Welcome to the April 10 Monday Business Briefing, your private business intelligence digest from Insider Louisville.
Here’s how many millions Louisville restaurant CEOs made last year
With the first quarter of 2017 behind them, publicly traded companies are rolling out proxy statements, the annual compendium of what a company’s top five earning employees made in total compensation during the prior year. The point of the filing is to keep executives’ compensation in check and explain to shareholders and the public why they deserved the compensation they received.
It should be noted that while the executives at Louisville-based restaurant companies Papa John’s and Texas Roadhouse are by no means paupers, their CEOs earn less than the average U.S. CEO, according to Glassdoor. The average CEO’s salary in 2015 was $13.8 million per year. (Yum Brands CEO Greg Creed earned $1.5 million more than that in 2016, but as shown below, in 2015, he earned more than $6 million less than the average.)
Here’s a quick look at what Papa John’s, Texas Roadhouse and Yum Brands’ top C-suites earned in 2016. First up, Papa John’s:
The final column shows how much estimated total compensation that each executive earned in 2016 compared to the two prior years.
Schnatter saw his total compensation drop slightly as a result of lower incentive compensation, though that didn’t keep him from joining Forbes’ Billionaires list.
Compensation for the three other top Papa John’s executives rose as both their salaries and incentive pay increased.
Unlike the Texas Roadhouse table below, Papa John’s doesn’t include another form of compensation — stock that executives exercise or vest during the year. In the case of Schnatter, he exercised or vested an estimated $8.56 million in company stock in 2016.
Texas Roadhouse’s executives did well in 2016. All still earned more in terms of salary and other compensation if you discount the large payout of stock awards in 2015. While some incentive pay is doled out on an annual basis, executives often are promised large stock award payouts if they meet certain goals over multiple years.
Unlike some other national restaurant companies, Texas Roadhouse has continued to perform well quarter after quarter.
The third Louisville-based restaurant company, Yum Brands, just filed its proxy statement Friday afternoon. The company underwent a major change this year with spinning off its China operations, it will be interesting to see how total compensation Yum Brands executive earn in 2017, the first full year where they aren’t responsible for what happens at its China stores.
Creed’s total compensation skyrocketed in 2016. Although the company had its ups and downs, Creed successfully led Yum Brands through the spinoff, which undoubtedly garnered him additional incentive pay last year.
Micky Pant, the now CEO of Yum China Holdings, also notably benefited from the success of the spinoff. He earned $6.4 million, but that is only for the 10 months of the year that he served as CEO of Yum Restaurants China. His actual total compensation, according to Yum China’s first proxy statement, was $10.4 million, more than double what he earned in 2015.
It’s difficult to read too much into the compensation for the Yum Brands president and CFO David Gibbs, general counsel Marc Kesselman and KFC division CEO Roger Eaton, who are all new to the top-paid list. —Caitlin Bowling
Work on former Kaelin’s Restaurant could be completed this summer
Owner Jesse Flynn has been keeping mum about plans for the former Kaelin’s Restaurant space, except to say that it will be a restaurant and could have touches of the old Kaelin’s Restaurant.
Flynn, a local real estate developer, bought the property in March 2016 for $657,730 from the bank that bought it at auction and worked for months to find a partner to operate a restaurant in the 8,500-square-foot space.
He recently received a building permit from the city to complete an estimated $550,000 worth of work on the building, including shoring up the basement, foundation wall and exterior staircase; framing the interior; and replacing the roof, windows, doors and patio.
Flynn told IL last week that work on the roof just wrapped up, and workers are in the process of replacing the HVAC system. He added that construction work on the building is expected to wrap up in late summer. He declined to say more.
Von Maur spinoff opening in Mall St. Matthews
Dry Goods, a high-end clothing store that caters to young women, is moving into Mall St. Matthews in late 2017.
David Jacoby, general manager of Mall St. Matthews, told IL that Dry Goods, which is owned by upscale clothing retailer Von Maur, is expected to open sometime during the fourth quarter. It will move into the space currently occupied by retail store Buckle, between Bath & Body Works and Auntie Anne’s.
