Despite six chief executives since going public in 2002, Così Inc. COSI +3.84% had yet to make a dime of profit. So when the sandwich chain picked its seventh CEO in a decade this year, directors decided to hedge their bets.
For CEO, they chose Carin L. Stutz, a restaurant-industry veteran from Chili's owner Brinker International Inc. EAT -0.18% And to help her craft a turnaround plan, the board named its newest member—longtime investment manager Stephen F. Edwards—as executive chairman, a salaried post with management and board duties. Both began Jan. 1.
Such power-sharing arrangements involving independent directors are rare. The heads of several rival restaurant chains warned Ms. Stutz about the difficulties of having two sets of hands on the steering wheel.
Così went public in November 2002 at $7 a share. On Tuesday, the stock stood at 79 cents. Its net loss doubled in 2011 to $6.5 million, as revenue slipped 7% to $102 million. That dismal record has led to serial changes at the top, with four permanent CEOs in 10 years and three others holding the job temporarily.
Ms. Stutz figured that sharing power with Mr. Edwards would help her cope with Così's persistent red ink, repeated delisting threats and unhappy major investors. Over the past five months, the pair spoke numerous times with The Wall Street Journal about how the arrangement actually works.
Board members say the extra support made it easier to decide to hire Ms. Stutz, a corner-office rookie. In addition, real-time oversight of Ms. Stutz by Mr. Edwards—even though he says he isn't her boss—means the board could react faster to change CEOs or strategy if it has to shift course again, said Karl Okamoto, a Così director and Drexel University law professor.
The arrangement—they characterize themselves as partners—pairs the fast-talking and effervescent Ms. Stutz, who is 55 years old, with the laconic and lanky Mr. Edwards, a 49-year-old who owns a 2.1% stake in Così. Ms. Stutz is focused on shrinking the menu, improving innovation and speeding service at the chain, which has 132 outlets. Read More