Wednesday December 24, 2008
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 leader.
Amy Greene, a research analyst with Avondale Partners, said she believes the new CEO will come from outside O'Charley's.
"You're 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.