Ousted Papa John’s founder has millions invested in company’s future
Fox Business Briefs: National Football League announces Pizza Hut will be official pizza sponsor replacing Papa John's.
Papa John’s founder John Schnatter remains heavily invested in the Kentucky-based pizza chain, even as he challenges the company’s board of directors over its handling of a public relations crisis that forced his resignation last week.
Schnatter, 56, is Papa John’s largest individual shareholder, owning more than nine million shares, or roughly 30% of the company. That ownership position ensures that Schnatter will be a key figure for the company in the coming days, despite the fact that he no longer holds an official role in its operation.
The ousted pizza executive’s shares were worth more than $510 million as of market close on Tuesday, when Papa John’s ended trading at $51.54. Schnatter profited from his own July 11 resignation, which caused Papa John’s stock to surge more than 10%.
Schnatter resigned as chairman shortly after Forbes reported that he had used a racial slur during a media training session with Laundry Service, a marketing firm that had been coaching him on how to avoid public relations mishaps. Months earlier, Schnatter had resigned as Papa John’s CEO shortly after he publicly blamed the NFL, a former corporate partner, for the pizza chain’s sagging sales.
In an interview shortly after his resignation as chairman, Schnatter accused Laundry Service executives of attempting to extort him for $6 million in order to keep his comments from going public. Schnatter also said he was “actually kind of provoked” into using the slur during the conference call.
Laundry Service has yet to comment on Schnatter’s accusations.
In a letter to Papa John’s board of directors obtained by the Wall Street Journal, Schnatter called his decision to resign under pressure “a mistake” and criticized the board for pushing him to step down without a proper investigation.
Schnatter’s lawyer, Patricia Glaser, said in a separate letter that her client “is not going to go quietly,” arguing that the board of directors cannot remove Schnatter as chairman without submitting the proposal to a shareholder vote. She also called on the board to fully investigate the matter.
Papa John’s has yet to comment on Schnatter’s extortion claims or Glaser’s letter. However, the company took action Sunday to oust Schnatter from its corporate headquarters and remove his image from all brand materials.
Additionally, the chain said it had instructed Schnatter to cease all media appearances.
Schnatter has a net worth of more than $700 million, according to Forbes.