Bed Bath & Beyond Shuffles Board in Response to Shareholder Pressure
Bed Bath & Beyond today announced that in response to shareholder feedback it will transform its current board of directors. The board will now comprise 10 directors (as opposed to 12), nine of whom are independent and six of whom are women. Five current independent directors will step down.The transformed board will reflect significant diversity across race, gender and ethnicity, and have an average tenure of less than four years. Specifically, Bed Bath & Beyond announced the following:
- Five current independent directors will step down, and five newly appointed independent directors will join, effective May 1.
- Co-Founders Warren Eisenberg and Leonard Feinstein have transitioned to the role of co-founders, co-chairmen emeriti, and will retire from the board.
- Current lead independent director Patrick Gaston has been named independent chairman, effective immediately.
- The board will form a Business Transformation and Strategy Review Committee to review all aspects of Bed Bath & Beyond's business transformation, strategy and structure.
- The Audit and Compensation Committees of the Board will be reconstituted, including the appointment of committee chairs.
- A new executive compensation plan that increases the at-risk component of executive compensation and aligns compensation with company performance and long-term shareholder value creation will be adopted.
Patrick Gaston, who was named independent chairman, said in a statement, "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're committed to continuing to act in the best interest of our shareholders."
Total Retail's Take: Bed Bath & Beyond is being proactive in making changes as it fights to survive amidst challenging circumstances. In March, activist investors Legion Partners Asset Management, Macellum Advisors GP and Ancora Advisors, confirmed their stake in Bed Bath & Beyond and demanded a full turnover of the company’s board. The investors were critical of Bed Bath & Beyond for being slow to focus on its e-commerce business and allowing costs to increase in recent years. It was also critical of its reliance on couponing. A few days after the meeting, Bed Bath & Beyond reportedly also laid off about 150 of its 65,000 employees, as well as announced store closures. With new leadership in place and a focus on reducing costs in order to improve the bottom line, Bed Bath & Beyond enters into a critical period for both the business and its shareholders.