(Bloomberg) -- Buffalo Wild Wings Inc. Chief Executive Officer Sally Smith, who ran the chain for more than two decades, is stepping down after activist investor Marcato Capital Management won a proxy fight to overhaul the company's board.
Shareholders voted to approve three nominees originally put forth by Marcato at the company's annual meeting on Friday, according to a preliminary count. As the activist takes a bigger role in steering the company, Smith will be out by the end of the year -- or sooner if a successor can be found.
Marcato, which controls a nearly 10 percent stake in Buffalo Wild Wings, had called on the chicken-wing chain to replace Smith. After a decline in same-store sales during four of the last five quarters, Marcato wants the company to focus on improving its core restaurant brand and rethink how it makes capital-allocation decisions.
“We are very pleased that our fellow shareholders recognize that additional change on the board is warranted,” said Mick McGuire, a managing partner at Marcato. “We will bring the fresh perspectives, restaurant industry expertise and oversight the board needs to spearhead improvements.”
The Marcato-backed directors joining the board include McGuire and Scott Bergren, who was formerly CEO of Yum! Brands Inc.'s Pizza Hut. Investors also elected Sam Rovit, a food industry executive first put forward by Marcato and then embraced by the company. Another Marcato nominee, Lee Sanders, wasn't mentioned in either statement.
“We look forward to working constructively with the new directors to achieve our shared objective of driving value for Buffalo Wild Wings shareholders,” the company said.
The shake-up sent the shares up as much as 6.2 percent to $159 in New York. The stock had been down 3 percent this year through Thursday's close.
McGuire complained in April that the board “blindly stood by management,” despite worsening financials. He also touted the idea of Buffalo Wild Wings selling more of its locations to franchisees, a popular tactic in the restaurant industry.
Smith's departure removes one of the longest-serving CEOs in the restaurant industry. She took the helm at Minneapolis-based Buffalo Wild Wings in 1996.
“I will focus on leading Buffalo Wild Wings and driving value-creating change until we are ready to make a smooth transition,” Smith said in a statement.
To contact the reporters on this story: Beth Jinks in San Francisco at bjinks1@bloomberg.net, Craig Giammona in New York at cgiammona@bloomberg.net.
To contact the editors responsible for this story: Elizabeth Fournier at efournier5@bloomberg.net, Nick Turner
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