Panera Bread CEO Ron Shaich has created one hell of playbook on a how to achieve greatness in the restaurant industry and reward shareholders in the process.
And now, he is ready to take his message -- one rooted in long-term investing -- to wage a war with short-term minded activist investors.
The JAB Holdings owned salad and sandwich chain said Wednesday that Shaich, 63, will step aside as CEO on January 1, 2018 while remaining on the board. Replacing Shaich will be restaurant industry veteran Blaine Hurst, who before joining Panera Bread as president in 2010 had executive level stints at Papa John's (PZZA) - Get Report and Boston Chicken. It was also announced that JAB Holdings will acquire 304 store sandwich chain Au Bon Pain.
"I have a limited time in life, and there is a limited time in a day -- I would like to pursue some of my personal interests in addition to Panera," Shaich told TheStreet in an interview. One of those interests is in getting the word out on the importance of long-term investing if a public company wants to truly win and create shareholder value.
Shaich says investing has become too short-term focused, in large part to the rise of activists and the overall trading environment. "Are activists really good for the economy? I think they inhibit GDP growth," Shaich explained.
Panera Bread found itself in the crosshairs of activists twice: in 2007 with Shamrock Activist Value Fund LP and in 2015 with Luxor Capital, Fortune reported. The latter battle led Panera to issue $500 million in new debt to buy back shares to appease Luxor.
To be sure, Shaich is coming to war with an impressive resume.
At age 27 and a only few years removed from Harvard Business School, Shaich (pronounced 'shake') opened a cookie store in Boston called the Cookie Jar in 1980. Ever the people watcher, Shaich began ordering baguettes and croissants for his store from a nearby Au Bon Pain after observing that many folks weren't buying cookies before noon.
Sensing an opportunity to sell more exotic sandwiches than the standard ones on whole wheat or rye, Shaich approached venture capitalist Louis Kane, who was running Au Bon Pain at the time, about joining the bakery chain. The two formed a partnership in 1981.
By 1993, Au Bon Pain, which went public in 1991, had spread across the U.S., and purchased St. Louis Bread, a regional restaurant chain known for its fresh ingredients and inviting environment. Shaich wanted the company to shift its attention toward St. Louis Bread instead of Au Bon Pain and after he prevailed in a board fight, Au Bon Pain was sold to a private-equity firm in 1999.
Shaich then took the helm at St. Louis Bread and changed its name to Panera, which is Latin for "bread basket" or "bread bowl," in order to appeal to a wider audience. From there, Shaich led an aggressive roll-out of Panera Bread restaurants across the country that led its stock to return more than 1,500% under his leadership.
In 2010, Shaich chose to step aside as CEO but retain the role of executive chairman so he could pursue philanthropic interests such as driving awareness of hunger in America. At the request of long-time friend and CEO Bill Moreton, however, Shaich returned to Panera as chairman and CEO in 2013 (Moreton is now executive vice chairman), in a move similar to Howard Schultz's return to the helm at Starbucks (SBUX) - Get Report .
Today, Shaich hands off the baton to a restaurant chain with more than 2,000 locations, under new owners in JAB Holdings and with a ton of momentum in digital ordering. Hat tip to an American success story.
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