Shareholder calls for chairman change at Wagamama owner the Restaurant Group

Activist shareholders had objected to proposed pay deals for bosses in the face of widening losses and called for a change in strategy to focus on the profitable Wagamama chain, over brands such as Frankie & Benny's and Chiquito.

In spite of this, all resolutions were approved at the company's AGM in May, although some 45% of shareholders voted against the remuneration policy, 23% voted against the re-election of Hanna and 16% voted against the re-election of chief executive Andy Hornby.

In a statement released yesterday (11 July) Adam Katz, co-founder and chief investment officer of Irenic, said: "Over the past year, Irenic has attempted to work constructively and privately with the Restaurant Group.

"We've encouraged the company's leadership to appropriately align executive compensation with shareholder returns, reduce excess overhead costs and speed up the disposal of non-core assets to delever and increase focus on the high-return Wagamama operations. The response from the board and management has been to dither and to delay. The result for all of the company's shareholders has been disaster.

"During the course of our private engagement, Mr Hanna has made clear that he is unwilling to consider any independent, non-executive director candidates suggested by so-called ‘activist' shareholders. This is the case regardless of the merit of that individual or the ways in which that person may add value to the board. This refusal to evaluate potential director candidates on merit runs counter to the company's stated corporate governance principles.

"Mr Hanna's partiality towards certain shareholders (including potentially affording them veto rights over director appointments) and his antipathy towards other shareholders are equally incompatible with the company's principles. His positions undermine the fundamental tenet that shareholders of equal rank should be treated equally. As such, we believe Mr Hanna should resign, or the board should take steps to appoint a new chairman that can represent all shareholders."

A spokesman for TRG said: "TRG acknowledges that it declined the request for a board seat from Irenic Capital Management who own approximately 2.4% of the company.

"TRG constantly reviews the appropriate composition of the board and only last month appointed a new non executive director in Helen Keays. There are absolutely zero foundations for Irenic's assertion that TRG's decline of Irenic's request for a board seat contravenes any corporate governance guidelines and the chairman enjoys the unanimous support of the entire board."