California's UNfriendly Fast Food Bill
The Fast Food Accountability and Standards Recovery Act would create a council of workers, union advocates, employers, and government regulators to review and update workplace standards every six months.
A first-of-its-kind bill that would give fast-food workers in California a big say in setting wages, hours, and workplace conditions is heading to a vote by the entire state Senate after clearing a third legislative committee. The mandates would apply only to quick-service restaurant employees and are aimed mainly at chain operations. The act also establishes that fast-food franchisors are, by definition, the joint employers of their franchisees' staff, a move that chain headquarters fear would expose them to a torrent of lawsuits arising from licensees' employment policies and practices. Under the measure, any California jurisdiction with a population of at least 200,000 could create its own committee to set standards for the local fast-food labor force. The Senate has until August 31 to consider the Fast Act, or AB 257. The state Assembly has already approved it. California fast-food operators have voiced concerns that the labor-heavy composition of the council would put them at a disadvantage in managing labor expenses and operations. Under the proposed set-up, a pro-employee contingent could easily outvote the employers on such matters as the minimum permissible wage, the minimum or maximum number of hours a staff member can work, and what workplace conditions are mandated. The state legislature and relevant regulatory agencies could alter or overturn what the council sets, but the council has wide latitude in what it can propose. Proponents say the act is necessary to curb the rampant mistreatment of fast-food workers within the state, the nation's largest quick-service market. California is home to 34,700 restaurant franchises, 69.4% of them single-unit operations, according to the International Franchise Association (IFA).
YUM CHINA
YUMC applied for voluntary conversion of its secondary listing status to Hong Kong.
The proposed move will lead to a dual listing on the NYSE and HKEX. A special shareholder meeting has been scheduled for October 11 to vote on the proposed dual listing. If approved, the conversion is expected to become effective on October 24. YUMC had previously warned that it may need to delist from the NYSE by 2024, according to the 10Q. To comply with the Hong Kong listing rules applicable to a dual primary listed issuer, the company will call a Special Meeting of Stockholders to be held on 11-Oct-22 Beijing/Hong Kong time to seek stockholder approval on certain proposed items. Conditional upon and subject to receiving stockholder approval on all proposed items at the Special Meeting and obtaining the necessary approvals from the HKEX, the company will become dual primary listed on the NYSE and the HKEX. The effective date of the Proposed Primary Conversion is expected to be 24-Oct-22. The company's common stock on the two exchanges will continue to be fully fungible, and investors can continue to choose to trade their shares on either stock exchange.
There are three items to be approved at the Special Meeting:
- The first two items will relate to the proposed share issuance and repurchase mandates, granting authority to the company's board to issue up to 20% and repurchase up to 10% of its total outstanding shares, respectively. Under Delaware law and the NYSE rules, the company's board has the authority to issue and repurchase its shares. However, under the Hong Kong listing rules, the company must obtain stockholder approval concerning these two items. The company is seeking approval solely to comply with the Hong Kong listing rules. Both are everyday items in Hong Kong.
- The third item is the proposed adoption of a new equity incentive plan. The new plan's features are primarily based on the existing equity incentive plan, with specific provisions changed to comply with the Hong Kong listing rules and specific other administrative changes.
Management Comments:
"Since our secondary listing in Hong Kong in 2020, we have enhanced access to our shareholders in Asia. We have diversified our investor base and tapped into additional capital pools," said Joey Wat, CEO of Yum China. "Dual primary listing would bring us even closer to our employees, customers, and other stakeholders. This strategic move would further broaden our shareholder universe, increase liquidity and mitigate the risk of delisting from the NYSE. Looking ahead, we are excited about our long-term prospects in China and remain deeply committed to building a stronger, more resilient, and innovative company."
