US packaged food group and restaurant operator Bob Evans Farms has said CEO Steve Davis has resigned “by mutual agreement”.
The announcement comes as Bob Evans Farms looks to improve its results after pressure from activist investor Sandell Asset Management Corp.
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This summer, four executives put forward by Sandell Asset Management secured seats on the Bob Evans Farms board. The fund, which holds over 9% of the sausage maker, had called for the replacement of the “stale and entrenched” board of directors.
Sandell had been pushing Bob Evans Farms, which also runs over 500 restaurants in the US, to spin off its food processing arm. It has also been calling for Bob Evans Farms to sell some real estate assets. In September, it claimed an unnamed private-equity group is mulling a move for Bob Evans Farms’ packaged foods business.
One of the four nominees, Mary Kay Haben, was named chairman two months later. She said Bob Evans Farms would gain from a change of CEO.
“The independent directors unanimously concluded that as the company strives to improve performance, it would benefit from new leadership and enhanced execution. We thank Steve for his tireless efforts, dedication and many significant achievements as CEO of Bob Evans for over eight years, and we wish him the best in his future endeavours,” she said in a statement.
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By GlobalDataIn an interview with The Wall Street Journal, Haben reportedly said the recent performance of Bob Evans Farms had not met expectations.
“In the beginning [Davis] had a good tenure, but at this point, business results are not what we’d like and not what we’re capable of,” she said.
One of the other four Sandell nominees, Charles Elson, who runs the Weinberg Center for Corporate Governance at the University of Delaware’s business school, told the WSJ: “We believed we had lost confidence in Steve’s ability to take the company forward.”
Earlier this month, Bob Evans Farms reported a fall in half-year income from continuing operations and sales.
While the company looks for a replacement for Davis, CFO Mark Hood and Mike Townsley, the president of the Bob Evans Foods business unit, will form an interim office of the chief executive.
In a statement, Davis said: “Over the last eight years, we have transformed Bob Evans Restaurants and the Bob Evans Foods business unit, created a great leadership team and brought our business and community involvement to the next level. I am proud of the legacy we have built and am confident the team will continue to build on our sales and profit growth.”
