The two shareholders who own 20% of the stock are giving up cheaply. Why? Because they are probably receiving extra perks, which we don't get. Those two will probably receive far more than $3.57 for their shares, while the rest get screwed. This whole thing stinks. I encourage all DRNK shareholders to raise a ruckus! Vote NO on this acquisition. Call management and complain loudly! Anything more we could do?
Oh, just in case you're wondering who's in charge over at Triarc, let me enlighten you, under the fair use doctrine:
************************************************************
> The Wall Street Journal -- June 12, 1997
> Intrinsic Value:
> Peltz's Pay and the Spirit of the Age
> By Roger Lowenstein
>
> Ordinarily, the news that Nelson Peltz, chairman of Triarc, had
> taken a $2 million bonus would hardly merit a footnote. By
> current fat-cat standards, $2 million doesn't rate. And compared
> with Mr. Peltz's net worth, which Forbes magazine put at $620
> million, it is chump change. Mr. Peltz, after all, is a titan of
> industry, a man who travels by private helicopter.
>
> But Mr. Peltz's bonus was not, as the recent proxy statement
> notes, an ordinary award, but a "special bonus," and in this, it
> was emblematic of the spirit of chief executive officers all
> over. Get what you can -- however you can get it.
>
> Mr. Peltz bought control of Triarc in 1993 from one Victor
> Posner, who, in a sort of lifetime-achievement award for various
> misdeeds, would be barred by a federal judge from running a
> public company.
>
> Triarc, a struggling conglomerate, owned Arby's restaurants, RC
> Cola, a propane business and other interests. The day after Mr.
> Peltz got control, he took 600,000 options for himself and
> 400,000 for his faithful Sancho Panza, Peter May. These options
> were, according to Triarc, then worth $10.2 million.
>
> The next year, in March, Messrs. Peltz and May took a total of
> 125,000 more options, worth $1.5 million. Then, a month later,
> in April 1994, they hauled in their big catch -- a mammoth grant
> of 3.5 million options (60% going to Mr. Peltz) worth $32
> million. These last were subject to shareholder approval. And
> there was a catch. According to the proxy statement, this huge
> grant was made "in lieu of base salary, annual performance bonus
> and long-term compensation" for the six years starting in April
> 1993. Shareholders voted in favor.
>
> Gordon Wolf, a principal at Towers Perrin, which recommended the
> plan, boasted that Messrs. Peltz and May, by taking salaries of
> $1 a year, were "extraordinary" examples of a bold new breed of
> executives. Mr. Wolf told this newspaper, "They really wanted to
> put their entire compensation at stake."
>
> Messrs. Peltz and May could afford this because, in the 1980s,
> with financing from Michael Milken, they had made a bundle with
> fortuitously timed investments in Triangle Industries. Though
> they delivered at Triangle, their unusually high pay attracted
> notice, prompting Mr. Peltz to observe that if Andrew Carnegie
> had endured such criticism, he could do no less.
>
> After they became dollar-a-year men at Triarc, one might have
> expected these Carnegies and Morgans to forgo taking more
> options. But no sooner did they haul in their big grant than the
> stock fell by half -- eroding the value of that grant. Later
> that year, the duo took 400,000 more options worth $2.5 million.
> And in 1995, 250,000 options worth $1.4 million. Of course, you
> can't spend an option if the stock doesn't rise. But you can
> spend money.
>
> And for 1996 -- kudos to consultant Graef Crystal for spotting
> it -- Mr. Peltz took a $2 million cash bonus and Mr. May a $1
> million cash bonus. What about working for $1 a year? Oh, these
> are "special bonuses," awarded for paying down debt, selling
> assets, restructuring and such. Mr. Peltz, in an interview, says
> the board always intended to leave the door ajar "if we did
> something special." Indeed, he said, that intention is clear
> from the minutes. It just isn't clear from the proxies that went
> to investors.
>
> Mr. Peltz says the proxies didn't rule out "all compensation."
> It merely said his big award was in lieu of "base salary, annual
> bonus and long-term" compensation. But in a section entitled
> "Overview of Executive Compensation," Triarc said its program
> comprises "three principal elements": base salary and annual and
> long-term incentives.
>
> When I asked whether the proxy should have mentioned something
> about a "special bonus," Mr. Peltz said, "You're probably right,
> as hindsight is 20-20. The intent was not to mislead. I will
> attempt to get my attorneys to rewrite that section." Sorry,
> fellas, the election's over.
>
> And what about his continued taking of options -- aren't they a
> form of "long-term" compensation? Mr. Peltz, on advice from his
> lawyer, says, "That was meant to be `long-term cash
> compensation.'" Funny how these guys have trouble saying what
> they mean.
>
> It doesn't stop there. This March, Messrs. Peltz and May took
> 300,000 more options. In an unusual step, the options were
> priced at only 85% of the market price -- because, Triarc said,
> the stock was lower in December, when it usually grants options.
> Should they exercise, this discount will put an extra $663,000
> in their pockets.
>
> Wall Street expected a quick turnaround when Messrs. Peltz and
> May took over but was disappointed. Despite a rebound, the stock
> has trailed the market during their reign. But Triarc is a
> changed company. It has acquired Mistic beverages and, most
> recently, Snapple, and the Street is high on it again. Maybe
> this time, it will work out. If so, Mr. Peltz, who controls 28%
> of the stock, will get plenty richer on his one huge grant. What
> business -- what possible earthly incentive -- did he have
> taking more?
>
> By the way, the head of the compensation committee is Gerald
> Tsai Jr., no naif on CEO pay. As head of Primerica, he grabbed a
> $28 million parachute for selling his company. He didn't return
> my calls. |
