Cracker Barrel’s leadership received a failing grade in a proxy advisory firm’s pay for performance metric last year before the company decided to move forward on an ill-fated rebranding effort.
A report by proxy advisory firm Glass Lewis in Nov. 2024 ahead of a shareholder vote gave Cracker Barrel an “F” grade in the firm’s proprietary metric for the company’s 2024 fiscal year. The struggling restaurant chain also received “D” grades on Glass Lewis’ pay for performance metric in both fiscal years 2022 and 2023.
The report noted a “potentially severe disconnect between pay and performance” due to Cracker Barrel’s performance relative to its executive pay levels among peer firms.
Glass Lewis noted that Cracker Barrel’s CEO transition “heavily impacted pay practices for the year in review,” as Julie Felss Masino was named the company’s new CEO in August 2023, just after the beginning of Cracker Barrel’s fiscal year 2024.
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The proxy firm explained that while Cracker Barrel shareholders should be “wary of the worsening level of disconnect between pay and performance” in the preceding year, it recognized that the weighted average of three years of average compensation was “significantly impacted” by the CEO transition as well as one-off awards in the prior year.
When considered on its own, Masino’s total target compensation was “reasonably positioned below the median” of Cracker Barrel peers in Glass Lewis’ analysis.
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Cracker Barrel Old Country Store Inc
The proxy firm also said Cracker Barrel announced in May 2024 that it would spend between $600 to $700 million on capital expenditures through fiscal year 2027, when it had initiated pilot testing for its remodel at two restaurant locations.
That move, along with an 80% dividend cut and slower traffic than expected in FY2024 “introduced significant uncertainty” and contributed to a 14.5% single-day decline in Cracker Barrel’s stock price following the announcement.
FOX Business reached out to Cracker Barrel for comment on the report.
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Last month, Cracker Barrel’s transformation project turned to a revamp of its classic logo, removing the “old timer” sitting next to a barrel and revising the Cracker Barrel script, a move which prompted fierce backlash from fans and spooked investors, resulting in a stock slide.
The rebrand, which was announced on August 19, was reversed before the end of the month, with Cracker Barrel announcing on August 27 that it would restore the original logo.
Cracker Barrel’s stock rallied back to near its August high of $62.55 a share following the reversal, though it has since declined this week back to near its mid-controversy lows of about $54.
Despite the recent volatility, Cracker Barrel’s stock is down about 1.7% year to date – though it’s up 35% in the last six months and 39% over the past year amid its transformation push.
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