Papa John’s (NASDAQ:PZZA) has taken a big step forward to help it turn around its fortunes, following a turbulent year and several months that saw founder and former CEO John Schnatter use a racial slur, leading to his departure from the brand.
Now, the pizza chain has inked a deal with the controversial founder in a settlement it filed with the SEC this week, which will require Schnatter stepping down from his role as a member of the company’s board by the chain’s annual meeting, which is slated for April 30.
The flip side of the deal is that Schnatter will have a voice in picking a new Papa John’s director, which also means that the founder will have to withdraw some of the lawsuits he filed against the business. Plus, the company has to turn over several documents that Schnatter in accordance to the deal.
The Papa John’s founder holds roughly 30% of the company’s stock, making him the largest shareholder. Schnatter said in a statement that he is thankful “that we can all focus on the company’s business without the need for additional litigation.” He can still raise new legal claims against the business if he discovers evidence of any wrongdoing within the company’s documentation.
Schnatter stepped down back in December 2017 and resigned as chairman of the company’s board the following July.
PZZA stock is up 5% on Tuesday following the news.