DEF 14A of Shake Shack Inc., Apr 25, 2024

DEF 14A of Shake Shack Inc.

Filed Apr 25, 2024 · FY20230001104659-24-051975

Open on EDGAR

  1. PROPOSAL NO. 1 - ELECTION OF DIRECTORS

    PROPOSAL NO. 1 - ELECTION OF DIRECTORS The Company’s Board of Directors is presently comprised of thirteen members who are divided into three classes designated as Class I, Class II and Class III. One class of directors is elected by the stockholders at each annual meeting to serve a three-year term. Class I directors consist of: Daniel Meyer, Anna Fieler, Jeff Flug, and Lori George; Class II directors consist of Randy Garutti, Joshua Silverman, Jonathan Sokoloff, and Tristan Walker; and Class III directors consist of Sumaiya Balbale, Charles Chapman III, Jeffrey Lawrence, Jenna Lyons, and Robert Vivian. On February 2, 2024, the Company filed a Current Report on Form 8-K to report that Jenna Lyons and Robert Vivian had informed the Board of each of their intentions to step down from the Board effective immediately prior to the Annual Meeting, and to not stand for re-election as Class III directors at the Annual Meeting. In addition, on April 17, 2024, the Company filed a Current Report on Form 8-K to report that Jonathan Sokoloff had informed the Board of his intention to step down from the Board effective immediately prior to the Annual Meeting. Accordingly, the Board determined to reduce the size of the Board from thirteen to ten directors, effective immediately prior to the Annual Meeting. Following the departure of Ms. Lyons and Messrs. Sokoloff and Vivian from the Board, the Board will consist of four Class I directors, three Class II directors, and three Class III directors. As previously announced, effective on May 20, 2024, Robert Lynch will commence his role as Chief Executive Officer of the Company and be appointed as a member of the Board as a Class II director. Also effective on May 20, 2024, Randy Garutti will resign as the Company’s Chief Executive Officer and as a member of the Board. Class III directors standing for re-election at the Annual Meeting are Sumaiya Balbale, Charles Chapman III, and Jeffrey Lawrence. Class I directors will stand for re-election at the 2025 annual meeting of stockholders and Class II directors will stand for re-election at the 2026 annual meeting of stockholders. Each of the nominees for election to Class III is currently a director of the Company. If elected at the Annual Meeting, each of the nominees would serve for three years and until his or her successor is duly elected and qualified, or until such director’s earlier death, resignation or removal. If any of the nominees is unable to serve or for good cause will not serve (a contingency which the Board does not expect to occur), the proxies will be voted for a substitute nominee chosen by the present Board. In such situation and in any other situation in which a nominee will not serve, the present Board may also (i) reduce the size of the Board or (ii) maintain the size of the Board and the stockholders may vote for a substitute nominee chosen by the present Board to fill the vacancy or vote for just the remaining nominee or nominees, leaving a vacancy or vacancies that may be filled at a later date by the Board. The names of the nominees for election as Class III directors at the Annual Meeting and of the incumbent and continuing Class I and Class II directors, and certain information about them, including their ages as of the Record Date, are included below.

  2. PROPOSAL NO. 1 - ELECTION OF DIRECTORS

    | Director Nominees | Class | Age | Position | Year Elected/ Appointed to Current Term | Current Term Expiration | Expiration of Term for which Nominated | | Sumaiya Balbale(1) | III | 43 | Director | 2021 | 2024 | 2027 | | Charles Chapman III(2) | III | 61 | Director | 2023 | 2024 | 2027 | | Jeffrey Lawrence(3) | III | 50 | Director | 2023 | 2024 | 2027 | | Incumbent and Continuing Directors | | | | | | | | Daniel Meyer | I | 66 | Chairman of the Board of Directors | 2022 | 2025 | - | | Anna Fieler(2) | I | 52 | Director | 2022 | 2025 | - | | Jeff Flug(4) | I | 61 | Director (Incoming Lead Director) | 2022 | 2025 | - | | Lori George(5) | I | 60 | Director | 2022 | 2025 | - | | Randy Garutti | II | 49 | Chief Executive Officer and Director (Resignation effective May 20, 2024) | 2023 | 2025 | - | | Robert Lynch | II | 47 | Director (Appointment effective May 20, 2024) | 2024 | 2026 | - | | Joshua Silverman(6) | II | 55 | Director | 2023 | 2026 | - | | Tristan Walker(7) | II | 39 | Director | 2023 | 2026 | - | | Jenna Lyons* | III | 55 | Director (Resignation effective immediately prior to Annual Meeting) | 2021 | 2024 | - | | Jonathan Sokoloff* | II | 66 | Director (Resignation effective immediately prior to Annual Meeting) | 2023 | 2026 | - | | Robert Vivian* | III | 65 | Director (Resignation effective immediately prior to Annual Meeting) | 2021 | 2024 | - |

  3. PROPOSAL NO. 1 - ELECTION OF DIRECTORS

    * Ms. Lyons will be stepping down immediately prior to the Annual Meeting as a member of the Board and as a member of the Nominating and Corporate Governance Committee and the Compensation Committee. Mr. Sokoloff will be stepping down immediately prior to the Annual Meeting as a member of the Board and as a member of the Compensation Committee. Mr. Vivian will be stepping down immediately prior to the Annual Meeting as a member of the Board and as the Lead Director and chair and member of the Audit Committee and as a member of the Compensation Committee. (1) Chair of the Compensation Committee and a member of the Audit Committee. (2) Member of the Compensation Committee. (3) Member of the Audit Committee and incoming chair of the Audit Committee to replace Mr. Vivian effective immediately prior to the Annual Meeting when Mr. Vivian will step down from the Board. (4) Currently chair of the Nominating and Corporate Governance Committee, to resign from this position effective immediately prior the Annual Meeting, and a member of the Audit Committee; will replace Mr. Vivian as Lead Director effective immediately prior to the Annual Meeting when Mr. Vivian will step down from the Board. (5) Currently a member of the Nominating and Corporate Governance Committee; will replace Jeff Flug as the committee’s chair effective immediately prior to the Annual Meeting. (6) Member of the Nominating and Corporate Governance Committee and the Audit Committee. Member of the Nominating and Corporate Governance Committee.

  4. Nominees for Election as Class III Directors

    Nominees for Election as Class III Directors Sumaiya Balbale has served on the Board of Directors of Shake Shack since March 2019. Ms. Balbale currently serves as the Chief Operating Officer for Sequoia Capital, which she joined in June 2020. Ms. Balbale previously served as the Vice President of E-commerce, Mobile and Digital Marketing for Walmart US, from February 2017 until her resignation from the company in February 2019. At Walmart she led e-commerce marketing and transformed the digital media, social media, marketing analytics and marketing technology capabilities of the company. Ms. Balbale joined Walmart after the retailer purchased Jet.com in 2016. At Jet.com she served as the Vice President of Marketing from September 2014 through October 2017, where she led all consumer marketing including brand, acquisition and retention efforts. During the first year of the acquisition, Ms. Balbale continued to operate in a dual capacity for both Jet.com and Walmart. From 2010 through 2014, Ms. Balbale worked for Quidsi, a collection of specialty e-commerce verticals that was acquired by Amazon during her tenure. Ms. Balbale graduated with a BA degree in History from Brown University in 2002, and received her MBA from Harvard Business School in 2009. In 2018, Ms. Balbale was named to Fortune’s 40 under 40 list. Key Skills and Experience: Ms. Balbale brings to her service on our Board of Directors particular knowledge and experience in e-commerce, mobile and digital marketing as well as digital and social media brand management. Charles Chapman III has served on the Board of Directors of Shake Shack since July 2023. Mr. Chapman is a seasoned restaurant executive with a strong strategic and operational track record in the industry, with a background in operations, supply chain, development, and marketing. Mr. Chapman was a senior executive at Panera Bread, where he served in several leadership positions from 2011 through 2019, including as (i) Chief Operating Officer, where he was responsible for Company Operations and Franchise Operations, Learning & Development, Retail Human Resources, Operations Tools and Services, and the Bakery Function; (ii) Chief International and Supply Chain Officer; and (iii) Executive Vice President of Development, Information Technology, and Non-Traditional Growth. Before joining Panera, Mr. Chapman also held several leadership positions at International Dairy Queen, including as Chief Operating Officer, Chief Development Officer, and Chief Concept Officer. Prior to Dairy Queen, Mr. Chapman was Chief Operating Officer of Bruegger’s Bagels, and, prior to that, the President and Co-owner of Beantown Bagels, a Bruegger’s Bagels franchisee. Early on, Mr. Chapman held various marketing, finance, and operations roles at Darden Restaurants. Mr. Chapman began his career as an associate consultant and consultant at Bain & Company. Mr. Chapman served as the Chief Executive Officer of Tatte Bakery & Café from 2020 through February 2024 and is a Partner in Act III Holdings, LLC, which invests in emerging niches in restaurants and entertainment. Mr. Chapman is currently a member of the board of directors of Taymax and formerly served on the Board of Directors of Cava, Panera Bread, and American Dairy Queen. Key Skills and Experience: Mr. Chapman brings to his service on our Board of Directors broad public company experience, more than 25 years of senior executive experience in the restaurant industry, and in-depth knowledge of restaurant operations, development, supply chain, franchising, and evolving concepts. Jeffrey Lawrence has served on the Board of Shake Shack since May 2023. Beginning in 2000, Mr. Lawrence spent more than 20 years at Domino’s Pizza, Inc., the leader in the global pizza industry, including five years as Executive Vice President & Chief Financial Officer. Mr. Lawrence was instrumental in Domino’s successful initial public offering, then the largest restaurant IPO ever, as well as the ground-breaking turnaround of the brand including the technological transformation, global expansion and dramatic increase in store level profitability, all of which led to best-in-class shareholder returns for more than a decade. Mr. Lawrence also previously served on the board of directors of Domino’s master franchisee in China. Subsequent to his time at Domino’s, he served as Chief Financial Officer of FIGS, Inc., a direct-to-consumer apparel brand, where he led its successful initial public offering and partnered to grow significant shareholder value during his tenure, from 2020 to 2021. Mr. Lawrence later served as Chief Financial Officer of ShiftKey, a technology-enabled marketplace connecting licensed professionals to the future of work, a position he held from 2022 to 2023. Mr. Lawrence began his career in public accounting and is a certified public accountant (registered status) in the State of Michigan. Mr. Lawrence holds an MBA with High Distinction from the Ross School of Business at the University of Michigan as well as a BBA (summa cum laude) from Wayne State University. Mr. Lawrence serves as a member of the board of directors of Xponential Fitness (NYSE: XPOF). Key Skills and Experience: Mr. Lawrence brings to his service on our Board of Directors more than 25 years of experience with particular expertise in the consumer retail and restaurant industries globally as well as in digital and technological transformation, and capital markets.

