Sleep Number investor Stadium Capital issues letter to shareholders

Stadium Capital Management, the largest shareholder of Sleep Number (SNBR) Number with ownership of approximately 11.7% of the Company’s outstanding shares, released the below open letter to the company’s shareholders. The letter said, in part: “On November 25 we communicated our serious concerns about Sleep Number’s corporate governance. To reiterate, our main concern is that while the Board of Directors has committed to changes that will eventually lead to improved governance over time, these changes are not sufficient to improve the Board in a timely fashion – and importantly, will occur after the Board hires Sleep Number’s next CEO through a deeply flawed process. The Company is essentially asking shareholders to trust an ineffective, lame duck chief executive to run the business during this critical operating period and a Board that possesses a horrific record to hire Sleep Number’s new leader. In our view, this is unacceptable and yet another significant mistake by the Board. In our November 25th letter, we offered a collaborative path forward that could be implemented immediately. Our path forward would do two things: first, it would dramatically improve corporate governance via immediate, meaningful changes to Board composition. This improved Board would have much greater odds of success in its search to recruit a high-caliber CEO. Second, our path forward would install a highly qualified Executive Chairman who could drive critical improvements in the business during the “lame duck” period of outgoing CEO Shelly Ibach’s tenure. This second element is especially important because it would immediately strengthen executive leadership, allowing time to reset a far more effective CEO search process…”