DEF 14A of Dominos Pizza Inc
Filed Mar 15, 2024 · FY20230001193125-24-068579
VIRTUAL MEETING ADMISSION
| | Page | | EXECUTIVE COMPENSATION TABLES | 49 | | Summary Compensation Table for 2023 | 49 | | Grants of Plan-Based Awards | 51 | | Outstanding Equity Awards at Fiscal Year-End | 52 | | Option Exercises and Stock Vested | 55 | | Non-Qualified Deferred Compensation | 55 | | Potential Post-Employment Payments to Named Executive Officers | 56 | | Pay Versus Performance | 60 | | CEO Pay Ratio | 65 | | PROPOSAL THREE: ADVISORY VOTE TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION | 66 | | PROPOSAL FOUR: SHAREHOLDER PROPOSAL | 67 | | COMPENSATION OF DIRECTORS | 69 | | Director Compensation Table for 2023 | 70 | | Non-Qualified Deferred Compensation of Directors | 70 | | Outstanding Equity Awards of Directors | 71 | | EQUITY COMPENSATION PLAN INFORMATION | 72 | | Domino’s Pizza, Inc. 2004 Equity Incentive Plan | 72 | | CERTAIN TRANSACTIONS INVOLVING MANAGEMENT OR 5% OR GREATER SHAREHOLDERS | 73 | | Review and Approval of Related Person Transactions | 73 | | Time-Sharing Agreement with Russell J. Weiner for Use of Corporate Aircraft | 73 | | Employment of David A. Brandon | 73 | | OTHER MATTERS | 74 | | Attending the Annual Meeting | 74 | | Shareholder Proposals and Director Nominations for Inclusion in Next Year’s Proxy Statement Pursuant to Rule 14a-8 | 74 | | Shareholder Proposals and Director Nominations Other Than Pursuant to Rule 14a-8 | 74 | | Universal Proxy Rules for Director Nominations | 74 | | Interested Persons and Shareholder Communications to the Board of Directors | 75 | | “Householding” of Proxy Materials | 75 | | General Information | 75 | | ANNEX A – DOMINO’S PIZZA, INC. EXECUTIVE OFFICERS AND DIRECTORS | A-1 |
Director Nominees
Director Nominees This table provides summary information about each director nominee. Each director stands for annual election to a one-year term. Our director elections are subject to our Majority Voting Policy.
Director Nominees
| Nominee | Age | Director Since | Current Principal Occupation | Current Committee Memberships* | | | | Current Public Company Boards Other Than Domino’s | | | | | | A | C | I&D | NCG | | | David A. Brandon | 71 | 1999 | Executive Chairman of Domino’s Pizza, Inc. | | | | | DTE Energy Co. | | C. Andrew Ballard | 51 | 2015 | CEO and Founder of Wiser Solutions, Inc. and Founder and Managing Partner of Figtree Partners | | ● | Chair | | Etsy, Inc. | | Andrew B. Balson | 57 | 1999 | Managing Partner of Cove Hill Partners | | ● | | ● | | | Corie S. Barry | 48 | 2018 | CEO of Best Buy Co., Inc. | | Chair | | | Best Buy Co., Inc. | | Diana F. Cantor | 66 | 2005 | Partner with Alternative Investment Management, LLC | | | ● | ● | Universal Corporation VICI Properties Inc. | | Richard L. Federico | 69 | 2011 | Former CEO and Chairman of P.F. Chang’s China Bistro Inc. | Chair | | | | | | James A. Goldman | 65 | 2010 | Former President and CEO of Godiva Chocolatier, Inc. | ● | | ● | | Abercrombie & Fitch Co. | | Patricia E. Lopez | 62 | 2018 | Former CEO of High Ridge Brands Co. | ● | | | Chair | Aramark Express, Inc. | | Russell J. Weiner | 55 | 2022 | CEO of Domino’s Pizza, Inc. | | | | | The Clorox Company |
Director Nominees
*A = Audit Committee / C = Compensation Committee / I&D = Inclusion & Diversity Committee / NCG = Nominating and Corporate Governance Committee
Director Nominees
| Proxy Summary (continued) | |
Nominees for Election to One-Year Terms Expiring at the 2025 Annual Meeting of Shareholders
Nominees for Election to One-Year Terms Expiring at the 2025 Annual Meeting of Shareholders Set forth below are the name, age, principal occupation and/or business experience and qualifications of each nominee for election as a director. All of the nominees are current members of the Board. The Nominating and Corporate Governance Committee believes that each of the nominees possesses the necessary professional experience and qualifications to contribute to the success of the Company. Information with respect to the business experience and other publicly-traded company boards on which the nominees serve, or served in the past five years, as a director is set forth below. The number of shares of Domino’s Pizza, Inc. common stock beneficially owned by each director nominee appears later in this Proxy Statement.
