Steak ’n Shake boss and potential replacements feeling the heat

Steak ’n Shake boss Sardar Biglari may not be qualified to flip burgers — but then again, neither is the self-styled cleanup crew seeking to replace him.

That’s the takeaway from two influential shareholder advisory firms that have weighed in on the tussle between Steak ’n Shake’s parent, Biglari Holdings, and activist investor Groveland Capital.

Both Glass Lewis and Institutional Shareholder Services, which went public with their recommendations on Friday, advised investors to withhold votes for all of Biglari’s incumbent directors.

However, Groveland failed to win any support from ISS for its dissident slate, while Glass Lewis recommended just two of the six nominees put forth by the firm.

An expert in proxy battles said the proxy firms “really punted on this one.”

“They essentially said this board must go, only it shouldn’t be replaced with this year’s dissident slate.”

Groveland wants want to replace Biglari as CEO of San Antonio-based Biglari Holdings at the company’s annual meeting April 9 in New York.

While Groveland failed to win key support, it has already cast a harsh light on the company’s corporate governance.

One big beef to hit a hot grill is that Biglari, who obtained his position through a proxy fight in 2008, will receive in the neighborhood of $20 million a year for five years should the company undergo a change of control.

This is due to a licensing agreement that Biglari struck with the company he runs that entitles him to 2.5 percent of revenue for the use of his surname.

The agreement, which kicks in should the CEO even lose his “sole capital allocation authority,” was estimated by ISS to be worth $100 million — about 11 percent of the company’s market cap.

Never mind “by Biglari” adds nothing to the Steak ’n Shake brand in the minds of burger consumers. It really serves as a poison pill — only better.

“Unlike many pills,” ISS pointed out, “the licensing agreement is not subject to shareholder approval, nor does it ever appear to sunset.”

The proxy firms also took issue with the company’s raising capital in the public markets and investing it in the CEO’s hedge fund.

That fund then purchased more stock in Biglari the company, thus giving the man in charge of the fund and the company nearly a fifth of the company’s vote, despite having an economic interest of only 1.5 percent.

Such maneuvers would seem to sway the proxy firms in favor of almost any dissident slate.

But the one assembled by Groveland, according to ISS, “lacks sufficient detail and strategic direction. In fact, the most tangible initiative on Groveland’s list is to “remove the ‘by Biglari’ appendage.”

The proxy firms found the makeup of the dissident slate lacking as well.

“We’re calling it a split decision in favor of us,” Groveland founder Nick Swenson told The Post. “The proxy firms essentially told investors to go to the sidelines, but that leaves the open-minded among them free to follow us.”