NEW YORK (AP) — Darden Restaurants CEO and Chairman Clarence Otis is stepping down as the company fights to fix its flagship Olive Garden chain following its contested sale of Red Lobster.
The company, based in Orlando, Florida, also said Monday that it's changing its corporate policies to split the CEO and chairman roles. It appointed lead independent director Charles Ledsinger Jr. as independent non-executive chairman, effective immediately.
Darden shares rose $2.03, or 4.5 percent, to $46.95 in after-hours trading.
Otis joined Darden in 1995, ascended to the CEO spot in late 2004, and became chairman a year later. His departure isn't entirely a surprise, given Darden's troubles. The company has been pressured to turn around declining sales at Olive Garden and Red Lobster. Customers had begun turning away from those chains as they cut back on spending during the recession.
Darden Restaurants Inc. earlier on Monday announced that it had completed the sale of Red Lobster to investment firm Golden Gate Capital. Activist investors Barington Capital and Starboard Value had objected to the nature of the breakup.
Barington had also said in March that it was time for Darden to start looking for a new chief executive, citing the company's "rapidly deteriorating financial performance." Last week, Starboard said it was suing Darden for documents related to Red Lobster's sale.
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