The number one topic shareholders want to talk about when it comes to CKE Restaurants is the company's cost structure, especially G&A. Since we are awaiting CKR FY08 proxy, we thought it would be a good time to focus on compensation trends for CKR's senior management.
- We believe that investors have a reason to be concerned about the level of G&A spending at the company. As seen in Chart 1, since 2002 CKE restaurants system-wide store count has declined by 8.2%.
- The company has stated publically that its incremental spending in G&A per store is around $20,000 to $24,000 per year. Therefore, given the decline in the system-wide store base, G&A should be $5-7 million lower form the levels seen in 2003.
- Despite the system-wide store count declining by 8%, G&A per store has increased 39.8%