Activist Investor Releases Salty Prescription To “Fix” Olive Garden

Starboard Value, the activist investor group hoping to wrest control of Olive Garden from parent Darden Restaurants, released a soup-to-nuts prescription last week on how to "fix" the 800-unit family-style Italian chain. Apparently, much of it starts in the kitchen.

Starboard’s nearly 300-page slide presentation lays out the changes it would make if it won control of the Darden board of directors. The presentation includes a clean slate of 12 board nominees and a road map for cutting costs and breaking up the company as well as some critiques of breadstick serving counts and mundane restaurant kitchen decisions that rarely are discussed in a boardroom fight.

With sales continuing to decline at the chain, the hedge fund blames Olive Garden’s management for everything from giving customers too many breadsticks and cooking pasta in unsalted water to extend the pots’ warranties; offering complex menus requiring too much internal prep and inefficient use of technology solutions; and a failure to outsource equipment repair and maintenance. At issue is Starboard’s desire to put Olive Garden and LongHorn Steakhouse into a separate company from Darden’s smaller chains, such as the Capital Grille and Bahama Breeze.