The revolving door of corporate governance turned yet again Tuesday at Famous Dave’s.
The Minnetonka-based restaurant company announced a new chairman and board member — Joseph Jacobs, president of activist shareholder group Wexford Capital, which recently became Dave’s largest owner with a 19 percent stake.
Jacobs replaces David Mastrocola, who had been installed as chairman just last year and is a founder of New York-based Pleasant Lake Partners, another activist group that was once Famous Dave’s largest shareholder. Pleasant Lake still has a 13 percent stake.
Famous Dave’s has been besieged by activist hedge funds in the past couple of years, and its boardroom and CEO suite have been in turmoil. In June, Ed Rensi suddenly resigned as Famous Dave’s CEO after just over a year at the helm. On Tuesday, the company said Rensi also has now resigned from the board, as has Brett Heffes, a board member for only a year.
Wexford Capital had a 10 percent stake in Famous Dave’s in March, when the company filed its annual proxy statement with federal regulators. But in a filing just days after Rensi’s exit, Wexford declared it had added to its stake and made its activist position clear.
Jacobs, Famous Dave’s new chairman, co-founded Greenwich, Conn.-based Wexford in 1994. Richard Shapiro, a Wexford partner and portfolio manager, also has been named to Famous Dave’s board of directors.
“Famous Dave’s is a company with a great heritage and spectacular products in a growing sector,” Jacobs said in a statement.
Famous Dave’s, a barbecue chain with 184 restaurants in 34 states, has had stagnant sales and profit growth in recent years. As activist investors started buying up its stock in 2013 and 2014, share prices more than doubled and were sitting at more than $30 as late as March.
But the bubble of optimism has since popped, and Famous Dave’s stock closed Tuesday at $18.09, down 86 cents or 4.5 percent. The news about the new board members came out after the market closed.
“We welcome the proven leadership and experience that our new directors bring to our board,” Adam Wright, a director and Famous Dave’s interim CEO, said in a statement. Wright is a co-founder of Blue Clay Capital Management, which owns about 6 percent of Famous Dave’s.
At least 60 percent of the company’s shares are now held by activist money managers.