  5. Incumbent and Continuing Directors

    Incumbent and Continuing Directors Daniel Meyer has served as the Chairman of the Board of Directors of Shake Shack since January 2010. Mr. Meyer is the Founder and Executive Chairman of Union Square Hospitality Group (“USHG”), which owns and operates the following restaurants: Union Square Cafe, Gramercy Tavern, Blue Smoke, The Modern, the Cafes at MOMA, Porchlight, Daily Provisions, Ci Siamo and Manhatta; and an event services business, Union Square Events. The restaurants have earned 28 James Beard Awards among them. Mr. Meyer co-authored the best-selling Union Square Cafe Cookbook and authored the New York Times bestseller Setting the Table: The Transforming Power of Hospitality in Business. Mr. Meyer is currently a member of the board of directors of Olo, as well as the not-for-profit Madison Square Park Conservancy. Mr. Meyer previously served as a member of the board of directors of The Container Store from 2013 to 2017, Sotheby’s from 2011 to 2015 and OpenTable from 2000 through 2014, as well as the following not-for-profit organizations: City Harvest, New Yorkers for Parks, Union Square Partnership and NYC & Co. Key Skills and Experience: Mr. Meyer brings to his service on our Board of Directors a deep understanding of our business derived from his leadership role in our founding and our subsequent growth, his long career in hospitality, and a particular knowledge and experience in strategic planning and leadership of complex organizations, hospitality businesses and board practices of other major corporations. Anna Fieler has served on the Board of Directors of Shake Shack since December 2017. Ms. Fieler has served as a member of the board of directors of QuinStreet (NASDAQ: QNST) since July 2020, where she serves as a member of the audit committee. Ms. Fieler has also served on the board of J.Crew Group since January 2021 where she serves as a member of the audit committee and the technology investment task force. Ms. Fieler’s additional governance expertise includes having earned the CERT Certificate in Cybersecurity Oversight for public company board directors. Ms. Fieler is currently Founder & Partner of Madison Park Ventures, an investment and advisory firm she founded in 2019, focusing on seed to Series B technology companies that advance well-being, connection and productivity. Ms. Fieler served as Chief Marketing Officer of PopSugar Inc., a leading digital lifestyle media company, from 2014 to 2018. Prior to PopSugar, Ms. Fieler served as the Chief Marketing Officer of Stella & Dot LLC, an online social selling company, from 2011 to 2012. From 2009 to 2011, Ms. Fieler served as Vice President of Marketing at Shutterfly, Inc., the leading e-commerce company for personalized products and custom design, where she led the brand strategy for the company’s portfolio of brands and served as the head of marketing for Tiny Prints, Inc., a subsidiary she helped grow and scale prior to its acquisition by Shutterfly, Inc. Ms. Fieler also served in various leadership roles at eBay Inc. from 2001 to 2007. Ms. Fieler began her career in traditional advertising at Ogilvy & Mather. Ms. Fieler received an MBA from Harvard Business School in 2000 and graduated magna cum laude from Brown University in 1995. She serves on the Board of Directors of the San Francisco Opera Board. Key Skills and Experience: Ms. Fieler brings to her service on our Board of Directors public company board experience, executive experience, cybersecurity oversight experience and in-depth knowledge regarding brand strategy, digital marketing and digital customer experience. Jeff Flug has served on the Board of Directors of Shake Shack since January 2010. Mr. Flug has over 25 years of leadership and management experience primarily in the financial industry, as well as in the non-profit sector. After graduating from the University of Massachusetts/Amherst in 1984, with a BBA in Accounting, summa cum laude, Mr. Flug began his career as an accountant at PricewaterhouseCoopers where he attained his CPA in 1986. Mr. Flug attended Columbia Business School, where he received his MBA in Finance in 1988. In 1988, Mr. Flug joined Goldman, Sachs & Co., and ultimately served as a Managing Director and Head of Fixed Income Financial Futures and Options Sales. In 2000, Mr. Flug became the Head of North America Fixed Income Institutional Sales for JPMorgan Chase & Co. In 2006, Mr. Flug served as CEO and Executive Director for Millennium Promise, a not-for-profit organization whose mission is to end extreme poverty and malaria in Africa. Mr. Flug served as USHG’s Chief Financial Officer and Chief Operating Officer from December 2009 until January 2011, and as USHG’s President from January 2011 until his retirement from the company in June 2015. Mr. Flug currently serves as a board member of Pennant Park Investment Corporation and Pennant Park Floating Rate Capital Limited. Mr. Flug previously served as a member of the board of directors of USHG from 2009 until his retirement from the company in June 2015 and Sears Hometown & Outlet Stores and the Mountain School of Milton Academy, both from 2012 until 2015. Mr. Flug has been appointed by the Board to the position of Lead Director, effective immediately prior to the Annual Meeting. Key Skills and Experience: Mr. Flug brings to his service on our Board of Directors a broad-base of financial experience and particular knowledge and experience in strategic planning and leadership of complex organizations as well as risks facing public companies. Lori George has served on the Board of Directors of Shake Shack since October 2022. Ms. George is the former Global Chief Diversity, Equity and Inclusion (“DEI”) Officer for The Coca-Cola Company (“TCCC”), a role in which she served from October 2018 until March 2022. In that role, Ms. George led TCCC’s DEI Center of Excellence, directed to enable a more engaged global workforce, mirror the markets served, and support a more inclusive culture to best position the employees of TCCC to drive growth. Prior to this role, Ms. George served as the Vice President of Community and Stakeholder Relations for TCCC’s North America Operating Unit from January 2018 through September 2018. Since 2002 when she joined TCCC, Ms. George served in a number of roles at TCCC relating to public affairs, global issues communications, shareowner affairs, community and stakeholder relations, social impact and diversity, equity and inclusion with increasing responsibility. Prior to joining TCCC, Ms. George led her own public relations consultancy, LG Communications; was a vice president at Porter/Novelli, a leading public relations firm where she founded their Multicultural Communications and Alliance Building practices; and a senior public affairs specialist for the District of Columbia Government’s Office of Human Rights and Minority Business. Ms. George received her Bachelor of Arts in public relations from Howard University and her Master of Arts in public communications at American University. In 2019, Ms. George completed a 13-month Executive Leadership Experience Program at Harvard Business School and in 2021, Ms. George completed Stanford University Graduate School of Business Directors’ Consortium. Ms. George currently serves on the board of directors of Pioneer Natural Resources (NYSE: PXD), NAACP Foundation and Arete Executive Women of Influence. She is a founding member of TCCC’s Equity Accountability Councils, and a member of the National Association of Corporate Director’s Center for Inclusive Governance Advisory Council, Howard University’s School of Communications Board of Visitors, Executive Leadership Council, OnBoard, International Women’s Forum, Extraordinary Women on Boards, Leadership Atlanta, Black Women on Boards, Public Relations Society of American and The Links, Inc.

