John H. Schnatter
November 22, 1961
|Residence||Anchorage, Kentucky, U.S.|
|Other names||Papa John|
|Alma mater||Ball State University|
|Occupation||Founder and former CEO and Chairman of Papa John's Pizza|
|Net worth||$801 million|
John H. Schnatter (born November 22, 1961), nicknamed commercially as Papa John, is an American entrepreneur who founded Papa John's Pizza in 1984. Schnatter stepped down as CEO on January 1, 2018, after comments he made in November 2017 criticizing National Football League commissioner Roger Goodell for allegedly not doing anything about national anthem protests by football players. He was succeeded as CEO by President and COO Steve Ritchie, but remained chairman of the board of directors until July 2018. He then resigned as chairman of the board on July 11, 2018, when a scandal broke out over his use of a racial slur when trying to minimize the controversy over his NFL national anthem comments by alleging that Colonel Harland Sanders had used the slur and it had not affected his popularity. As of March 2019, he remained the owner of 31 percent of the company's shares, but by May 23, he had sold 3.8 million shares and reduced his stake in the company to 19%. He remains the company's largest shareholder.
Early life and education
Schnatter was born in Jeffersonville, Indiana, on November 22, 1961, to Mary and Robert Schnatter. He has German ancestry. He graduated from Jeffersonville High School in 1979. then earned a business degree from Ball State University in 1983.
In the 1980s, John Schnatter's father co-owned Mick's Lounge, a tavern in Jeffersonville.
Schnatter founded Papa John's Pizza in 1984, when he converted a broom closet in the back of his father's tavern. Schnatter sold his 1971 Z28 Camaro to purchase $1,600 worth of used pizza equipment and began selling pizzas to the tavern's customers. The following year, his business had become successful enough that he was able to move into an adjoining space.
In October 2017, in a conference call with investors, Schnatter blamed the National Football League for poor financial performance, stating "The NFL has hurt us ... We are disappointed the NFL and its leadership did not resolve this", referring to the U.S. national anthem protests by football players. Papa John's Pizza had a marketing agreement to be the "official pizza company" of the NFL and also had marketing deals with 23 of its individual teams, and Schnatter said the protests were hurting the company's sales of pizzas. Later that day, Papa John's announced that the NFL shield or "official sponsor" designation on Papa John's commercials and advertising would be removed.
As of November 2017, the company is the third largest take-out and pizza delivery restaurant chain in the world, with headquarters in Jeffersontown, Kentucky, part of the Louisville metropolitan area.
On December 21, 2017, Schnatter announced he would step down as CEO of Papa John's amidst controversy over comments he made regarding the NFL, saying they were not doing anything about players kneeling or sitting during the National Anthem and should have taken action. Schnatter was replaced as Chief Executive Officer effective January 1, 2018, by Chief Operating Officer Steve Richie. The company said Schnatter would still appear in the chain's commercials and on its pizza boxes, and was the company's biggest shareholder with approximately 9.5 million shares. He remained chairman of the company's board of directors at the time.
On July 11, 2018, it was reported that Schnatter had used the word "nigger" during a conference call with marketing agency Laundry Service in May of that year, saying "Colonel Sanders called blacks niggers and Sanders never faced public outcry". In the call, he also said that people in Indiana where he was from used to drag African Americans from trucks until they died, which may have been intended as a way of expressing distaste for historical racism, but was considered offensive by some of the people on the call. The conference call had been a role-playing exercise to help train Schnatter to avoid making remarks that could cause public controversy and damage the company reputation. After the call, the owner of the marketing agency moved to end their contract with Papa John's. Schnatter resigned as chairman of the board the same day the incident was reported. Later that same day, Schnatter also stepped down from his position on the University of Louisville board of trustees.
On July 26, 2018, Schnatter filed a lawsuit in Delaware against Papa John's Pizza to give him access to the company's books and records after they did not allow him to access the company's business records following his resignation in the wake of the teleconference call scandal. He described the company's procedures as an "unexplained and heavy-handed way" to cut ties between him and the company that he founded. In addition to preventing him from accessing information, the corporation also implemented a "poison pill" strategy in order to limit Schnatter's chances of buying back a majority stake in the company. Schnatter also filed a lawsuit against the company in Kentucky in a dispute over property ownership. In January 2019, a judge ordered the company to give Schnatter access to its records relating to his ouster. A settlement of the lawsuits was announced on March 5, 2019. Under the agreement, the company agreed to share all of company's records with Schnatter and agreed to remove a part of its "poison pill" plan that restricted Schnatter's communication with other shareholders, and Schnatter agreed that he would not seek to stay on the company's board of directors after his current term expires on April 30, 2019, and that if a mutually agreeable independent director is chosen to replace him, he would step down before the end of his term. Schnatter retained the right to sue if the records show wrongdoing by the company. The company also agreed to remove a requirement that the activist hedge fund Starboard Value, which owns about 10% of the company, must vote in favor of the incumbent board. As of March 2019, Schnatter remained the owner of 31 percent of the company's shares, but by May 23, he had sold 3.8 million shares and reduced his stake in the company to 19%. He remains the company's largest shareholder, and has committed to not selling additional shares of stock until at least August 19, 2019.
