Luby’s Inc. shareholders elected the company’s slate of nine board nominees despite, an activist investor’s proxy contest, the company said in announcing preliminary results Friday.
During the annual meeting of the Houston-based company — parent of the Fuddruckers and the Luby’s Cafeteria brands — shareholders rejected all four directors nominated by Bandera Partners LLC, a New York hedge fund that owns about 9.8 percent of Luby’s shares.
Rejected nominees included Bandera managing partner Jeff Gramm and his father, former U.S. Sen. Phil Gramm (R-Texas).
“We greatly appreciate the candid and valuable perspectives that shareholders provided to us throughout this election, and we appreciate the support that we received from shareholders,” said Gasper Mir III, Luby’s chair, in a statement.
Mir said the company plans to implement changes announced in the run-up to the proxy vote.
“Our goal as a company and a board is to be responsive to shareholder feedback and continue these dialogues, particularly as we conduct the previously announced search to add two new independent directors to the board,” Mir said. “We will welcome the input and views of Bandera Partners during our board refreshment process and will be seeking to engage further with them in the near-term.”
Mir earlier this month said he would step down as chairman later this year.
The other eight Luby’s-endorsed board members, who serve one-year terms, include: Gerald Bodzy, president and owner of Houston-based Showcase Custom Vinyl Windows and Doors; Judith Craven, president of JAE & Associates LLC, a physician consulting firm; Twila Day, chief information officer of the Huntsman Corp., a Woodlands, Texas-based chemical manufacturer and marketer; Jill Griffin, principal at the Austin, Texas-based Griffin Group; Frank Markantonis, general counsel at Pappas Restaurants Inc.; Joe McKinney, vice chairman of San Antonio, Texas-based Broadway National Bank; Chris Pappas, Luby’s CEO and president; and Harris Pappas, former chief operating officer of Luby’s.
Chris Pappas and Harris Pappas own about 36.8 percent of Luby’s shares.
“With this annual election now completed, our full focus returns to executing our turnaround plan for the business and ensuring that we have our right board composition to oversee our strategy,” said Chris Pappas in a statement.
Luby’s earlier said it would be adding two new independent directors later this year.
The company is scheduled to release results for the first quarter of fiscal 2019 on Jan. 28.
For the fourth quarter ended Aug. 29, Luby’s narrowed its loss to $1.9 million, or six cents a share, from $4.1 million, or 14 cents a share, in the same period a year ago. Sales were down 3.1 percent to $83.9 million from $86.6 million in the prior year quarter.
Luby’s operates 142 restaurants, including 82 Luby’s Cafeterias, 59 Fuddruckers and one Cheeseburger in Paradise unit. The company franchises 104 Fuddruckers in the United States and abroad. In addition, Luby’s culinary contract services division provides foodservice management at 30 sites, including healthcare, higher education, sport stadium and corporate dining locations.
Contact Ron Ruggless at [email protected]
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Clarification Jan. 25, 2019: This story has been edited to clarify that Gasper Mir III will step down as chairman. He plans to remain on Luby's board.