In a surprise move that followed years of racial controversy and a losing quarter, Flagstar Chairman Jerry Richardson, co-founder of the Denny’s and Hardee’s restaurant chains, announced his resignation Tuesday, effective immediately.
Richardson, 58, stunned more than 200 shareholders by delivering the news at the end of Flagstar Cos.’ annual meeting.
He said the time demands of his new National Football League franchise, the Carolina Panthers, and his involvement in NFL activities made it a logical moment for him to depart.
“The time has come for me to once again shift the emphasis in my life to another goal of mine--bringing the Carolinas a Super Bowl championship team within the next 10 years,” Richardson said.
Flagstar’s board named President and Chief Executive James Adamson to the additional post of chairman.
Early this year, Richardson left those posts and was replaced by Adamson, former chief executive of Burger King.
Richardson co-founded Flagstar 34 years ago. The company owns Denny’s, El Pollo Loco and Quincy’s Family Steakhouse and is the biggest franchisee of Hardee’s fast-food restaurants.
On Monday, Flagstar said its operating loss widened to $22.4 million, or 61 cents a share, in the first quarter, compared to a loss of $12.7 million, or 38 cents a share, a year earlier. Revenue rose to $636.5 million from $626.3 million.
Flagstar was sued in two class-action suits alleging racial discrimination at Denny’s restaurants. The company settled the accusations a year ago for $46 million.
Richardson said then that the settlement was not made out of guilt but because the costs of litigation were “unacceptably high” in attorneys fees and public perception.
Shareholders at Tuesday’s meeting asked what measures were being taken to enable the company to polish its image.
“We’re going to draw a line in the sand,” Adamson responded. He said the company will become more defensive and work harder at gaining favorable media coverage.
Flagstar’s stock was unchanged at $5.125 Tuesday on the Nasdaq market.