News

Pre-earnings call, Papa John's top brass get 'golden parachutes'

November 6, 2018

Papa John's executives left out of jobs if the brand is purchased will have hefty severance deals, according to Louisville Business First, a publication in the brand's headquarters city. The so-called "change-of-control severance plan," went into effect Nov. 1, the publication said.

Such plans —sometimes referred to as golden parachutes —often materialize before a company's purchase. Under the Securities and Exchange Commission filing of the plan, the paper said the top-three C-suite executives — CEO, chief operating officer and chief financial officer — at Papa John's would get the benefits within 24 hours if the company is taken over and they are fired without cause or quit for a good reason, the Securities and Exchange Commission filing said. 

More specifically, Louisville Business First said the three executives would be compensated in these ways:

• CEO Steve Ritchie would get pay equal to 36 months of his base salary
• Chief financial officer, Joe Smith and chief operating officer, Mike Nettles, would get 24 months of base salary. 
• All three executives would get a prorated portion of quarterly or annual nonequity bonus payouts earned under any nonequity incentive-based compensation plan. 
• Likewise, company executives of the senior vice president or higher rank in the leadership team can get nine months base salary and COBRA coverage or health benefits if they're fired without cause.

Rumors of potential buyers for the brand have circulated in the media, financial and restaurant communities for several months after the brand's falling-out with founder, John Schnatter, who was released of his CEO and board chair roles following a series of highly publicized comments. The company's quarterly earnings call takes place tonight at 5 p.m. Eastern.