Tag: Keith Meister

GE outsources, shuts down line — shifting 320 jobs; and KFC franchise owner in Ky. offers ultimate meal deal to cops: free food

A news summary, focused on 10 big employers; updated 5:23 p.m.

GE said today it will outsource work at a warehouse and distribution operation at Appliance Park and also close a water-heater manufacturing line, displacing about 300 good-paying union jobs and another 20 salaried ones. Officials said they expect all the affected workers will be absorbed into current operations, a prediction union leaders worry still could cost jobs (Courier-Journal).

KFC sign law enforcement eats free
Franchise owner Doug Knipp reportedly posted this sign outside an Ohio KFC.

KFC: An Ashland KFC franchise owner is offering uniformed law enforcement officers free meals 24/7 at his restaurants in Kentucky, Ohio and West Virginia, and a photo of a sign announcing the deal on the front door of one outlet is spreading across Facebook like wildfire. Doug Knipp’s KFCs in Kentucky include outlets in Pikeville, Ashland, Grayson, Hazard, Jackson, Prestonsburg, Morehead, Paintsville, and Louisa (WKYT). It’s unclear how long Knipp’s been making the offer, but it follows several high-profile cases where law enforcement officers have been treated poorly at Yum restaurants, most recently at a Taco Bell in Louisville last week; news of that incident continues to spread.

Keith Meister
Meister

YUM: The activist investor and Yum director who drove last October’s agreement to spin off the China Division is at it again, this time at the Williams Cos. Keith Meister of Corvex Management, which holds a 4% stake in the energy giant, is using an unusual approach to run his own 10-member slate of nominees for the board of directors. Trying to meet a sudden deadline, he’s nominated 10 who will merely serve as placeholders until after the election. At that point, if he’s victorious, they would resign in favor of permanent ones. Meister favors a merger deal with a Williams competitor, but he’s been thwarted by the CEO and some board members (New York Times).

PAPA JOHN’S: A Memphis couple has been sentenced to a combined 30-plus years in federal prison for robbing a Papa John’s and multiple other businesses across Memphis in May and June last year (Fox 13 Memphis).

AMAZON: Three years after it started opening distribution centers in Texas as part of a settlement with the state over the collection of sales taxes, Amazon says it will open its eighth major shipping facility in the state. It will be in Coppell, 22 miles northwest of Dallas; an existing center there employs about 1,000 workers. Two more are under construction in San Marcos and Houston (Dallas Morning News and press release). The retailer employs 6,000 in the Louisville area at centers in Jeffersonville and Shepardsville; more about the company here.

Amazon is expanding its bricks-and-mortar footprint across the United States, undeterred by the fact many physical bookstores have been struggling for years. It’s adding stores in Chicago, San Diego, and Portland, Ore., after opening its first last year in its Seattle hometown. The Chicago store is to open next year (Financial Times).

Documents reveal the enormous cost of spinning off Yum’s China Division

KFC Shanghai
A KFC in Shanghai, where Yums’s China Division is based.

Last fall, Yum announced plans to turn the huge China Division into a standalone company, a mammoth undertaking the Louisville fast-food giant plans to complete by Oct. 31 — despite recent reports of stalled talks with two big investors.

Expenses for investment banking, legal, and other spin-related services are enormous, according to Securities and Exchange Commission documents. Yum disclosed initial expenses of $9 million in the annual report last February. They’ve mushroomed ever since, according to the most recent quarterly report:

$10 million

spent in the second quarter alone

$28 million

since the spinoff was announced in October

$58 million

projected total cost by Oct. 31

What’s at stake?
Greg Creed
Creed

Much of Yum’s future. Based in Shanghai, the China Division has 7,200 restaurants, mostly company-owned KFCs and Pizza Huts. Last year, they accounted for 61% of Yum’s $11.1 billion in revenue and 39% of $1.9 billion in profits. Overall, Yum has 43,000 restaurants. (About Yum.)

Yum CEO Greg Creed and the board of directors agreed in October to separate the China business under pressure from activist investors, including Corvex Management Founder Keith Meister, who gained a seat on the board as part of the deal. They think the sum of the parts is greater than the whole.

Yum’s risky China bet

The company has regularly warned investors about Continue reading “Documents reveal the enormous cost of spinning off Yum’s China Division”

Yum investors must now go to Charlotte, N.C., to settle disputes with the company. (Take note: Keith Meister)

Louisville to Raleigh
Yum is officially headquartered in Louisville, but its corporate HQ is actually a three-hour flight away, in Raleigh, N.C.

In a new filing with the Securities and Exchange Commission today, Yum said it made an important amendment to its corporate bylaws that now requires disputes between shareholders and the company be handled in North Carolina’s court system.

Why that state? Because, even though Yum is headquartered in Louisville — and the top brass works part of the time in suburban Dallas — the company itself is incorporated in North Carolina, where the fast food giant’s principal office is in Raleigh. (Of course, that office might be little more than a mailbox drop.) Adding a little confusion, the specific court is actually 167 miles away, in Mecklenburg County’s Charlotte.

Keith Meister
Meister

The SEC filing doesn’t say what prompted the company to choose the N.C. court system. But it follows a high-profile dispute between dissident stockholder Keith Meister of Corvex Management that ended last fall when he was given a seat on the board of directors. Corvex had built up a 5% stake to press the company into spinning off its flagging China Division, a step it’s planning to complete by Oct. 31.

Yum’s 12-member board of directors approved the bylaw change last Friday, according to today’s SEC 8-K filing. It’s a new Section 9 of Article 8 called “Forum for Adjudication of Certain Disputes.” Here’s the full text: Continue reading “Yum investors must now go to Charlotte, N.C., to settle disputes with the company. (Take note: Keith Meister)”