  6. Incumbent and Continuing Directors

    Key Skills and Experience: Ms. George brings to her service on our Board of Directors experience in leadership, growth and strategic planning in complex organizations and in developing and implementing breakthrough programs, including DEI programs, that meet organizational goals. Randy Garutti has served as Shake Shack’s Chief Executive Officer and on the Board of Directors since April 2012. Prior to becoming Chief Executive Officer, Mr. Garutti served as Chief Operating Officer of SSE Holdings since January 2010. Prior to leading Shake Shack, Mr. Garutti was the Director of Operations for USHG, overseeing the operations for all its restaurants. In addition, Mr. Garutti served as General Manager of Union Square Cafe and Tabla, both of which won numerous accolades in the hospitality industry. Mr. Garutti graduated from Cornell University’s School of Hotel Administration in 1997. Mr. Garutti currently serves on the board of directors of Block, Inc. Mr. Garutti also is a member of the board of directors of the Columbus Avenue Business Improvement District, a not-for-profit organization. Effective on May 20, 2024, Mr. Garutti will resign as our Chief Executive Officer and as a member of the Board and, on the same date, Robert Lynch will join as Chief Executive Officer and be appointed as a member of the Board. Robert Lynch was appointed as Shake Shack’s Chief Executive Officer and to the Board of Directors to be effective May 20, 2024. Prior to Shake Shack, Mr. Lynch served as President and Chief Executive Officer of Papa John’s International, Inc. since August 2019. Prior to joining Papa John’s, Mr. Lynch served in multiple positions within Arby’s Restaurant Group, Inc., including as President from August 2017 to August 2019 and Brand President and Chief Marketing Officer from September 2013 to August 2017. From 2012 until August 2013, Mr. Lynch served as Vice President of Marketing at Taco Bell. Mr. Lynch also held senior roles at H.J. Heinz Company and Procter & Gamble. Mr. Lynch currently serves on the board of directors at Kontoor Brands, Inc. (NYSE: KTB). Mr. Lynch is a graduate of the University of Rochester, where he obtained his BA and MBA. Key Skills and Experience: Mr. Lynch will bring to his service on our Board of Directors extensive quick-service restaurant industry and marketing experience, leading purpose-driven organizations and high-performing teams, and growing successful consumer brands. Mr. Lynch also has a track record of leading brand turnaround and improved profitability. Joshua Silverman has served on the Board of Directors of Shake Shack since November 2016. Mr. Silverman currently serves as CEO of Etsy, Inc., a position he has held since May 2017. Mr. Silverman served as Executive in Residence for Greylock Partners, a venture capital firm, from October 2015 to April 2017. He previously held this position from October 2010 through June 2011. From June 2011 to December 2015, Mr. Silverman served as President of Consumer Products and Services at American Express. Prior to joining American Express, Mr. Silverman served as CEO of Skype from February 2008 until September 2010. From July 2006 until March 2008, Mr. Silverman served as CEO of Shopping.com, an eBay company, and, from December 2003 until June 2006, Mr. Silverman served as Managing Director of Markplaats.nl & eBay NL, a Dutch subsidiary of eBay. Mr. Silverman is the co-founder of Evite, Inc., and served as its CEO from December 1998 until its sale in May 2001. Mr. Silverman received his BA in Public Policy from Brown University in 1991 and his MBA from Stanford University Graduate School of Business in 1997. Mr. Silverman currently serves on the board of directors of Etsy, Inc., as well as the following not-for-profit organizations: Code Nation, which equips students in under-resourced schools with both fundamental coding skills and professional experiences, and Clubbed Thumb Theater. He also served on the Consumer Advisory Board of the Consumer Financial Protection Bureau from 2012 to 2015. Key Skills and Experience: Mr. Silverman brings to his service on our Board of Directors particular knowledge and experience in strategic planning and leadership of complex organizations, including risk and financial management. He also brings meaningful experience in cybersecurity and sustainability. Tristan Walker has served on the Board of Directors of Shake Shack since June 2020. Mr. Walker is the Founder and was the Chief Executive Officer of Walker & Company Brands, which Mr. Walker founded in 2013 and which merged with Procter & Gamble in December 2018, through June 2023. Mr. Walker is also the Founder of Heirloom Management Co., an investment fund which aims to partner with founders of disruptive companies committed to developing culturally connected products and services. Prior to founding Walker & Company Brands, Mr. Walker was an Entrepreneur-in-Residence at Andreessen Horowitz from 2012 to 2013. From 2009 to 2012, Mr. Walker served as the Director of Business Development for Foursquare, where he oversaw strategic partnerships and monetization. In this role, Mr. Walker managed integrations with large brands and media companies including American Express, The New York Times, CNN, MTV, Starwood Hotels & Resorts, and Starbucks. In 2019, Mr. Walker was named one of Fortune Magazine’s 50 “World’s Greatest Leaders.” Mr. Walker has also been named a USA Today Person of the Year, TIME 100 Next, Ebony Magazine’s 100 Most Powerful People, Vanity Fair’s “Next Establishment,” Fortune Magazine’s “40 Under 40,” AdAge “Creative 50,” and Black Enterprise’s “40 Next.” Mr. Walker is a member of the board of directors of Footlocker, Inc. and the Founder of CODE2040, a program that matches high performing Black and Latino undergraduate and graduate coders and software engineering students with Silicon Valley start-ups for summer internships. Mr. Walker holds a bachelor’s degree in economics from Stony Brook University, where he graduated as valedictorian in 2005, and obtained an MBA from the Stanford University Graduate School of Business in 2010. Key Skills and Experience: Mr. Walker brings to his service on our Board of Directors a broad-based experience and deep knowledge of strategic planning in complex organizations as well as detailed understanding of brand and marketing strategies. Jenna Lyons has served on the Board of Directors of Shake Shack since December 2014. Ms. Lyons served as the President, Executive Creative Director of J.Crew Group, Inc. from July 2010 until her resignation from the company in April 2017, and before that served as Executive Creative Director since April 2010. Prior to that, she was Creative Director since 2007 and, before that, was Senior Vice President of Women’s Design since 2005. Ms. Lyons joined J.Crew Group, Inc. in 1990 as an Assistant Designer and has held a variety of positions within J.Crew Group, Inc., including Designer from 1994 to 1995, Design Director from 1996 to 1998, Senior Design Director in 1999, and Vice President of Women’s Design from 1999 to 2005. Ms. Lyons is currently a member of the board of directors of the Council of Fashion Designers of America, a not-for-profit organization. As previously announced, Ms. Lyons will be stepping down from the Board effective immediately prior to the Annual Meeting. Key Skills and Experience: Ms. Lyons has brought to her service on our Board of Directors deep knowledge and experience in leadership of and branding in complex organizations and retail businesses as well as a deep understanding of the consumer markets.

  7. Incumbent and Continuing Directors

    Jonathan Sokoloff has served on the Board of Directors of Shake Shack since December 2012. Mr. Sokoloff is currently a Managing Partner with LGP, which he joined in 1990. Before joining LGP, he was a Managing Director in Investment Banking at Drexel Burnham Lambert since 1985. Mr. Sokoloff serves as a member of the board of directors of the following companies or their parent holding companies: Jetro Cash & Carry, USHG and Mariner Wealth Advisors. He is a trustee of his alma mater, Williams College, as well as a trustee of the Los Angeles County Museum of Art and a director of the Melanoma Research Alliance. As previously announced, Mr. Sokoloff will be stepping down from the Board effective immediately prior to the Annual Meeting. Key Skills and Experience: Mr. Sokoloff has brought to his service on our Board of Directors particular knowledge and experience in finance and capital market transactions, as well as his broad-based experience in the leadership of retail businesses and the board practices of other major corporations. Robert Vivian has served on the Board of Directors of Shake Shack since June 2010. Mr. Vivian served as the Co-Chief Executive Officer of P.F. Chang’s China Bistro from January 2009 until his retirement from the company in December 2011. Prior to that time, he served as P.F. Chang’s President from December 2000 through January 2009 and as its Chief Financial Officer from 1996 through December 2000. Mr. Vivian is currently a member of the board of directors of Bonci USA. Mr. Vivian previously served as a director of Cheddar’s from December 2011 until April 2017 and P.F. Chang’s China Bistro from January 2009 through April 2011. Before joining P.F. Chang’s, Mr. Vivian served in a variety of positions with Brinker International, Inc. As previously announced, Mr. Vivian will be stepping down from the Board effective immediately prior to the Annual Meeting. Key Skills and Experience: Mr. Vivian has brought to his service on our Board of Directors a breadth of financial and operational leadership experience in the hospitality industry, including global licensing. Mr. Vivian also brings experience in board practices of other major corporations.

