Stadium Capital Management, LLC (SCM), which owns over 11 percent of Big 5 Sporting Goods Corp, plans to nominate three independent candidates to the sporting good chain’s board at its upcoming annual meeting.

According to a press release from SCM, the nominees are Dominic P. DeMarco, a managing director and co-chief investment officer of SCM and an existing board member; Nicholas Donatiello, Jr., a consumer, media and technology strategist; and Michael J. McConnell, an investor who is a former managing director at PE firm, Shamrock Capital Advisors.

Speaking for SCM's investment committee, DeMarco said: “It has become clear to us that the board of directors lacks a sufficient sense of urgency and the fresh perspectives necessary to unlock Big 5's full potential.”

He noted that over the past one, five and ten years, Big 5 has significantly underperformed its peer group, the S&P 600 Retailing Index and the Russell 2000. He said that SCM's investment committee has tried to work with the board to improve Big 5's governance practices and board composition but have continually met resistance.

An included letter sent to Steven Miller, Big 5's chairman, president and CEO, further pointed out that since he joined the board in October 2011, DeMarco had already taken a number of steps – including formalizing a review of underperforming stores and advocating the first multi-year strategic operating and capital plan – that have already helped create “substantial value for stockholders.”

He claims the Big 5’s current independent directors, excluding DeMarco, have an average tenure of greater than 9 years on the board yet collectively own less than 1 percent of the company's stock. He implied that many independents have conflicts as well, pointing to one board director who’s law firm does significant business with Big 5.

DeMarco asserted that SCM’s two candidates “can bring insightful, experienced and new voices to the board, and offer both the board and stockholders the opportunity for substantial improvement in the company's governance and ultimately its operating and stock price performance.”

In response, Big 5 issued a statement acknowledging that it had received the nominations while also defending its board on the charges of mismanagement.

Big 5 said its board and management team remain focused on “continued execution of our proven business model,” which has consistently delivered “solid profitability” and return value to stockholders in the forms of dividends and share repurchases.

“Over our 60-year history, our business model has been to provide our customers with the optimal mix of value, selection, service and convenience, and this has enabled us to both successfully navigate economic and competitive headwinds and capitalize on product trends that are inherent to our business,” the statement read. “We believe our efforts to refine our product offering to meet the demands of today's consumer, combined with diligent expense management and our controlled store growth strategy, have our company well positioned to drive meaningful value for our stockholders.”

The shareholder meeting is expected to take place in June.