Salad-focused restaurant opening in St. Matthews
A former Chop Shop Salads employee is opening a new build-your-own-salad shop in a former Chop Shop Salads location in St. Matthews.
Joey Mascaro is opening Green District with partners Jordan Doepke, who works in insurance; Chris Furlow, who owns an Anytime Fitness; and Matt Petty, who’s in banking. Mascaro will oversee the day-to-day operations.
The group chose the location at 126 Breckenridge Lane near Shelbyville Road, in part because it was a Chop Shop Salads store before. It already was built out and even had some equipment remaining. That said, they are changing the look. (See rendering above.)
Another salad restaurant, Vinaigrette Salad Kitchen, is opening in Chop Shop Salads former Hurstbourne Parkway store.
Green District will offer customers a choice of leafy greens — iceberg, romaine or spinach — and allow them to add on any of dozens of toppings, as well as house-made salad dressings.
The menu also will feature specialty salads and wraps. Prices will range from $6 to $10.
Green District will open in early May and offer delivery to nearby businesses.
Mascaro left Chop Shop Salads in Louisville, which he did not own, and opened his own location in Nashville. That store is still operation and will transition to the new name and look once the St. Matthews store is up and running.
Green BEAN Delivery now has an app
Green BEAN Delivery, which delivers fresh produce right to your door, has been around for a while, but it’s still trying to keep things new. So, owners have created an app for their ordering service that makes ordering even easier than ever.
(BEAN, by the way, stands for Biodynamic, Education, Agriculture, Nutrition.)
“We are thrilled to unleash our new app, providing even more convenience for our members to shop online from a full selection of fresh produce and natural groceries,” said Matt Ewer, CEO of BEAN LLC, parent company of Green BEAN Delivery in a news release. “As one of the only farm-to-table businesses that offers an app for its members, our goal is to allow those who rely on their mobile devices for everyday tasks to quickly manage their accounts and grocery ordering.”
The features of the app include:
- Store browse and search;
- Order customization;
- Schedule and delivery management;
- Easy review of pending orders;
- Push notifications;
- Featured recipes with simple click ingredient ordering; and
- “Buy it Again,” which helps users find items they’ve recently or frequently purchased to make shopping faster.
Starting today through Monday, May 1, Green BEAN Delivery is donating one pound of produce to local food banks, including Dare to Care Food Bank, for each app download. It’s available both for Android and iOS.
Matt Ewer and his wife, Beth Blessing, started Green BEAN Delivery in 2007 and their delivery service covers parts of six states in the Midwest. The company has two organic farms and a third farm in Ohio in partnership with the Cincinnati Zoo, which hosts a wetland preserve and natural habitat for a variety of species. Some of the produce raised on the latter farm feeds animals at the zoo. —Melissa Chipman
Who’s been funded? (revisited)
In Friday’s TCB, IL let you know that only one company reported receiving funding in March and no companies reported funding in February. March 2016, however, was a banner month for Louisville startups with five startups getting funding to the total tune of $4.31 million and one being acquired for an undisclosed sum.
So IL reached out to EnterpriseCorp’s Lisa Bajorinas to see if she had any thoughts on this apparent slowdown.
“The year-over-year investment in early-stage companies is lower this quarter than last year at this time,” she said via email. “I counted eight companies funded Jan-Apr 2016 versus five companies this Jan-Apr 2017. The outlier at this time last year was, of course, Apellis Pharmaceuticals with their $47M investment.”
That D-round of investment for Apellis closed in February 2016 and was co-led by new investors Cormorant Asset Management, Hillhouse Capital Group and venBio Global Strategic Fund, joining existing investors Morningside Venture Investments, AJU IB Investment and Epidarex Capital.
Bajorinas continued: “Two reasons may account for this difference in number of companies funded: the Kentucky SBIR matching grant program reduced the number of application periods from 4 times per year to two; and the annual allocation of $3M for the Kentucky Angel Investment Act tax credit program was fully used by January 31, 2017.”