Nominees for Election to One-Year Terms Expiring at the 2025 Annual Meeting of Shareholders
| Our Board of Directors Unanimously Recommends a Vote FOR Each of the Nominees Listed Below | ✓ |
Nominees for Election to One-Year Terms Expiring at the 2025 Annual Meeting of Shareholders
| David A. Brandon Executive Chairman Director since: 1999 Age: 71 Current Committees: None | David A. Brandon has served as Chairman of Domino’s Board of Directors since March 1999 and as Executive Chairman since April 2022. Mr. Brandon also served as Domino’s Chief Executive Officer from March 1999 to March 2010 and as Special Advisor from March 2010 to January 2011. In addition to his position at Domino’s, Mr. Brandon currently serves as Executive Advisor to KKR & Co., Inc., one of the world’s largest private equity firms. He previously served as Chief Executive Officer of Toys “R” Us, Inc., formerly the world’s largest specialty retailer of toy and baby products, from July 2015 to December 2018. He was the Director of Athletics at the University of Michigan from March 2010 to October 2014. Prior to joining Domino’s, Mr. Brandon was President and CEO of Valassis, Inc., a company in the sales promotion and coupon industries, from 1989 to 1998 and Chairman of the Board of Directors of Valassis, Inc. from 1997 to 1998. In addition to serving on the Board of Directors of Domino’s, Mr. Brandon also serves on the Board of Directors of DTE Energy Co., as well as several private companies and non-profit organizations. He previously served on the Boards of Directors of MillerKnoll, Inc., Toys “R” Us, Inc., Burger King Corporation, Kaydon Corporation, Northwest Airlines and The TJX Companies, Inc. | | | Qualifications: Mr. Brandon served as the Company’s Chief Executive Officer for eleven years and has served as Chairman of the Board since 1999 and as Executive Chairman since 2022. He thereby possesses a deep understanding of the Company’s operations, market development objectives, strategic planning and other internal business aspects of the Company. Mr. Brandon brings to the Board extensive executive experience in marketing and sales. His service on the Boards of Directors of several other companies, including retailers, also makes him qualified for service as a director of the Company. | | C. Andrew Ballard Presiding Director (Lead Independent Director) Director since: 2015 Age: 51 Current Committees: Inclusion & Diversity (Chair) Compensation | C. Andrew Ballard currently serves as the Chief Executive Officer and Founder of Wiser Solutions, Inc., a software and data company, a position he has held since December 2012. Mr. Ballard is also Founder of Figtree Partners, an investment firm focused on software and technology, and has served as its Managing Partner since November 2012. He was previously a Senior Advisor at the private equity firm Hellman & Friedman LLC from 2012 to 2019, where he also served as Managing Director from 2006 to 2012 and as a Director from 2004 to 2006. Prior to joining Hellman & Friedman in 2003, Mr. Ballard worked at Bain Capital, LLC in San Francisco and Boston, as well as Bain & Company, Inc. from 1994 to 2002. Mr. Ballard has served on Domino’s Board of Directors since July 2015 and has served as Presiding Director since May 2022. Mr. Ballard serves as the Chairperson of the Inclusion & Diversity Committee and is a member of the Compensation Committee of the Board of Directors. In addition to serving on Domino’s Board of Directors, Mr. Ballard serves on the Boards of Directors of Etsy, Inc., Datacor, Inc. and Zignal Labs. Mr. Ballard previously served on the Boards of Directors of Activant Solutions Inc., Catalina Marketing Corporation, DoubleClick Inc., Getty Images, Inc., Internet Brands, Inc. and Vertafore, Inc. and was the Chair of the Board of Trustees and Chair of the Investment Committee of the San Francisco Foundation. | | | Qualifications: Mr. Ballard brings to the Board strategic business and acquisition experience, as well as overall business acumen through his experience at Hellman & Friedman and Bain Capital. Mr. Ballard also provides valuable technology and digital knowledge, making him qualified for service as a director of the Company. |
Nominees for Election to One-Year Terms Expiring at the 2025 Annual Meeting of Shareholders
| Proposal One: Election of Directors (continued) | |
Nominees for Election to One-Year Terms Expiring at the 2025 Annual Meeting of Shareholders
