Potbelly Corp. (PBPB) on Monday, July 20, installed a new chief executive just two months after the restaurant chain reached a settlement with shareholder group including its ex-CEO that added two dissident directors to its board.
The fast food chain announced that Robert Wright, a former executive vice president and chief operating officer at Wendy’s Co. (WEN) would take the role of CEO starting Monday.
Potbelly’s lead independent director, Joe Boehm, a portfolio manager at activist Ancora Advisors LLC, said in a statement he and the board were “thrilled” to welcome a new leader “with extensive restaurant operating experience.”
Potbelly CEO Alan Johnson, who was installed in the CEO position in November 2017, stepped down, the statement said.
The new CEO emerged after Potbelly reached an agreement in May with its former CEO Bryan Keil and a dissident group, who had targeted the company with a proxy fight. As part of that agreement, Potbelly installed Todd Smith, a restaurant industry official, and David Near, founding partner of Pisces Foods LP to its board. Near had previously served as COO of Wendys, while Smith previously worked as chief marketing officer of Sonic Drive-In.
According to relationship mapping service BoardEx, a sister company to The Deal, Wright had been Wendy’s COO between 2014 and 2019. Near had been Wendy’s COO between 2006 and 2008, according to BoardEx. He also served as president of Wendy’s Franchise Advisory council.
The CEO shake up emerged after The Deal in February suggested that Kiel likely was seeking to oust Johnson from the CEO role.
Potbelly shares traded up 12% to about $2.44 a share, after the market closed, on the news. Shares had dropped 48% year-to-date and 51% over the past 12 months as the chain grapples with dramatic sales losses, location closures and furloughed employees because of the coronavirus pandemic.
A July 16 S&P Global Market Intelligence report ranked Potbelly as the fifth “most vulnerable public U.S. restaurant chains” to default. The report said that Potbelly had a 16.3% chance it could default in the next year.
Of the company’s 10 directors, four will either be activists or board members with activist backing. In addition to Smith and Near, Ancora Advisors, a 5.33% shareholder, has a seat on the board in portfolio manager Boehm, while Privet Fund Management LLC, which owns 4.73% of shares, has a seat held by the fund’s partner Benjamin Rosenzweig.
—Dave Elman contributed to this report