Shake Shack Inc. has appointed Jeffrey Lawrence, the former chief financial officer of Domino’s Pizza Inc., as an independent director as the burger chain moves to settle a battle with activist investor Engaged Capital.
(Bloomberg) — Shake Shack Inc.
has appointed Jeffrey Lawrence, the former chief financial officer of Domino’s Pizza Inc., as an independent director as the burger chain moves to settle a battle with activist investor Engaged Capital.
New York-based Shake Shack said in a statement on Tuesday that it will also work with Engaged to identify and appoint another independent director with restaurant experience.
Shake Shack Chief Executive Officer Randy Garutti said the company appreciated the constructive dialogue with Engaged.
“We are executing our strategic plan and share Engaged Capital’s view that Shake Shack can drive additional profit growth,” Garutti said in the statement.
“We look forward to continuing to increase stockholder value.”
Shake Shack went public in 2015, with Wall Street betting that the company’s cult following in the New York City area and popularity among young people would propel growth.
But it struggled to meet those expectations, and the Covid-19 pandemic dealt another blow as traffic around its mostly urban stores near offices slumped.
On Monday, it emerged Engaged had taken a stake in the burger chain and was pushing for changes.
Engaged has now agreed to support the company’s full board slate at the upcoming annual general meeting.
“Given his expertise in scaled operations, digital and international expansion, as well as his strong financial leadership experience, we believe he will be able to make immediate and impactful contributions to Shake Shack,” Danny Meyer, chairman of Shake Shack’s board, said of Lawrence’s appointment.
“I am also pleased that we reached an agreement with Engaged Capital, one of our largest stockholders, that I believe will further our mutual goal of enhancing stockholder value,” Meyer said.
Shake Shack said in its statement that it’s agreed to retain a consulting firm to support its ongoing operational initiatives to improve performance, and that Meyer and certain affiliates have agreed to step down their director designation rights over time.
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