| Andrew B. Balson Independent Director Director since: 1999 Age: 57 Current Committees: Compensation Nominating and Corporate Governance | Andrew B. Balson is currently the Managing Partner of Cove Hill Partners, L.P., a firm formed to make private equity investments. Previously, Mr. Balson was the Chief Executive Officer of Match Beyond, an innovative college completion program that helps low-income young adults attain college degrees and prepare for the workforce, a position he held from January 2015 to June 2016. Prior to becoming the Chief Executive Officer of Match Beyond, Mr. Balson was a Managing Director at Bain Capital, LLC, a global investment company, from 2001 to 2013. Mr. Balson became a Principal of Bain Capital in January 1998. Mr. Balson has served on Domino’s Board of Directors since March 1999 and is a member of the Compensation Committee and a member of the Nominating and Corporate Governance Committee of the Board of Directors. Mr. Balson previously served on the Boards of Directors of Bloomin’ Brands, Inc., FleetCor Technologies, Inc., Dunkin’ Brands, Inc., Skylark Co., Ltd., BELLSYSTEM24, Inc., Burger King Corporation and Bright Horizons Family Solutions, Inc. Mr. Balson currently serves on the Boards of a number of private companies. | | | Qualifications: Mr. Balson brings to the Board strategic acquisition experience, a high level of financial literacy and overall business acumen through his executive experience at Bain Capital, LLC and Cove Hill Partners, L.P. His public and private company directorship experience and his familiarity with the Company and other restaurant companies, as well as his extended tenure on our Board, make him qualified for service as a director of the Company. | | Corie S. Barry Independent Director Director since: 2018 Age: 48 Current Committees: Compensation (Chair) | Corie S. Barry currently serves as Chief Executive Officer and as a member of the Board of Directors of Best Buy Co., Inc., a specialty retailer of consumer electronics, personal computers, entertainment software and appliances, roles held since June 2019. Prior to becoming CEO, Ms. Barry served as Best Buy’s Senior Executive Vice President and Chief Financial and Strategic Transformation Officer from June 2016 to June 2019, Chief Strategic Growth Officer from October 2015 to June 2016, Interim President of Geek Squad Services from March 2015 to May 2016, Senior Vice President of Domestic Finance from May 2013 to October 2015 and in a variety of financial and operational roles, both in the field and at the corporate campus, since joining Best Buy in 1999. Prior to Best Buy, Ms. Barry worked at Deloitte Touche Tohmatsu Limited from 1997 to 1999. Ms. Barry has served on Domino’s Board of Directors since July 2018 and is the Chairperson of the Compensation Committee of the Board of Directors. | | | Qualifications: Ms. Barry brings to the Board experience leading a public company, vast financial expertise, retail operations and strategic growth know-how and overall business acumen, making her qualified for service as a director of the Company. | | Diana F. Cantor Independent Director Director since: 2005 Age: 66 Current Committees: Inclusion & Diversity Nominating and Corporate Governance | Diana F. Cantor is currently a Partner at Alternative Investment Management, LLC, a position she has held since January 2010, and is past Chairman of the Virginia Retirement System, where she served as a Trustee and a member of the Audit and Compliance Committee from 2010 to 2020. She also serves as a Senior Adviser with AKF Consulting Group, focusing on the areas of governance, fiduciary duties and oversight of state-run investment programs. Ms. Cantor has served on Domino’s Board of Directors since October 2005 and is a member of the Inclusion & Diversity Committee and a member of the Nominating and Corporate Governance Committee of the Board of Directors. In addition to serving on Domino’s Board of Directors, Ms. Cantor serves on the public company Boards of Directors of Universal Corporation (Chairman of the Nominating and Corporate Governance Committee, member of the Compensation Committee and the Finance and Pension Investment Committee) and VICI Properties Inc. (Chair of the Audit Committee, member of the Nominating and Corporate Governance Committee), and the private company Boards of Directors of Mauser Packaging Solutions and SCP Retirement Services. She previously served on the Boards of Directors of Adore Me, Media General, Inc., Revlon, Inc., The Edelman Financial Group Inc., Vistage International, Inc., Knowledge Universe Education LLC, Edelman Financial Services, LLC and Service King Body and Paint LLC. | | | Qualifications: Ms. Cantor possesses extensive financial skills and brings to the Board an important financial perspective. Ms. Cantor also provides valuable consumer product and marketing knowledge, as well as significant public company directorship experience, making her qualified for service as a director of the Company. |
