Independent Special Committee of Papa John’s Board of Directors Issues Letter
To the Papa John’s Community:
The independent members of the Papa John’s Board of Directors take seriously our responsibility to serve and protect the best interests of Papa John’s and our stakeholders.
The Board’s decision to appoint a new CEO at the end of last year was
unanimous as was the later decision to appoint a new Chairman.
The Board specifically directed
John Schnatternot to talk about the NFLcontroversy related to the National Anthem on the 2017 third quarter earnings call. In direct defiance of these instructions, John Schnattermade unscripted comments about the NFLcontroversy.
When independent market research showed that a change in spokesperson
and advertising strategy was warranted,
John Schnattercommissioned his own research and produced separate commercials that starred himself.
On numerous occasions it was reported that
John Schnatterhad meetings with Papa John’s management and staff without the CEO’s knowledge and gave management directions without informing the CEO or the Board. John Schnatterwas reminded on many occasions that the CEO is to direct management, not the non-executive Chairman. John Schnatteralso proposed to have all communications from management to the Board come through him, which was not in accordance with our governance guidelines regarding “director access to management, employees and advisors,” and that was totally rejected by the Board.
It is simply not true that the Board asked
John Schnatterto become Executive Chairman, as he has recently asserted. Rather, John Schnattersuggested to individual Board members that he should become Executive Chairman and even directed a member of management to make unauthorized contact with the Compensation Committee’s independent consultant in July 2018to ask for peer compensation data.
John Schnatter’s assertion that the Board agreed with him that
Steve Ritchie“needed to go” is not true. John Schnatterdirectly violated the instructions of the Board in July 2018when he held a meeting with another restaurant company’s executives without Steve Ritchie. The Board had instructed John Schnatterto only have this meeting with the CEO present. John Schnattermisinformed the Board about the circumstances surrounding the termination of the Company’s relationship with Laundry Service.
It is unfortunate that
Papa John’s is 120,000 strong, and we have a solid foundation in place
that reflects our talented team, quality heritage and premier franchise
We have received outspoken support from customers, employees, franchisees, partners and shareholders for the actions we are taking. We are confident that we are building a better, more successful future for Papa John’s.
The Special Committee of the Papa John’s Board of Directors
About Papa John’s
Certain matters discussed in this press release and other company
communications constitute forward-looking statements within the meaning
of the federal securities laws. Generally, the use of words such as
“expect,” “intend,” “estimate,” “believe,” “anticipate,” “will,”
“forecast,” “plan,” “project,” or similar words identify forward-looking
statements that we intend to be included within the safe harbor
protections provided by the federal securities laws. Such
forward-looking statements may relate to projections or guidance
concerning business performance, revenue, earnings, cash flow, consumer
sentiment, profit margins, unit growth, unit level performance, capital
expenditures, corporate governance, shareholder and other stakeholder
engagement and support, strategic decisions and actions, changes to our
current business plan, the effectiveness of our new brand strategy, the
ongoing cultural audit and investigation and related initiatives and
actions. Such statements are not guarantees of future performance and
involve certain risks, uncertainties and assumptions, which are
difficult to predict and many of which are beyond our control.
Therefore, actual outcomes and results may differ materially from those
matters expressed or implied in such forward-looking statements. Our
risk factors are discussed in detail in “Part I. Item 1A. – Risk
Factors” in our Annual Report on Form 10-K for the fiscal year ended