Sardar Biglari’s push to unseat Jack in the Box board chair Davie Goebel may be gathering momentum. The activist investor said Glass Lewis and Egan-Jones, two of the largest proxy advisory firms, have recommended not voting for Goebel, according to a press release from Biglari.
Glass Lewis noted that Jack has, under its current board leadership, “persistently and dramatically underperformed during the extended tenures of several sitting directors,” and concluded: “there exists persuasive cause for investors to oppose the candidacy of David Goebel at this time,” according to Biglari’s press release.
Egan-Jones, meanwhile, concurred that Goebel should be replaced, citing sustained underperformance, Biglari said. Biglari’s campaign against Goebel is necessitated by the chain’s record in recent years, which includes same-store sales declines, the sale of Del Taco, and large-scale closures, Biglari said. The activist investor has sought changes at the chain since last year, prompting the brand to adopt a poison pill.
Jack in the Box, in its own statement, opposed the arguments made by the two proxy firms.
“We strongly believe that Glass Lewis reached the wrong conclusion in failing to recommend shareholders vote for Mr. Goebel,” the burger brand said in a statement. “Mr. Goebel has demonstrated strong leadership as the Board has overseen strategic actions to put the Company back on track.”
Jack in the Box also noted that ISS, another major proxy advisory firm, said Biglari’s effort to remove Goebel was unwarranted. Biglari’s “focus on Goebel as the primary source of underperformance does not fully account for adverse macroeconomic developments over the period,” ISS said in a statement cited by Jack in the Box.
The burger brand, which has seen dramatic sales erosion in recent quarters, ascribed Biglari’s pressure campaign as “his self-interest and anger at the Board’s unanimous decision that he was not well suited to join the Board.” Biglari attempted to join the board in December but ultimately withdrew his and another nomination.
Biglari has pursued long and unsuccessful activist campaigns against other restaurant companies, according to a Jack in the Box presentation to investors filed with the SEC. Biglari has spent 14 years trying to push Cracker Barrel to make changes he desires, Jack in the Box said. Last year, he failed to remove the brand’s CEO, but helped oust one board member, after Cracker Barrel drew consumer and political ire with its rebranding efforts.
