Bed Bath & Beyond co-founders Warren Eisenberg and Leonard Feinstein have left the board of directors after facing pressure from three activist investors. Another five independent board members also have been replaced, creating a 10-person board that includes nine independent directors, but the investor activist trio still expressed dissatisfaction with the extent of the changes.
The updated board will form a Business Transformation and Strategy Review Committee to “review all aspects of the Company’s business transformation, strategy and structure,” according to a statement by the company. This committee will likely review investor complaints that include a “continued pattern of value destruction,” “repeatedly failed execution and strategy” and “excessive executive compensation and poor alignment of pay with performance.”
Additionally, 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 by the company.
Activist investors Legion Partners Asset Management, Macellum Advisors GP and Ancora Advisors had called for Bed Bath & Beyond to replace its entire board and oust CEO Steven Temares in March. The group was invited to participate in the transformation of the board but declined, according to the statement.
The activist investors are still calling for Temares to “be held accountable for the Company’s prolonged poor performance and destruction of shareholder value,” according to a statement from the three firms. Additionally, they claim the new board failed to offer a “detailed strategic vision for driving value creation” at the retailer, and that the new directors lack “the required skill sets and retail experience to effect swift and real change.”