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John Schnatter

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John Schnatter
John Schnatter at Charlotte Motor Speedway 2013 (8929996982).jpg
Schnatter at Charlotte Motor Speedway in 2013
BornNovember 22 or 23, 1961[1]
Jeffersonville, Indiana, U.S.
Other namesPapa John
Alma materBall State University[2]
OccupationFounder, former CEO, and Chairman of Papa John's Pizza
Years active1984–2018
Spouse(s)
Annette Cox
​
​
(m. 1987; sep. 2019)​
Children3

John Hampton Schnatter (born November 22 or 23,[3][4] 1961),[1] nicknamed commercially as Papa John, is an American entrepreneur who founded Papa John's Pizza in 1984.[5] Schnatter started the business in the back of his father's tavern after selling his car and using the proceeds to purchase used restaurant equipment. As of 2017, his net worth was over $1 billion.[6]

Schnatter stepped down as CEO on January 1, 2018, after controversy around his comments that the National Football League (NFL), who had a business affiliation with Papa John's, had not done enough to stop national anthem protests by NFL players, and that the protests had hurt his business.[7][8] Before he stepped down, his comments had resulted in the NFL cancelling its association with Papa John's.

After stepping down as CEO, Schnatter remained chairman of the board of directors until July 2018, when it was revealed that, during an internal sensitivity-training May 2018 conference call, he pointed out that Colonel Sanders had used the word "nigger" without backlash.[9][10] Schnatter resigned when the comment became public, but has since maintained that the board conspired against him and unfairly forced him out of his position.[11][12]

Early life and education

Schnatter was born in Jeffersonville, Indiana, in 1961,[13][1] to Mary and Robert Schnatter. His mother was a real estate agent and his father was a judge in Jeffersonville.[14] He has German ancestry.[15] He graduated from Jeffersonville High School in 1980 and received a business degree from Ball State University in 1983.[2][1]

In the 1980s, John Schnatter's father co-owned Mick's Lounge, a tavern in Jeffersonville.[2]

Career

Schnatter founded Papa John's Pizza in 1984, when he converted a broom closet in the back of his father's tavern.[1] Schnatter sold his 1971 Z28 Camaro to purchase $1,600 worth of used pizza equipment and began selling pizzas to the tavern's customers.[16][17][18] His pizzas proved sufficiently popular that a year later he moved into an adjoining space. The company went public in 1993. A year later it had 500 stores, and by 1997 it had opened 1,500 stores.[19] In 2009, Schnatter reacquired the Camaro after offering a reward of $250,000 for the car.[20]

Schnatter also launched a business called Calistoga Artisan Sandwiches in 2007. In 2008, Schnatter made a million-dollar contribution to the Louisville Zoo's Glacier Run expansion in exchange for Calistoga having naming rights to an adjacent water park.[21][22] The Calistoga business was mostly shut down in 2012, although three locations continued to operate in Naples, Florida.[21]

In October 2017, in a conference call with investors, Schnatter blamed the National Football League for poor financial performance, stating "The NFL has hurt us ... We are disappointed the NFL and its leadership did not resolve this", referring to the U.S. national anthem protests by football players. Papa John's Pizza had a marketing agreement to be the "official pizza company" of the NFL and also had marketing deals with 23 of its 32 individual teams, and Schnatter said the protests were hurting the company's sales of pizzas. Later that day, Papa John's announced that the NFL shield or "official sponsor" designation on Papa John's commercials and advertising would be removed.[23] On December 21, 2017, Schnatter announced that he would step down as CEO of Papa John's amidst controversy over his comments.[24] Schnatter was replaced as Chief Executive Officer by Chief Operating Officer Steve Richie, effective January 1, 2018. The company said Schnatter would still appear in the chain's commercials and on its pizza boxes, and was the company's biggest shareholder with approximately 9.5 million shares. He remained chairman of the company's board of directors at the time.

In July 2018, Schnatter participated in an internal training conference call with marketing consultants in which there was a role-playing exercise to help Schnatter avoid making remarks that could cause public controversy and damage the company's reputation. During the conference call, Schnatter said, "Colonel Sanders called blacks niggers and Sanders never faced public outcry". Schnatter also said that people in his home state of Indiana used to drag African Americans from trucks until they died. After the call, the owner of the marketing agency moved to end their contract with Papa John's.[25][26] Schnatter resigned as chairman of the board the same day the incident was reported.[9] Later that same day, Schnatter also stepped down from his position on the University of Louisville board of trustees.[27]

