Tag: SEC documents

Executive Pay

Reaching a new record high, Schnatter’s Papa John’s stake jumps past $800 million for the first time
John Schnatter
Schnatter

This afternoon, Papa John’s stock soared to a new record closing high of $77.38 a share, up 4.6%, or $3.37, on a better-than-expected second-quarter report. That’s good news for all shareholders (except for the shorts, of course!) — but none more so than founder and CEO John Schnatter. He’s the pizza chain’s single-biggest stockholder, with 10,455,981 shares — 27.6% of all, according to Securities and Exchange Commission documents.

Papa John’s shares have staged a huge comeback since hitting a 52-week closing low of $45.50 on Feb. 3. Here’s the value of Schnatter’s stake that day compared to its rising value the day after each of the past three quarterly earnings reports:

$475,747,136

Feb. 3

$623,176,468

Feb. 23

$629,031,817

May 3

$809,083,810

Today

Schnatter, 54, founded Papa John’s in 1984, right after graduating from Ball State University with a business degree. More than 30 years later, it’s now a fast-food goliath with 4,700 restaurants worldwide — including more than 1,200 international ones in 37 countries and territories. It has 750 employees in Louisville, and another 21,000 across the globe. The company went public in 1993. More about Papa John’s.

Bottom Line

In new SEC filing, Humana warns investors about DOJ suit and possible ‘abandonment’ of $37B merger

The Louisville-based health insurer added new language to the “Risk Factors” section of its quarterly 10-Q report filled today with the Securities and Exchange Commission, about the Department of Justice’s lawsuit last month blocking Humana’s $37 billion merger with Aetna of Hartford. Here’s what the new section says.

Humana and Aetna logos 250On July 21, the DOJ filed a civil antitrust complaint (which we refer to as the DOJ action) against us and Aetna in the U.S. District Court for the District of Columbia, charging that the merger would violate Section 7 of the Clayton Antitrust Act and seeking a permanent injunction that would prevent the Merger. The filing of the DOJ action is delaying, and, if we and Aetna are unsuccessful in defending against or settling the DOJ action, could ultimately prevent, the consummation of the merger. There can be no assurance that we will be successful in defending against or settling the DOJ action or that the merger will be consummated by any particular time, if at all.

In addition, even if we and Aetna enter into a settlement with respect to the DOJ action, there can be no assurance that we and/or Aetna will not be required to agree to terms, conditions, requirements, limitations, costs or restrictions that could further delay completion of the merger, impose additional material costs on or limit the revenues of the combined company, or limit some of the synergies and other benefits we presently anticipate to realize following the merger. We cannot provide any assurance that any such terms, conditions, requirements, limitations, costs or restrictions will not result in a material delay in, or the abandonment of, the merger.

Latest Headlines

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.

Bottom Line

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” →

Cops and Courts

Restaurant regulations 101: Risk factors companies face in the course of their business

Publicly traded companies disclose an array of risks to their businesses in annual reports filed with the Securities and Exchange Commission. Lawsuits and other legal proceedings are a big one, because they can spur huge monetary awards to plaintiffs.

Here are relevant passages from the “Risk Factors” section of the annual 10-K reports for three restaurant chain giants that are occasionally drawn into crime news stories; links are to the reports themselves. Continue reading “Restaurant regulations 101: Risk factors companies face in the course of their business” →

Latest Headlines

Lexington judge won’t budge on $5.3M bias award against UPS; Humana’s got slim chance beating anti-trusters; BF nabs top disability award; and Chinese nationalists expand protests beyond KFC

A news summary focused on 10 big employers; updated 4:37 p.m.

UPS: This morning in Lexington, Ky., a Fayette Circuit judge denied a motion to overturn a jury’s April verdict and $5.3 million in damages to eight black men who claimed a hostile work environment at a UPS facility in the city. Judge Ernesto Scorscone also rejected UPS attorney Neal Shah’s motion for a new trial. Shah didn’t have any comment after the hearing (Herald-Leader).

HUMANA and Aetna have only a slight chance to reverse the Justice Department’s decision yesterday to block their $37 billion merger, analysts and investors told Reuters, even as the two insurance giants promise to fight tooth and nail to win. “My initial impression from the complaint . . . is that the Justice Department and the states are on much safer ground” in their argument against an Aetna-Humana, said Beau Buffier, co-head of the antitrust group at Shearman & Sterling in New York (Reuters). Meanwhile, New Hampshire and Florida — with an especially big population of seniors — joined the Justice Department suit filed yesterday to block its $37 billion acquisition by Aetna of Hartford; Illinois joined the suit yesterday (Union Leader and News 4 Jax).

Humana logoIn more encouraging news, Humana was awarded a six-year Defense Department contract for the East Region of TRICARE, the military health care program providing benefits to service members, retirees and their families. Under the award, Humana’s service area would expand to about six million beneficiaries in a 30-state region. The Louisville-based insurer already has the contract for the South Region: Alabama, Arkansas, Florida, Georgia, Louisiana, Mississippi, Oklahoma, South Carolina, Tennessee, most of Texas and the Ft. Campbell-area in Kentucky. The new East Region is a combination of the current South and North regions (press release). The contract is worth $41 million (Federal News Radio). Humana’s announcement, nearly buried in yesterday’s DOJ news, to exit eight of 19 state health-care exchanges drew critics, who saw the move as a direct challenge to the Obama administration to block the Humana-Aetna merger (New York Post).

BROWN-FORMAN was awarded a score of 100 in the 2016 Disability Equality Index survey, by the US Business Leadership Network and the American Association of People with Disabilities. The survey awarded points in four major categories: culture and leadership, company-wide access, employment practices, and community engagement and support services. This year, 83 Fortune 1000-size companies completed the survey; two-thirds of these top the Fortune 500 list; complete list (news release).

KFC: Chinese nationalists have added iPhones and Continue reading “Lexington judge won’t budge on $5.3M bias award against UPS; Humana’s got slim chance beating anti-trusters; BF nabs top disability award; and Chinese nationalists expand protests beyond KFC” →