Steak n Shake pays former exec year's severance

July 15, 2008
The Steak n Shake Co. disclosed in a regulatory filing today that it paid interim president Jeffrey A. Blade the equivalent of his $305,000 annual salary in severance in connection with his departure announced July 11. Blade also will receive $12,000 to spend on outplacement services.

The resignation, which was effective immediately, came after director Sardar Biglari was named chairman in June. Biglari, an investor who has been agitating to boost Steak n Shake's sagging sales and stock price, replaced interim Chairman Wayne L. Kelley.

Shares of Steak n Shake hit a new 52-week low today, dropping to $5.45.

Separately, the Metropolitan Development Commission is scheduled tomorrow to consider a tax abatement worth more than $100,000 for the Indianapolis company. The incentives would be doled out in exchange for the company's retaining 160 jobs and a $2.5-million investment in new equipment.

IBJ first reported in April on local government plans to throw Steak n Shake a life raft of incentives that also include a $200,000 state training grant to help the struggling chain keep its headquarters in Indianapolis.

The incentives, though modest, are unusual given that the company does not plan to expand or add employees. Its new equipment involves financial systems and store point-of-sale technology.

Steak n Shake agreed to the deal earlier this year after months of negotiation, but the incentive offerings still must win final government approval.

"This is an opportunity to help them succeed," Nick Weber, the city's economic development director and a deputy mayor, told IBJ in April. "They're an Indiana-headquartered company with superior wages."

Weber would not say whether Steak n Shake threatened to move elsewhere, but he said headquarters deals often pit local officials against counterparts in other cities who are intent on stealing good companies and good jobs.

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