Papa John's says Schnatter 'promoting self-interest' and 'harming the company'
Papa John's released the following from the Special Committee of independent directors of the Papa John's board of directors: "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. John Schnatter is promoting his self-interest at the expense of all others in an attempt to regain control. John Schnatter is harming the Company, not helping it, as evidenced by the negative impact his comments and actions have had on our business and that of our franchisees. We have tried to meet directly with John Schnatter to discuss how we can move forward in the best interest of all stakeholders. However, John Schnatter had not responded to our requests until last week when his attorney conveyed his conditions for a meeting, stating John Schnatter would agree to meet only if we cancelled the annual Operators Conference and allowed John Schnatter alone to reschedule it to a date, time and location of his choosing. OpCon, which is being held this week, is a critical annual meeting that brings together approximately 1,500 team members and franchisees from all around the world. John Schnatter's demand that it be cancelled just one week in advance was unreasonable and does not support his purported concern for the future success of Papa John's franchisees, employees and team members. 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. John Schnatter praised Steve Ritchie in his own book as a "model of what a leader should be" and fully supported his appointment as CEO. However, when the Company decided to implement a new marketing plan that did not feature John Schnatter, he began to criticize the management team and undermine the new CEO's leadership." The committee continued, saying that Schnatter has demonstrated "a continued pattern of ignoring decisions" of the board. In particular, the board said that Schnatter was told not to talk about the NFL controversy related to the National Anthem, and that it is "simply not true" that the board asked him to become executive chairman or that the board agreed with him that CEO Ritchie "needed to go." The board added that Schnatter misinformed the board about the circumstances surrounding the termination of the company's relationship with Laundry Service and "directly violated" violated the instructions of the board in July 2018 when he held a meeting with another restaurant company's executives without Steve Ritchie. The board had instructed John Schnatter to only have this meeting with the CEO present.