Piecing together a revolving door at Red Robin…

Red RobinRestaurant chain Red Robin (RRGB) is known for its claim to be the Gourmet Burger expert since 1969. But lately they seem to be a revolving door when it comes to several top management spots.

Back on June 29, the company announced that both its CFO, Katie Scherping, and its Chief Marketing Officer, Susan Lintonsmith, would be stepping down in two weeks. Unlike a lot of other press releases we read with similar changes, Red Robin didn’t trot out the personal reasons line, though the release noted that Scherping’s departure was not related to any disagreements. The release noted that the company had also “initiated searches for their successors”.

Clearly, the searching didn’t take all that long because on Aug. 1, the company announced that it had hired Denny Post to replace Lintonsmith. And then, on Friday, the company announced that it had hired Stuart Brown as its new CFO. Brown’s employment agreement doesn’t appear to be finalized and there were no details provided in the 8-K. But somewhat oddly, the separation agreement with Lintonsmith was attached to the announcement about Brown. Also filed Friday, in the 10-Q that clocked in at 4:31 pm, was the employment agreement with Denny Post.

Clearly, that’s a lot for investors to digest all at once, especially on a summer Friday. Lintonsmith, who spent four years at Red Robin, will collect $315,000 in severance, the equivalent of one year’s salary, in exchange for being available through the end of next March. Of course, she won’t be working full-time or for an entire year to collect that amount. We’ve yet to see any sort of separation agreement with Scherping, though it would be hard to imagine that one isn’t being negotiated, since she had been at the company longer than Lintonsmith.

Post, whose prior work experience includes stints at Burger King and Starbucks, as well as consulting gigs at Sara Lee and ConAgra, will be making considerably more: $385,000 a year. In addition, Red Robin is giving her a $125,000 signing bonus. There’s also a car allowance and up to $425,000 to cover moving expenses to cover Post’s move from Seattle to Denver, where Red Robin is based.

As with most restaurant chains (and actually most retailers), there’s also a smaller, but perhaps, more enticing perk: discounted meals at Red Robin restaurants. Last year, for example, Lintonsmith received $3,769 worth of such benefits, which represents about a 60% discount off the cost of a meal.

Of course, with its stock performing strongly, investors may not care much about the revolving door. But if they do, there’s clearly a lot to digest.

Image source: ginnerobot via Flickr

This post was written by footnoted intern Andy Cheng, a rising junior at the University of Chicago.


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