Nominees for Election to One-Year Terms Expiring at the 2025 Annual Meeting of Shareholders
| Proposal One: Election of Directors (continued) | |
Nominees for Election to One-Year Terms Expiring at the 2025 Annual Meeting of Shareholders
| Richard L. Federico Independent Director Director since: 2011 Age: 69 Current Committees: Audit (Chair) | Richard L. Federico served as Non-Executive Chairman of P.F. Chang’s China Bistro, Inc. based in Scottsdale, AZ, from February 2016 until its acquisition in March 2019. Mr. Federico previously served as Executive Chairman of P.F. Chang’s from March 2015 to February 2016 and as Chairman of the Board, Chief Executive Officer or Co-Chief Executive Officer from September 1997 to March 2015. Mr. Federico joined P.F. Chang’s as President in 1996, when he also began his service on its Board of Directors. Mr. Federico started his career in the restaurant industry as a Manager at Steak & Ale, and later at Orville Beans and Bennigan’s restaurants. He went on to develop Grady’s Goodtimes, serving as Co-Founder/Partner and Vice President of Operations until Brinker International, Inc. acquired Grady’s in 1989. Upon joining Brinker International, Mr. Federico served as Senior Vice President and concept head for Macaroni Grill before being promoted to President of the Italian Concept division. As President, he directed operations and development for Macaroni Grill and Spageddies. Mr. Federico has served on Domino’s Board of Directors since February 2011 and is the Chairperson of the Audit Committee of the Board of Directors. In addition to serving on Domino’s Board of Directors, Mr. Federico currently serves on the Boards of Directors of Black Rock Coffee, The Melt and Boqueria, all privately-held restaurant concepts. Mr. Federico previously served as Chairman of the Board of Directors of Jamba, Inc. and on the Boards of Directors of RPT Realty and Tastemaker Acquisition Corp. He is a Founding Director of Chances for Children. | | | Qualifications: Mr. Federico brings to the Board experience in leading a successful publicly-traded restaurant concept, overall business and financial acumen and public company directorship experience, making him qualified for service as a director of the Company. | | James A. Goldman Independent Director Director since: 2010 Age: 65 Current Committees: Audit Inclusion & Diversity | James A. Goldman currently serves on three portfolio company Boards representing Eurazeo SE, a global investment firm listed on the Paris Stock Exchange, including Q Mixers, a leading premium carbonated mixer brand, Waterloo Sparkling Water Corp., a carbonated beverage company, and Dewey’s Bakery, a premium baked goods company. Mr. Goldman served as President and Chief Executive Officer and as a member of the Board of Directors of Godiva Chocolatier, Inc. from 2004 to 2014. Mr. Goldman was President of the Food and Beverage Division at Campbell Soup Company from 2001 to 2004 and served in various executive positions at Nabisco, Inc. from 1992 to 2000. Prior to his work at Nabisco, Mr. Goldman was a senior consulting associate at McKinsey & Company, Inc. Mr. Goldman has served on Domino’s Board of Directors since March 2010, and is a member of the Audit Committee and a member of the Inclusion & Diversity Committee of the Board of Directors. In addition to serving on Domino’s Board of Directors, Mr. Goldman serves on the Board of Directors of Abercrombie & Fitch Co., where he is a member of the Compensation Committee and Chair of the Nominating and Corporate Governance Committee. Mr. Goldman previously served on the Board of Directors of The Children’s Place, Inc. He also served on the Board of Trustees and Executive Committee of Save the Children in Fairfield, CT, the Executive Board of the International Tennis Hall of Fame, and the Board of Trustees at the YMCA Camps Becket and Chimney Corners in Becket, MA. | | | Qualifications: Mr. Goldman brings to the Board experience in leading successful retail and branded consumer companies, including more than 30 years in the global food industry, overall business acumen and public company directorship experience, making him qualified for service as a director of the Company. |
Nominees for Election to One-Year Terms Expiring at the 2025 Annual Meeting of Shareholders
