A day at the beach…

images8.jpegFormer SEC Chairman Richard C. Breeden may be new to the world of hedge funds and activist investing. But it didn’t take him long to find his sea legs, so to speak. In this letter sent to Campbell Soup (CPB) CEO Douglas Conant, Breeden wastes no time in chastising Conant for his role as chairman of Applebee’s International’s (APPB) compensation committee:

On 29 occasions from from April 2006 through January 2007, Applebees’s corporate aircraft flew into and out of Galveston, Texas, where former CEO Lloyd Hill happens to own a beach house. The nearest Applebees’s restaurant is more than 40 miles away. Though Mr. Hill ceased to be CEO in September 2006, company planes continue the Galveston shuttle."

Ouch. The letter then goes on to say that "most Applebees’s customers would be shocked to find out that a portion of their meal goes to fly the former CEO back and forth to his beach house." But the letter doesn’t just poke at Conant over use of the corporate jet. It also shows declining profit margins, declining same-store-sales and declining ROIC. Breeden’s firm, Breeden Partners, owns about 5.3% of Applebee’s shares, the letter notes. This latest missive was a follow-up to this 13-D filed on December 11 where Breeden proposed nominating four directors to Applebee’s board.

What’s particularly interesting here is that Breeden’s folks dug through flight records to help make its case against the company. After all, the proxy that Applebee’s filed last April only includes the amount that Hill received — $91,333 — and doesn’t provide detail on any flight plans. Just imagine if some other folks started digging into corporate flight logs — now that would make for some interesting proxy reading. In fact, this sounds like a great wiki-project for readers. Anyone interested in helping to pull this together?