Monday’s edition of Popular Information focused on the conduct of Ruth’s Chris Steak House. The restaurant chain had $441 million in revenue last year, $86 million in cash reserves, and pays its CEO $6.2 million. But Ruth’s Chris, through its parent company Ruth’s Hospitality Group, obtained a $20 million forgivable loan from the “Paycheck Protection Program,” a fund that was supposed to benefit struggling small businesses.
Popular Information reported that, despite taking the loan, Ruth’s Chris had laid off virtually all of its hourly workers. The only people still receiving a paycheck were executives and managers. Meanwhile, thousands of real small businesses were not able to obtain a loan before the Paycheck Protection Program money ran out. The piece went viral on Twitter and Facebook.
On Wednesday, Popular Information reported that Ruth’s Chris had plenty of company. Reviewing hundreds of SEC filings, we identified 32 companies that pay their CEOs at least $1 million annually but obtained a forgivable loan under the Paycheck Protection Program. One company that received a large loan, Veritone, paid its CEO $18.7 million last year.
On Thursday morning, facing increasing public backlash about the administration of the program, the Treasury Department published new guidance about the Paycheck Protection Program. Specifically, the Treasury Department said that it is “unlikely” that any public company “with substantial market value and access to capital markets” qualifies for the loans. Treasury Secretary Steve Mnuchin said there would be “severe consequences” for companies that did not return the money by May 7.
On Thursday afternoon, Ruth’s Chris announced they would return the $20 million loan. It will now be available to small businesses that desperately need it.
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Change is possible. But there is a lot more work to do. Dozens of public companies have yet to return their Paycheck Protection Program loans. Look for updates in future editions of Popular Information.