Sardar Biglari
About Sardar Biglari
Sardar Biglari (age 47) is Chairman and CEO of Biglari Holdings (BH-A) since 2008 and Chairman/CEO of Biglari Capital Corp. since 2000. He is BH’s controlling shareholder and central decision-maker for investment and capital allocation; he beneficially controls approximately 74.3% of BH’s Class A voting power and 69.7% of aggregate economic interest across Class A and B shares . Pay is structured around an ROI/book-value “Incentive Agreement” with a 6% hurdle and high-water mark; he received non‑equity incentive payouts of $7.27M in 2023 and $0.455M in 2024, with base salary fixed at $900k since 2009 . Shareholder return metrics reported in the proxy show the value of a $100 investment at $180.03 (2024), $143.97 (2023), $122.30 (2022), and $124.61 (2021), while net income excluding partnerships was $24.36M (2024), $40.30M (2023), and $24.61M (2022) .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Biglari Holdings Inc. | Chairman & Chief Executive Officer | 2008–present | Centralized capital allocation; led diversification into restaurants, insurance, oil & gas, licensing |
| Biglari Capital Corp. | Chairman & Chief Executive Officer | 2000–present | General partner to The Lion Fund and The Lion Fund II; performance fee only above 6% hurdle with high-water marks |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Biglari Capital Corp. | Chairman & CEO (private investment firm) | 2000–present | Oversees investment partnerships managing BH’s capital; no AUM fee, performance-based incentive with aggregated high‑water mark |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary (USD) | $900,000 | $900,000 | $900,000 |
| Target Bonus % | Not disclosed | Not disclosed | Not disclosed |
| Cash Bonus Paid | $0 | $0 | $0 |
| Equity Grants (RSUs/PSUs) | None; BH does not grant stock or options to executives | None | None |
Director compensation context: Non‑employee directors receive $90,000 cash retainer; Audit/Compensation Chairs +$10,000; Vice Chairman (Cooley) $270,000 .
Performance Compensation
| Component | Metric/Formula | Target/Hurdle | Actual (2023) | Actual (2024) | Payout | Vesting/Payment Terms |
|---|---|---|---|---|---|---|
| CEO Incentive Agreement | Growth in adjusted equity attributable to operating businesses (book value) above high‑water mark; payout = 25% of incremental book value above 6% hurdle | 6% hurdle over prior high‑water mark | Hurdle exceeded; incentive earned | Hurdle exceeded; incentive earned | $7,271,055 (2023) | Annual; 2023 fee paid in 2024 |
| $454,596 (2024) | 2024 fee paid in 2025 (accrued compensation at YE 2024) |
Notes:
- No stock options, RSUs, severance, change‑of‑control, or employment agreement .
- Incentive excludes investment partnership income; avoids “double dipping” .
Equity Ownership & Alignment
| Security | Beneficial Ownership | % Voting Power (Class A) | % Aggregate Economic Interest (A+B) |
|---|---|---|---|
| Class A | 153,678 shares (Lion Fund 128,014.7; Biglari Capital 25,663.1; Mr. Biglari 0.1) | 74.3% | 69.7% |
| Class B | 1,394,438 shares (Lion Fund 1,322,582; Biglari Capital 71,855; Mr. Biglari 1) | n/a | n/a |
Additional alignment and trading context:
- The proxy states Mr. Biglari has never sold any BH stock .
- The Lion Fund purchased 5,857 Class A shares at avg $1,012–$1,188 and 45,366 Class B shares at avg $204–$231 in Nov–Dec 2024, indicating insider‑affiliated buying support .
- Stock ownership guidelines, hedging/pledging policies for executives are not disclosed; an Insider Trading Policy exists (preclearance, window periods) .
Employment Terms
- Employment agreement: None
- Severance/change-of-control: None
- Clawback: Not referenced; company disclosed no incentive compensation recovery analysis was required in 2024 filings
- Perquisites: A rolling five‑year services agreement with Biglari Enterprises LLC and Biglari Capital for business services (personnel, legal, proxy, travel, admin) at fixed monthly fees—$700k (to Nov 2023), $800k (Dec 2023–Sep 2024), $900k (Oct–Dec 2024); BH paid $8.5M (2023) and $9.9M (2024)
- Family employment: Brother Shawn Biglari (SVP Franchise Partnerships) $300,000 (2024); Father Ken Biglari (consultant) $160,000 (2024); Other related family employment disclosed
Board Governance
- Board service: Chairman & CEO; director since 2008
- Independence: Not independent; BH is a NYSE “controlled company” and exempt from certain governance requirements
- Committees: Audit (Cooper, Cardwell, Person; two “financial experts”); Compensation (Cooper, Cardwell, Person)
- Committee chairs: Cooper chairs both Audit and Compensation
- Lead Independent Director: None; two non‑management executive sessions held in 2024 (Cooper ad hoc chair)
- Attendance: Each director attended all Board and committee meetings in 2024; Board met 4 times; Audit 5; Compensation 2
- D&O insurance: BH does not provide directors and officers liability insurance to directors
- Director pay (2024): Cooley $270k; Cooper $100k; Cardwell $90k; Person $90k
Multi‑year CEO Compensation
| Metric (USD) | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary | $900,000 | $900,000 | $900,000 |
| Bonus | $0 | $0 | $0 |
| Non‑Equity Incentive | $0 | $7,271,055 | $454,596 |
| Total | $900,000 | $8,171,055 | $1,354,596 |
Company Performance Metrics
| Metric | FY 2021 | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|---|
| Revenues (USD) | $307.5M* | $303.7M* | $298.0M* | $289.4M* |
| EBITDA (USD) | $66.8M* | $82.2M* | $78.4M* | $63.0M* |
Values retrieved from S&P Global.
