Minneapolis-based mattress maker Sleep Number Corp. is facing calls to change the makeup of its board after lackluster financial results.

In a Sept. 13 letter to Sleep Number’s board, Connecticut-based investment firm Stadium Capital Management pinned recent financial troubles on failures in the boardroom. Sleep Number reported a net loss of $5.4 million in its 2022 fiscal year ended Dec. 31, although it has reported positive income in the first two quarters of this year.

“To be clear, we believe Sleep Number is a tremendous brand with a compelling, differentiated product set and an attractive business model,” Stadium Capital Management’s investment committee wrote in the letter. “Unfortunately, these positive attributes have been obscured by poor execution and ineffective corporate governance from our view.”

The investment firm noted that Sleep Number’s executives and directors have received tens of millions of dollars in dilutive compensation over the past decade. That, in turn, has led to the “unacceptable negative total shareholder returns,” Stadium Capital officials wrote. The firm went on to criticize the board for using investors’ support to enrich its members.

Stadium Capital Management owns about 9% of Sleep Number, according to Reuters.

The investment firm also said that Sleep Number has doubled its research and development budget since 2019, and expanded the number of technology, corporate, and management employees by 70% from 2020 to 2023 despite mattress deliveries remaining flat.

“The blame largely falls on management as a result of its poor financial planning and weak execution against its operating goals. But blame must also be placed on the board for failing to hold management accountable for these clear performance issues,” said Stadium Capital.

In response to the investor’s concerns, Sleep Number said its board and management team “are committed to acting in the best interests of the company and all of its shareholders.”

“The board has moved expeditiously to put together a proposal that demonstrates that Sleep Number has listened closely to Stadium Capital and offered an opportunity for Stadium Capital to participate in the selection of a new independent director,” Sleep Number officials said in a statement.

In the past, however, Stadium Capital had asked Sleep Number to add three new directors with no apparent success, according to Reuters.