Tag: George Garvin Brown IV

Slime time: In the genteel world of old-money philanthropy, pizza king Schnatter is busting loose

By Jim Hopkins
Boulevard Publisher

When Tom Jurich chases the money John Schnatter gives to charity every year, it’s the ever-prowling cats that pose competition.

No — not those ones. I’m referring to the snow leopard and other big cats at Louisville Zoo, just five miles from Papa John’s Cardinal Stadium, the University of Louisville colossus about to undergo a $55 million renovation that athletics director Jurich wants done in just two years.

Schnatter, 54, loves U of L. He’s donated more than $20 million to the 22,000-student school over the past decade, winning naming rights for his Louisville-based pizza chain for decades to come. (And Schnatter’s a Ball State graduate, to boot.)

Papa John's logoBut he also likes other charities — especially the zoo, according to the most recent IRS tax returns for his John H. Schnatter Family Foundation, which filed its 2015 return only last week. The returns show the foundation gave $111,000 to the zoo in 2012-2015; only one other recipient — U of L — got more, among the dozens of charities Schnatter and his wife Annette support. And that was on top of $1.1 million they donated to the zoo in 2008. To be sure, the zoo was just barely ahead of No. 3 on the foundation’s gift list (keep reading).

The returns offer an inside look at how one of the city’s richest couples — we’re talking $800 million — positions themselves in a pecking order where the right kind of philanthropy is the ticket to top-drawer society. This much is clear: the Schnatters don’t give a flying fig about old-money Louisville. They’re passing on virtually all the usual suspects: the Speed Museum, Actors Theatre, Kentucky Opera, the Fund for the Arts — cultural war horses favored by more established families like the Browns and their 150-year-old whiskey fortune, or the Binghams and their faded media empire from 1918.

Instead, the Schnatters devoted their relatively modest $1.9 million to 86 charities over the four years I examined, focused heavily on helping children and veterans; animal welfare and — crucially, for anxious development officers — advancing John Schnatter’s growing interest in free enterprise and limited government.

But he’s never been old money, anyway.

1980s: bustin’ out

After graduating from Ball State University in 1983, Schnatter started Papa John’s in a broom closet at his father’s tavern, Mike’s Lounge, which he famously saved from ruin with $2,800 he got selling his prized 1972 Camaro. Nearly 32 years and many millions of pies later, he stars in his own TV commercials blanketing the air, proving he’s not above getting dirty to make a sale — literally. In a Sony Pictures marketing tie-in this summer, he played a slimed Ghostbuster pizza delivery guy; that’s a still photo, top of page. (Can you imagine Brown-Forman Chairman George Garvin Brown IV dressed as a dancing mint julep for an Old Forester spot? Neither can I.)

Tom Jurich
Jurich

No matter. Schnatter’s laughing all the way  to the bank. Today, Papa John’s has more than 4,700 restaurants in 38 countries and territories. Its 22,000 employees include 750 in Louisville. And his stake in the $2.8 billion behemoth just soared past $800 million for the first time. That’s a lot of loot that’s arrived relatively fast. On a split-adjusted basis, Papa John’s stock has increased six-fold in the past five years alone. The question over at U of L: How much of that will Jurich wrangle for his $55 million stadium project? Continue reading “Slime time: In the genteel world of old-money philanthropy, pizza king Schnatter is busting loose”

Brown-Forman discloses director election tally, and support wasn’t uniform across the board

Garvin Brown IV
Brown

The director-by-director vote tallies filed today with the Securities and Exchange Commission followed last Thursday’s annual meeting, where the Louisville-based spirits giant said only that the full slate of 12 directors had been re-elected.

As is often the case, directors received varying degrees of support. Here’s the tally of “for” votes each one got; names are listed in order of those getting the highest to lowest share of all eligible votes. Board Chairman George Garvin Brown IV won the most: 95.72%.

Brown-Forman vote tally

The Brown family controls the nearly 150-year-old company through their 67% ownership of all voting class A shares.

Updated 8:40 p.m. Also today, Garvin Brown and newly re-elected Director Augusta Brown Holland were among a group of officers and executives who filed updated stock ownership notices with the SEC. The 22 separate Form 4 documents are in the SEC filings section of the company’s investor relations webpage.

