Struggling retailer Bed Bath & Beyond announced several changes to its board on Monday, including the appointment of five new independent directors, after facing pressure from activist investors who called for an internal overhaul.
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The company reduced the size of its board to 10 members, down from 12. Five current directors will step down from the board, while co-founders Warren Eisenberg and Leonard Feinstein will retire from their active roles and assume the new titles of co-chairman emeriti.
Bed Bath & Beyond said it would establish a committee to conduct a strategic review of its business practices and guide turnaround efforts. The company will restructure its audit and compensation committees and alter its executive compensation plan to tie awards to performance.
“As we have communicated to Bed Bath & Beyond shareholders, the Board has been undertaking a comprehensive review of its composition, governance structure and compensation practices,” said Patrick Gaston, who was named the company’s independent chairman. “The changes announced today reflect significant shareholder input and underscore our commitment to ensuring we have best-in-class governance.”
The changes were announced weeks after a trio of activist investors – Legion Partners Asset Management, Macellum Advisors GP and Ancora Advisors – called on Bed Bath & Beyond to replace its entire board of directors and fire its current CEO, Steven Temares. The funds argued that the company’s current leadership has failed to adapt to industry trends and has allowed its operational costs to balloon.
Bed Bath & Beyond’s sales have slowed in recent years amid a shifting retail landscape and the rise of e-commerce competitors.
The five new independent directors are Harriet Edelman, Harsha Ramalingam, Andrea Weiss, Mary Winston and Ann Yerger. In total, nine of the company’s 10 directors are independent.