Updated from 12:35 p.m. EDT

Six weeks after

Wendy's

(WEN) - Get Report

added three seats on its board to placate shareholder activists, its longtime CEO stepped down, and the fast food-chain operator signaled that more changes are in the works.

The company said late Monday that its chairman and CEO, Jack Schuessler, plans to retire after more than 30 years with the company. It named Chief Financial Officer Kerrii Anderson interim CEO and president, while longtime board member James Pickett will serve as chairman.

Wendy's said it will hire a search firm to find a permanent CEO, and it plans to keep the chairman and chief executive roles separate.

The change comes as Wendy's is seeking to turn around its business after posting its worst sales performance in 18 years in 2005. It acknowledged its problems in a press release.

"Consumers rate Wendy's as a superior brand in many areas, but we must confront reality -- the brand has not kept pace with our competitors or the marketplace," the company said. "While there is no quick fix, we intend to regain positive momentum by improving our restaurant operations, driving sales by launching new, innovative products our customers want, and focusing on more effective marketing."

Meanwhile, Nelson Peltz, the billionaire investor who turned around Snapple and Arby's, recently acquired about 5.5% of Wendy's through his Trian fund. His public complaints about Wendy's leadership paved the way for three of his associates to join the company's board of directors. On Monday, the company said its board established "two small working committees to assist management" in effecting strategic changes and optimizing shareholder value.

Wendy's spokesman Bob Bertini says Peltz had no role in Schuessler's decision to step down, but Morningstar analyst analyst John Owens says there are signs that the new members of the board are pushing for major changes that probably reflect Peltz's preferences. He points to Wendy's statement about exploring how its strong balance sheet and cash position can be used to benefit shareholders.

"It looks like they're really looking to return more cash to shareholders, which would be very much in line with Peltz's ambitions for the company," says Owens.

Bertini says the entire board is working toward changes designed to improve Wendy's performance, and he declined to speculate on whether plans to return more cash to shareholders are being discussed.

Along with bringing in the new directors, Wendy's recently agreed to spin off the remainder of its

Tim Hortons

(THI)

doughnut chain by the end of the year. The company reiterated this position Monday and said it hired

Goldman Sachs

(GS) - Get Report

to explore strategic alternatives for its Baja Fresh Mexican chain.

Despite its dismal sales performance, all the changes at Wendy's has pushed its stock up almost 11% so far this year. In 2004, the stock jumped about 42%, helped along by a proxy fight led by William Ackman's hedge fund, Pershing Square Capital. Ackman pressured the company into raising its dividend, expanding its share repurchase plan, selling off underperforming real estate and spinning off Tim Hortons.

Anderson, 48, joined Wendy's in September 2000 from

M/I Homes

(MHO) - Get Report

, and Pickett has been a Wendy's board member since 1982. The company said Tim Hortons also is expected to name Pickett as its chairman to replace Schuessler.

Carl Sibilski, managing director with Oyster Capital Management, says Wendy's new leadership will face difficulties, but that the burger chain's competitive position can improve given time.

"Wendy's is in a tough spot between

McDonald's

(MCD) - Get Report

and

Burger King

," says Sibilski. "It's kind of outgunned by the competition, but in the long run, they can do better than Burger King if they stick to their message of a higher-quality menu and a more adult environment."