Chains offer few options at units: study

Many restaurant chains now invite store-level managers to buy a stake in their units, but how about equity in the parent concern? A new study suggests stock options have barely trickled down to the restaurant level in most public foodservice companies, and almost never below the rank of general manager.

In a survey of 81 public restaurant concerns, HVS Executive Search found that few options were awarded to managers with less than area-wide responsibilities. The most generous allotment found by the research and consulting company's canvassers at the area-manager level consisted of options for 5,000 shares. The biggest package extended to a regional director of operations was 6,845 options. In both instances, the recipients worked for the largest of the surveyed concerns.

The largest award extended to a unit general manager last year was 4,000 options, according to HVS. The use of options as a long-term incentive fell off precipitously below that level, with no more than 200 options presented to any of the assistant GMs working at the contacted companies. Not a single firm, for instance, said it had extended options to the kitchen manager or executive chef. Yet a number of casual-dining chains are now inviting individuals holding those titles to buy a stake in the unit where they work.

The findings were part of an extensive review of stock-option awards by restaurant-company positions. The data is contained in a larger report on compensation trends within the restaurant industry, from chairman to unit-level posts.


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