Despite Challenges, Clarence Otis Persists with Diversity Mission

Despite Challenges, Clarence Otis Persists with Diversity Mission


On Thursday, Barington Capital Group hosted an online presentation in which it challenged the course of Darden Restaurants.  The 14 year-old hedge fund represents a group of shareholders that currently own less than 2% of Darden’s common stock and has been very public over the past four months in espousing what it sees as a new way forward for the 46 year-old multi-brand restaurant operator.  In its latest attempt to extract greater shareholder value, Barington called for sweeping changes, which include the sale and lease-back of several of Darden’s real estate holdings and severing the Chairman and CEO positions, currently held by Clarence Otis, Jr.


Otis, who was named CEO of Darden restaurants in 2004, is one of six active Black CEOs of Fortune 500 Companies. He is joined in that distinction by Kenneth C. Frazier of Merck & Co, Inc., Roger W. Ferguson, Jr., TIAA-CRF, American Express’ Kenneth I. Chenault, Don Thompson of McDonald’s, and Ursula M. Burns, a woman of Panamanian descent who heads up Xerox Corporation.


Otis joined Darden in 1995 as its Vice President and Treasurer.  He also served as its Senior Vice President of Investor Relations from July 1997 to August 1998, Senior Vice President of Finance from August 1998 to December 1999, Senior Vice President from December 1999 to April 2002, Chief Financial Officer from March 2002 to December 19, 2002 and Executive Vice President from March 2002 to November 2004.  In 2004, Otis was named CEO and the chairman post was added in 2005.


Overseeing the operations of Central Florida’s 10th – largest employer, the world’s largest full-service restaurant company – is no easy feat. In response to mounting pressure from shareholders, Darden announced in December that it would sell Red Lobster, a popular chain with 678 restaurants in the U.S. and 27 in Canada.  Presently, Darden owns and operates more than 2,105 restaurants in 50 states including Red Lobster, Olive Garden, The Capital Grille, LongHorn Steakhouse, Bahama Breeze, Yard House, Seasons 52, Eddie V’s and Wildfish Seafood Grille.


Amid broader changes, however, Otis has been consistently focused on creating a quality restaurant experience, for consumers and employees alike. Under Otis’ leadership, Darden has been consistently ranked by Fortune Magazine as one of the top 100 companies to work for in the country, owing it large part to its employment of over 135,000 part-time workers, all of whom are eligible for low-cost health insurance.  Likewise, Darden is one of the most diverse employers in the nation, with 30% of its restaurant manager positions being held by minorities and 41% being held by women.


While achieving the company’s bottom line is key, Otis continues to demonstrate that he is concerned with the “people parts” of his business as well, not just corporate profitability. In addition to ensuring a diverse workforce and benefits opportunities to employees, Otis has also championed training and increased board participation for women and minorities as a means of promoting advancement and upward mobility among his workers.


Even as Darden is expected to undergo continued changes in the future in light of broader economic realities, Otis’ leadership will likely continue to benefit America’s growing and increasingly diverse majority population.