To succeed in business, it helps to believe in your product.

Ritch Allison, until last year chief executive officer of Domino’s, indisputably believed in pizza.

As proxy season approaches — when companies prostrate/parade themselves in front of shareholders over things like expenses and jet usage — FT Alphaville’s eye has been caught by an idiosyncratic quirk of Domino’s executive expenses tab: the personal pizza bill.*

Here’s a table from Domino Pizza, Inc’s latest DEF14A filing with the SEC, from March last year, capturing executive compensation during 2021:

And here’s the bit that involves pizza:

Perhaps the real MVP listed above is Domino’s ex-CFO Stu Levy, who left in May 2021 after less than a year at the company, and whose only expense that calendar year was pizza. But anyway … $3,919 in personal pizza purchases for Allison! We had to find out more.

Tough at the topping

Remarkably, 2021 was not even Allison’s peak consumption of the debauched Italianate dish.

Regulatory filings for previous years show the North Carolinian (who took over as CEO in mid-2018, having been “President – International” for several years before that), routinely bagged several stacks’ worth of pizza on the Domino’s dime:

2020 was a banner year for Allison’s pizza habit, as it it was for many during lockdown. He notched up a remarkable $6,129 in personal pizza spending.

For context, total average monthly expenditure by single consumers (single earner) that year was $3,808.75, according to the Bureau of Labor Statistics. Allison’s expensed pizzas were equivalent to 124 per cent of the average US consumer’s total 2020 at-home food spending.

The immoderate noshing stands in stark contrast to predecessor J Patrick Doyle (CEO 2010-18), whose personal pizza tabs were far lower. Looked at in isolation, they indicate Doyle’s enthusiasm either for pizza, Domino’s Pizza or free Domino’s Pizza pizza waned during the second half of tenure:

New chief executive Russell Weiner** (formerly president, USA (for Domino’s)) appears to be more in the Allison mould:

Clearly though, he has some big shoes to fill.

But this is all fairly notional without an exploration of the most important question: how much pizza did Allison claim?

The slice is right

There are a whole lot of unknowns here, the most salient of which we’ll summarise:

1. We don’t know where Allison bought these pizzas. Was he regularly partaking at Domino’s headquarters, just north-east of Ann Arbor, Michigan (where, presumably, pizza is offered), or was he eating them at home, or while travelling (nb those multi-hundred-thousand-dollar jet receipts)?

2. We don’t know how Allison bought these pizzas. Various internet sources indicate Domino’s staff get a 50 per cent discount on orders that can’t be combined with deals. Was he using this discount, or leveraging deals (often offering superior pizza-purchasing-power)? Does he bother to claim a discount on pizzas he is putting on expenses?

3. We don’t know why Allison bought these pizzas. Did he eat them all? Were they to share?

4. We don’t know what Allison bought (these pizzas). Prices across the Domino’s Pizza franchise network vary widely, so choice of pizza makes a big difference.

We’ll get on to (2) and (4). Number (3) is unknowable, so will assume, for now, that the “personal” nature of these pizzas means they were, at least in theory, for Allison’s consumption.

In an attempt to address point (1), Alphaville tried to find a sensible middle point. We settled on the Domino’s at 2601 Plymouth Rd, Ann Arbor — the closest store to Domino’s headquarters cluster (which includes a petting farm). It’s the domino nearest to the red circle on this digitally enhanced map:

After stumbling at the first hurdle — actually accessing the menu for the Plymouth Rd Domino’s, which wouldn’t work for our UK IP*** — we sought help from Alphaville’s US bureau**** to provide us with some key stats:

Pizzas
— On basic settings a small (10”) pizza is $8.99
— Medium (12”) is $10.99
— Large (14”) is $12.99
— The most expensive pizza our researcher could assemble — a large (14”) hand-tossed MeatZZa with premium chicken, bacon, Philly steak, salami, pineapple and shredded parmesan asiago (3,920 calories) — was $30.43