| Proposal One: Election of Directors (continued) | |
Nominees for Election to One-Year Terms Expiring at the 2025 Annual Meeting of Shareholders
| Patricia E. Lopez Independent Director Director since: 2018 Age: 62 Current Committees: Audit Nominating and Corporate Governance (Chair) | Patricia E. Lopez most recently served as Chief Executive Officer and as a member of the Board of Directors of High Ridge Brands Co. from July 2017 to March 2020. Ms. Lopez served as a Senior Vice President at Estée Lauder Companies Inc. from January 2015 to July 2016, a Senior Vice President at Avon Products, Inc. from December 2012 to November 2014 and previously held various positions at The Procter & Gamble Co. for 25 years, most recently serving as a Vice President and General Manager overseeing its Eastern Europe business. Ms. Lopez has served on Domino’s Board of Directors since July 2018 and is the Chairperson of the Nominating and Corporate Governance Committee and a member of the Audit Committee of the Board of Directors. In addition to serving on Domino’s Board of Directors, Ms. Lopez also serves on the Boards of Directors of Aramark and Express, Inc. She previously served on the Board of Directors of Acreage Holdings. | | | Qualifications: Ms. Lopez brings to the Board tremendous global business leadership, brand marketing and operations experience, as well as directorship experience and overall business acumen, making her qualified for service as a director of the Company. | | Russell J. Weiner Chief Executive Officer Director since: 2022 Age: 55 Current Committees: None | Russell J. Weiner has served as Domino’s Chief Executive Officer since May 2022. Prior to becoming CEO, Mr. Weiner served as Chief Operating Officer and President – Domino’s U.S. from July 2020 to April 2022, Chief Operating Officer and President of the Americas from July 2018 to July 2020, President, Domino’s USA from October 2014 to July 2018, and joined Domino’s as Executive Vice President and Chief Marketing Officer in September 2008. Prior to joining Domino’s, Mr. Weiner held various marketing positions at PepsiCo, Inc. from 1998 to 2008, most recently serving as Vice President of Marketing, Colas for Pepsi-Cola North America. Mr. Weiner has served on Domino’s Board of Directors since April 2022, when he was elected in conjunction with his appointment as Chief Executive Officer effective May 2022. Mr. Weiner also serves on the Board of Directors of The Clorox Company. | | | Qualifications: Mr. Weiner’s many years of executive leadership experience with the Company, including as its Chief Executive Officer, and in the restaurant and food and beverage industries generally, provides him with a deep knowledge of brand building, marketing, operations and consumer insights. In addition, his experience in digital innovation enables him to help the Company maintain its leadership position in digital technology within the restaurant industry, making him qualified for service as a director of the Company. |
Nominees for Election to One-Year Terms Expiring at the 2025 Annual Meeting of Shareholders
| Corporate Governance and Director Information | |
Compensation Program Overview
Compensation Program Overview The Compensation Committee is responsible for determining the compensation of our executive officers and administering the cash incentive and equity-based plans in which our executive officers, directors and other eligible employees participate. The goal of the Company’s executive compensation program is to attract, motivate and retain talented and high-performing individuals to help us attain our business goals and objectives. We are committed to achieving long-term, sustainable growth and increasing shareholder value. Our compensation program for our named executive officers is designed to be aligned with and to enhance these commitments, as well as to enhance retention and to encourage and reward strong financial performance on both an annual and long-term basis. We use a combination of short-term and long-term incentives to ensure a strong connection between Domino’s operating performance and actual compensation delivered. The Compensation Committee uses total direct compensation as the primary measure of compensation for our named executive officers. The principal elements of total direct compensation for our CEO and our other named executive officers are: (i) annual base salary, (ii) annual performance cash incentives under the AIP and (iii) long-term incentive compensation consisting of PSUs, RSUs and stock options granted under the EIP.
