With the pandemic severely restricting economic activity, thousands of small businesses across the country are on the brink of collapse. Congress created the Paycheck Protection Program as a lifeline. The $350 billion fund was intended to rescue small businesses with forgivable loans to cover their payrolls for two months.
But just days after the program launched, it ran out of money. Many small businesses, especially those without pre-existing lending relationships with a bank, were left out. Congress and the White House have reached an agreement to add more money to the program, but it has not been signed into law. It’s unclear when more money will be available and, meanwhile, numerous small enterprises have been forced to close permanently.
On Monday, Popular Information reported that, before the Paycheck Protection Program ran dry, the parent company of Ruth’s Chris Steak House obtained a $20 million forgivable loan. The publicly-traded corporation, Ruth’s Hospitality Group, is not small. It brought in over $441 million in revenue last year, maintains $86 million cash reserves, and pays its CEO, Cheryl J. Henry, $6.1 million. Despite the influx of free cash, Ruth’s Chris has laid off virtually all of its hourly restaurant staff.
Ruth’s Chris is the tip of the iceberg. A Popular Information investigation has identified 32 additional publicly-traded companies that pay their CEOs $1 million or more and have scooped up funds intended for struggling small businesses.
Veritone: $18,669,779 in CEO compensation
Veritone, according to its corporate website, is “a leading provider of artificial intelligence technology and solutions.” In 2019, it had $49.6 million in revenue and, as of December 31, maintained $44 million in cash reserves. It paid its CEO, Chad Steelberg, $18,669,779 in total compensation in 2018, the most recent year the company disclosed executive compensation. Veritone’s president, Ryan Steelberg, received 13,859,099 in total compensation in 2018. In 2017, the Steelbergs both received more than $14 million in cash and stocks.
Veritone paid three other top executives over $500,000 each in 2018. It also acquired three other companies for millions in cash and stock.
Last week, Veritone was granted two forgivable loans from the Paycheck Protection Program for a total of $6.5 million.
“Small businesses are vital to the nation’s economy, and we are grateful the CARES Act established a safety net to help companies like Veritone weather the significant disruption and uncertainty associated with the COVID-19 pandemic,” Chad Steelberg said in a press release, “This loan, together with our cost savings initiatives, will help us to continue operations without salary reductions...”
PolarityTE: $13.7 million in CEO compensation
PolarityTE is “a biotechnology company developing and commercializing regenerative tissue products and biomaterials.” As of March 31, the company had $39.5 million in cash on hand. In 2018, former CEO Denver Lough was paid $13,714,337 in total compensation, including a bonus of $1,010,000. Former CFO Paul Mann’s total compensation was even bigger, $13,862,967. The company also paid former COO Eric Swanson $4,525,587.
On April 12, the company received a $3.6 million forgivable loan from the Paycheck Protection Program.
The company announced that it would cut salaries for its current executives (and all at-will employees) by 10%. But this will have little impact on their total compensation, which is mostly conveyed through stock grants and options.
But on April 16, four days after the loan, the company awarded its current COO, Richard Hague, a $165,000 cash bonus and 115,000 stock units. The value of the cash bonus, not to mention the stock grant, was many times larger than Hague’s salary reduction. On the same day, Chief Counsel Cameron Hoyler received a $125,000 bonus and 100,000 stock units. The current CEO, David Seaburg, received 315,000 stock units.
Aquestive Therapeutics: $8,010,587 in CEO compensation
Aquestive Therapeutics is a pharmaceutical company that manufactures drugs that can be administered via an oral film. The company went public in 2018, and the IPO netted the company $63.5 million. In 2019, the company had $52.6 million in revenue and, as of December 31, 2019, $49.3 million in cash on hand.
In 2018, CEO Keith Kendall was paid $8,010,587 in total compensation. Chief Innovation and Technology Officer Mark Schobel made $7,575,662. Two other top executives made a combined $3.9 million.
On April 17, Aquestive received a forgivable loan from the Paycheck Protection Program for $4,830,000.00.
The pandemic does not appear to be having any negative impact on the company’s business. Since March 15, its stock price has more than doubled.
DMC Global: $2.7 million in CEO compensation
DMC Global provides products and services to “the energy, industrial processing and transportation markets.” In 2019, the company turned a $34 million profit and, as of December 31, it had $20 million cash on hand.
In 2019, CEO Kevin Longe was paid $2,683,684 in total compensation. Ian Grives, president of DMC Global’s DynaEnergetics subsidiary, was paid $1.12 million in cash, stocks, and other perks, including $24,378 for a leased company car. CFO Michael Kuta was paid $1.14 million in total compensation, including an $18,000 car allowance.
On April 14, DMC Global received a Paycheck Protection Program loan of $6,700,000.
On April 1, DMC Global laid off 264 employees. After receiving the influx of cash, an executive said the company “doesn’t immediately plan to rehire” anyone.
The 32 companies paying their CEOs millions while collecting taxpayer money intended for struggling small businesses
The following is a listing of companies, as of April 21, that received a forgivable loan from the Paycheck Protection Program and have paid their CEO more than $1 million in total compensation. The CEO compensation is based on the latest data available, which is either from 2018 or 2019.
CORRECTION (4/23): This chart initially listed Bionano Genomics, which received a loan for $1,770,000 from the Paycheck Protection Program. Bionano Genomics’ CEO, R. Erik Holmlin, received total compensation of $2,527,257 in 2018. But a more recent filing reveals Holmlin’s total compensation for 2019 was $898,590. We regret the error.
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The 1%. Grifters never get enough. Some fancy CFO, Accounting firms and Lawyers dance to the bank with helping land these loans you can bet.
That graph tho. Brilliant work. Absolutely brilliant. I shared with full credit to you, Judd.
A beer toast on this article. Can I hear "Huzzahs!"
for Judd!
I see President Trump has requested for Harvard University to return $8.6 million. How are the businesses you cited different, or are they? If there’s no difference, then why not request the funds be returned by businesses like those in your article?