Business

Darden CEO has too much on his plate: critics

Board seats are like breadsticks at the Olive Garden: Sooner or later, you have to say, “Enough.”

Critics charge that Clarence Otis Jr., who heads the corporate parent of Olive Garden and Red Lobster, has overloaded his plate with duties at other companies’ boards — even as his own faces a brewing battle with shareholders over gripes about governance.

Otis, who as chairman and CEO of Darden Restaurants is currently sparring with investors over his controversial plan to sell the struggling Red Lobster chain, was obligated to attend at least 76 board meetings last year for companies and organizations other than Darden, securities filings and other documents show.

That’s “a striking total that’s far outside the norm,” especially for a company facing operational and board issues, said Robert Jackson, a Columbia law professor specializing in corporate governance.

To make matters worse, Darden has been allowing Otis to use its own jets to attend the meetings for other companies — a perk worth more than $67,000 in 2012, according to the most recent disclosures available.

“The idea that you’d fly a director around to other companies’ meetings in the corporate plane sounds like something from the 1980s,” Jackson said.

Asked for comment, a Darden spokesman said the aircraft perk is treated as taxable income.

“Darden has a strong leadership team, including Mr. Otis, an engaged and active board of directors and a deep management team at both the corporate level and at our brands,” the spokesman said.

The idea that you’d fly a director around to other companies’ meetings in the corporate plane sounds like something from the 1980s.

 - Columbia professor Robert Jackson

Otis’ all-you-can-eat approach to accepting directorships has extended to Verizon Communications, where he bagged $288,692 last year to sit on three of the telecom giant’s four standing board committees — a responsibility that required him to attend 38 Verizon meetings in 2013 alone, filings show.

VF Corp., the manufacturer of Wrangler jeans and North Face outerwear, paid Otis $249,195 to sit on its board and attend 22 meetings last year, according to securities filings.

Otis chairs VF’s nominating and governance committees — a fact that’s “ironic” given recent flaps over Darden’s own governance, noted Charles Elson, director of the Center for Corporate Governance at the University of Delaware.

Watchdog groups, including ISS and Glass Lewis, have slammed Darden for lavish executive pay amid lackluster performance, and blasted the board for directors’ overlong tenures and for not separating Otis’ chairman and CEO roles.

In March, critics cried foul when Darden toughened its bylaws to crack down on shareholder rights — a move that has provoked lawsuits from two institutional shareholders.

In addition to Verizon and VF Corp., Otis last year attended at least a dozen meetings of the Atlanta Federal Reserve Board.

The 58-year-old executive is a trustee of Williams College, requiring four meetings a year, and sits on local boards near Darden’s Orlando headquarters, including the Central Florida YMCA.

Darden shares have fallen 5 percent over the past 12 months and closed Tuesday at $50.86, up 0.5 percent.