As you’re no doubt aware, restaurants and the people who work(ed) for them are hurting right now. There are a variety of relief efforts worth supporting, and restaurateurs have made some valiant sacrifices to try and keep their staff paid and their businesses afloat.
While a lot of those sacrifices should be celebrated, a recent decision made by the head of Texas Roadhouse has drawn special consideration. Last week, its founder, CEO, and president Kent Taylor announced that he would completely forego his base salary and incentive bonus, effective March 18, 2020 through January 7, 2021, according to a recent Securities and Exchange Commission filing. Instead, that money “will be made available to assist front-line hourly restaurant employees,” the filing says. A separate SEC filing indicates Taylor took home $1.36 million for the 2018 fiscal year.
To Taylor, doing right by his people is a necessary gesture during such a time of hardship. “I have always said we are a people-first company that just happens to serve steaks,” Taylor said. “Giving up my salary is the least I could do to show my commitment to that belief.”
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There’s been much discussion about what restaurants, grocers, and other companies who continue to operate owe their employees at a time like this. While some have raised wages by a few dollars an hour here or there, others have lagged behind in doing right by their workers, as evidenced by this week’s strikes among Instacart, Amazon, and Whole Foods employees and independent contractors.
It’s important to place Taylor’s salary giveaway in context, however. Texas Roadhouse employed more than 64,000 hourly restaurant employees according to the company’s most recent annual report. That would amount to only about $21.25 per employee based on the CEO’s salary from the 2018 SEC filing. A proxy statement from 2019 also suggests that the value of stock that Taylor acquired in 2018 (not to mention what he already holds) is worth multiple times what he received in direct compensation that year. In short, Taylor is still retaining a significant amount of money as long as Texas Roadhouse’s stock doesn’t crash.
By that metric, could Texas Roadhouse be doing more? Certainly. An extra $1.36 million is a drop in the bucket to a company that brought in $2.8 billion in 2019 revenue. It’s probably too harsh to describe this solely as a cynical PR move, however, given that Taylor is giving up guaranteed income at a time of market uncertainty. Ultimately, whatever Texas Roadhouse decides to do for its workers (if anything) next will tell the real story.
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