Three nominees put forward by a dissident shareholder group have won election to The Pantry’s 9-member board of directors.
The Cary convenience store chain announced the preliminary results of its shareholder vote Thursday morning.
The Pantry had opposed the election of the three independent nominees: Todd Diener, James Pappas and Josh Schechter. They will replace Robert Bernstock, Thomas Murnane and Edwin Holman, the current board chairman.
Murnane had been on the board since 2002. Bernstock and Holman both joined in 2005, and Holman briefly served as interim CEO before the company hired current CEO Dennis Hatchell.
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Pappas runs JCP Investment Management, which along with Lone Star Value Management has sought to shake up The Pantry’s board. The two investment groups collectively own about 1.9 percent of The Pantry’s outstanding shares.
The group argued that the current board had overseen a decade of poor performance and that The Pantry’s stock has underperformed both its peers and the S&P 500.
“While a number of different ideas and perspectives were expressed during this process, at the end of the day all interested parties share the common goal of creating value for The Pantry’s stockholders,” The Pantry said in a statement. “The incumbent board and management team welcome the new directors and intend to work cooperatively with them to successfully execute the company’s strategic plan and deliver superior returns for The Pantry’s stockholders.”
In addition to running JCP, Pappas is the board chairman of Morgan’s Foods, a publicly traded company that operates more than 70 restaurants. Diener is a former executive of Brinker International, where he served as the president of Chili’s Grill & Bar and On the Border restaurants. Schechter is director of Aderans Co., a hair-related business.
Pappas said in an interview last week that his group wasn’t interested in removing Hatchell or his management team, just bringing more accountability to the board. The group proposed a number of possible ways to unlock more shareholder value in a presentation it sent to shareholders. They included reassessing its capital expenditure program and exploring alternative ownership structures for the 410 sites it owns. The Pantry has 1,538 stores in the Southeast, primarily under the Kangaroo Express brand.
Hatchell said last week that he opposed the independent candidates because he thought it would disrupt the turnaround strategy that The Pantry is now pursuing.
The Pantry shares closed Thursday at $15.44, down 4 cents. The stock is down 8 percent this year.