Stadium Capital Management, LLC (SCM) said it has notified Big 5 Sporting Goods Corp. that it will nominate three “highly qualified, independent candidates” to serve on the retailer's board at Big 5's 2015 annual meeting expected to be held in June 2015. SCM owns over 11 percent of Big 5, the company's largest stockholder.
It has been an investor in Big 5 for nearly a decade.
The nominees are Dominic P. DeMarco, a managing director and co-chief investment officer of SCM and an existing member of the Board; Nicholas Donatiello, Jr., a consumer, media and technology strategist and a recognized corporate governance expert; and Michael J. McConnell, an investor and former chief executive officer of consumer-facing businesses with restructuring expertise.
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. Over the past one, five and ten years, Big 5 has underperformed its peer group, the S&P 600 Retailing Index and the Russell 2000 by a staggering amount. This level of underperformance is unacceptable, and we are confident that our fellow stockholders will agree that substantial change on the Board is needed.”
DeMarco continued: “We have tried to work constructively with the Board of Directors to improve Big 5's governance practices and board composition but have encountered resistance at every turn. At the upcoming annual meeting, we are delighted to offer stockholders a choice between the existing Board and its record of both weak governance and stockholder returns and our three highly qualified, independent nominees and their fresh perspectives.”
Also today SCM delivered a letter to Steven G. Miller, Big 5's chairman, president and chief executive officer, regarding SCM's continuing concerns with the company's governance practices. The full text of the letter follows: