Calls for Change at Cracker Barrel’s Board

Two prominent voting firms are urging shareholders to remove certain members of Cracker Barrel’s board, including a marketing executive involved in the chain’s problematic logo redesign.

Institutional Shareholder Services and Glass Lewis expressed their concerns on Monday, stating that the Southern Dining chain needs to make some changes. The restaurant’s renovation efforts and logo change—which temporarily eliminated the beloved Uncle Herschel character—have been poorly received, contributing to a 45% drop in the company’s stock price this year.

The firms have recommended that investors vote against the re-election of DEI specialist Gilbert Davila at the annual shareholder meeting scheduled for November 20. They pointed to “deficiencies” in his marketing expertise at the board level.

Interestingly, it seems that Davila, who is also the largest individual shareholder of Cracker Barrel, may have played a significant role in the branding efforts that faced backlash.

“Mr. Davila appears as one of two marketing professionals among the independent directors in board documents,” according to a memo from ISS. “He also serves on a committee focused on assessing social and political risks related to the company’s operations.”

While Davila is being scrutinized, CEO Julie Fels Masino, who took over in November 2023, hasn’t faced the same calls for dismissal from the agency. Yet, she ultimately rescinded the new logo and renovation plans due to overwhelming public criticism, which even included remarks from former President Trump.

ISS cautioned that firing Masino might lead to more instability but noted that if the company doesn’t improve, further changes could be necessary.

At the same time, activist investor Sardar Biglari, who runs the Steak ‘n Shake chain, is pushing for the removal of both Masino and Davila as part of his ongoing proxy campaign—a campaign that has reportedly cost the company millions in defensive efforts, as stated by the Wall Street Journal.

In a recent letter to shareholders, Cracker Barrel emphasized that the board, Masino, and their senior management are dedicated to getting the company back on track for fiscal year 2025. They accused Biglari of spreading false information to undermine the business for his own gain.

Conservative activist Robbie Starbuck, who has a substantial following on social media, criticized Davila as well, questioning his qualifications for a board position based on his 15 years of experience in DEI consulting.

Davila’s firm has yet to respond to requests for comment.

Glass Lewis further urged shareholders to oppose board member Jody Bilney concerning “arbitrary” and “regressive” charter amendments. They expressed that the evident shortcomings in Cracker Barrel’s marketing and brand management require urgent attention and rebuked the company’s recent governance reforms.

This year, Cracker Barrel updated its bylaws to block proxy campaigns from moving forward with candidates who lack sufficient shareholder support.