Notes: Revenue trend down 5.9% CAGR from 2021–2024; EBITDA down 1.9% CAGR over same period.
BH-reported segment performance highlights: Restaurant revenue $251.4M (2024) vs $250.9M (2023); same‑store sales +6.4% at company‑operated units (2024) . Oil & gas contribution to net earnings: $15.46M (2024) vs $25.41M (2023) with asset sales gains; insurance underwriting profit declined on higher severity at First Guard . TSR table (value of $100 investment): $124.61 (2021), $122.30 (2022), $143.97 (2023), $180.03 (2024) .
Related Party Transactions
| Item | 2022 | 2023 | 2024 |
|---|---|---|---|
| Services Agreement Fees to Biglari Enterprises (USD) | $8.4M | $8.5M | $9.9M |
| Partnership Contributions (Lion Funds) (USD) | $59.9M | $45.0M | $75.9M |
| Partnership Distributions (USD) | $70.7M | $14.5M | $10.0M |
| Incentive Reallocation (Partnership Level) | None | None | None |
| Family Compensation (examples) | — | Shawn $289,020; Ken $160,000; Robert Chapman $184,573 (partial year) | Shawn $300,000; Ken $160,000; Robert Chapman $600,000 |
Compensation Structure Analysis
- Increase in guaranteed/recurring fees: Services agreement escalated to $900k/month by late 2024 (+29% y/y in total fees), channeling substantial fixed payments to entities owned by the CEO .
- Equity risk transfer: No options/RSUs; incentive pay solely formulaic cash tied to book-value growth (operations), reducing equity dilution risk but relying on internal accounting measures .
- Pay-for-performance variability: Non‑equity incentive collapsed from $7.27M (2023) to $0.455M (2024) as book‑value creation above hurdle moderated; salary unchanged .
- Governance checks: Compensation Committee (independent directors) oversees Incentive Agreement; management asserts investment partnership returns are excluded to avoid double counting .
Risk Indicators & Red Flags
- Material weakness in internal control over financial reporting identified for 2024; adverse auditor opinion on ICFR; risks include deficient IT general controls and journal entry/reconciliation controls across subsidiaries, and communication/monitoring deficiencies .
- Controlled company; concentrated voting power and decision authority with CEO may limit governance counterweights and potential corporate actions like takeovers .
- Significant related‑party services payments and capital locked in CEO‑controlled partnerships (rolling five-year lock‑up), constraining liquidity and creating potential conflicts .
- Family member employment/compensation at operating subsidiaries; monitor for independence and performance outcomes .
- No D&O insurance for directors; may influence board recruitment/retention risk .
Say‑on‑Pay & Shareholder Feedback
- 2025 proxy includes advisory say‑on‑pay; Board recommends FOR .
- Frequency vote: Board recommends triennial (every three years) .
- 2024 proxy included animal welfare shareholder proposal; Board recommended AGAINST; management asserted existing supplier standards .
Equity Ownership & Director Compensation (Board Snapshot)
| Director | Independence | Committee Roles | 2024 Attendance | 2024 Fees (USD) |
|---|---|---|---|---|
| Sardar Biglari | Not independent | Board Chair | 100% | Employee; no director fees |
| Kenneth R. Cooper | Independent | Audit; Compensation (Chair both) | 100% | $100,000 |
| Ruth J. Person | Independent | Audit; Compensation; “financial expert” | 100% | $90,000 |
| John G. Cardwell | Independent | Audit; Compensation; “financial expert” | 100% | $90,000 |
| Philip L. Cooley | Vice Chairman | Not committee member | 100% | $270,000 |
Investment Implications
- Alignment: CEO’s large beneficial ownership and history of no sales supports long-term alignment; incentive plan tied to operating book-value growth can be a strong capital discipline signal .
- Governance/related-party: Heavy services agreement payments and capital concentration in CEO‑controlled partnerships warrant ongoing monitoring; while partnership incentives were nil in 2022–2024, the lock‑up and aggregated high‑water provisions affect liquidity and capital allocation flexibility .
- Execution risk vs. comp variability: 2024 incentive sharply lower versus 2023 amid mixed segment results (oil & gas gains reliant on asset sales; insurance underwriting headwinds; restaurants modest improvement). Compensation will be highly sensitive to operating book‑value creation; traders should expect payout volatility .
- Control and ICFR: Controlled company structure plus 2024 material weakness in internal controls introduces governance and financial reporting risk premium; consider in valuation, especially for event‑driven strategies .
- Flow-of-funds/tactical: Insider‑affiliated Lion Fund purchases in late 2024 may signal perceived value; however, overall investment partnership results were negative in 2024, contributing to BH’s net loss—be cautious about extrapolating partnership activity into near‑term equity performance .