FAT Brands, Inc. Announces Board of Directors Changes, Elects "Controlled Company" Status, and Sets New Compensation for Non-Employee Directors

Strategic Insights -

FAT Brands, Inc., a leading developer of restaurant chains and owner of the FAT Brands, Inc. franchise system, has made several significant changes to its Board of Directors. On March 28, 2023, the holder of a majority of the voting power of the outstanding voting stock of FAT Brands, Inc. removed Kenneth Anderson, Lynne Collier, Amy Forrestal, James Neuhauser, and Edward Rensi from the Board. The sole remaining director then increased the size of the Board and appointed seven new members: Donald Berchtold, Tyler Child, Kenneth Kepp, Carmen Vidal, Mason Wiederhorn, Taylor Wiederhorn, and Thayer Wiederhorn. Additionally, Lynne Collier was re-appointed as a director on April 1, 2023, and Mark Elenowitz was appointed as a director on April 1, 2023, while Edward Rensi was re-appointed but subsequently declined the offer. The new Board is comprised of Donald Berchtold, Tyler Child, Lynne Collier, Mark Elenowitz, Kenneth Kepp, Carmen Vidal, Andrew Wiederhorn (Chairman), Mason Wiederhorn, Taylor Wiederhorn, and Thayer Wiederhorn.

Key Takeaways:

  • The new Board of Directors is comprised of Donald Berchtold, Tyler Child, Lynne Collier, Mark Elenowitz, Kenneth Kepp, Carmen Vidal, Andrew Wiederhorn (Chairman), Mason Wiederhorn, Taylor Wiederhorn, and Thayer Wiederhorn.
  • The size of the Board was increased to ten persons after the removal of five directors and the appointment of seven new members.
  • Lynne Collier was re-appointed as a director, and Mark Elenowitz joined the Board on April 1, 2023.
  • Edward Rensi was re-appointed but subsequently declined the offer to re-join the Board.
  • The new Board has elected "controlled company" status for purposes of the corporate governance rules of The Nasdaq Stock Market, exempting the company from the requirement to maintain a Board comprised of majority independent directors.
  • The Compensation Committee and Nominating and Corporate Governance Committee of the Board were dissolved.
  • The newly constituted Board approved an amendment to the standard cash compensation for non-employee directors, changing such amount to $120,000 per year.
  • The non-employee directors will also continue to receive annual equity awards of stock options to acquire 30,636 shares of Class A common stock of the Company, with an exercise price set at fair market value at the time of grant and vesting over three years.

Statistics:

  • The total compensation for non-employee directors has been increased from $80,000 per year plus $40,000 per year for service on Board committees to $120,000 per year.
  • The annual equity awards of stock options to acquire 30,636 shares of Class A common stock of the Company will continue.
  • Donald Berchtold received aggregate cash compensation from the Company of approximately $349,067 in base and $125,000 in bonus compensation since the beginning of fiscal 2022.
  • Mason Wiederhorn received aggregate cash compensation from the Company of approximately $523,076 in base and $1,220,000 in bonus compensation since the beginning of fiscal 2022.
  • Taylor Wiederhorn and Thayer Wiederhorn's compensation during fiscal 2022 was reported in the Company's Annual Report on Form 10-K filed on February 24, 2023.

Sources:

  • FAT Brands, Inc.'s Form 8-K filed with the U.S. Securities and Exchange Commission on April 3, 2023.