Changing of the family guard: At Brown-Forman’s annual meeting, the ordinary was actually extraordinary

By Jim Hopkins
Boulevard Publisher

George Garvin Brown IV, a great-great grandson of the young pharmaceuticals salesman who started Brown-Forman in 1870, stepped onto a dais at the whiskey giant’s annual stockholders meeting today, and told an amusing story about a subject that might otherwise have been deadly dull: brand loyalty.

Garvin Brown IV
Garvin Brown

It was 9:30 a.m., and several hundred stockholders had assembled in a conference room at the white-collanaded headquarters on Dixie Highway west of downtown. On a classically muggy Louisville summer morning, this was a dressy crowd. Many of the men wore dark suits, crisp white shirts, and boarding school repp ties. Women wore tailored dresses, or smart skirts paired with jackets, and an occasional pearl necklace. People were tan and slim and — in the case of the many Browns there — very, very rich.

This was a business event, but it felt as much like a family reunion, too — because, after all, a core group of Browns control the company through an equity stake worth well north of $6 billion. Garvin Brown, who is 47 and lives mostly in London, was running the meeting as chairman of the board. Seated nearby in Chippendale-style chairs facing the audience were the other 11 directors up for re-election.

This is the story Brown told. He was on a flight from London to Warsaw for a meeting with the Brown-Forman team responsible for the company’s growing business in Poland. Brown had lucked out, scoring one of his favorite seats — aisle, in a roomy exit row — with two empty ones between him and the window. Then a British man, one of the many harried road warriors aboard, arrived to take the window seat. He asked for a Jack Daniel’s, Brown-Forman’s most profitable brand, when the flight attendant rolled the snack cart down the aisle. Here, Brown’s ears perked up.

Jack Daniel's bottleBut the airline was all out. Would the Brit settle for another brand of whiskey, the attendant asked, perhaps a Johnnie Walker? Nope, he replied, and asked for a glass of champagne instead. As Brown pointed out to the audience, here was a man so loyal to Jack Daniel’s, he’d sooner drink airline champagne than just any other whiskey.

That’s how Brown eased the stockholders into a more formal presentation by CEO Paul Varga, who deployed many bar charts and fever graphs showing return on shareholder equity over one year, five years, and 20 years — important stuff, to be sure, but not quite as compelling as Brown’s literally on-the-fly market research.

By this point, Brown had already dispatched Continue reading “Changing of the family guard: At Brown-Forman’s annual meeting, the ordinary was actually extraordinary”

Brown-Forman and other publicly traded companies file an annual report with the Securities and Exchange Commission that includes reams of facts, figures and other information. An essential section describes the business itself. This morning, the company filed its latest report; here’s the passage, slightly edited:

Garvin Brown IV
Chairman Brown.

“Brown-Forman Corp. was incorporated under the laws of the State of Delaware in 1933, successor to a business founded in 1870 as a partnership and later incorporated under the laws of the Commonwealth of Kentucky in 1901. We primarily manufacture, bottle, import, export, market, and sell a wide variety of alcoholic beverages under recognized brands. We employ over 4,600 people on six continents, including about 1,300 people in Louisville, home of our world headquarters. We are the largest American-owned spirits and wine company with global reach. We are a ‘controlled company’ under New York Stock Exchange rules, and the Brown family owns a majority of our voting stock.”

The company also published a summary of its brands:

Old Forester“Beginning in 1870 with Old Forester Bourbon Whisky — our founding brand — and spanning the generations since, we have built a portfolio of more than 40 spirit, wine, and ready-to-drink cocktail brands that includes some of the best-known and most-loved trademarks in our industry. The most important brand in our portfolio is Jack Daniel’s Tennessee Whiskey, which is the fourth-largest spirits brand of any kind and the largest American whiskey brand in the world, according to Impact Databank’s ‘Top 100 Premium Spirits Brands Worldwide’ list.”

Related: Fresh details emerge about the Brown family’s multibillion-dollar stake in the company now led by Chairman George Garvin Brown IV.

B-F paid CEO Varga $9.6M, just-filed proxy report says; it also reveals fresh details about Brown family stockholdings

Paul Varga
Varga

Brown-Forman chief executive Paul Varga‘s fiscal 2016 pay was down from $11 million the year before and $12.3 million two years prior, the company disclosed in its annual shareholders proxy report.

Compensation for the other four highest-paid executives was mixed vs. the year before, according to the report, which the Louisville whiskey distilling giant filed with the Securities and Exchange Commission late this afternoon.

The figures appear on Page 40, and cover the year ended April 30. In addition to Varga, they include CFO Jane Morreau; Mark McCallum, president of the marquee Jack Daniel’s brand; Jill Jones, executive vice president over North America and Latin America regions, and General Counsel Matthew Hamel.

