(Reuters) - Casual dining chain Luby’s Inc (LUB.N) will shake up its board, it said on Friday, just one week before shareholders vote on whether to add an investor activist’s representatives as directors.
The company, which is facing pressure from Bandera Capital, a New York hedge fund that owns nearly 10 percent of its shares, will invite two new independent directors to replace two sitting members and will choose a new chair.
“Luby’s has recently been engaged in in-depth discussions with many of our shareholders, and based on the feedback we have received, we have chosen to accelerate our plans to transform the Board,” board chairman Gasper Mir III, said in a statement.
Mir plans to give up his role as chair but stay on the board.
At Luby’s Jan. 25 annual meeting shareholders will decide whether to put Bandera’s nominees, which include the hedge fund’s founder and his father, Philip, a former U.S. Senator from Texas, on the board.
Bandera has criticized the chain’s high expenses, and investors are unhappy as its share price has tumbled 42 percent in the last year and traded at $1.60 on Friday morning.
Bandera, run by Jeff Gramm, is urging other investors to back it in demanding more accountability and oversight by the nine-member board.
Proxy advisory firm ISS recommended electing Gramm and his father to the board while another advisory firm, Glass Lewis, recommended adding only Jeff Gramm. Bandera is urging investors to add four newcomers.
Luby’s operates 142 restaurants nationally, including 82 Luby’s Cafeterias, 59 Fuddruckers, and 1 Cheeseburger in Paradise.
Reporting by Svea Herbst-Bayliss in Boston; Editing by Jeffrey Benkoe