GREENWOOD VILLAGE Colo. Red Robin Gourmet Burgers Inc. is asking its shareholders to ignore a recommendation by ISS, a New York proxy advisory firm, to vote against an equity incentive plan and deny former Sonic Inc. president Pattye Moore a seat on Red Robin’s board of directors.
In a letter sent Thursday to shareholders, Red Robin chairman and chief executive Dennis Mullen defended the equity plan and Moore’s nomination to the board and asked shareholder to vote in favor of both at the annual stockholders meeting on May 29.
ISS’s evaluation of Mullen’s compensation was based on a “flawed peer group that bears little resemblance” to the casual-dining segment in which Red Robin operates, Mullen said.
ISS included data on fitness clubs, casinos, hotels and quick-service restaurants, and only three casual-dining restaurants. That group had fewer equity grants, given the variety of companies and their difference in compensation practices, Mullen argued.
Red Robin said it issued Mullen an equity grant of 22,000 restricted shares that was based on an independent review of equity ownership of other casual-dining chief executives. In addition, he holds 75,000 shares of restricted stock that vest in 25,000 increments over the next three years.
ISS also objected to Moore’s placement on the board because she had served as a paid marketing consultant to Red Robin before her appointment last fall. As a board member, Moore no longer serves as a paid consultant and receives no additional compensation, Mullen said.
Red Robin also pointed out in its letter that another proxy firm, Glass, Lewis & Co. LLC, has recommended that shareholders approve the restaurant company's proposals.
Red Robin, based here, operates or franchises more than 390 restaurants.