Biglari Holdings Shareholders Should Consider Legal Action

[Parsad]

I think Biglari Holdings shareholders could have a case to file an injunction against the board of directors of BH.  I posted some quotes from their filing yesterday, but here is one more on director's compensation:

 

Director Compensation

 

Directors of the Corporation who are employees or spouses of employees do not receive fees for attendance at directors’ meetings.  During fiscal year 2010, a director who was not an employee or a spouse of an employee received an annual cash retainer of $22,000, and the Chairs of the Audit Committee and Governance, Compensation and Nominating Committee received an annual retainer of $37,000.  In addition, non-employee directors receive cash meeting attendance fees as follows:

 

  · $3,500 for each in-person Board meeting attended;

 

 

  · $1,250 for each committee meeting attended in-person not held in conjunction with a Board meeting;

 

 

  · $500 for each committee meeting attended held in conjunction with a Board meeting; and

 

 

  · $500 for any meeting (Board or committee) in which the director participated by phone.

 

 

From November 2008 to March 2009, we paid all retainers in Company stock.  We have discontinued that practice to avoid equity dilution.  Effective April 1, 2009, all annual retainers have been paid in cash only.

 

On December 9, 2010, the Board approved an increase in the annual cash retainer for non-employee directors of the Corporation to $32,000.  The Board also approved the payment of a $120,000 annual cash retainer to Dr. Cooley for his role as Vice Chairman of the Board and such other duties as designated by the Board.

 

This is brutal!  Not only are they provided a $32K retainer, but lucrative per meeting payments.  Cooley is now provided with a $120K retainer!  How about you incorporate large shareholders into your board, and stop with the cash payments?  Cheers!

[farnamstreet]

It pays to agree with the CEO!

[maxprogram]

Trying to determine Biglari's exact amount of economic ownership of BH.

 

He owns 4,521 shares directly, or 0.3%.

 

The Lion Fund owns 203,357 shares, of which Biglari Holdings owns 100,387. The remaining 102,970 shares are the look-through shares held by the other Lion Fund partners. Biglari is one of these partners but I'm unsure of the percentage he owns. (I would guess it's less than a third of them, or 34,000 shares.)

 

Any help is appreciated.

 

 

[Parsad]

Max, I think you are on the right track.  I would guess he owned less than 15% of the assets in the Lion Fund, so about 30,000 shares, plus whatever he held personally.  That's why I think this is even more ridiculous.  If he controlled 35% of the company personally, and he wanted to treat it like his personal piggy bank, then so be it, since the shareholders couldn't really do much about it.  But he owns perhaps 3% of the stock!  This is insane!  Cheers! 

[MCN]

Did i read it right? Biglari recieves a base salary of $900k plus the bonus package?

 

For some reason I always thought the bonus package was instead of the base salary.

 

 

[CFA Omaha]

what a crook.  this guy has the biggest ego!  i would have a hard time entrusting him with my money.  i am sure he is smart but he sure is liberal with the company dollars.  i am not sure the companies BOD is being a fiduciary

[Kuhndan]

I think if you check board members at other public companies you will see they have similar compensation arrangements including per meeting payments. My guess is this is that far out of line.

[Myth465]

I think if you check board members at other public companies you will see they have similar compensation arrangements including per meeting payments. My guess is this is that far out of line.

 

It is when you take into account his prior letters and attacks on management teams.

[Parsad]

I think if you check board members at other public companies you will see they have similar compensation arrangements including per meeting payments. My guess is this is that far out of line.

 

The CEO's compensation was over $5M in 2010.  That's a far cry from the $900K salary the year before, or the $280,000 salary the year before that! 

 

You've got a company that made about $30M last year.  If they earned the same this year, about $7M would go to the CEO, and another $500K to the board of directors.  $7.5M in compensation for a company with $300M in equity and $30M in earnings.  That's a nice gig!  How do you explain that to the thousands of employees making $8/hour, or your shareholders who are footing that bill...Pay for performance?  Cheers!

[Guest ValueCarl]

I wish I weren't right about this man, but as soon as I saw his determined, extremely professional looking wife by his side-their matching dress code included-at West's Nasdaq bell ringing ceremony, I knew there was a very serious "greed factor" to be dealt with. Some attempted to chastise me for making reference to it.

 

Overtime, greed does kill because it knows no BOUNDARIES. Give SARDAR time, and he will mess up especially with things he cannot possibly control. imo