Shake Shack (NYSE:SHAK) Inc shares rose over 4% in pre-market trading Monday after the Wall Street Journal reported that activist investor Engaged Capital is planning a proxy fight for three board seats at the premium-priced burger chain.
Engaged currently owns about 6.6% of Shake Shack (NYSE:SHAK)’s outstanding shares.
The US-based investor activist said it has determined ways to double the company's profitability within two years and believes Shake Shack (NYSE:SHAK) should get rid of its staggered board, which means that not all directors are up for election at the same time, according to the report.
The Wall Street Journal noted that Engaged has been in talks with the company's management for over six months and sent a letter to the board in March detailing its proposal for new directors and other changes to help boost Shake Shack (NYSE:SHAK)'s lagging stock price without an agreement.
Shares of Shake Shack have gained more than 56% year to date but are up just 9% over the past five years.
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