Don’t cry for John Schnatter.
Though the Papa John’s pizza founder resigned in disgrace from his company’s chairmanship last week, he’s still a very rich man. How rich?:
•He still owns about 30 percent of Papa John’s, which was worth about $531 million at the close of business Friday.
•He lives with his wife, Annette, in Louisville’s most expensive home, an 18,000-square-foot limestone mansion modeled after an Italian villa on 15 acres outside Louisville in the suburb of Anchorage, Kentucky, that is assessed at $11.2 million.
•Through a business, Hampton Airways, Schnatter also owns the fastest civilian business jet in the world, a Citation 750, on which his family can fly to their other residences, a $6 million condo in Naples, Florida, and condos at Deer Valley, Utah, they bought for $23 million.
•To the chagrin of some neighbors, he often travels the 5 miles between his mansion on Stone Gate Road and Papa John’s corporate office by helicopter. (Thirty-nine takeoffs and landings from Sept. 1 through June 30, according to the city of Anchorage.)
•His real estate company owns an additional 57 acres in Anchorage.
In an interview for a 2013 Louisville Courier Journal profile, from which portions of this story are drawn, Schnatter said the size of his Anchorage home has been greatly exaggerated. The Wall Street Journal once reported it had a 22-car garage. It only holds four cars, Schnatter said, though he added that he owned 16 bicycles.
“We have no chef, no butlers, no nannies,” he said.
At that time, he said he and his company had given more than $30 million in charitable contributions to the community – “more than my house costs.”
The company did not immediately respond to a request last week for an updated figure, although news accounts show that he has since given $4.6 million to University of Louisville and $8 million to University of Kentucky to create centers for the study of free enterprise. The centers are also supported by the conservative Koch Foundation. Schnatter gave another $8 million to Purdue University.
When it comes to politics, Schnatter’s contributions are relatively modest.
Since 2010, the registered Republican has contributed about $250,000 to political action committees supporting GOP candidates, including U.S. Sen. Rand Paul and Sen. Majority Leader Mitch McConnell. He gave no money to Democrats in federal races, but in Kentucky, he gave $15,250 to Democrats and $36,000 to Republicans. He also contributed $50,000 to cover costs of Gov. Matt Bevin’s 2015 inauguration.
Schnatter makes no apologies for his money or how he spends it.
“When you have built a $3 billion company out of a broom closet,” he said in the 2013 profile, “I think you are entitled to a nice house.”
In a speech last year, Schnatter said a consultant advised him that based on the company’s $4 billion in annual sales, he could justify a salary as high as $18 million.
But he said it is “immoral” to pay an executive that much when employees barely make a living. He told the crowd that his $3.5 million salary that year was more than enough.
He also told the gathering that the minimum wage of $7.25 an hour was too low and should be raised.
Starting from scratch
Though the company started with nothing, Schnatter’s own story is hardly rags to riches. He grew up in an upper-middle-class family. His mother, Mary Beth Ackerson, was a real estate agent; his father, Robert Schnatter, a lawyer and entrepreneur.
Robert launched solar heating, wine distribution and cable TV companies. All failed, and sometimes the family’s electricity and water got turned off, the younger Schnatter later recalled.
He told People magazine in a 1997 profile that he still worried the same might happen at his sprawling Anchorage home.
“I wake up scared every morning,” he said then.
The roots of Papa John’s were planted when he was 15 and making pizzas at Rocky’s Sub Pub at night. Later he worked his way through Ball State University at another pizzeria in Muncie.
After Schnatter was rejected by the University of Louisville law school (“I took the LSAT twice and flunked it — I don’t do well on long tests,” he said) and his father bought a failing Jeffersonville, Kentucky, tavern, he jumped at the chance to run it.
He took over Mick’s Lounge on Sept. 29, 1983, and seven months later knocked out a broom closet to make way for a pizza oven. Within three months, he paid off half the tavern’s debt and refinanced the rest.
“At 22, I had something I loved to do, make pizza, and something I was good at, running a business,” he said.
He was the rare entrepreneur able to start a company and also run it. Keeping his focus solely on pizza, the company grew spectacularly, went public in 1993, opened its 500th store the next year and its 1,500th four years after that. It now has 4,600 stores in 34 countries.
But there were bumps along the way.
In 1998, top-selling Pizza Hut sued over Papa John’s claim to sell better pizza, setting off what the press dubbed a “pizza holy war.” A jury decided that Papa John’s claims were deceptive and awarded Pizza Hut $467,619 in damages, but a federal appeals court reversed the verdict, finding that the better-ingredients slogan was so exaggerated nobody was fooled by it.
In 1999, a cellphone service saleswoman, Lesli Workman, then 29, sued Schnatter and the company, alleging that he had sexually harassed her for months, sending her roses, repeatedly stopping by her home and throwing rocks at her window, and kissing her and touching her breasts while they were in his pool and hot tub, according to her complaint.
Schnatter denied the allegations and in a counterclaim alleged that Workman pursued him, telephoning and paging him dozens of times, asked him for loans and ultimately tried to extort $5 million from him and his company. The suit was dismissed and neither side would say if there was a settlement.
The company itself experienced some hiccups, including a decline in sales in the early 2000s that Schnatter blamed in part on self-satisfied franchisees.
“Our system was asleep,” he told PizzaMarketplace.com a few years later. “We were on our boats, on our yachts, on our golf club memberships, but we weren’t paying attention to the fundamentals of the business.”