Offers
— Domino’s carryout deal allows customers to buy two or more of several items, including 2-topping medium pizzas, for $6.99 apiece

[Important note on figures:
— These are current prices, so inflation‡ matters here… but given we don’t have a historical Domino’s price index (wen, FRED?), we’re going to have to work with what we know, meaning these will be conservative estimates
— We only have evidence of current promotions. For the purposes of this analysis we’re going to assume they were the same throughout]

[Important note on circles:
— Readers who don’t deal with geometry on the regular may be unaware that circles (the default shape of a pizza) are magical. Which is to note that, for example, although the diameter of a medium pizza is only 2”/20 per cent greater than that of a small pizza, its surface area is about 44 per cent larger]

Focusing on the core products, the results:

Evidently, the most cost-efficient way to buy pizza from Domino’s for hoi polloi is through multi-medium-pizza batches (roughly 6.2 cents per square inch/cpsi). Employees are in less of a microeconomic bind, given they can buy small pizzas at $4.50 (5.7cpsi), mediums at $5.50 (4.9cpsi). Larges are 4.2cpsi.

All of which throws up a range of options that transforms the Domino’s menu into a puzzle fit to stump the author and also, presumably, most great economic minds. Behavioral factors have to be considered.

There might be laissez-faire Allison, ordering at the worst possible value (ie constantly buying small pizzas without discount), because ultimately he wasn’t paying. Or value Allison, who always went large, insisted on his 50 per cent off and then expensed it anyway. Perhaps normie Allison, who eyeballed the figures and bought N+1 mediums. Or some freestyle combination of all of them?

Where Excels dare

Having lured you in with the promise of pizza, we’ve served up geometry and the rationality of economic agents. Sorry. We promise that this section actually contains pizza.

Rolling with our four Allison archetypes — laissez-faire, value, normie and freestyle (treated as an mean average blend of the others) — let’s get cooking.

Computing the figures at Peak Allison Pizza Consumption (PAPC/2020/$6,126), and Average Allison Pizza Consumption (AAPC/2014–2021/$4,453), here’s how much pizza each archetype might have bought:

Problems here, like a pair of calzoni, are twofold:

1. There is no physical way Allison was eating that much pizza alone, ruining our hypothesis

2. It’s very difficult to compare the different figures here when the unit and quantity are both changing

Regarding (1), our new hypothesis is that the definition of “personal”, like pizza dough, may have been well stretched. To address (2), we normalised to square feet of pizza for comparison purposes:

In tabloid journalist layperson’s terms, this means value PAPC area equates to:

— Nearly 24 king-sized mattresses
— 1.3 per cent of a professional football (soccer) field
— 0.000000004 per cent of Wales

Or, laid edge-to-edge thusly: ⏺⏺⏺⏺⏺⏺⏺⏺⏺⏺ etc

And perhaps most relevantly to Allison’s health, expressed in calorie/day terms:

Dietary Guidelines for Americans 2020–25 recommends adults of Allison’s age eat an average of 2,600 calories per day. So, uh… conceivably, Allison could have eaten nothing but small pizzas bought at full prices for the duration of the period studied without breaking recommended consumption limits. God Bless America.

Or, as appears to be most likely, Allison decided a personal pizza allowance — like the food itself — is a thing best shared.

We defy readers to claim they learned anything useful in this piece.

—

* H/t the fine minds over at AlphaSense (née Sentieo) for bringing this to our attention

** Not to be confused with Russell “Russ” Goldencloud Weiner, the nominatively-determined creator of piss-looking energy drink Rockstar.

*** Yes, we could have used a VPN, no, we were not going to ask the FT’s IT team if they could put an VPN on our computers in order to browse Michigan Domino’s’ menus.

**** Additional reporting by Scaggsy.

***** Fun fact, Domino’s says 25 per cent of its store-level spending is on cheese