On July 26, 2018, Schnatter filed a lawsuit in Delaware against Papa John's Pizza to give him access to the company's books and records after they did not allow him to access the company's business records following his resignation in the wake of the teleconference call scandal. He described the company's procedures as an "unexplained and heavy-handed way" to cut ties between him and the company that he founded. In addition to preventing him from accessing information, the corporation also implemented a "poison pill" strategy in order to limit Schnatter's chances of buying back a majority stake in the company.[28] Schnatter also filed a lawsuit against the company in Kentucky in a dispute over property ownership.[29] In January 2019, a judge ordered the company to give Schnatter access to its records relating to his ouster.[29] A settlement of the lawsuits was announced on March 5, 2019.[29] Under the agreement, the company agreed to share all of its records with Schnatter and agreed to remove a part of its "poison pill" plan that restricted Schnatter's communication with other shareholders, and Schnatter agreed that he would not seek to stay on the company's board of directors after his current term expired on April 30, 2019, and that if a mutually agreeable independent director was chosen to replace him, he would step down before the end of his term.[29][30] Schnatter retained the right to sue if the records show wrongdoing by the company.[30] The company also agreed to remove a requirement that the activist hedge fund Starboard Value, which owns about 10% of the company, must vote in favor of the incumbent board.[30] As of March 2019, Schnatter remained the owner of 31 percent of the company's shares,[29] but by May 23, he had sold 3.8 million shares and reduced his stake in the company to 19%.[31] By November 2019, his stake was under 17%.[32]

In June 2019, the company was the fourth largest take-out and pizza delivery restaurant chain in the world,[33][34][35] with headquarters in Jeffersontown, Kentucky, part of the Louisville metropolitan area.[36][37][38]

In November 2019, Schnatter made his first public comments after leaving Papa John's to Louisville Fox affiliate WDRB. In the interview, Schnatter admitted he had used the word nigger during an internal conference call on diversity training, but said he did so to convey his hatred of racism and was quoting someone else. Schnatter said, "I've had over 40 pizzas in the last 30 days, and it's not the same pizza. It's not the same product. It just doesn't taste as good." He warned that "the day of reckoning will come".[39] The interview subsequently went viral, with numerous parodies appearing online.[40] In an interview three months later, Schnatter said he had not actually eaten over 40 pizzas in 30 days. Instead, he had tasted over 40 pizzas during that time, as a quality inspection activity.[41] Schnatter also criticized the way the company had been run immediately after his departure by Steve Ritchie, who was described as his former protégé. Ritchie had replaced him as CEO, but had been dismissed after less than a year, and Schnatter said he saw more common ground with Jeff Smith, who became chairman of the board in February 2019. "The one thing he and I agree on is that Steve Ritchie is not a CEO," Schnatter said.[39]

Personal life

In 1983, Schnatter sold his 1971 Chevrolet Camaro to help his father's struggling business. He used the leftover funds to start Papa John's. Decades later, he offered a reward of $250,000 for finding the car, and on August 26, 2009, Schnatter bought the Camaro back for $250,000. The family he sold it to had sold it, but he still paid them a $25,000 finders fee.[42][43] In celebration, Papa John's offered a free pizza to anyone who owned a Camaro.[44] Schnatter's original Camaro has been on display in the company's headquarters in Louisville, Kentucky. The company owns several replicas that are used on tours and for public and TV appearances.[45][unreliable source?] On August 15, 2015, Schnatter's original Camaro was stolen along with two other classic cars in Detroit, where they were slated to appear in the city's annual Woodward Dream Cruise.[46] The Camaro was recovered two days later on the city's west side with minimal damage.[47]

In 1987, Schnatter was married to Annette Cox. The couple lived in Anchorage, Kentucky and have three children.[1] Cox filed for divorce on December 5, 2019, and said they had been separated since April 1.[48]

In 1999, Schnatter was accused of stalking and groping a woman. He claimed the woman was trying to extort him for $5 million. The situation ended with a confidential settlement.[49]

In 2009, Schnatter was accused of sexual misconduct involving a 24-year-old female marketing employee, resulting in a confidential settlement.[49][50]

Politics

In 2012, Papa John's and Schnatter received media attention after he made critical comments about the Affordable Care Act to a class on entrepreneurship.[51] In a shareholder conference call, Schnatter said that he opposed the ACA because "our best estimate is that the Obamacare will cost 11 to 14 cents per pizza".[52]

Schnatter hosted a fundraiser at his home for Republican Party candidate Mitt Romney in May 2012.[53]

Schnatter contributed to Donald Trump's 2016 presidential campaign[54] and made supportive comments about his administration in January 2017.[15]

Charitable contributions

On September 4, 2019, Schnatter's charitable foundation donated $1 million to Simmons College, a historically black college in Kentucky.[55] Simmons College President Rev. Kevin Cosby expressed the opinion in a press conference that Schnatter's actions should speak louder than his words, saying "The Black community has heard far too many false words, but today this action – this generosity specifically for Black education and uplift – speaks louder."[56] There was, however, some criticism of the donation offer. Rev. Gerome Sutton, a Simmons graduate and member of its board of trustees said "It doesn't take a rocket scientist to figure out what's going on. [Schnatter] is trying to pay off the black community with 30 pieces of silver."[57]

In October 2019, the foundation also donated $500,000 to Jeffersonville High School, for renovation of its baseball field, where he had played on the team while a student there. The baseball field was renamed the John H. Schnatter Stadium.[58]

Awards and honors

References

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