Bravo Brio taken to task by largest investor

Bravo Brio’s largest shareholder is not happy, not happy at all.

Donald Adam, chairman of TAC Capital, owns about 15 percent of Bravo Brio’s stock. In a letter this week to the company’s board of directors, he raged about the locally-based restaurant company’s poor earnings and what he called “ineffective management.”

“We believe that the board of directors has continued to compound numerous mistakes that the company has made over the years,” he wrote in a letter filed with the U.S. Securities and Exchange Commission.

Adam, who has lobbied to put several of his own choices on the board but was rebuffed, also attacked current CEO Brian O’Malley.

O’Malley, a long-time employee who rose through the ranks to become chief operating officer then CEO, replaced Saed Mohseni, who left Bravo Brio in 2015 to take the helm at Bob Evans Farms.

“We believe that the board of directors has not offered any meaningful change to correct the serious issues negatively impacting shareholder value,” Adam wrote, “and this appointment (O’Malley’s promotion) reflects the continued exercise of poor judgment by the board of directors.”

O’Malley and Bravo Brio did not respond to requests for comment.

Bravo Brio’s sales and profits have been sliding as the company has been unable to reverse declines in customer visits and same-store sales.

Adam lamented the company’s stock price, which is trading at about a quarter of the value it was when the company launched its initial public stock offering in 2010.

“We attribute the market’s substantial discount to the company’s misguided strategy,” Adam wrote, “poor oversight by the board of directors and ineffective management.”

Bravo Brio has announced that it is looking at strategic alternatives, a way of saying that it has put out a “for sale” sign. Adam believes the announcement was for show and only came about after he went public with his desire to replace members of the board of directors.

The company has also rescheduled its annual shareholders meeting, pushing it from May to December, a move that Adam sees as disenfranchising to shareholders.

“The incumbent directors, including Mr. O’Malley whose term is set to expire ... should not prioritize selfpreservation over the rights of shareholders,” Adam wrote.