(Reuters) - Papa John’s International Inc on Tuesday named Arby’s Restaurant Group Inc President Rob Lynch as its chief executive officer, replacing Steve Ritchie barely 19 months after he took the role, sending shares of the world’s third-largest pizza chain up nearly 10%.
A former marketing executive at Yum Brands’ Taco Bell and Procter & Gamble Co, Lynch will be tasked with turning around the company’s struggling sales as it fights to get past the negative publicity surrounding its founder John Schnatter.
“(Lynch’s) proven record transforming organizations and realizing the growth potential of differentiated brands is ideally suited for Papa John’s as the company sets forth on its next chapter,” said the company’s chairman and hedge fund Starboard Value LP CEO, Jeff Smith.
Schnatter resigned as CEO in 2017 after he came under fire for criticizing the National Football League’s leadership over national anthem protests by players, giving the role to Ritchie.
Starboard too has been pushing for a turnaround in sales after taking a stake in the company, which was worth $200 million in February. Papa John’s chose Starboard over a rival offer from Schnatter.
“We believe new leadership will foster menu innovation and ignite faster pace of change at the company,” BTIG analyst Peter Saleh said in a note.
Schnatter, who is the largest shareholder in the company, according to Refinitiv data, said he was pleased that the company made a change in leadership, adding that Lynch has proven to be an effective marketing leader in previous roles.
Shares of Papa John’s rose 9.7% to $48.06, adding to its 10% gain this year.
In a statement, Inspire Brands, the company that owns Arby’s, said the sandwich chain’s marketing head Jim Taylor would take over as president.
Lynch's appointment was reported by Bloomberg late on Monday. (bloom.bg/2ZoeiSL)
Reporting by Uday Sampath and Aishwarya Nair in Bengaluru; editing by Arun Koyyur and Maju Samuel
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