York-based hedge fund
Crescendo Partners, pressured O'Charley's into putting three Crescendo
nominees on the restaurant company's board this summer, and on Tuesday
the two firms said a revised agreement will give the hedge fund a
fourth seat within 10 days.
That means Crescendo will control
one-third of O'Charley's 12 board seats — a clear sign to analysts that
the hedge fund will have a big say in determining the company's next
Amy Greene, a research analyst with Avondale Partners, said she believes the new CEO will come from outside O'Charley's.
going to need someone with turnaround experience, particularly in
casual dining," Greene said, adding that the ideal candidate would have
experience with different types of casual dining concepts.