Schnatter has been married to his wife, Annette, since 1987. The couple live in Anchorage, Kentucky and have three children. Schnatter is an Evangelical Christian and is a member of the Southeast Christian Church.
In 1999, Schnatter was accused of stalking and groping a woman. He claimed the woman was trying to extort him for $5 million. The situation ended with a confidential settlement.
In 1983, Schnatter sold his 1971 Chevrolet Camaro to help his father's struggling business. He used the leftover funds to start Papa John's. Decades later, he offered a reward of $250,000 for finding the car, and on August 26, 2009, Schnatter bought the Camaro back for $250,000. The family he sold it to had sold it, but he still paid them a $25,000 finders fee. In celebration, Papa John's offered a free pizza to anyone who owned a Camaro. Schnatter's original Camaro has been on display in the company's headquarters in Louisville, Kentucky. The company owns several replicas that are used on tours and for public and TV appearances.[unreliable source?] On August 15, 2015, Schnatter's original Camaro was stolen along with two other classic cars in Detroit, where they were slated to appear in the city's annual Woodward Dream Cruise. The Camaro was recovered two days later on the city's west side with minimal damage.
In 2012, Papa John's and Schnatter received media attention after he made critical comments about the Affordable Care Act to a class on entrepreneurship. In a shareholder conference call, Schnatter said that he opposed the ACA because "our best estimate is that the Obamacare will cost 11 to 14 cents per pizza".
Awards and honors
- Named 1998 National Ernst & Young Retail/Consumer Entrepreneur of The Year.
- Named one of the Ten Outstanding Young Americans in 2000 by the National Jaycees Organization.
- Inducted into the Junior Achievement U.S. Business Hall of Fame in 2007.
- In May 2009 Schnatter was named honorary chair of the Ride to Conquer Cancer benefiting Louisville's Norton Cancer Institute.
- Inducted into the Kentucky Entrepreneur Hall of Fame in 2010.
- In 2012, he became an honorary initiate of Alpha Tau Omega.
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- "Jeffersontown to dedicate new bike and walking path Saturday". The Courier-Journal. November 7, 2007. p. C7. Retrieved December 6, 2012.
Papa John's office is in Jeffersontown
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- "'Papa John' files lawsuit against Papa John's pizza chain".
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- "Back to dough after losing bread: Papa John Schnatter shutters Calistoga Artisan Sandwich project after three and a half years". Insider Louisville. Archived from the original on April 19, 2012. Retrieved December 5, 2012.
- "Calistoga cafe prepares for real-world test". Louisville Business First. 10 March 2008. Retrieved 16 July 2018.
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- Resnikoff, Ned (November 20, 2012). "Denny's, Papa John's walk back criticism of Obamacare". NBCNews.com. Retrieved February 4, 2014.
- Tau, Byron (August 7, 2012). "Papa John's: Obamacare will raise pizza prices". Politico.com. Retrieved July 11, 2018.
- Gerth, Joseph (April 17, 2012). "Presidential hopeful Mitt Romney to visit Louisville Thursday for fundraiser". The Courier-Journal. Retrieved February 4, 2014.
- ""OpenSecrets Donor Lookup: John Schnatter"".
- Chipman, Melissa (March 9, 2017). "Behind the Ernst & Young Entrepreneur of the Year awards with Phoebe Wood". Insider Louisville. Retrieved November 7, 2017.
- "TOYA Past Honorees". July 22, 2011.
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- "Conquer Cancer website". Conquercancer.ca. May 28, 2009. Retrieved July 30, 2010.
- Burke, Pamela; Lytle, Alan. "Nine Entrepreneurs Going Into New Hall of Fame". WUKY. Retrieved November 7, 2017.
- "'Papa John' Schnatter Talks About ATO". Alpha Tau Omega at Ball State. August 5, 2012. Retrieved September 27, 2018.
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