  8. Incumbent and Continuing Directors

    | The Board of Directors recommends a vote FOR the election of each of the nominated directors. |

  9. Director Compensation

    Director Compensation The Compensation Committee periodically reviews the director compensation program and its competitiveness relative to the compensation peer group as well as other industry peers. Since April 2022, our non-employee director compensation policy awards each non-employee director a combination of cash and restricted stock units in consideration for his or her service on our Board of Directors as follows: (A) (1) annual cash compensation equal to $62,500, payable in four equal installments following each of the Board’s quarterly meetings, and (2) for the chairperson of each of the Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee, additional annual cash compensation equal to $10,000, $7,500, and $5,000, respectively, payable in four equal installments following each of the Board’s quarterly meetings; and (B) (1) an annual equity award in the form of restricted stock units with an aggregate grant date fair value of $62,500 granted immediately following the annual meeting of stockholders, and (2) for the chairperson of each of the Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee, an additional annual equity award in the form of restricted stock units with an aggregate grant date fair value of $10,000, $7,500, and $5,000, respectively, granted immediately following the annual meeting of stockholders. With respect to the annual cash compensation, each director may elect to receive all, 75%, or 50% of his or her annual cash compensation in the form of additional restricted stock units. The terms of each such annual equity award described above is set forth in a written award agreement between the applicable non-employee director and us, which provides for vesting after one year of continued service as a director, subject to acceleration upon a change of control. The non-employee director compensation policy may be further amended, modified or terminated by our Board of Directors at any time in its sole discretion. In addition to the non-employee director compensation policy, we adopted a director stock ownership policy encouraging non-employee directors to hold shares of our Class A common stock and/or LLC Interests with a value equal to or in excess of the fair value of the restricted stock units or other equity award that the non-employee director received as an annual equity award on or following the most recent annual meeting. The following table sets forth the cash compensation and equity grant for each of our non-employee directors in fiscal 2023. The awards below were made in accordance with the above compensation amounts.

  10. Director Compensation

    | Name | Fees paid in cash ($)(1) | Restricted Stock Units ($)(2)(3) | Total ($) | | Daniel Meyer | - | 125,017 | 125,017 | | Sumaiya Balbale | 52,500 | 70,040 | 122,540 | | Charles Chapman III | - | 125,019 | 125,019 | | Anna Fieler | 46,875 | 62,508 | 109,383 | | Jeff Flug | 67,500 | 67,556 | 135,056 | | Lori George | 54,688 | 62,508 | 117,196 | | Jeffrey Lawrence | - | 125,017 | 125,017 | | Jenna Lyons | 62,500 | 62,508 | 125,008 | | Joshua Silverman | 46,875 | 62,508 | 109,383 | | Jonathan Sokoloff | 62,550 | 62,508 | 125,058 | | Robert Vivian | 72,500 | 72,525 | 145,025 | | Tristan Walker | 62,500 | 62,508 | 125,008 |

  11. Director Compensation

    (1) In fiscal 2023, nine non-employee directors received cash compensation under the non-employee director compensation policy. The fiscal year 2023 includes one quarter of the Board service year that commenced in 2022 and three quarters of the Board service year that commenced in 2023. For the service year that began in the second quarter of 2022, Messrs. Meyer and Silverman and Mses. Balbale and Fieler elected to receive their cash compensation in the form of equity compensation. Ms. George elected to receive 50% of her cash compensation, prorated due to her appointment during the service year, in the form of equity compensation. For the service year that began in second quarter of 2023, Messrs. Meyer, Chapman and Lawrence elected to receive their cash compensation in the form of equity compensation. (2) In fiscal 2023, each non-employee director was awarded equity compensation in consideration for his or her time of service on the Board of Directors consistent with the non-employee director compensation policy. Fiscal 2023 awards were granted to Board members as of the date of the 2023 annual meeting held on June 29, 2023. Mr. Chapman’s award was granted as of July 24, 2023. (3) As of December 27, 2023, the following non-employee directors held unvested restricted stock units as follows: Mr. Meyer - 1,610; Ms. Balbale - 902; Mr. Chapman - 1,619; Ms. Fieler - 805; Mr. Flug - 870; Ms. George - 805; Mr. Lawrence - 1,610; Ms. Lyons - 805; Mr. Silverman - 805; Mr. Sokoloff - 805; Mr. Vivian - 934; and Mr. Walker - 805.

  12. How We Make Compensation Decisions

    | 2023 Peer Group | | | Bloomin Brands, Inc. | Ruth’s Hospitality Group, Inc. | | Brinker International, Inc. | Sweetgreen, Inc. | | Chipotle Mexican Grill, Inc. | Texas Roadhouse, Inc. | | Dave & Buster’s Entertainment, Inc. | The Cheesecake Factory Inc. | | Planet Fitness, Inc. | Vail Resorts, Inc. | | Portillo’s Inc. | Wingstop Inc. |

  13. Base Salary

    Base Salary We provide competitive base salaries to our NEOs to compensate them for services rendered to the Company. Base salaries provide a fixed component of compensation reflecting the executive’s skills, expertise, leadership contributions and day-to-day performance. In the annual review of NEO compensation for fiscal 2023, the Compensation Committee reviewed total direct compensation for each NEO versus Peer Group NEO compensation as well as other competitive benchmark detail. This review revealed the base pay values for Ms. Fogertey and Mr. Koff were within the competitive range of the Peer Group. Accordingly, the Compensation Committee approved merit based adjustments to their base pay only. Mr. Garutti requested the Compensation Committee not consider, or award, any increase to his compensation for 2023.

  14. Short-Term Cash Incentive Plan Design

    Short-Term Cash Incentive Plan Design The NEOs are entitled to receive short-term performance-based cash bonuses, the amount of which is based on satisfaction of Company objectives that are approved by the Board of Directors. Cash incentives reward both the achievement of short-term financial goals, as well as the execution of activities to advance our strategic and operational priorities, which support near-term financial performance and long-term strategic objectives. Beginning fiscal 2021, the Compensation Committee determined it was in the best interest of the Company to adjust the financial performance measurement period and goals from an annual to a quarterly basis primarily due to the uncertainty caused by the COVID-19 pandemic. The Compensation Committee has approved the continuation of the financial performance measurement period and goals on a quarterly basis for fiscal 2023 primarily due to the uncertainty of the macroeconomic environment. Target award opportunities are expressed as a percentage of base salary, earned during the applicable performance period and are based on the individual NEO’s level of responsibility and ability to impact the business results. In the annual review of NEO compensation, the Compensation Committee also determined the short-term incentive targets for our NEOs were aligned with the market position and accordingly, such targets would be consistent with those used in 2022. Below are the threshold, target and maximum award levels approved by the Compensation Committee.

  15. Short-Term Cash Incentive Plan Design

    | | Target Cash Award Opportunity (as % of Base Salary) | | | | | | 2023 | | | NEO | Threshold | Target | Maximum | | Randy Garutti | —% | 100% | 200% | | Katherine Fogertey | —% | 50% | 100% | | Zachary Koff | —% | 40% | 66.8% |

  16. Short-Term Cash Incentive Plan Design

    The Compensation Committee approved Total Revenue and Adjusted EBITDA, which are key drivers of our business, as the 2023 Short-Term Cash Incentive Plan performance metrics. The measurement of the performance metrics for all NEOs was based 100% on Company-wide, quarterly performance.

  17. Short-Term Cash Incentive Plan Design

    | | 2023 Weighting | | Performance Metrics | All NEOs | | Quarter Total Revenue vs Budget* | 50% | | Quarter Adjusted EBITDA vs Budget** | 50% |

  18. Short-Term Cash Incentive Plan Design

    * For purposes of the Short-Term Cash Incentive Plan, the Company defines Total Revenue as revenue, inclusive of revenue from Company-operated Shacks and licensing revenue from international and domestic licensed Shacks. ** For purposes of the Short-Term Cash Incentive Plan, the Company defines Adjusted EBITDA as net income before (A) interest expense, (B) income tax expense or benefit, (C) depreciation expense and (D) amortization expense, and excluding certain non-cash and other items not considered in the Company’s evaluation of ongoing operating performance, including equity-based compensation expense, deferred lease costs, impairment and loss on disposal of assets, amortization of cloud-based software implementation costs and certain non-recurring charges. Adjusted EBITDA performance (both budget and actual performance) excludes bonuses.

