Buffalo Wild Wings Project

Topics: Standard deviation, Board of directors, Capital asset pricing model Pages: 11 (1922 words) Published: November 23, 2014


Group Project #1: Buffalo Wild Wings
Researched & Compiled by:
Cali Lavey
Michael Counihan
Kilandra Bass
Corey Devine
Part 1:
The first Buffalo Wild Wings began operation in Columbus, OH in 1982. With wings, beer and sports showcased as the main attractions, BWW markets itself as a gathering place for friends, family and sports fans alike. With the exception of Rhode Island, Buffalo Wild Wings continues to expand both throughout the United States and internationally. The company is currently led by Chief Executive Officer Sally Smith, who has been acting CEO and President since July 1996, and acted as CFO two years prior. Additionally, BWW is led by Executive VP, CFO and Treasurer Mary Twinem, COO James Schmidt, Executive VP of Global Brand and Business Development Kathleen Benning, Executive VP of North American Operations Judith Shoulak, and directors Dale Applequist, Robert MacDonald, Warren Mack, J. Oliver Maggard, Michael Johnson, James Damian and Jerry Rose. Number Outstanding Shares

Number Owned by CEO/President
Number Owned by Officers/Directors
% Owned by CEO/President
% Owned by Officers/Directors
18,757,239
89,842
354,392
.48%
1.9%
The following table depicts what percentage of the company is owned by the aforementioned officers and directors:

The means of producing these percentages can be further explained on page 25 of the company’s 2013 proxy report. It states Buffalo Wild Wings instituted a stock ownership guideline program where the stock ownership guidelines were as follows:

CEOs, COOs, VPs and directors all must own a percentage of stocks with respect to their title, based off of their salary. In addition to considering the officers and directors are a group of twelve individuals who own almost 2% of the company, and about ¼ of this percentage is owned by the CEO, the requirements and policies instilled by the stock ownership guidelines above definitely incentive the company leaders to align their interests with those of their stockholders. With equity in the company making up such a significant proportion of the leaders’ compensation, it would benefit the leader to work towards maximizing the long-term value of the company and constantly improving stock value. With the exception of CEO Sally Smith, an inside director, all other company directors are classified as independent, making up 92% of the company’s directors. Although these directors do not have any immediate ties to or interests in Buffalo Wild Wings prior to being appointed, I believe that the previously described stock ownership guidelines forces the directors to be active participants in overseeing and evaluating the company’s business affairs. For example, although Director and Chairman James Damian formerly served as Senior VP of BestBuy’s Enterprise Design Group prior to employment at BWW, double of whatever the salary he receives at BWW will be provided to him in stockholdings. For this purpose alone, he is encouraged to actively voice opinions and suggestions as to what he thinks will improve company worth. To aid in the process of overseeing and evaluating company business affairs, the officers and directors are appointed to a series of committees designed to focus and improve specific sectors of the Buffalo Wild Wings enterprise. The Audit Committee, composed of four independent directors; J. Oliver Maggard – Chair, Robert W. MacDonald, James M. Damian, and Jerry R. Rose, held ten meetings during fiscal 2012. While maintaining correspondence with their independently registered public accounting firm, the audit committee reviews Buffalo Wild Wings financial statements, accounting practices and systems, internal audit reports, and the adequacy of internal controls for compliance with corporate policies and directives. It is also responsible for engaging and managing Buffalo Wild Wings’ relationship with their independent registered public accounting firm. The...
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