BJ’s Restaurants announced in an SEC filing Wednesday that it ended pay reductions for executives and certain employees and replaced the lost compensation with special stock grants.
In order to save money at the beginning of the COVID pandemic, BJ’s reduced salaries of executives, retainer fees for non-employee board members, and salaries for Restaurant Support Center employees whose pay was above $100,000. The removal of the pay cut was effective September 2 for executives and September 9 for Restaurant Support Center workers. Non-employee board members will have their retainer fees restored at the end of Q4.
To make up for the loss in pay, BJ’s approved special fully-vested restricted stock grants for executives and affected Restaurant Support Center employees. The stock grants won’t exceed an aggregate of 25,000 shares.
The pay reductions were removed because of the brand’s improved financial situation. During an earnings call in July, BJ’s forecasted that if it maintained current sales levels, it should end Q3 at $62,000 in average weekly sales, which would be around 60 percent of historical sales levels. Average weekly sales peaked at roughly $75,000 in late June and margins were in the mid-teens, but that was prior to California shuttering dining rooms in July, which is about 30 percent of BJ’s footprint.
In addition, Keith Pascal, an independent director, was voted off the board at BJ’s Annual Meeting of Shareholders. Pascal was appointed to the board pursuant to the $70 million investment from Act III Holdings in May. However, the restaurant explained in its filing that certain institutional shareholders withheld votes for Pascal because they didn’t consider him independent. BJ’s noted in the filing that Pascal met the definition of an independent director under SEC and NASDAQ rules.
Pascal tendered his resignation, but BJ’s didn’t accept it. To address concerns, Pascal and the board agreed that he won’t serve on any committees, but that he will have the right to attend the Governance and Nominating Committee as a non-voting observer.