GREENWICH Conn. Breeden Partners LP, a hedge fund that holds a 5-percent stake in Applebee’s International Inc., criticized the restaurant company’s compensation practices, alleging that such practices as executives’ liberal use of the corporate jet was part of a “broader set of problems at the top of the company,” according to a letter from Breeden to Applebee’s filed with regulators late Friday.
Breeden, based here, said Applebee’s compensation structure is not truly linked to performance and is set up to allow personal use of the company plane, as exemplified by trips on the craft by former chief executive Lloyd Hill to and from a beach house in Galveston, Texas, according to the filing. Breeden said the jet had flown into Galveston 29 times between April 2006 and January 2007, yet the Applebee’s nearest to the city is 40 miles away.
Applebee’s could not be reached for comment by press time.
On Jan. 25, Breeden’s founder, Richard Breeden, a former U.S. Securities and Exchange Commission chair, sent a letter to Applebee’s compensation committee chair, Douglas R. Conant, the chief executive of Campbell Soup Co. The letter said Applebee’s compensation structure should be changed to “eliminate unnecessary expense and unhealthy practices,” especially during a time of “abysmal” financial performance.
The hedge fund suggested an immediate ban to personal use of corporate aircraft and a moratorium on any incentive compensation for senior executives.
Breeden said in December it would nominate four members to Applebee’s board of directors in an effort to turnaround the casual-dining giant that has posted slowed sales and below-par shareholder returns for the past three years.
Applebee’s operates or franchises more than 1,900 namesake restaurants.