Waitr Holdings Inc. Chief Executive Officer Adam Price has resigned four months after taking the helm of the Louisiana-based on-demand food delivery business, with tech industry executive Carl Grimstad taking his place.
Grimstad, who is 51 years old, is the chief manager of C. Grimstad Associates LLC, a private family investment business incorporated in 2006, and managing partner of GS Capital LLC, a private family investment company founded in 1995. Grimstad also is a co-founder and a past executive of iPayment Inc., a credit and debit card payment processing services business to small and middle market merchants across the U.S., founded in 1999.
Price, who is in his 30s, was promoted to CEO of Waitr from chief operations officer in August and tasked with take the emerging on-demand food delivery business toward profitability. He had joined Waitr after it acquired his logistics company in February 2019. Price resigned on Dec. 27, but the resignation wasn't disclosed to investors until Friday in a U.S. Securities and Exchange Commission filing.
Lake Charles-based Waitr Holdings Inc., which has major operations in Lafayette and serves much of Louisiana and various parts of the country, was flying high when its market capitalization hit $900 million in March just a few months after going public in a stock sale.
The on-demand food delivery business even acquired a similar-sized competitor, Bite Squad. But the merging of operations proved to be a rockier task than the company anticipated. Waitr wrote off much of the value of the Bite Squad acquisition by September.
Over the course of the year, the company also laid off hundreds of workers, founder Chris Meaux resigned as CEO but remains chairman of the company's board and its stock price fell below $1 per share. Waitr has been warned by the Nasdaq stock exchange that it may be on the path to delisting from the exchange if it doesn't pull its closing bid price above $1 per share by June 2020.
Adam Price isn't your typical turnaround CEO.
Grimstad has been evaluating "every aspect" of Waitr alongside the board of directors and its advisers, officials said.
"I see significant potential to build upon the solid foundation," Grimstad said in a news release.
Grimstad was president of iPayment until 2011 and served as CEO until 2016. Grimstad worked at the company when iPayment had its initial public offering in 2003 and also when it was taken private in 2006.
Grimstad is on the board of directors of Beauty Tap Inc. and Kard Financial Inc. He is an alumnus of Boston University with a degree in economics.
“We believe that the combination of his extensive operational, executive and leadership experience, including as a successful president of a public company, as well as his career focus of providing small and medium-sized merchants payment and technology solutions, will create substantial shareholder value,” said Meaux, Waitr's founder and former CEO who is chairman of the board of directors.
Grimstad's employment agreement guarantees him a base salary of $83,333 each month and expires in January 2022, records show. That's a total $999,996 annual base salary.
Price earned a $400,000 annual salary, with potential of another $400,000 performance bonus and $2 million in restricted stock, according to U.S. Securities and Exchange Commission filings.
In addition to his salary, Grimstad could receive a bonus of $3 million if he remains CEO until 2022, the employment agreement is terminated by Grimstad "for good reason" or the executive's agreement is terminated for any other reason than misconduct. The executive was also offered a restricted stock option agreement for 12.5% of the company's outstanding stock for 37 cents per share that lifts in part in 2021 and the remainder in 2022.
Several months ago, Waitr attempted to renegotiate contracts with higher fees among independent restaurants to spur higher volume sales. Since then, about 75% of restaurants have returned to Waitr. But the transition period was publicly rough as restaurant owners complained about the new contracts. In the early days of the startup, Waitr was not charging fees to cover credit card costs and its contracts with restaurants was less than 5% — to the point where the startup was losing money by taking orders.
Among other savings, Waitr chipped away $19 million in annual salary expenses when it laid off about 300 workers in early November.
Now Waitr looks to hit $30 million in savings promised to investors for 2020.
Waitr declined to share future earnings forecasts with investors during third quarter, citing a lack of a chief financial officer, who left in early November alongside two board members. Since then, the company has retained a former president as an independent contractor to add to its leadership ranks.
Waitr generated $49.2 million in revenue during third quarter, up from $19.4 million during the same time frame the year before. About $24 million of that total revenue stemmed from Bite Squad’s sales, the food delivery startup the company acquired last year.
Waitr has been warned by the Nasdaq stock exchange that it may be on the path to delisting if it doesn't pull its closing bid price above $1 per share by June 2020.
Waitr's stock was trading close to 37 cents Friday, with a market capitalization of $28 million. It's down from a 52-week peak of $14 per share in March.
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