Shares of Bed Bath & Beyond (NASDAQ:BBBY) were down 4.2% as of 3:30 p.m. EDT Monday after the specialty retailer announced sweeping changes to its board of directors.
Specifically, five of its current independent directors will step down, and its co-founders Warren Eisenberg and Leonard Feinstein will retire from the board, moving to the roles of co-founders and co-chairmen emeriti. The company has also named its current lead independent director, Patrick Gaston, as its new independent chairman, and is appointing five new independent directors, effective May 1, 2019.
This shake-up shouldn't be entirely surprising. Shares only just plunged less than two weeks ago after Bed Bath & Beyond released disappointing fourth-quarter 2018 results and underwhelming guidance -- shortly after which a consortium of activist investors repeated calls to replace the company's entire board and its CEO.
To be sure, the company noted these changes came "in response to shareholder feedback and in connection with its commitment to accelerating refreshment at the board-level ..."
The company also announced its board will form a new Business Transformation and Strategy Review Committee, reconstitute its Audit and Compensation Committees, and introduce a new executive compensation plan that's more aligned with company performance and the creation of long-term shareholder value.
Bed Bath & Beyond still has its work cut out if it hopes to return to sustained, profitable growth. But given its relative underperformance in recent years, this executive refresh could certainly be a step in the right direction.