Brown-Forman Family Letter Blasts CEO, Strategy; CEO Steps Down

Two members of the Brown-Forman family that controls the Jack Daniel’s owner drafted a letter to the board last month, blasting CEO Lawson Whiting for deteriorating results, questionable pay and a bungled deal with Pernod Ricard. Three days after the letter was dated, Whiting announced his retirement.

W. L. Lyons Brown III, a descendant of the founding family, and his brother Stuart Brown, a retired director, took the board to task in the July 10 letter. They wrote that Whiting “carries a three-year track record defined by poor operating performance, failed transactions, and significant increases in personal compensation, even as the stock languished and employees were terminated.” The letter was reported by the Wall Street Journal.

The brothers were especially critical of the failed Pernod Ricard acquisition talks. Brown-Forman announced in late March that it had terminated discussions. The company’s market value had slumped from a peak of $38 billion in 2020 to as low as $10.5 billion early this year. The swoon is “eliminating billions of dollars of generational wealth for the Brown family and all other shareholders,” the brothers wrote.

Despite the breakdown of the Pernod deal, the board approved millions of dollars in bonuses for executives involved. Whiting received $2.7 million; CFO Jim Peters and others shared roughly $6 million total, according to a regulatory filing. “The board is rewarding failure, and doing so lavishly and publicly,” the brothers wrote.

Brown-Forman also fielded interest from Sazerac Co., the closely held owner of Buffalo Trace bourbon. The company rejected an unsolicited $15 billion offer earlier this year. Lyons Brown III and Stuart Brown questioned the lack of disclosure about the Sazerac engagement and called on the board to present a strategic plan, restore accountability in executive compensation and engage more with family shareholders. “The status quo is unacceptable,” they wrote.