2023 Principal Elements of Total Direct Compensation
| Base Salary | + | Annual Performance Incentive (cash award under the AIP) | + | Long-term Incentive Compensation (performance-based restricted stock units, time-vesting restricted stock units and stock options under the EIP) | = | TOTAL DIRECT COMPENSATION |
2023 Principal Elements of Total Direct Compensation
| • | No tax gross-ups on change in control-related payments; |
2023 Principal Elements of Total Direct Compensation
| • | A cap on maximum annual performance incentives; |
2023 Principal Elements of Total Direct Compensation
| • | No dividends are paid on unvested RSUs and PSUs; dividend equivalents in the form of cash are only payable to the extent the RSUs and PSUs ultimately vest. |
Compensation Philosophy and Process
| * Represents each named executive officer’s target pay mix. Amounts are based on the grant date fair value of target long-term incentive compensation and assume target performance for short-term cash incentives and PSUs. Totals may not sum to 100% due to rounding. |
Compensation Philosophy and Process
| * Represents each named executive officer’s target pay mix. Amounts are based on the grant date fair value of target long-term incentive compensation and assume target performance for short-term cash incentives and PSUs. Totals may not sum to 100% due to rounding. |
Compensation Philosophy and Process
For fiscal 2023, the amount of annual short-term cash performance incentives reported in the Summary Compensation Table as earned by our named executive officers is greater than the amount awarded at target, as shown above, due to the achievement by the Company of the AIP performance measure at above-target levels in light of the Company’s strong 2023 financial performance, as further described below under “—Components of Total Direct Compensation—Annual Performance Incentives.” Consideration of Say-On-Pay Vote and Shareholder Feedback. In evaluating the Company’s executive compensation program, the Compensation Committee also considered the results of the advisory vote on the say-on-pay proposal presented at the Company’s 2023 annual meeting of shareholders. At the 2023 annual meeting, more than 92% of shares voted were in support of the compensation provided to our named executive officers. While shareholder support of our executive compensation program, as reflected in the results of the annual advisory say-on-pay shareholder vote, has been very strong in recent years, the Compensation Committee continually assesses the structure of our long-term incentive compensation program with guidance from Meridian. The Committee believes that the current program comprised of PSUs, RSUs and stock options has further improved the alignment between executive compensation and the interests of shareholders and believes that the use of PSUs, RSUs and stock options that vest over a multi-year period focuses executives on the Company’s long-term interests without leading to imprudent risk-taking and also reflects market “best practices.” In addition to considering the results of the 2023 say-on-pay vote as described above, the Company regularly engages in discussions with certain major shareholders to solicit their feedback regarding our executive compensation program, including as part of our regular shareholder outreach efforts described further in “Corporate Governance and Director Information—Shareholder Engagement.” The Company has made changes to our executive compensation program in prior years based upon feedback from this shareholder outreach and plans to continue these shareholder engagement efforts in future years. Discussions with these shareholders in 2023 did not indicate any significant issues with our current executive compensation program.
Compensation Philosophy and Process
Role of the Compensation Consultant. The Compensation Committee has the authority under its charter to engage the services of outside consultants, advisors and others to assist the Compensation Committee and also to discontinue such services in its sole discretion. In accordance with this authority, the Compensation Committee engaged Meridian as an independent compensation consultant beginning in fiscal 2019 to advise on matters related to executive and director compensation. In addition to attending the regular Compensation Committee meetings held in 2023, in December 2022 Meridian provided its analysis of competitive executive pay practices (the “Meridian Analysis”) that the Compensation Committee used in evaluating and determining our named executive officers’ target total direct compensation, and the components and relative weightings thereof, for fiscal 2023. Meridian was available to advise the Compensation Committee with respect to various executive and director-related compensation matters throughout the year. The Compensation Committee assessed the independence of Meridian pursuant to Item 407(e)(3)(iv) of Regulation S-K and concluded that no conflict of interest existed with Meridian during its engagement that would prevent Meridian from independently advising the Compensation Committee. The Compensation Committee has continued to retain and use Meridian in fiscal 2024. Benchmarking and Peer Group. The Compensation Committee evaluates executive compensation by measuring the target total direct compensation of our named executive officers against benchmarks consisting of the Company’s peer group described below and of other comparable companies (through the use of benchmark data). It conducts an annual review of executive compensation by analyzing peer group pay data and applicable benchmark data, including the Meridian Analysis (as previously described), which include relevant retail/wholesale and general industry compensation market data. The Compensation Committee generally uses a composite of this peer group and market survey and other data to determine market compensation levels, which it then considers when establishing target levels of total direct compensation for the named executive officers and the components and relative weightings of such compensation. When making compensation decisions, the Compensation Committee is informed by the experiences of its members and also takes into account individual compensation recommendations from our CEO, with respect to the other named executive officers, and the Executive Chairman of the Board and the Chairperson of the Compensation Committee, with respect to our CEO, along with, among other things, the executive’s individual performance, scope of job responsibilities, leadership and years of experience, all as further described below. The Compensation Committee generally sets target total direct compensation for our executives to be competitive with the Company’s peer group and other market data, taking into account the Company’s scale and level of performance. For 2023, the Compensation Committee considered the industry survey data in the Meridian Analysis, along with Company and individual-specific factors including Mr. Weiner’s limited tenure as CEO, when setting his annual base salary and total direct compensation targets at a level below the relevant market median, as described in further detail under “Compensation for Chief Executive Officer” below. The Compensation Committee generally targets the annual base salary and total direct compensation for the other named executive officers, on average, to be within a competitive range around the market median for the upcoming year, again taking into account both the Company and individual-specific factors described above. The Compensation Committee reviews the composition of its peer group annually in July for use in executive compensation decisions for the following year with input from Meridian. The peer group below, which remained unchanged from the prior year, was used for benchmarking with regard to compensation for 2023.
