US Foods settles with activist investor Sachem Head
The board of US Foods has agreed to say goodbye to CEO Pietro Satriano from the foodservice distributor and to elect three board members from activist hedge fund Sachem Head’s slate.
Why it matters: The agreement is a win for Sachem Head and its founder, Scott Ferguson, who initially argued that US Foods should consider putting itself up for sale — an option likely to remain on the front burner now that the hedge fund is inside the boardroom.
Catch up fast: The accord caps the hedge fund's campaign for the food distributor to improve profitability, among other moves, even as US Foods grappled with supply chain challenges and rising inflation.
- The settlement averts a contested election at the upcoming annual meeting and puts this proxy fight in the books.
What’s happening: Ferguson will join the board, alongside two Sachem Head nominees: James Barber, a former COO of UPS, and David Toy, the CEO of omnichannel retailer Heartisan Foods. Their appointments will go into effect on May 18.
Details: Andrew Iacobucci, chief commercial officer, was named interim CEO, US Foods said.
- Nonexecutive chair Robert Dutkowsky will step into the executive chair role as part of this arrangement.
What’s next: Ferguson and Toy will join the search committee as the company looks for a new head. US Foods plans to hold its annual shareholder meeting on May 18.