Despite his resignation as chairman of Papa John's International Inc. (PZZA) - Get Report , founder John Schnatter will remain on the company's board, according to a filing with the Securities and Exchange Commission.

"Mr. Schnatter will remain on the Board," the filing said. Schnatter owns 29% of Papa John's shares, according to Bloomberg data.

When considering why Schnatter was not removed from the board entirely, it's important to remember that shareholders pick directors, and shareholders have the power to remove directors, Professor Charles Elson, the director of the Center for Corporate Governance at the University of Delaware, told TheStreet in a phone interview. Notably, Schnatter is Papa John's largest shareholder with a 29.4% stake, according to FactSet.

Schnatter stepped down as chairman on Wednesday, July 11, after he allegedly used a racial slur on a conference call. Schnatter compared his comment to Colonel Sanders using the n-word and he complained that Colonel Sanders never faced backlash, Forbes reported.

"Directors can't remove directors," Elson said. "[Schnatter] didn't break the law; what he did was a bad thing -- you're talking about rude and distasteful conduct, but nothing against the law."

The report came months after Schnatter was forced to resign as CEO because he blamed the falling sales of Papa John's pizza on the NFL protests. Pizza Hut was then tapped to replace Papa John's as the NFL's official pizza.

"A person running a company obviously shouldn't make those comments," Elson said.

Will Slabaugh, an analyst for Stephens, released a note Thursday, July 12, that said, "Schnatter's exit appears to be well received by the market, taking into account the notable drag on sales following the November incident ... We believe this helps to stem what had likely become an elevated risk of losing various partnerships/sponsorships, though conclusions are difficult to draw at this point."

Stephens has Papa John's rated as overweight with a target price of $70.

"We continue to believe that [Papa John's global growth potential and concept positioning make the brand an attractive asset," Slabaugh said. In closing, the note said that Stephens believes that Papa John's is attractive "to both the ongoing business and a potential buyer."

Shares of Papa John's jumped 12.4% on Thursday to $54.33.