Papa John’s CEO John Schnatter has sold another big chunk of stock, according to a regulatory filing this afternoon, bringing to 411,050 shares the total he’s sold since announcing a special trading plan in early September under which he could sell up to 480,000 total.
Combined proceeds so far from all the sales, according to Securities and Exchange Commission filings: $32.2 million. (Table shows all the trades.)
Today’s SEC filing says Schnatter, who founded the company in 1984, sold 86,314 shares yesterday and Wednesday for prices averaging from $80.07 to $81.02 a share. The proceeds were $6.9 million, most of it from a single sale of 63,318 on Wednesday — the largest such block since Boulevard began tracking a wave of sales he started under the trading plan.
Papa John’s stock closed at $80.45 this afternoon, up 47 cents.
Company executives often adopt “10b5-1” trading plans, named for the SEC rule that governs insider trading. They are often approved by a company’s board of directors, and require an executive to sell a certain number of shares at fixed intervals to avoid any appearance they’re trading on inside information.
John Schnatter sold the 73,637 shares yesterday at an average $78.17 each, according to a Securities and Exchange Commission filing this afternoon. The trade left him with 10.4 million shares, and was made in accordance with a so-called Rule 10b5-1 trading plan he adopted Sept. 2, under which he could sell up to $36 million of stock.
With these trading plans, top executives typically sell a predetermined number of shares at fixed intervals to avoid any appearance of trading on insider information.
When Brown-Forman stockholders gathered in July at the whiskey giant’s Georgian Revival headquarters west of downtown, the outcome of a crucial vote — re-electing 12 directors to the governing board — was anything but a surprise.
This has been the founding Brown family’s company for nearly 150 years. Six of the directors were Browns, including board Chairman George Garvin Brown IV — a great-great grandson of the founder — and the rest were unquestionably family loyalists.
Stockholders outside the family knew what Brown-Forman has disclosed for years in an annual statement soliciting their votes: 13 individual Browns and family groups hold 67% of all the voting shares in “a variety of family trusts and entities, with multiple family members often sharing voting control and investment power.”
Much less has been known about the scope of those entities, leaving more than 5,600 other stockholders in the dark about exactly how the Browns divvy up nearly $6 billion in shares among a core group of relatives.
But now, documents filed by the Browns with the Securities and Exchange Commission detail how complex their ownership has grown since the pharmaceuticals salesman George Garvin Brown founded the company in 1870. They shed light on how the Browns have deployed extensive trust accounts, business partnerships, and other legal vehicles to pass down Brown-Forman stock through six generations. That’s an exceptional legacy in American business: Just 12% of family-owned companies survive into the third generation, and a slim 3% survive to the fourth and beyond.
The documents also point to a network of boutique consulting firms and other white-shoe professionals advising the city’s wealthiest families on everything from investments to taxes and charitable giving, hiring housekeepers and gardeners — even organizing vacation travel and family gatherings. Paid tens of thousands of dollars a year in fees, the firms are the backbone of a larger, multibillion-dollar economy serving the area’s uber-rich.
The pizza giant’s founder and CEO, John Schnatter, notified the Securities and Exchange Commission that he’d adopted a stock trading plan today under which he may sell up to 480,000 company shares, a block worth $36.4 million at today’s closing price of $75.75.
In a late-afternoon filing with the SEC disclosing the plan, Schnatter didn’t provide any more details, such as a timetable for when he would sell and in what amounts.
Company executives often adopt these “10b5-1” plans, named for the SEC rule that governs insider trading. The plans are often approved by a company’s board of directors, and require an executive to sell a certain number of shares at fixed intervals to avoid any appearance they’re trading on inside information.
Today’s filing came after stock markets closed. In extended trading, PZZA shares hardly fluttered, indicating Wall Street wasn’t concerned. That’s not surprising. Even if Schnatter had sold all 480,000 shares today, he’d still own about 10 million, including those subject to options — a stake equal to 26.3% of all outstanding shares. He would still be the company’s single-biggest stockholder, with a total stake worth $758 million.
The filing was noteworthy for another reason. Without explaining why, Papa John’s said it would not disclose any future 10b5-1 plans that might be adopted by other officers or directors. Nor will it report any changes or termination of any publicly announced trading plan, including Schnatter’s, except to the extent required by law.
Schnatter’s plan follows an especially busy month of trading for the executive. Since Aug. 5, he’s sold more than 138,000 shares for $10.5 million; chart, below.
In business journalism, some of the most interesting news shows up in fine-print footnotes in documents companies file with government agencies. Hospital and nursing giant Kindred Healthcare is great example. Last spring in a statement to stockholders, it disclosed two special payments to top executives: $6 million to then-executive vice chairman Paul Diaz in connection with his leaving the CEO’s job, and $250,000 to Chief Financial Officer Steven Farber, to help him escape a high-profile dispute with a Glenview neighbor. But to uncover that, you had to follow three different footnotes on a table showing how much they got paid overall.
This leads me to another footnote, of sorts — one that appeared on a story today at Insider Louisville, the online news site launched in 2010, and to a document I’ve run across at the Securities and Exchange Commission. Together, they open a window on who’s investing in Louisville’s news media at a time when the once-dominant Courier-Journal has been losing influence amid steep staff cutbacks, shifting the balance of power in Kentucky’s biggest city. They underscore the importance of news outlets everywhere telling readers who’s behind the scenes, and about any conflicts of interest owners may pose for their publication. (I’ve got disclosures of my own.)
This morning, at the bottom of a long story about the Humana Foundation, Insider Louisville editors added this disclosure: “One of the five directors of the Humana Foundation is David A. Jones Jr., an investor of Insider Louisville.”
To be sure, close readers of Insider Louisville have known Jones was an investor for several years. In August 2014, owner Tom Cottingham told readers he’d brought in three new minority investors he knew from a prior venture: Jones; Doug Cobb, the former Greater Louisville Inc. CEO, and Jon Pyles, now the site’s vice president of marketing. The story — which carried only a “staff” byline — didn’t say how much they’d invested, nor the exact size of their stake. Cottingham said he remained the majority holder.
Now, though, an SEC document filed in April offers more clues about the publication’s investors, whom we learned this summer include a prominent heiress to the glittering Brown-Forman whiskey fortune. I can’t find any mention of the regulatory filing on Insider Louisville’s website, nor in any other media outlet in Louisville. My readers may well correct me after I publish this post; in any case, this is certainly the first time I’m writing about it.
The April 12 document shows that Insider Louisville LLC raised $975,000 from 12 investors in a $1.5 million stock offering that drew the first investment March 31. It didn’t identify the investors by name, however, and it didn’t say how big their stakes were. The first $450,000 was to pay down an undisclosed amount of debt, according to the document; anything left over would go to any of its directors: Jones, Cottingham, and a third named Jamie Wilson. (Who’s Wilson? I haven’t figured that out; maybe one of my readers knows.)
Another day, another $2.7 million in Papa John’s stock sold, according to founder and CEO John Schnatter’s just-filed notice this afternoon with the Securities and Exchange Commission. It says the most recent sale was Monday: 35,603 more shares at $76 a share, again.
This table summarizes his month-long binge:
Not to worry (much), as we’ve been noting each time: He’s still the pizza chain’s No. 1 holder, with 10.5 million shares, including those under option. Still, executives don’t often sell when shares are poised to head higher, so Schnatter’s active trading is worth following.
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