  19. 2023 Short-Term Cash Incentive Plan Payout

    2023 Short-Term Cash Incentive Plan Payout The Short-Term Cash Incentive Plan payout is determined by the achievement of the performance metrics approved quarterly by the Board of Directors. The table below summarizes the threshold, target, and maximum performance achievement levels and the respective payout results for fiscal 2023.

  20. 2023 Short-Term Cash Incentive Plan Payout

    | Financial Performance Metric | Range of Performance Achievement | | | | | Threshold | Target | Maximum | | Total Revenue | 90% | 100% | 105% | | Adjusted EBITDA | 90% | 100% | 115% |

  21. 2023 Short-Term Cash Incentive Plan Payout

    | | Q1(1) | | Q2(2) | | Q3(3) | | Q4(4) | | | Financial Performance Metric | Target Performance Goal | Actual Achievement | Target Performance Goal | Actual Achievement | Target Performance Goal | Actual Achievement | Target Performance Goal | Actual Achievement | | Total Revenue | $245,295,219 | 103.3% | $277,936,692 | 97.8% | $275,414,712 | 100.3% | $274,459,448 | 104.3% | | Adjusted EBITDA | $22,249,790 | 139.4% | $38,828,394 | 100.3% | $36,298,019 | 106.1% | $28,100,807 | 128.7% |

  22. 2023 Short-Term Cash Incentive Plan Payout

    Note: If performance is achieved at a level between the threshold and target or between target and maximum, the payout level is determined through straight-line interpolation. (1) The actual achievement corresponds to a payout of the target value of 182.54% for the CEO and CFO and 155.30% for the COO. (2) The actual achievement corresponds to a payout of the target value of 89.96% for the CEO and CFO and 89.63% for the COO. (3) The actual achievement corresponds to a payout of the target value of 123.15% for the CEO and CFO and 115.51% for the COO. Mr. Koff received payment of 2/3 of the amount of Q3 payout due to the timing of his transition and the terms of his Separation Agreement. (4) The actual achievement corresponds to a payout of the target value of 192.94% for the CEO and CFO. Q4 payout did not apply to Mr. Koff due to the timing of his transition and the terms of his Separation Agreement. The total amounts of the short-term cash incentives paid to each NEO for fiscal 2023 performance are shown in the table below:

  23. 2023 Short-Term Cash Incentive Plan Payout

    | NEO | Target Annual Award (% of Base Salary) | Target Annual Incentive Value ($) | Total Payout Based on Financial Performance Actual Achievement | Total Award Payout Value | | Randy Garutti | 100% | $750,000 | 147.1% | $1,103,605 | | Katherine Fogertey | 50% | $246,245 | 146.9% | $361,700 | | Zachary Koff | 40% | $102,309 | 120.5% | $123,277 |

  24. 2023 Short-Term Cash Incentive Plan Payout

    Note: Target annual incentive value is calculated as a percentage of base salary paid. In the case of Mr. Koff, this amount reflects the reductions in payment values described above in accordance with the terms of his Separation Agreement.

  25. 2024 Short-Term Incentive Plan Design

    2024 Short-Term Incentive Plan Design For fiscal 2024, our NEOs will continue to be measured and awarded cash bonuses based on the achievement of Total Revenue and Adjusted EBITDA performance. The financial performance and goals will no longer be measured and awarded on a quarterly basis, but semiannually, on each respective half of the 2024 fiscal year. For fiscal 2025, it is currently expected that our NEOs will transition to an annual bonus arrangement with the financial performance and goals being measured over the full fiscal year.

  26. Long-Term Incentives

    Long-Term Incentives We provide our NEOs with long-term incentive awards under our 2015 Incentive Award Plan (as amended, the “2015 Plan”). Awards under the 2015 Plan are intended to align the interests of our NEOs with those of our stockholders and to create a link between executive pay and long-term stockholder value creation. Awards earned by our NEOs in connection with the 2015 Plan are subject to a service condition and, at times, also subject to performance conditions. For awards with both service and performance conditions, the Compensation Committee approved Total Revenue and Adjusted EBITDA, which are key drivers of our business, to measure performance. 2023 Long-Term Incentive Plan Design Annual Equity Awards In November 2021 the Compensation Committee engaged with management to design a special, one-time equity award for certain of our management team, including our NEOs, to recognize achievements, retain services, and motivate our management team by way of a long-term performance incentive to ensure alignment with our growth targets while creating value for our stockholders. After thorough discussion and analysis, the Committee approved the grant of a special, one-time performance based restricted stock units (the “November 2021 PSU Award”) to retain and motivate the management team to achieve strategic, long-term financial goals. The grant date fair value of the November 2021 PSU Award was approximately $2.6 million for our NEOs and is earned based on the achievement of Total Revenue and Adjusted EBITDA performance measures, measured over a three-year, cumulative period through fiscal 2024. This award has an opportunity to achieve a maximum payout of 200% through the applicable vesting date. In March 2023, consistent with the Company’s practice granting equity awards annually, the Compensation Committee granted restricted stock units (“RSUs”) to each of our NEOs, which vest ratably over a four-year period and are subject to the NEO’s continued employment with us through the applicable vesting date. The Compensation Committee determined an annual award in the form of time-based RSUs was appropriate for fiscal 2023 given that the November 2021 PSU award has considerable long-term performance goals and a three-year cumulative performance period. 2024 Long-Term Incentive Plan Design For 2024, we are continuing our compensation philosophy that seeks to balance performance-based and time-based long-term equity incentive awards. Therefore, for fiscal 2024, the Compensation Committee approved awards of time-based RSUs and perfomance-based restricted stock units (“PSUs”) to each of our NEOs (other than Mr. Garutti). The RSU design utilizes the ratable vesting structure over a period of four years of our prior awards. The PSUs are earned and vest over four years based on the achievement of two, equally weighted, pre-determined financial goals measured over a one-year performance period which is the 2024 fiscal year. The Committee determined that a one-year performance period was appropriate due to potential impact of business goals with the appointment of the new CEO. The RSU and PSU awards granted to Mr. Lynch as our incoming CEO are described in further detail below under the “Employment Agreements” section.