Compensation Philosophy and Process
| Peer Group | | | Bloomin’ Brands, Inc. | Papa John’s International, Inc. | | Chipotle Mexican Grill, Inc. | Restaurant Brands International Inc. | | Darden Restaurants, Inc. | Royal Caribbean International | | Expedia Group, Inc. | Texas Roadhouse, Inc. | | Hilton Worldwide Holdings Inc. | Wayfair Inc. | | Hyatt Hotels Corporation | The Wendy’s Company | | InterContinental Hotels Group | Wyndham Hotels & Resorts, Inc. | | Norwegian Cruise Line Holdings Ltd. | Yum! Brands, Inc. |
Compensation Philosophy and Process
The following criteria were considered in determining the members of the Company’s 2023 peer group: publicly-traded retail or hospitality industry companies of comparable scale and scope and relative size, taking into account both reported and system-wide revenue, market capitalization and level of international operations, along with complexity of business (including franchise model) and a similar recruiting pool for executives. Role of Executive Officers in Establishing Compensation. The Company’s executive officers have a limited role in the executive compensation setting process. Our CEO, the Company’s Executive Vice President, Human Resources and the Chairperson of the Compensation Committee annually review the performance of each named executive officer (other than our CEO) and the Company’s other senior leadership to formulate compensation recommendations for the Compensation Committee. In addition, the Executive Chairman of the Board and the Chairperson of the Compensation Committee review the performance of our CEO to make recommendations to the Compensation Committee regarding our CEO’s compensation. Our CEO abstains from participating in all discussions regarding the CEO’s compensation. The scope of these reviews is to evaluate performance for a given year and make compensation recommendations for that year and the subsequent year, including with respect to base salary adjustments and annual and long-term incentive awards under the AIP and EIP, respectively. The Chairperson of the Compensation Committee typically engages in discussions with the independent compensation consultant prior to presenting compensation recommendations to the full Compensation Committee for approval, which occurs in February of each year. The Compensation Committee may exercise its discretion to modify any recommended base salary adjustments or annual performance incentive or long-term incentive compensation awards to executives. The Compensation Committee ultimately makes all compensation decisions for our named executive officers, which, for all named executive officers other than the CEO, are then ratified by our Board of Directors. Use of Tally Sheets. In 2023, the Compensation Committee continued its practice of annually reviewing comprehensive tally sheets for each of our named executive officers. These tally sheets are prepared by management and quantify the elements of each named executive officer’s total direct compensation. The tally sheets contain annual cash compensation (base salary and annual performance incentive), other compensation, stock option exercises, equity award vesting events and annual equity award grants under the EIP, and also include the Accounting Standards Codification 718, Compensation—Stock Compensation (“ASC 718”) fair market values for the equity award grants, potential severance payments, and equity award holdings, with the total in-the-money value of such equity awards at the end of the preceding fiscal year. The Compensation Committee uses the tally sheets to get a full picture of the compensation accumulated by each named executive officer to date, including accumulated equity value and potential severance. Equity Award Processes. Annual equity awards are granted to our named executive officers in March of each year to align with the timing of the annual total direct compensation decisions made by the Compensation Committee and to have awards granted closely in time with the beginning of the three-year performance period applicable to the PSUs described below. On occasion, in connection with new hires, promotions or certain corporate events, equity awards have been granted at other times throughout the year, including on a quarterly basis. The Compensation Committee does not have any plans, practices or policies of timing these equity award grants in coordination with the release of material non-public information and the Company does not have any plans, practices or policies of timing the release of material non-public information with the timing of equity awards. The exercise price of stock options is set at the closing price of the Company’s common stock on the NYSE on the date of the grant.
