Half a star…

May 18, 2007

starhalf.gif CKE Restaurants (CKR) gets a gold star, and not just because they use a star in the logo of their Carl’s Jr. chain. In this recently filed proxy the company, which also owns Hardee’s and La Salsa Fresh Mexican Grill, tells the dramatic story of former-CEO William Foley’s resignation in 2000 at a time when the share price and earnings were tanking.

Instead of hiring a high-dollar turnaround specialist, the company promoted their attorney, Andrew Puzder. By 2006, Puzder had the share price up and the debt load down.

We are tempted to give a gold star to any filing that tells a good story, even if it is used to justify big pay hikes. In 2007, Puzder’s salary went from $860K to $1 million. But the company did resist the temptation to give away the bank to an outsider when times were tough.

But here’s the gold star clincher: the proxy says that executives requested tax gross ups and additional change-in-control benefits for 2007 that were denied by the compensation committee. It’s a little sad, but in today’s world telling an executive to pay their own taxes is at least worth half a star.

P.S.: Michelle is on the road with a very weak WiFi connection. An upgrade done the other day has created a few glitches with the site that we’re trying to fix despite the fact that I’m pretending to take a day off and enjoy Santa Barbara. Sorry about the inconvenience.

Leave a Reply

You must be logged in to post a comment.