The president and CEO of Domino’s Pizza wowed House Republicans at a party retreat earlier this year with a speech about how he took a faltering brand and rebuilt it into an international pizza powerhouse. He called the address “Turning It Around.”
Eric Cantor, the Republican House Majority leader, ate it up. And why not: For the last eight years, his wife has sat on Domino’s board of directors and seen the dramatic comeback up close – and made off with a financial windfall as the company’s stock has soared.
Domino’s has delivered cash, stock, and stock options currently worth more than $3 million to Diana Cantor since October 2005 – all for her part-time work as a director. She has collected or cashed out more than $1.7 million of that money and is sitting on another roughly $1.4 million in Domino’s holdings, as the stock hovers near an all-time high.
Eric Cantor’s latest financial disclosure report will be published on Friday, but it will list his assets and earnings only in broad ranges. A National Journal analysis of Securities and Exchange Commission records determined the extent to which his wife’s role with Domino’s has improved his family’s finances.
The Cantors, who have been married since 1989, were millionaires before Diana Cantor joined the board of Domino’s, but the company’s success has nonetheless dramatically swelled their wealth. In 2006, her first full year on the board, the Cantors had a net worth of between $1.97 million and $6.51 million, according to calculations by the Center for Responsive Politics.
That means her $3 million in Domino’s compensation has boosted their total net worth by roughly between 50 percent and 150 percent since 2006.
“I’m very proud of Diana, who over the past 30 years has built a tremendous business career while raising our three wonderful children,” the congressman said in a statement to National Journal. “She is an example to all aspiring young women and working mothers who want to study hard, work hard, and achieve great things.”
Her earnings have thrust Eric Cantor, who has held public office since 1992, into the upper tier of the wealthiest members of Congress. He ranked 60th among House members in 2011, according to the Center for Responsive Politics. (He is still not the wealthiest member of the House leadership. That title falls to Minority Leader Nancy Pelosi, who ranked 6th-richest in the chamber, thanks largely to her investor/financier husband, Paul Pelosi.)
Diana Cantor’s work for Domino’s and elsewhere on Wall Street is legal; there are few employment limits on congressional spouses. A veteran businesswoman, she has qualifications befitting a corporate board member, including a stint two decades ago as a Goldman Sachs vice president. She has a law degree and an M.B.A., and she is a certified public accountant. In addition to multiple board posts, she is a partner of a New York-based wealth management company and cofounder of another consulting firm – all while chairing the Virginia Retirement System Board of Trustees.
“She brings a lot to the party,” said Lynn Liddle, company spokeswoman, adding that “everything that Diana has done here is completely independent of anything the congressman has done or is involved in.”
“She’s a highly, highly qualified board member. We feel lucky to have her,” Liddle said.
Of course, Cantor has been lucky to have Domino’s – though it didn’t always appear that way.
She joined the board in October 2005, as the company’s stock was selling at around $21 per share, but three years later, following the financial collapse, Domino’s stock had cratered to $3.03. Such a low price put the tens of thousands of stock options that she had been issued underwater, as she would have had to buy the stock at prices far higher than it was then selling.
Then, in June 2009, the company reissued many of its stock options for board members in a move that proved highly lucrative.
Cantor’s option to purchase 7,500 shares at $26.32, for instance, was exchanged for the right to purchase 5,625 shares at half that price – $13.16, according to SEC records. (Domino’s was trading around $9 at the time.) In effect, the reissue meant that Domino’s stock would have to rise only slightly for her to make a profit – rather than needing to nearly triple in value.
An additional 27,500 stock options in her portfolio were exchanged to allow her to purchase them at cheaper prices.
Then, in December 2009, Domino’s did something dramatic. The company launched a scathing ad campaign attacking its own pizza as “cardboard,” “boring,” and “bland.” The spots were linked to the debut of a new recipe and an admission that its old pizza stunk.
The ads were a roaring success. Domino’s was named “chain of the year” by the trade publication, Pizza Today, in 2010 and 2011. Sales surged and the stock price followed suit.
A share of Domino’s was selling for more than $32 by late 2011 and Cantor began to unload some of her now-valuable portfolio. In a single November day, she bought and sold 25,000 of her stock options – for a profit of more than $622,000. She continued the sell-off in August 2012, as the stock hit $34.57, when she bought and sold 24,250 more stock options in four transactions that netted her more than $574,000, SEC records show.
Her combined earnings those two days: $1.2 million.
And stock options weren’t Cantor’s only compensation. Since 2006, she has collected $574,750 in fees as a director and, in recent years, chair of the board’s audit committee. Also, in 2010, Domino’s began giving its directors, including Cantor, stock grants. She is currently sitting on 18,590 Domino’s shares.
With Thursday’s closing price of $59.43, that portfolio is worth $1.1 million. And industry analysts expect the stock to keep rising.
“I don’t think anything is really going to slow it down,” said Peter Saleh, a restaurant industry analyst with the Telsey Advisory Group in New York. “You can’t poke any holes in their story. It’s almost perfect. It’s hard to find something that’s going to knock them off their pedestal.”
“I continue to be bullish on Domino’s,” added Mitchell Speiser, an equity analyst who specializes in the restaurant industry for Buckingham Research.
All that bullish praise is a reminder that Cantor could have made even more money if she had held onto her stock options, as she sold them when the stock was $25 lower per share than it is now – a loss of more than $1 million in potential earnings.
Still, there has been plenty to cheer. Eric Cantor turned 50 earlier this month, and Domino’s pizza was served at the celebration, his spokesman said.
In addition to Domino’s, Cantor is on the board of other companies, including Universal Corporation, which advertises itself as “the world's leading leaf tobacco merchant and processor,” and Media General, a broadcasting firm.
Media General has paid her $442,750 in director fees and she has been issued 81,077 shares of stock since she joined the board in 2005, SEC records show. Like most media companies, Media General stock has suffered, from trading in the $60 range in 2005 to around $5 last year. But the stock has been on the rise since billionaire financier Warren Buffett’s Berkshire Hathaway Inc. took a stake in the company in 2012.
The stock had been trading around $3.50 before the Buffett purchase. It closed Wednesday at $8.76 per share – a difference worth hundreds of thousands of dollars to the Cantors.
Cantor joined Universal Corporation’s board in 2012. She has received 3,130 shares of company stock since last August, according to SEC filings, though she is ineligible to sell them for three years. The stock closed Wednesday at $59.41 per share, making her holdings worth an estimated $180,000.