Buffalo Wild Wings is shaking up its board, but that may not be enough to quell concerns posed by investor Marcato Capital Management.
The hedge fund, which holds a 5.6 percent stake in the chicken wing chain, has been pushing since July for Buffalo Wild Wings to franchise more of its restaurants and even nominated four directors to the company's board in February.
Marcato was hoping to get Mick McGuire, the activist hedge fund's founder, and three other nominated directors onto the board.
However, Buffalo Wild Wings disclosed on Monday that it had only nominated one of Marcato's suggestions, Sam Rovit, who has 20 years of experience in the food service industry, to stand for election.
The other nominees from Marcato were Scott Bergren, former CEO of Yum Brands, and Lee Sanders, who held leadership roles at TGI Fridays and Johnny Rockets.
Buffalo Wild Wings also nominated Janice Fields, the former executive vice president and COO of McDonald's. Board Chairman James Damian and board member Michael Johnson are slated to retire from the board at the annual meeting in May.
"The nomination of Jan [Fields] and Sam [Rovit], respectively, along with the additions of Andre Fernandez, Hal Lawton and Harmit Singh, who joined the Board in October 2016, demonstrates our commitment to enhancing Buffalo Wild Wings' governance practices through Board refreshment," Buffalo Wild Wings said in a statement Monday.
The gesture may not be enough for Marcato, however. The company said Monday that B-Dubs did "not go far enough" and had not addressed the firm's proposed operational improvements and business model modifications, which it believes will drive value for shareholders.
"Buffalo Wild Wings' desperate actions only confirm that there is substantial deficiency at the board level and lack of a cohesive plan to create long-term shareholder value," Marcato said in a statement Monday. "It is deeply troubling that the company would take these steps without consulting us or other major shareholders, as we have continuously endeavored to engage in constructive dialogue with the board and management on the strategic, operational and financial issues that we believe are plaguing the company. Unfortunately, every attempt we've made has been stymied."
Buffalo Wild Wings declined to comment further.
In March, McGuire took aim at Buffalo Wild Wings, publishing a presentation for investors that argued the executives' interests were not closely aligned with the wing chain's shareholders. McGuire noted that none of the Buffalo Wild Wings executives currently owns shares in the company and only one director has ever executed an open-market purchase of the stock.
He also argued that B-Dubs management team has been using equity incentive plans to purchase shares at a lower price and then sell them on the market to make cash.
Shares of the company were down more than 2 percent in early morning trading.