  27. Employment Agreements

    Employment Agreements We entered into an amended and restated employment agreement with Mr. Garutti, effective as of October 25, 2018; an employment agreement with Ms. Fogertey, effective as of June 14, 2021; and an amended and restated employment agreement with Mr. Koff, effective as of January 5, 2017. The material terms of such agreements are summarized below. Pursuant to advice of a tax advisor retained by the Company, effective as of the start of fiscal 2018, Mr. Garutti ceased to be treated as an employee of the Company for tax purposes, while remaining a partner of SSE Holdings. So that he is not adversely impacted by the cessation of his status as an employee of the Company for income tax purposes, pursuant to his amended and restated employment agreement, Mr. Garutti is entitled to an annual gross-up payment that will leave Mr. Garutti in the same economic position as if he had been classified as an employee for income tax purposes. The gross-up arrangement has had and is expected to have a minimal impact on the Company. The Company also will reimburse Mr. Garutti for any expenses he incurs in connection with calculating his tax obligations pursuant to the amended and restated employment agreement. Randy Garutti As previously announced, on January 26, 2024, Randy Garutti, the Company’s Chief Executive Officer, entered into a Transition and Advisory Agreement (the “Transition and Advisory Agreement”). As previously disclosed, Mr. Garutti has informed the Company’s Board of Directors that he will retire from the Company effective May 20, 2024 as its Chief Executive Officer and as an executive Board member, but that he will serve as an advisor following this time through the end of 2024 to ensure a proper transition. The terms of the Transition and Advisory Agreement modify the terms of the Amended and Restated Employment Agreement, entered into on October 23, 2018, between Mr. Garutti and the Company (the “Employment Agreement”). Pursuant to the Transition and Advisory Agreement, Mr. Garutti will continue to serve as the Company’s Chief Executive Officer and as an executive Board member until May 20, 2024 (the “Resignation Date”). Mr. Garutti has also agreed in good faith not to resign without Good Reason (as defined in the Employment Agreement) prior to the Resignation Date. Through this time period, Mr. Garutti shall continue to receive his current compensation and Mr. Garutti will receive a partial bonus for the first half of 2024 in an amount equal to the product of (A) the actual bonus that he would otherwise have been entitled to receive absent his termination of employment on the Resignation Date and (B) the ratio of (x) the number of days elapsed during the first half of 2024 through the Resignation Date to (y) the number of days elapsed during the first half of 2024. In addition, as consideration for staying through the Resignation Date, Mr. Garutti will be entitled to the vesting of the RSUs awarded to Mr. Garutti pursuant to the Company’s 2015 Incentive Award Plan that would have vested if Mr. Garutti was still employed by the Company through March 31, 2025. Following the Resignation Date and through the end of 2024, Mr. Garutti shall make himself available as an “Advisor” to his successor and the Chairman of the Board in the same capacity that members of the Board currently serve the Chief Executive Officer. As full payment for Mr. Garutti’s services as an Advisor, the Company shall pay Mr. Garutti a monthly fee equivalent to the monthly fee payable to the Company’s directors pursuant to the Non-Employee Director Compensation Policy. Robert Lynch As previously announced, on March 18, 2024, the Board appointed Robert Lynch to serve as the Company’s Chief Executive Officer, effective as of May 20, 2024 (the “Effective Date”). In addition, Mr. Lynch has been appointed as a member of the Board, also effective as of the Effective Date. In connection with his appointment, Mr. Lynch entered into an Employment Agreement with the Company The term of Mr. Lynch’s employment will be three (3) years from the Effective Date, subject to automatic one (1)-year extensions unless either party gives notice of non-extension no later than 90 days prior to the expiration of the then-applicable term. Mr. Lynch will receive an initial annual base salary of $1.0 million, subject to annual review by the Board. Mr. Lynch will be eligible to receive an annual bonus, semi-annual bonus, or such other periodic bonus as determined by the Board, in each case based on an annualized target bonus opportunity of 150% of his annual base salary, payable upon the attainment of Company performance goals established by the Board (or the Compensation Committee), with the opportunity to make up to 200%, on an annualized basis, of his annual base salary. For fiscal 2024, Mr. Lynch will be eligible to receive a pro rata amount of an annual performance-based cash bonus based on a target bonus opportunity of 150% of his annual base salary, payable upon the attainment of Company performance goals established by the Compensation Committee solely for the purposes of determining his 2024 bonus, with the opportunity to make up to 200% of his 2024 salary. Mr. Lynch also will be eligible to receive an annual equity award. For fiscal 2024, Mr. Lynch will receive (i) an annual equity award comprised of restricted stock units for such number of shares of the Company’s Class A common stock as may be determined based on an aggregate grant date fair value of $2.0 million, and (ii) an annual equity award comprised of performance stock units representing the right to receive shares of the Company’s Class A common stock as may be determined based on an aggregate grant date fair value of $3.0 million. Mr. Lynch also will receive the following signing awards: (i) a cash award equal to a pro rata amount of 150% of his annual base salary, which will become payable within 30 days following the conclusion of fiscal 2024 if he remains employed through the date of payment, (ii) an RSU award comprised of RSUs for such number of shares of the Company’s Class A common stock as may be determined based on an aggregate grant date fair value of $1.6 million, and (iii) a PSU award representing the right to receive shares of the Company’s Class A common stock as may be determined based on an aggregate grant date fair value of $4.2 million. Zachary Koff As previously announced, on August 2, 2023, the Company and Zachary Koff, the Company’s former Chief Operating Officer, entered into a Separation Agreement and General Release (the “Separation Agreement”). The terms of the Separation Agreement modify the terms of the Amended and Restated Employment Agreement, entered into on January 15, 2017, between Mr. Koff and the Company. Pursuant to the Separation Agreement, Mr. Koff continued to serve as the Company’s Chief Operating Officer until September 7, 2023, (the “Separation Date”). Following the Separation Date, Mr. Koff received, in exchange for executing and not revoking a general release of claims in favor of the Company, (i) a lump sum payment equal to his then-current base salary, (ii) payment of his quarterly bonus for the Company’s third fiscal quarter based on actual performance through the end of such quarter, (iii) accelerated vesting of his outstanding RSU awards that would have vested in March 2024, and (iv) reimbursement of the portion of his COBRA health and welfare insurance premiums. Position and Employment Term Under the applicable employment agreements, during their respective terms of employment, Mr. Garutti, Ms. Fogertey, and Mr. Koff (prior to his separation) serve as Chief Executive Officer, Chief Financial Officer, and Chief Operating Officer, respectively, of Shake Shack, SSE Holdings and all of

  28. Employment Agreements

    its affiliates. The current employment terms are as follows: (i) for Mr. Garutti, through October 25, 2024 (the term was automatically extended on October 25, 2021 for an additional three years) with automatic three (3)-year renewal terms thereafter, unless either party provides written notice of non-extension within 90 days of the expiration of the then-current term (as discussed above, Mr. Garutti will step down from his role as Chief Executive Officer on May 20, 2024); (ii) for Ms. Fogertey, through June 14, 2024, with automatic one (1)-year renewal terms thereafter, unless either party provides written notice of non-extension within 90 days of the expiration of the then-current term; and (iii) for Mr. Koff through January 5, 2024 (the term was automatically extended on January 2, 2023 for an additional year but such term ended upon his separation), with automatic one (1)-year renewal terms thereafter unless either party provides written notice of non-extension within 90 days of the expiration of the then-current term (as discussed above, Mr. Koff stepped down effective September 7, 2023). Base Salary, Annual Bonus and Equity Compensation The annual base salary for fiscal 2023 for each of Mr. Garutti, Ms. Fogertey and Mr. Koff was $750,000, $496,125 and $386,250, respectively. In addition, pursuant to their employment agreements, Mr. Garutti, Ms. Fogertey, and Mr. Koff are eligible to receive short-term cash incentives upon the attainment of Company performance goals established by the Compensation Committee. The amount of the annual performance-based cash bonus that may be received by Mr. Garutti, Ms. Fogertey and Mr. Koff upon attainment of target performance for the 2023 fiscal year was 100% of base salary, 50% of base salary, and 40% of base salary, respectively, and the maximum amount of the annual performance-based cash bonus that may be received by Mr. Garutti, Ms. Fogertey, and Mr. Koff for the 2023 fiscal year was 200% of base salary, 100% of base salary, and 66.8% of base salary, respectively. Under the employment agreements, Mr. Garutti, Ms. Fogertey, and Mr. Koff are also eligible for annual equity awards, the form and terms of which will be determined by the Compensation Committee in its discretion. Severance The employment agreement for each of Mr. Garutti, Ms. Fogertey and Mr. Koff provides for severance upon a termination by us without cause or by Mr. Garutti, Ms. Fogertey and Mr. Koff for good reason, in each case, subject to the execution and non-revocation of a waiver and release of claims by Mr. Garutti, Ms. Fogertey or Mr. Koff, as applicable. Upon such a termination, each of Mr. Garutti, Ms. Fogertey and Mr. Koff is entitled to severance consisting of (a) continued base salary (i) for Mr. Garutti, for 18 months following the date of termination, (ii) for Ms. Fogertey, during the severance period, which is three months if Ms. Fogertey has completed six months of service, six months if Ms. Fogertey has completed one year of service, and thereafter, one additional month for every twelve months of service, up to 12 months of severance, and (iii) for Mr. Koff, for 12 months following the date of termination,, (b) a prorated annual cash bonus for the year of termination based on actual Company performance, and (c) reimbursement of COBRA premiums such that the cost of coverage is equal to the cost for then current employees for up to the applicable severance period described in subpart (a) of this sentence. Upon such a termination, Mr. Garutti is entitled to accelerated vesting of a prorated portion of all of the annual equity awards that would have vested within 18 months following the date of termination absent such termination, and Mr. Koff is entitled to accelerated vesting of a prorated portion of the annual equity award in any event, that would next vest following the date of termination, such amount to be based on the number of full fiscal months elapsed during the twelve month period between the previous vesting date or, if none, the award date, and the date of termination. For purposes of the employment agreements, the Company will have “cause” to terminate each of Mr. Garutti’s, Ms. Fogertey’s or Mr. Koff’s employment upon (a) his or her willful misconduct, gross negligence or act of dishonesty with regard to the Company or any of its affiliates, which in either case, results in or could reasonably be expected to result in material harm to the Company or such affiliate, (b) his or her willful and continued failure to attempt to perform his or her duties with the Company or any of its affiliates (other than any such failure resulting from disability), which failure is not remedied within 30 days after receiving written notice thereof, (c) his or her conviction of (or his or her plea of guilty or nolo contendere to) any felony involving moral turpitude (other than traffic related offenses or as a result of vicarious liability), or (d) his or her material breach of any material provision of the employment agreement, which breach is not remedied within 10 days after receiving written notice thereof. For purposes of the employment agreements, each of Mr. Garutti, Ms. Fogertey and Mr. Koff will have “good reason” to terminate his or her employment after the occurrence, without his or her consent, of (a) any material adverse change in base salary, position, duties, responsibilities, authority, title or reporting obligations, or the assignment of duties that are materially inconsistent with his or her position, (b) a relocation of principal business location by more than (i) 25 miles, in the case of Mr. Garutti, and (ii) 50 miles, in the case of each Ms. Fogertey and Mr. Koff, from its then current location, or (c) any other material breach by the Company of the employment agreement or any other agreement with him or her. However, no termination for good reason will be effective unless (i) Mr. Garutti, Ms. Fogertey or Mr. Koff, as applicable, provides the Company with at least 30 days’ prior written notice of his or her intent to resign for good reason (which notice must be provided within 60 days following the occurrence of the event(s) purported to constitute good reason); (ii) the Company has not remedied the alleged violation(s) within the 30-day period; and (iii) Mr. Garutti’s, Ms. Fogertey’s or Mr. Koff’s resignation, as applicable, becomes effective no later than 30 days after the Company has either failed to cure such event or indicated that it will not cure such event. As discussed above, the terms of Mr. Garutti’s Transition and Advisory Agreement supersede the severance terms contained in his employment agreement, and the terms of Mr. Koff’s Separation Agreement superseded the severance terms contained in his employment agreement. Restrictive Covenants Pursuant to their respective employment agreements, Mr. Garutti, Ms. Fogertey and Mr. Koff are subject to certain non-competition and non-solicitation restrictions during employment and for a(n) (a) 18-month period, in the case of Mr. Garutti, and (b) 12-month period, in the case of each Ms. Fogertey and Mr. Koff, after termination of employment. During the restricted period, Mr. Garutti may not compete, directly or indirectly, with the Company in the business of developing, managing, and/or operating of (a) “better burger” restaurants, (b) “quick service” or “fast food” restaurants with an emphasis on hamburgers, and (c) restaurants that derive 50% or more of their revenues from the sale of hamburgers, hot dogs, chicken, french fries, and/or frozen desserts. Each of Five-Guys and In-N-Out Burger are included in the competitive restrictions described above. Each of Ms. Fogertey and Mr. Koff may not compete, directly or indirectly, with the Company in the business of developing, managing, and/or operating of (a) “better burger” restaurants, (b) “quick service” or “fast food” restaurants with an emphasis on hamburgers, or (c) “fast casual” restaurants.

