Amid New Leadership Structure, Jack in the Box Chief Legal Officer to Depart
Executive vice president, chief legal and risk officer and corporate secretary Phillip Rudolph will be leaving his role at the company Feb. 28.
October 03, 2019 at 05:30 PM
4 minute read
The original version of this story was published on Corporate Counsel
The top lawyer and two other executives at the San Diego-based restaurant chain Jack in the Box Inc. will be leaving the company in 2020, as the company is in the middle of a lawsuit over its marketing efforts and after franchisees expressed a vote of no confidence in the CEO.
Executive vice president, chief legal and risk officer and corporate secretary Phillip Rudolph will be leaving his role at the company Feb. 28. Leonard Comma, CEO of Jack in the Box, said in the press release that the organization's leadership structure is evolving to support a single restaurant brand.
The press release announcing Rudolph's departure says that Rudolph's responsibilities, along with the other executives leaving the company in 2020, will be assumed by others in the organization. It is not clear if the company plans on hiring a full-time replacement for Rudolph. The company did not mention who will be assuming Rudolph's responsibilities when he leaves.
According to a filing with the Securities and Exchange Commission, Rudolph will be eligible for a lump-sum cash payment of $686,538. That figure represents 12 months base pay plus additional compensation based on years of service. In addition, the compensation committee approved a one-time cash payment of $50,000 to Rudolph and the other departing executives for their "significant contributions related to the strategic and financing alternatives process, specifically the completion of the privately placed business securitization transaction."
A spokesperson for the company did not respond to requests for additional comment Thursday. Rudolph could not be reached for comment Thursday.
According to his biography on the company website, Rudolph joined Jack in the Box in 2007 as general counsel and corporate secretary. In 2014, he was made chief legal and risk officer.
"Phil joined Jack in the Box Inc. 12 years ago with an impressive, well-rounded resume earned after years of experience in private practice and corporate law," Comma said in the press release. "In addition to his skilled stewardship of the company's legal and risk functions, Phil's commitment to ethics and corporate responsibility has strengthened the culture of integrity throughout the organization."
Executive vice president and chief of staff and strategy Mark Blankenship and senior vice president, controller and treasurer Paul Melancon are slated to leave the company Jan. 3.
Robert Zarco, of Zarco, Einhorn, Salkowski & Brito in Miami, who represents the National Jack in the Box Franchisee Association, said the brand was built because of the institutional knowledge of its executives. He said by having three executives resign, the company is losing out on approximately 44 years of institutional knowledge.
"This attempt to get rid of 44 years of institutional knowledge is going to in essence gut the infrastructure the company needs in order to be able to really operate the business the way it does," Zarco said. "They're looking to replace the chief legal officer, or some of the other individuals, with newer younger executives. These people are not going to have the same level of experience that the people who have been asked to leave have."
The announcement of Rudolph's departure comes while the company faces litigation from Jack in the Box franchisees who have wanted to oust Comma. In December 2018, the independent National Jack in the Box Franchisee Association filed suit against the company. The franchisees are seeking a court injunction, which would allow them to audit the company's marketing fund, according to a report in Restaurant Business. Zarco said the group is concerned that marketing fees are being used to offset operational costs. The case has been transferred from Los Angeles to San Diego and is in the briefing stage on a motion to dismiss filed by Jack in the Box.
In October 2018, the franchisee association called on the company to replace Comma following a July 2018 vote of no confidence in the company's management.
"They still want to make sure the company pursues the direction that it has utilized in building the brand over the years," Zarco said.
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