Olive Garden parent Darden names interim CEO

NEW YORK - Olive Garden's parent company Darden Restaurants (DRI) promoted Chief Operating Officer Gene Lee to interim CEO after a board takeover by an activist investor last week.

The company, based in Orlando, Florida, said Tuesday that Lee will replace Clarence Otis effective immediately. Darden had announced this summer that Otis, who had been CEO since late 2004, would step down by the end of this year or when a replacement was found.

The change at the top comes after Starboard Value succeeded in its bid to replace all 12 of Darden's board members with its own nominees at the company's annual meeting Friday. Darden has been under intense pressure because of years of declining sales at its flagship chains, Olive Garden and Red Lobster.

Late last year, Darden announced it would get rid of Red Lobster and focus on fixing Olive Garden. The subsequent sale of the seafood chain riled up shareholders.

Starboard Value and another investor, Barington Capital, took issue with how Red Lobster's sale was structured. In March, Barington sent a letter to Darden's board saying it was time to consider looking for a new CEO. It said it had "long questioned why the board did not select a person with stronger operating experience in the industry to run Darden."

Lee was named chief operating officer last year. Before that, he headed up Darden's specialty restaurant group, which includes smaller chains like The Capital Grille.

Starboard CEO Jeffrey Smith, Darden's new independent nonexecutive board chairman, said the board's search committee will include internal as well as external candidates.

The company also said the election of Starboard's 12 nominees has been certified.