  29. Employment Agreements

    No severance payments or benefits described above shall be paid following the first date that any of Mr. Garutti, Ms. Fogertey or Mr. Koff violates his or her restrictive covenants. However, following his separation on September 7, 2023, Mr. Koff may compete in the “fast casual” restaurant business during the restricted period without violating his employment agreement but he will not receive any severance after the date he begins to compete in the “fast casual” restaurant business.

  30. Accounting Considerations

    Accounting Considerations The Compensation Committee recognizes accounting implications that may impact executive compensation. For example, we recognize expense related to salaries and performance-based cash compensation when earned in our financial statements. U.S. GAAP also requires us to record an expense in our financial statements for equity awards, even though equity awards are not paid as cash to employees.

  31. Summary Compensation

    | Named Executive Officer and Principal Position | Year | Salary ($)(1) | Bonus ($)(2) | Stock Awards ($)(3) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($)(1) | Nonqualified Deferred Compensation Earnings ($) | All Other Compensation ($)(4) | Total ($) | | Randy Garutti Chief Executive Officer | 2023 | 750,000 | — | 1,500,028 | — | 1,103,605 | — | 203,813 | 3,557,446 | | | 2022 | 731,577 | — | 1,500,022 | — | 996,013 | — | 118,224 | 3,345,836 | | | 2021 | 630,250 | — | 3,549,992 | — | 623,103 | — | 663,217 | 5,466,562 | | Katherine Fogertey Chief Financial Officer | 2023 | 492,490 | — | 575,037 | — | 361,700 | — | 8,861 | 1,438,088 | | | 2022 | 469,038 | — | 750,048 | — | 319,213 | — | 6,265 | 1,544,564 | | | 2021 | 238,846 | — | 2,650,010 | — | 165,824 | — | 1,015 | 3,055,695 | | Zachary Koff Former Chief Operating Officer | 2023 | 268,644 | 386,250 | 575,037 | — | 123,277 | — | 4,015 | 1,357,223 | | | 2022 | 368,192 | — | 750,048 | — | 176,960 | — | 3,106 | 1,298,306 | | | 2021 | 328,024 | — | 1,350,071 | — | 130,503 | — | 1,977 | 1,810,575 |

  32. Grants of Plan-Based Awards

    Grants of Plan-Based Awards The following table sets forth information with respect to plan-based awards made to our NEOs in fiscal 2023.

  33. Grants of Plan-Based Awards

    | | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards | | | Estimated Future Payouts Under Equity Incentive Plan Awards | | | All Other Stock Awards: Number of Shares of Stock or Units | All Other Option Awards: Number of Securities Underlying Options | Exercise or Base Price of Option Awards | Grant Date Fair Value of Stock and Option Awards | | Named Executive Officer | | | Threshold | Target | Maximum | Threshold | Target | Maximum | | | | | | | Type | Grant Date | ($) | ($)(1) | ($)1) | (#) | (#) | (#) | (#)(2) | (#) | ($/Sh) | ($)(3) | | Randy Garutti | Cash Incentive | 12/29/2022 | — | 750,000 | 1,500,000 | — | — | — | — | — | — | — | | | RSUs | 3/1/2023 | — | — | — | — | — | — | 26,284 | — | — | 1,500,028 | | Katherine Fogertey | Cash Incentive | 12/29/2022 | — | 246,245 | 492,490 | — | — | — | — | — | — | — | | | RSUs | 3/1/2023 | — | — | — | — | — | — | 10,076 | — | — | 575,037 | | Zachary Koff | Cash Incentive | 12/29/2022 | — | 102,309 | 170,856 | — | — | — | — | — | — | — | | | RSUs | 3/1/2023 | — | — | — | — | — | — | 10,076 | — | — | 575,037 |

  34. Grants of Plan-Based Awards

    (1) In the case of Mr. Koff, amounts represent the award eligibility according to the terms of Mr. Koff’s Separation Agreement. (2) Reflects RSUs granted under the 2015 Incentive Award Plan. (3) Amounts represent the grant date fair value determined in accordance with ASC Topic 718. For stock awards, the grant date fair value is based on the closing market price of our Class A Common Stock on the grant date.

  35. Outstanding Equity Awards

    Outstanding Equity Awards The following table sets forth certain information with respect to outstanding equity awards of our NEOs as of December 27, 2023.

  36. Outstanding Equity Awards

    | | Option Awards | | | | Stock Awards | | | | | Named Executive Officer | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($)(1) | Equity incentive plan awards: Number of unearned shares, units or other rights that have not vested (#) | Equity incentive plan awards: Market or payout value of unearned shares, units or other rights that have not vested ($)(1) | | Randy Garutti | — | — | — | — | 53,994 | 4,100,304(2) | 17,701 | 1,344,214(3) | | Katherine Fogertey | — | — | — | — | 30,463 | 2,313,360(4) | 8,851 | 672,145(5) | | Zachary Koff | — | — | — | — | — | — | — | — |

  37. Outstanding Equity Awards

    (1) Based on the closing price on December 27, 2023. (2) Consists of (i) 3,278 RSUs granted on March 2, 2020 that vest equally on March 2, 2024; (ii) 2,892 RSUs granted on March 15, 2021 that vest equally over two installments on March 15, 2024 and March 15, 2025; (iii) 6,562 PSUs granted on March 15, 2021 which were earned based on the achievement of the 2021 performance criteria established by the Compensation Committee as certified by the Compensation Committee in February 2022 and which vest equally over two installments on March 15, 2024 and March 15, 2025; (iv) 14,978 RSUs granted on March 1, 2022 that vest equally over three installments on March 1, 2024, March 1, 2025 and March 1, 2026; and (v) 26,284 RSUs granted on March 1, 2023 that vest equally over four installments on March 1, 2024, March 1, 2025, March 1, 2026 and March 11, 2027. Consists of 17,701 PSUs, at target, granted on November 15, 2021 that cliff vest on March 1, 2025. The PSUs earned are based on the achievement of the 2022-2024 cumulative performance criteria established by the Compensation Committee as certified by the Compensation Committee in February 2025. Consists of (i) 12,898 RSUs granted on July 15, 2021 when Ms. Fogertey joined the Company, which vest in three equal installments on July 15, 2024, July 15, 2025 and July 15, 2026; (ii) 7,489 RSUs granted on March 1, 2022 that vest equally over three installments on March 1, 2024, March 1, 2025 and March 11, 2026; and (iii) 10,076 RSUs granted on March 1, 2023 that vest equally over four installments on March 1, 2024, March 1, 2025, March 1, 2026 and March 11, 2027. (5) Consists of 8,851 PSUs, at target, granted on November 15, 2021 that cliff vest on March 1, 2025. The PSUs earned are based on the achievement of the 2022-2024 cumulative performance criteria established by the Compensation Committee as certified by the Compensation Committee in February 2025.

