Driven Brands CFO resigns after one year on job

Dive Brief:

Driven Brands Holdings CFO Gary W. Ferrera is leaving the automotive services company to “pursue a professional opportunity at a privately held company and move back to Colorado, where his family is located,” the company announced Thursday, noting that the move does not reflect any disagreement with the company on any matter related to its operations, policies, practices or its accounting.
The departure, which will be effective when the company’s first quarter 10-Q is filed, comes roughly one year after Ferrera joined and took the finance reins of the Charlotte, North Carolina-based company. He succeeded Tiffany Mason, who departed abruptly after serving as the company’s finance chief since 2020, CFO Dive previously reported.
The company, which has begun a search for a new permanent CFO, has also agreed to waive Ferrera’s obligation to repay a $100,000 cash sign-on bonus in exchange for his agreement to provide transition services for six months after he leaves the company, according to a Securities and Exchange Commission filing.

Dive Insight:

Driven Brands, a holding company that counts Take 5 Oil Change and Meineke Care Car Centers among its businesses, included the news of the CFO exit in its first quarter earnings release Thursday. The company reported first quarter net income of $4.3 million, compared to $29.7 million in the year earlier period, with revenue rising 2% to $572 million in the quarter year-over-year. It also reaffirmed its financial outlook for fiscal 2024. Analysts had expected more revenue growth, according to MarketWatch.

Packaging leadership changes and earnings together is a common communications strategy that can appear orderly and telegraph solidarity between an outgoing executive and the financial reports released, and pave the way for a smooth and timely transition, CFO Dive previously reported. But in the case of Driven Brands, investors didn’t appear to be reassured by the one-two-punch of the day’s news: the company’s shares fell about 20% Thursday to close at $11.69.

A veteran CFO, Ferrera earlier in his career worked as an international tax consultant at Arthur Andersen and as a director at Citigroup, according to his LinkedIn profile. Before joining Driven Brands, Ferrera most recently served as finance chief for corporate digital learning firm Skillsoft. He served as CFO for ATM owner and operator Cardtronics beginning in 2017 and ending in 2021, when the company was sold to NCR Corporation for $1.7 billion. He also served as CFO of Great Wolf Resorts.

At Driven Brands in 2023 the compensation that Ferrera was paid, awarded or earned totaled $4.72 million, which includes $430,962 in salary and bonuses totaling $775,000, comprised of the cash sign-on bonus and $675,000 for a 2023 annual bonus program, according to the company’s proxy statements filed March 27.

The timing of his resignation complicated the status of the cash sign-on bonus Ferrera already received, according to the filings. Under its terms, Ferrera would be required to repay it if he was terminated for cause or resigned from the company without “good reason,” according to the transition agreement contained in an SEC filing.

“Your employment with the Company will terminate effective promptly following the filing of the Company’s quarterly report on Form 10-Q for the quarter ended March 30, 2024...and such termination will constitute your resignation without Good Reason,” according to the agreement outlined in a letter sent by CEO Jonathan Fitzpatrick to Ferrara on April 29. “You acknowledge and agree that the Effective Time is expected to occur prior to the expiration of the Repayment Obligation. In exchange for your agreement to provide transition services to the Company for a period of six months following the Effective Time...the Company will waive the Repayment Obligation.”

After Ferrera exits, Driven Brands said Michael Beland, 53, currently the company’s chief accounting officer, will be its principal financial officer and Joel Arnao, 51, who has served as the company’s senior vice president, FP&A, Treasury, and investor relations since July 2023, will be its interim CFO.

The company and Ferrera did not respond to separate requests for comment.