The resignation of CFO Chuck Sonsteby was surprising to me but it does not spell disaster for Brinker.
Last night, news of Sonsteby’s departure hit the tape. While I expected him to stay at the company for a few more years, his leaving for Michaels Stores probably offers him some significant monetary upside – particularly if he gets cheap equity and leads the charge on an initial public offering of the private company. Furthermore, the Bar & Grill industry is a difficult area in this current environment, and while the operational initiatives at Chili’s will generate rewards for the company, Michaels Stores may have provided a more appealing experience (with a possible big IPO payday).
While I am yet to speak with anyone at the company, I do not think this implies any major issues within Brinker. If anything, it may shorten the odds of a take-out – something I did not think was likely prior to Sonsteby’s resignation. I will follow up with further details shortly.
Howard Penney
Managing Director
