The purpose of this memo is to recommend shareholders of Cracker Barrel (CB) concerning their votes determining whether or not Sardar Biglari should obtain a seat on the board. Also, we recommend practices need to improve CB’s performance in the future. Biglari, as the largest single shareholder, has the right to test resolves and examine the fiduciary duty of the board. Challenges he brought up have made the board take changes. Although alarming effect of his actions, shareholders should not vote in favor of Biglari. First, current directors’ working relationship and balance might be jeopardized. There is no doubt that the board has done a satisfying job making CB survive the recession and continuing to grow. The integrity of CB’s board must …show more content…
First, forming an audit committee to reinforce a high road accounting measure. Segment wise reports for restaurant and retail operations are recommended. Second, establishing a compensation committee to review CEO goals, evaluate performance and determine compensations. Current executive compensation plan was based on 1994 standard and need update. Third, the threshold of poison pill should be raised to 20%. The 10% trigger might restrict investors without hostile intent in ISS’s perspective. However, activating poison pill is not recommended. At last, a nomination committee should be established to nominate independent directors. This committee would also recommend appropriate service tenure for independent board …show more content…
Between 2005 and 2011, its operating income has declined by 0.5% and customer traffic has decreased at an average pace of 2.2% annually. However, 75 successful new retail locations and paying down some long-term debt are signals of CB’s not-so-bad performance. Revenue and operating income growth has been challenging for the past years. Even if revenue has increased by $244 million, CB’s operating income has decreased by $1.6 million. CB’s strategy for revenue increases has been to open new restaurants, an attempt seemed to inflate financial results rather than solve real problem. Declining operating income growth indicates the ineffectiveness of this strategy. In terms of the longevity and proximity to CB and directors, aside from adding new members in 2011, the board has remained fairly constant with some members even back to 1971. After Biglari announced his intentions, four new directors replaced three existing directors and Mike Woodhouse stepped down and was replaced by Sandra Cochran, who then announced a sixpoint plan to improve sales and profits and to update pricing strategy. This change got positive market response with CB’s stock price rebounding from an 18month low, subsequently increasing by over
There was a trend in rise of the net property & equipment related assets since 2002 to 2004. This boost in net property and equipment assets was related to the acquisition strategy conducted by Applebee’s. For the $34 millions acquisitions of 21 restaurants in Washington D.C. area on November 7, 2002; $24 millions has been allocated to the fair value of property and equipment plus $10 millions in goodwill. This has caused a jump in net property & equipment assets for 2002 to jumped 16% and Intangibles assets to jumped 12% when compared to 2001. Since most of the purchased are by cash, this has caused a 31% decreased in the Cash & Equivalents for Applebee’s balance sheet. For the 11 Applebee’s restaurants acquisitions in Illinois, Indianan, Kentucky, and Missouri for $21.8 million on March 24, 2003, $7.9 millions were allocated to the fair value of property and equipment, the other $16.6 millions went to goodwill, plus a net liabilities in additions of $1.3...
Richard believes that his vision for the company, a two-tiered concept with a top microbrewery producing fresh, quality beer and a chain of brewpubs, has potential. However, due to the more complex nature of running a restaurant, he believes that the company has yet to figure out how to run its restaurant business profitably.
The success of Au Bon Pain continued even further upon the acquisition of the Saint Louis Bread Company in 1993. For several years Au Bon Pain’s management studied Saint Louis Bread Company’s operations as well as watched the habits of their consumer base. Eventually, Au Bon Pain’s management realized the business habits of their new acquisition had the capability to lead them even further down the road of success. For the next several years Au Bon Pain focused much of its time, effort, and capital on the successful expansion of their café style Saint Louis Bread stores, al...
In 2014, JB Hi-Fi announced the retirement of their CEO Terry Smart. He had been with the company for more than 14 years. In an interview with Smart Company, Smart explained the process for hiring his successor. Smart (2014) stated that succession planning is not something that can be done overnight, it’s a long-term process and it’s part of the board’s role. When JB Hi-Fi promoted Richard Murray to CEO it was because of his extensive experience, knowledge, skills and contribution to the organisation over 11 years (Keating 2014). This example of JB Hi-Fi’s succession planning not only demonstrates their diligence in following their charter but also the emphasis placed on laying the right
The oversight responsibilities of the board, the CAE lacking of expertise or broad understanding of financial controls and responsibilities, and the understaffed internal audit functions lacking of independence and direct access to the board of directors contributed to the absence of internal controls. To begin with, the board should be retrained to achieve financial literacy to review financial reporting. Other than attending formal meetings, the board of directors should be more involved with the management. For the Audit Committee, the two members who were recruited as acquaintances to Brennahan need be replaced with experts who are more sufficiently knowledgeable about accounting rules beyond merely “financially literate”. Furthermore, the internal audit functions need to expand with different expertise commensurate with the expanded activities of the organization, testing financial reporting rather than internal controls from an operational perspective. The CAE should be more independent and proactive to execute audit plans, instead of following orders from the CFO, and initiate a direct and efficient communication between internal audit and audit
Through out his tenure at Sunbeam,Al Dunlap’s advocated profit by firing many employees and shutting down many factories.If we look at it in the short term ,this approach seems very attractive as it brings in quick short term gains.In the long term ,however, such a decision would not ensure the sustainability of the company. Profitability and responsibility can and should be combined in an ideal world, however it is clear that they are at least partially contradictory. Shareholder pressure should not force a company to make short-term decisions that might be detrimental to the long-term profitability of the company.
