Rock ‘em Sock ‘em at Cracker Barrel…

December 16, 2011

There’s nothing like a good old fashioned proxy fight to help you forget that you still have countless holiday-related chores left to cross off your to-do list. And when that proxy fight involves a self-styled (or, in this case, media-proclaimed) Warren Buffett, you know it’s going to be good.

Over the past week, Sardar Biglari and Cracker Barrel (CBRL) have filed — count ’em — nine separate filings with the friendly folks at the SEC. That’s more than two per day, since it doesn’t include any of today’s filings (though we’re quite sure there will be some, judging by the pattern). Yesterday alone, three proxy-related documents were filed — two from Biglari and one from the company.

We won’t lie and tell you that we’ve read everything on those 166 pages. But we have done a fair amount of skimming and there’s some pretty interesting — ok — amusing things in those filings. We particularly liked the “stats” chart that compared Biglari to longtime director (and compensation committee chair) Charles E. Jones, Jr., whom Biglari hopes to replace. The chart was included in Wednesday’s daily dose of goodness.

The chart, which is hard to reproduce in this format, compares Biglari’s experience to that of Jones’ in three different areas: leadership, financial, and industry experience. Since the filing was made by Team Biglari, it shouldn’t come as much of a surprise that Jones comes up woefully short. Here’s a snip from Wednesday’s filing:

In the final analysis, this election comes down to who is best suited to represent shareholders, the true owners of Cracker Barrel. Biglari Holdings is the largest shareholder of the Company owning approximately 10% of the shares. Charles Jones, despite his 30 years on the Board, currently owns significantly less than 1%, with more than three-quarters of his shares having been granted to him rather than purchased on the open market. Sardar Biglari, whose interests are aligned with all shareholders, is seeking just one seat out of eleven. Who better to represent shareholders, to challenge the status quo, and to work to maximize value for all shareholders, then a true owner?

We don’t own any Cracker Barrel stock, so we’re just observing on the sidelines. In the past, however, we have footnoted Cracker Barrel for excessive compensation.

But here’s one thing we think is fairly certain: between now and next Tuesday, there will probably be many more pages filed with the SEC. Shareholders may not be happy being buried in all of this paper. But we bet the lawyers who draft all of these documents are!

Image source: Glocally Newark

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So far in 2011, we’ve given footnotedPro subscribers a heads-up on four M&A targets and AMR’s likely bankruptcy, along with dozens of other early warnings and hidden opportunities. We dig through filings to find the bad news — and good — that other investors overlook. To find out more, or to inquire about a trial subscription, please contact us.

 

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