NEW YORK — Shareholder drama continues for Darden Restaurants — and this time, it’s personal.

In a March 26 letter to Orlando, Fla.-based Darden’s board of directors, investor Barington Capital Group, L.P. recommended the company find a new chief executive officer. The shareholder group expressed concern over Darden’s “rapidly deteriorating financial performance” under the leadership of Clarence Otis, chairman and chief executive officer.

“While we are patient, long-term investors, we are deeply concerned by the rapidly deteriorating financial performance of Darden under the leadership of Mr. Otis,” Barington wrote.  “In addition, we are dismayed by his efforts to separate Red Lobster and its valuable real estate from the company without shareholder approval, notwithstanding the fact that this controversial transaction could potentially diminish shareholder value and appears to us to be self-serving.”

Barington said Mr. Otis was “disingenuous” and self-serving in defending Darden’s December-announced comprehensive strategic plan to pursue a tax-free spin-off or sale of Red Lobster, reduce unit growth at Olive Garden and LongHorn Steakhouse, lower capital expenditures and forgo acquisitions of additional brands.

In the letter, Barington recommended to Darden seven actions to improve long-term shareholder value:

• Appoint an independent chairman to ensure board decisions are unbiased;
• Directly engage in meaningful dialogue with shareholders;
• Permit shareholders to vote on the Red Lobster separation plan;
• Reconsider its current restructuring plan and explore opportunities to unlock the value of its real estate assets;
• Ensure shareholders receive full and fair disclosure;
• Improve the company’s corporate governance;
• And, finally, consider searching for a new chief executive officer.

The pushback began in September, when Barington first recommended that Darden create two independently managed, publicly-traded restaurant operating companies that would separate Olive Garden and Red Lobster from Darden’s higher-growth brands of LongHorn Steakhouse, The Capital Grille, Yard House, Bahama Breeze, Seasons 52 and Eddie V’s Prime Seafood. Additionally, the letter called for a transfer of the company’s real estate assets, valued at approximately $4.2 billion, into stand-alone, publicly-traded real estate investment trusts.

Following Darden’s December announcement, Barington countered with a January letter reiterating its recommendations and calling Darden’s plan “incomplete and inadequate.”

Another shareholder group also challenged Darden’s strategy. Starboard Value L.P. recommended in a January letter that the company delay its spin-off of Red Lobster to pursue alternative options, such as a company-wide cost-reduction plan or sale of the company’s real estate.

But in a March 21 conference call with analysts, Darden again stood by its plan, even as the company announced earnings and sales declines during its most recent quarter.

“We are puzzled by Mr. Otis’s continued resistance to more broadly implementing the proven strategies we have recommended that have improved long-term shareholder value at a number of other restaurant companies,” Barington wrote in the March 26 letter. “Given the extensive list of benefits that Darden has stated Red Lobster will achieve from a separation, one would expect that a c.e.o. truly focused on doing what is best for shareholders would want the same for Darden's seven other brands.”

For the third quarter ended Feb. 23, Darden posted net earnings of $109.7 million, equal to 84c per share on the common stock, down 18% from $134.4 million, or $1.04 per share, in the prior-year period. Net sales for the quarter totaled $2,233.1 million, down 1.1% from $2,258.2 million last year.