  38. Option Exercises and Stock Vested

    Option Exercises and Stock Vested The following table sets forth information with respect to the exercise of stock options by our NEOs during fiscal 2023 and the vesting of the RSUs held by the NEOs during fiscal 2023.

  39. Option Exercises and Stock Vested

    | | Option Awards | | Stock Awards | | | Named Executive Officer | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | | Randy Garutti | — | — | 16,805 | 952,023 | | Katherine Fogertey | — | — | 6,797 | 481,129 | | Zachary Koff | 15,100 | 674,386 | 11,700 | 689,737 |

  40. Nonqualified Deferred Compensation

    Nonqualified Deferred Compensation The following table sets forth our nonqualified deferred compensation as of December 27, 2023.

  41. Nonqualified Deferred Compensation

    | Named Executive Officer | Named Executive Officer Contributions In Fiscal 2023 ($) | Registrant Contributions in Fiscal 2023 ($) | Aggregate Earnings in Fiscal 2023 ($) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at December 27, 2023 ($) | | Randy Garutti | — | — | — | — | — | | Katherine Fogertey | — | — | — | — | — | | Zachary Koff | — | — | — | — | — |

  42. Potential Payments Upon Termination

    Potential Payments Upon Termination The following table presents the amount of compensation payable to each of our NEOs as if the triggering termination event had occurred on the last day of our most recently completed fiscal year, December 27, 2023 (with annual bonuses based on actual performance through December 27, 2023). The actual amounts that would be paid to any NEO can only be determined at the time of an actual termination of employment and may vary from those listed below. Generally, in the event of a termination for Cause, or resignation without Good Reason, our NEOs are entitled only to earned but unpaid salary, vested benefits under any applicable benefit plans, reimbursement of incurred expenses, and all accrued but unused paid time off.

  43. Potential Payments Upon Termination

    | Potential Payments Upon Termination without Cause or Resignation with Good Reason(1) | | | | | Compensation Element | Mr. Garutti(2) | Ms. Fogertey | Mr. Koff | | Accrued and Unpaid Salary and Other Benefits ($) | 79,423 | 23,583 | — | | Short-term Bonus ($) | 187,500 | 62,016 | — | | Salary through Employment Term ($) | 1,125,000 | 289,406 | — | | Total Cash Payments ($) | 1,391,923 | 375,005 | — | | Acceleration of Unvested Equity Awards ($)(3) | 3,693,595 | — | — | | COBRA ($) | 27,092 | — | — | | TOTAL | 5,112,610 | 375,005 | — | | Potential Payments Upon Termination Due to Death or Disability(4) | | | | | Compensation Element | Mr. Garutti | Ms. Fogertey | Mr. Koff | | Acceleration of Unvested Equity Awards ($)(3) | 896,143 | 448,097 | — | | TOTAL ($) | 6,008,753 | 823,102 | — |

  44. Potential Payments Upon Termination

    Amounts listed in this table are calculated in accordance with the terms of the applicable employment agreement. (2) Pursuant to the gross-up arrangement in Mr. Garutti’s employment agreement, a true up payment may be required to be made, but no amount has been included here since the information required to calculate any amount that would be due is not available nor reasonably estimable. (3) Amounts listed in this table are calculated in accordance with the terms of the applicable employment agreement, equity award agreement and governing equity plan documents, as applicable. Equity values are determined based on the closing price of our Class A common stock on December 27, 2023 and equity holdings as of that date. (4) If an NEO dies or becomes Disabled (as the term is defined in the applicable PSU award agreement) in the period a PSU is subject to performance criteria, a portion of that tranche will vest, pro rata, based on service provided.

  45. CEO PAY RATIO

    CEO PAY RATIO

  46. PAY VERSUS PERFORMANCE

    PAY VERSUS PERFORMANCE As required by the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(v) of Regulation S-K (“Item 402”), we are providing the following information about the relationship between executive compensation actually paid (“CAP”) and certain financial performance measures of the Company. Neither the Compensation Committee nor the executives of our Company directly used the information in this table or the related disclosures when making compensation decisions for 2023. You should refer to the Compensation Discussion and Analysis in this Proxy Statement for a complete description of how executive compensation relates to Company performance and how the Compensation Committee makes its decisions. The following table shows the total compensation for our CEO and other NEOs as set forth in the Summary Compensation Table, the CAP to our CEO and other NEOs, our total shareholder return (“TSR”), the TSR of the S&P 600 Restaurants Index, our net income, and Adjusted EBITDA, our Company-select Performance measure, over the last three fiscal years.

  47. Pay Versus Performance Table

    Pay Versus Performance Table

  48. Pay Versus Performance Table

    | | | | | | Value of Initial Fixed $100 | | | | | Fiscal Year | Summary Compensation Table for CEO | Compensation Actually Paid to CEO(1) | Average Summary Compensation Table Total for other NEOs(2) | Average Compensation Actually Paid to Other NEOs(2) | Total Shareholder Return(3) | Peer Group Total Shareholder Return(3) | Net Income (in millions) | Adjusted EBITDA (in millions)(4) | | 2023 | $3,557,446 | $5,895,824 | $1,579,427 | $1,605,019 | $126.67 | $121.68 | $21 | $144.63 | | 2022 | 3,345,835 | 1,435,005 | 1,421,436 | 407,308 | 70.98 | 97.44 | (25.97) | 83.97 | | 2021 | 5,466,562 | 4,472,993 | 2,263,343 | 1,389,545 | 116.95 | 122.76 | (10.11) | 67.53 |

  49. Pay Versus Performance Table

    Item 402 requires certain adjustments to be made to the Summary Compensation Table totals to determine CAP for reporting in the Pay versus Performance Table. CAP is a value calculated under Item 402, but does not necessarily represent cash and/or equity transferred to the NEO without restriction. As required by Item 402, the following table details adjustments made to Summary Compensation Table total compensation values to arrive at CAP values (Note that NEOs do not participate in a defined benefit plan so there are no adjustments for pension benefits, and similarly, there are no adjustments made for dividends):

  50. Pay Versus Performance Table

    | Fiscal Year | Named Executive Officers | Summary Compensation Table Total | Grant Date Value of New Awards | Year End Value of New Awards | Change in Value of Unvested Awards | Change in Value of Vested Awards | Total Equity Compensation Actually Paid | Compensation Actually Paid | | 2023 | CEO | $3,557,446 | $(1,500,028) | $1,996,007 | $1,605,454 | $236,945 | $3,838,406 | $5,895,824 | | | Other NEOs | 1,579,427 | (756,808) | 382,586 | 510,913 | (111,099) | 782,400 | 1,605,019 | | 2022 | CEO | 3,345,835 | (1,500,022) | 849,766 | (1,255,404) | (5,170) | (410,808) | 1,435,005 | | | Other NEOs | 1,421,436 | (750,048) | 424,904 | (639,163) | (49,821) | (264,080) | 407,308 | | 2021 | CEO | 5,466,562 | (3,549,992) | 2,566,569 | (257,369) | 247,223 | 2,556,423 | 4,472,993 | | | Other NEOs | 2,263,343 | (1,883,432) | 1,416,528 | (487,841) | 80,947 | 1,009,634 | 1,389,545 |

  51. Pay Versus Performance Table

    (2) The other NEOs include Ms. Fogertey and Mr. Koff. Ms. Fogertey’s compensation totals reflect amounts based on her time served in the position of Chief Financial Officer which began in June fiscal 2021. Mr. Koff’s compensation total reflects amounts based on his time served in the position of Chief Operating Officer through September 8, 2023, in accordance with the terms of Mr. Koff’s Separation Agreement. (3) TSR is based on the value of an initial fixed investment of $100. The TSR peer group consists of the S&P 600 Restaurants Index. The Company defines Adjusted EBITDA as net income before (A) interest expense, (B) income tax expense or benefit, (C) depreciation expense and (D) amortization expense, and excluding certain non-cash and other items not considered in the Company’s evaluation of ongoing operating performance, including equity-based compensation expense, deferred lease costs, impairment and loss on disposal of assets, amortization of cloud-based software implementation costs and certain non-recurring charges. Adjusted EBITDA (both budget and actual performance) excludes bonuses.

  52. Relationship Between “Compensation Actually Paid” and Performance Measures

    Relationship Between “Compensation Actually Paid” and Performance Measures The charts below show, for the past four fiscal years, the relationship of the Company’s TSR relative to its peers as well as the relationship between the CEO and other NEO CAP and (i) the Company’s TSR; (ii) the Company’s net income; and (iii) the Company’s Adjusted EBITDA.

  53. Interest of Directors and Executive Officers

    Interest of Directors and Executive Officers All members of our Board and all of our executive officers are eligible for awards under the 2025 Plan and, thus, have a personal interest in the approval of the 2025 Plan.