Proxy advisors back Cracker Barrel board

Firms say Biglari arguments not strong enough, focus on Bradford résumé 'unnecessarily combative and puerile'

Cracker Barrel Old Country Store executives have scored a big victory in their fight against activist investor Sardar Biglari, who is seeking two board seats at the Lebanon-based chain.

Institutional Shareholder Services and Glass Lewis, the two most prominent companies that advise investors on how to vote their shares, have both recommended that the Cracker Barrel-backed slate of director nominees be retained rather than have Biglari and his associate, Phil Cooley, come on board. Both companies agree with Cracker Barrel President and CEO Sandy Cochran that the company is on the right track financially and has improved its governance through the addition of a number of board members in the past year and a half.

"Cracker Barrel has already enjoyed some success in translating improved financial performance into superior shareholder returns and a more attractive valuation,” a Cracker Barrel press release quotes Glass Lewis officials as saying. “Most notably, based on the noted period-end date, it appears the Company posted superior total shareholder returns versus the Peer Composite and both indices across each of the selected periods, a distinction we expect is owed, in no small part, to the efforts of the reconstituted board.”

Both Glass Lewis and ISS also say Biglari hasn't helped himself by resorting at times to what Glass Lewis calls "abrasive commentary" that would seem to go against his stated aim of working in the company's best interests.

“When viewed within the context of a contest that could afford Mr. Biglari significant board representation and the prospective ability to materially alter Cracker Barrel's strategic direction, we find such suggestively negative phrasing, particularly in the absence of truly compelling evidence, both unnecessarily combative and puerile,” the firm said. “Further, we fail to see how such an approach is likely to portend constructive board-level discussions in the event Messrs. Biglari or Cooley are elected.”

Shares of Cracker Barrel (Ticker: CBRL) closed at $63.45 Friday, down about 0.7 percent. Year to date, they have risen 25 percent.