Biglari Holdings has raised various complaints about Cracker Barrel Company concerning the latter’s financial performance. According to the critique documented by the Biglari Holdings, they are concerned that Cracker Barrel is not making enough sales and that it is being poorly run. Some of the complains from Biglari include, a lack of detailed financial data about the operations of the company, that the executives of the company are collecting bonuses at the expense of the shareholders, and that there is poor governance in the company. In my opinion, Biglari is justified to raise his claims about Cracker Barrel Company because he is one of the shareholders holding stock in the Company.
The fact that Cracker Barrel blocked Biglari from purchasing more stock is an unfair move on the former’s side. Just like other shareholders, Biglari should be allowed to purchase stock up to the agreed limit. It was wrong for Cracker Barrel to deny Biglari the permission to attend the board meeting on grounds of conflict of interest. Biglari, being a shareholder, should be allowed attendance of the board meetings so that he can make his remarks about the financial performance of the company. Biglari made claims that the management of Biglari pays the executives bonuses at the expense of the shareholders. Despite Cracker Barrel responding to this claim, it would be fair if the shareholders benefited more from the bonuses because they contribute more in the running of the company.
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The part that resonates the most with me is where Biglari claims that the executives receive bonuses at the expense of the shareholders, and that this is wrong. In my opinion also, the shareholders deserve to benefit from the bonuses more because Cracker Barrel Company is in operation because of the capital that they have invested in it. The management and the executives are just but employees of the shareholders. The shareholders need to benefit from the bonuses more than the executives. Biglari is justified in his critique because he has invested a lot of capital and he needs to see his investment performing well.