The corporation I chose to discuss is McDonald’s. McDonald’s is a publicly traded corporation that includes the following domestic companies, McDonald’s, Chipotle Mexican Grill, and Boston Market. This paper will discuss the following:
The Board of Directors is consisted of 11 members: James M. Elliot, the Chairman of the Board, 3 inside members and 7 outside members. The economy is stable and profitable, but that also means a lot of competition in the market. This poses a great opportunity for the company to grow and gain more of the market share. The only foreseeable real threat that the company will face is new competitors in the market.
For one of my selections for buying stock, I invested into Starbucks, this company has attracted me with their wonders of different coffees, and I knew many others were interested in the very popular coffee company. Starbucks all started 1971 in Seattle Washington. With three men which were Jerry Baldwin, Zev Siegel and Gordon Bowker each of them put in one thousand three hundred and fifty dollars along with a barrowed five thousand from the bank to start up there small coffee shop in pick place market, witch is located in down town Seattle. The name for this company was inspired from the character Starbuck from Moby Dick; this character was a coffee lover. There close friend designed there well known logo. These men never thought of this small company to get large they just thought of it as a small coffee shop. Out of all three men Siegel was the only one that work at it full time. The men depened on a man named Alfred Peet for there coffee beans but soon then started there own blends of coffee beans. With in a year opening the first store they were able to open a second store. When the 1980’s rolled around, it was a thriving company, in the Seattle area. However, the co-founders began to have other interests and were involved in other careers simultaneously. Despite that, the company was about to undergo a major turning point. A man by the name of Howard Schultz started to pursue an interest in the company. He noticed that the coffee shop had a wonderful environment. He started asking a questions and becoming more and more interested by every moment. He loved how the founders had so much knowledge on the coffee and each blend. In 1982, Schultz became director of retail operation. This was just the start to a new phase with the company.
Stakeholders are individuals and constituencies that contribute, either voluntarily or involuntarily, to its wealth-creating capacity and activities, and who are therefore its potential beneficiaries and/or risk bearers1. There are several different types of stakeholders associated with a corporation, and those stakeholders can have different views and opinions on what corporation's goals should be and how they should be running. I have interviewed three different stakeholders of Staples Inc., an employee, a customer and a stock holder, to find their relationship between them and the firm. Then, I will use this information to suggest how the firm should proceed and continue to have a better and more beneficial relationship with its stakeholders.
This is a publicly traded company in the US that has been ding quite well in the recent years. The company’s 10k filing for the year 2014. From this statement, the risks facing the company will be identified classified and suggestions made on how best to mitigate them in the subsequent areas. There are various areas that the risks can arise based on the company’s 10k filling (Mertz, 1999).
Koehn, N.F., Besharov, M.A., & Miller, K. (2008). Starbucks Coffee Company in the 21st Century. [Case study]. Boston, MA: Harvard Business School Publishing.
PepsiCo can potentially acquire California Pizza Kitchen and integrate it in the company’s decentralized management approach. Since PepsiCo executives have experience in the quick service food industry, it should not be a reach for the company to successfully run this casual dining restaurant. For this venture to be successful, it is imperative that management cut down the operating costs at California Pizza Kitchen through the PepsiCo Food Systems distribution network and improve on the 3.1% operating margin that California Pizza Kitchen is currently operating at.
According to Carol Padgett (2012, 1), “companies are important part of our daily lives…in today’s economy, we are bound together through a myriad of relationships with companies”. The board of directors remain the highest echelon of management in any company. It is the “group of executive and non-executive directors which forms corporate strategy and is responsible for monitoring performance on the behalf of shareholders” (Padgett, 2012:1). Boards are clearly critical to the operation of companies and they are endowed with substantial power in the statute (Companies Act, 2014). The board is responsible for directing and steering the company. The board accomplishes this by business planning and risk management through proper corporate governance.
Organizations that only have top management as the board members are more susceptible to accounting malpractices. Members of the board should preferably own shares in the company to ensure diligence when it comes to the interests of the company. Apart from the Board of Governors, there should also be an audit committee in place to oversee the financial dealings of the bank. Members of the board and the audit committee should have basic financial knowledge. Some of the members should also be experts in finances so that they can detect any anomaly that may take place in terms of financial reporting. An overhaul of the regulatory framework is required to empower authorities to intervene immediately, and make improvements. New technology is required. Manual antiquated processes should be eliminated because this causes greater human error and poor