Garvin Brown IV
Brown

Chairman George Garvin Brown IV got paid non-equity incentive compensation of $531,787 plus a small salary of $38,750. (“Non-equity incentive compensation” sounds like a cash bonus, but for some reason, Brown-Forman doesn’t use that term.)

In fiscal 2015, Brown’s non-equity incentive pay was much less: $281,845, according to last year’s proxy report. But that year he was still working as an executive vice president in addition to his chairman’s duties. For his EVP work, he was paid $320,427. He left that job a year ago today.

The company also said it incurred $18,359 for certain expenses associated with Brown’s living abroad, and other employee benefits provided to him. The proxy report doesn’t say where Brown, 47, was living at the time. (London, it appears, based on this Globe and Mail story last year.)

The Browns are firmly in charge

The Brown family controls Brown-Forman through their enormous stock portfolio, preserved through multiple generations — at least four — that followed George Garvin Brown, a pharmaceuticals salesman who started the company in Louisville in 1870. At current market prices, the family’s holdings are worth at least $6 billion — but in reality, much more.

The holdings are divided between the company’s two classes of stock: “A” shares, which carry voting rights, and non-voting “B” shares. Both classes trade on public markets, although for different prices. The family owns at least 67% of the A shares, according to the proxy report.

Campbell Brown, Old Forester
Campbell Brown

Chairman Brown and his brother, Campbell Brown — who’s also a senior executive at the company — hold one of the family’s single-biggest stakes: 6.8 million class A shares, through an entity called the G. Garvin Brown III Family Group. At today’s closing price of $105.48, those shares are worth $718 million.

Campbell, 48, has been president and managing director of Old Forester, the company’s founding bourbon brand, since 2015.

Keeping business in the family

Another big stockholder is Laura Lee Brown, who with her husband Steve Wilson, founded the trendy 21c Museum Hotel chain in Louisville. She owns 2.2 million class A shares outright, worth $233 million at current prices.

Steve Wilson Laura Lee Brown
Wilson and Brown.

In the proxy report, Brown-Forman said it did business with the couple, as it has in previous years. It includes developing historic Whiskey Row on Main Street into a complex of new lofts, retail and restaurant space to be called 111 Whiskey Row. The company paid $900,000 to a company controlled by the couple: Brown Wilson Development, according to the proxy report.

The project was heavily damaged in a fire last summer, but was saved and work continues.

Brown-Forman also paid the couple $267,395 for rooms, meals and other entertainment at their 21c hotel and its Proof on Main restaurant. It also paid them another $250,440 for leases on parking spaces in a garage they own adjoining Brown-Forman’s downtown offices.

Unraveling founding family’s wealth

Valuing the Brown family’s total stock holdings is difficult. Individual members own shares outright. They also have partial, beneficial ownership through family partnerships and legal entities. Because they overlap with other family members, it’s hard to assign a value to them.

However, counting each share just once among family members owning more than 5% of all outstanding shares, their combined total is about 57 million, worth $6 billion. But that only covers shares held by the single-biggest owners who, under Securities and Exchange Commission rules, are required to disclose holdings exceeding 5%. There may be other Browns sitting on multimillion-dollar positions, undisclosed because they don’t meet the 5% threshold.

And that’s only counting the class A shares. The Browns own several million non-voting B shares, too. Determining exactly how many is tricky, but tables and footnotes in the proxy report offer clues.

For example, Garvin Brown IV and his brother Campbell together own 1.3 million Class B shares outright; at today’s closing price of $97.90, they’re worth another $125 million. Adding that to their A shares, the brothers own $843 million in stock.

Sandra Frazier
Sandra Frazier

Sandra Frazier, who just cycled off the board of directors, owns 373,376 B shares plus 1.4 million A shares. They’re worth a total $185 million. Frazier, 44, is CEO of Tandem Public Relations in Louisville, which she founded in 2005. She’s also a member of the board of directors at Glenview Trust Co., a boutique wealth management company that serves 500 of the richest families in the area.

Laura Frazier
Laura Frazier

Her first cousin, Laura Frazier, joined the Brown-Forman board when Sandra left. Laura owns 239,829 B shares and 225,433 A shares. Combined, they’re worth $47.3 million. In addition to being a director, Laura, 58, owns Bittners, the high end furniture and decorating company in NuLu.