The tax credit program provides 50 percent tax credits to accredited investors who invest in Kentucky small businesses that create additional jobs and promote the development of new products and technologies —Melissa Chipman
Derby dressing and doing good
What do you mean it’s already April 10, and you still don’t have your Derby outfits? “Down’s with Derby Fashion Show and Silent Auction” benefiting Down Syndrome of Louisville can help fix that problem.
Nic and Kat’s Boutique will be debuting their brand-new mobile boutique, housed in an Airstream trailer. Owner Nicole Volz named the trailer “Ellie” after her sister who has Down’s syndrome.
The event at the Frazier Museum will feature a fashion show with models who have Down’s syndrome, live music from Louisville’s own Zach Longoria, Derby-inspired drinks, and hors d’oeuvres while you socialize, shop and give back. All the boutique’s clothes are $100 or less. The event will also be auctioning six limited edition dresses by London-based company Hearts and Roses.
The event is free if you register with Eventbrite and use the code “Nicole.” —Melissa Chipman
Poor jobs report, attack in Syria = bad day for (most) local stocks
Despite a poor jobs report and the U.S. attack on Syria, broader stock indices did not move much on Friday, but many stocks of local importance, including Papa John’s, PharMerica and Humana, recorded significant declines.
The U.S. Department of Labor said Friday that the U.S. economy added 98,000 jobs in March, fewer than expected. The department also lowered previously reported jobs gains in January and February.
The labor force participation rate remained unchanged, and the unemployment rate fell to 4.5 percent.
The Dow Jones Industrial Average and the S.&P. 500 fell slightly in early trading, but recovered, rose slightly from the prior day’s close, then fell again in midafternoon to end about where they started.
Shares of about two-thirds of 14 companies based in Louisville or with significant local operations did not fare well on Friday. Porter Bancorp posted a 4 percent gain, CafePress rose 1.7 percent and Republic Bancorp finished nearly 1 percent higher. However, shares of Papa John’s and PharMerica dropped about 2 percent, while UPS, Kindred Healthcare and Humana fell between 1.57 percent and 0.87 percent. Churchill Downs, Stock Yards Bancorp, Yum Brands and Ford declined less than 0.5 percent. Brown-Forman was essentially unchanged.
One company with local operations did get a boost on Friday: military contractor Raytheon.
The company made the 59 Tomahawk cruise missiles the U.S. military dropped on Syria Thursday night in retaliation for the Syrian regime’s alleged nerve gas attack. Marketwatch said the missiles, made in Arizona, cost about $1 million each.
Raytheon employs about 300 at its South Louisville facility, where it designs and builds weapons systems used by the U.S. Navy. The company last summer unveiled a new anti-ship missile defense system, the production of which was to add 100 jobs in Louisville.
Eclipse Bank promotes EVP to president
Louisville-based Eclipse Bank has named Andrew Pyles its new president. He succeeds Steve Stratton, who resigned in February.
Pyles most recently served as Eclipse Bank’s chief lending officer and executive vice president.
The 37-year-old Campbellsville native has been in the banking industry for 15 years, the bank said in a press release.
According to his LinkedIn page, Pyles began as a lender at Winchester Federal Savings Bank in 2002, after attending the University of Kentucky. He worked at Forcht Bank for five years and for Community Trust BanCorp for six years before joining Eclipse in February 2016.
Eclipse told Insider that Pyles also attended the Stonier Graduate School of Banking at the University of Pennsylvania.
Pyles lives in St. Matthews and serves on the boards of The Healing Place and The Housing Partnership.
Stratton, his predecessor, left in February. According to his LinkedIn page, Stratton is now president of Louisville-based QuayCo LLC. Eclipse Chairman Robert Hill remains interim CEO.
Eclipse, established in 2005, is headquartered at 3827 Shelbyville Road and reported net income of $423,000 last year, according to the FDIC. It had assets of nearly $150 million as of Dec. 31.
According to the Banktracker at American University, Eclipse had a troubled asset ratio of 8.5 in the third quarter, which was above the national median of 5.3, but significantly below the 18.9 ratio the institution reported in the first quarter. A higher ratio indicates that the bank is struggling more with loans that clients are not paying back as scheduled. —Boris Ladwig