Outgoing Panera Bread CEO: We went private because the market can't think long-term


As he rounds out his last few months as CEO of the now-private Panera Bread, Ron Shaich told CNBC that one of his biggest worries is the “pervasive short-term-ism” of the public market.

“The greatest competitive advantage Panera had, the reason we produced these results we did, is because we could think long term,” Shaich told “Mad Money” host Jim Cramer on Wednesday. “And the reason I took our company private is I’m increasingly worried about our ability to do that in a public market.”

Shaich, who co-founded Panera and remained at its helm for two decades, highlighted a sea change he’s noticed in his 26 years as CEO of a public company.

After issuing and watching the results of more than 100 quarterly earnings reports, the restaurant industry veteran said that traders, not institutional investors, increasingly run the show in the stock market.

“What’s driving today’s shareholdings are traders on the market,” Shaich said. “We had large shareholders like Capri, Goldman Sachs, Baron Funds, but the reality is, they don’t drive the price. What drives the price are the traders who are betting on next week’s comp. And that affects the entire organization.”

“Do you think this is good for economic growth?” the CEO added.

Shaich called attention to the recent upheaval in Buffalo Wild Wings to cement his point. Over the summer, activist firm Marcato incited a proxy fight that ended with the resignation of the chain’s CEO, Sally Smith.

Shaich said that Smith called him when the proxy fight started, and they talked about “drawing a line in the sand” to push back against the activists.

“Her management supported her. Her franchisees supported her. She lost the proxy fight, the stock popped 10 percent for a couple of weeks and then it fell 40 percent. And they were forced to sell the company for no more than it was trading at at the beginning,” Shaich said.

Shaich expressed his frustration with activists who take minority stakes in companies only in order to boost the stock price in the near term.

As Shaich sees it, the long-term view often serves companies much better than the day-by-day, quarter-by-quarter sentiment that today’s market has adopted.

“The greatest competitive advantage of the FANG stocks – Facebook, Amazon, Netflix and Google – is they have the ability to be long term. They have a capital structure that’s long term,’ Shaich said. “I think that increasingly, if we’re going to have change, we need to really express this. We need to recognize how these markets have changed.”



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