Components of Total Direct Compensation
| • | Industry compensation survey and peer group compensation data provided and summarized by its independent compensation consultant; |
Components of Total Direct Compensation
| • | The executive’s employment agreement with the Company; |
Components of Total Direct Compensation
| Executive | 2023 Annual Performance Incentive Target (% of annual base salary) | | Russell J. Weiner | 200% | | Sandeep Reddy | 100% | | Joseph H. Jordan | 150% | | Kelly E. Garcia | 100% | | Arthur P. D’Elia | 100% |
Components of Total Direct Compensation
The Compensation Committee establishes the performance measures and targets and approves annual performance incentive payouts for the named executive officers based on the extent to which the pre-established performance targets associated with such annual incentives have been achieved. The Compensation Committee approved annual performance incentive awards under the AIP to each of the named executive officers for fiscal 2023 as further described below. The AIP provides the Compensation Committee with flexibility in selecting the plan participants and establishing the performance measures, performance periods and performance targets, including minimum and maximum annual payment thresholds, for annual awards made under it. All bonus-eligible team members of the Company participate in the AIP or another Company annual bonus program that contains the same financial performance metrics as the AIP. For fiscal 2023, greater than 85% of the applicable performance target (the “performance threshold”) was required to be achieved in order for AIP (and other annual bonus program) participants to be eligible to receive an annual performance incentive payout; the maximum annual payout under the AIP was the lesser of (i) 250% of an individual’s annual performance incentive target and (ii) $5,000,000 per participant, the maximum annual payment amount under the AIP. The specific performance targets under the AIP established by the Compensation Committee are based on the business plans of the Company and take into account a variety of factors, including certain strategic plans, programs, commodity pricing and discounts (including long-term supply contracts), product pricing and discounts, volume and sales predictions, corporate store marketing plans and expenses, U.S. and international store count projections, product initiatives, technological initiatives, macroeconomic conditions, general operational needs of the Company and other significant factors related to the Company’s business. In December 2022 and consistent with its historical approach, the Compensation Committee established the annual adjusted total segment income performance target under the AIP (and other annual bonus programs) for the 2023 fiscal year in advance of the end of the Company’s then-current fiscal year. In January 2023, shortly following the beginning of fiscal 2023, the Compensation Committee reviewed the Company’s finalized fiscal 2022 results, the trajectory of
Components of Total Direct Compensation
| • | If the annual performance result was $939.3 million, or 101.0% achievement of the $930.0 million annual performance target at which level an award in excess of a named executive officer’s annual performance incentive |
Components of Total Direct Compensation
| target could be earned, the Company would pay the named executive officer 110% of their annual performance incentive target, or $550,000. In other words, for 1% outperformance versus the $930.0 million target, an additional 10% of target would be awarded. |
Components of Total Direct Compensation
| • | If the annual performance result was $923.1 million, or 102.0% achievement of the $905.0 million annual performance target but below the $930.0 million annual performance target at which level an award in excess of a named executive officer’s annual performance incentive target could be earned, the Company would pay the named executive officer 100% of their annual performance incentive target, or $500,000 (100% of the annual performance incentive target is awarded in the event the Company achieved between $905.0 million and $930.0 million in adjusted total segment income). |
Components of Total Direct Compensation
| • | Conversely, assume the annual performance result was $859.75 million, or 95% achievement of the $905.0 million annual performance target. In this situation, the Company would pay the named executive officer 66.6% (0.666% for every 0.1% over the performance threshold) of their annual performance incentive target, or $333,500. |
Components of Total Direct Compensation
| • | Finally, assume the annual performance result was $769.25 million, or 85% achievement of the $905.0 million annual performance target. Given the performance threshold, the Company would pay the named executive officer 0% of their annual performance incentive target, or $0. |
Components of Total Direct Compensation
| Fiscal Year | Annual Performance Target Percentage Change From Prior Year Actual Results(2) | | Annual Performance Target Percentage Change From Prior Year Performance Target | Annual Performance Incentive Payout | | 2019(1) | 7.9 | | 8.6% | 127.9% | | 2020(1) | 9.5 | | 12.2% | 152.9% | | 2021(1) | 5.2 | %(3) | 10.3% | 138.5% | | 2022(1) | 6.6 | | 9.5% | 49.8% | | 2023(1)(4) | 5.5 | | -3.9% | 106.3% |
Components of Total Direct Compensation
| (3) When excluding the impact of the 53rd week in 2020, the 2021 annual performance target reflected an 8.1% increase from 2020 actual results. |
Components of Total Direct Compensation
| (4) Annual performance target in 2023 reflects the $905.0 million annual performance target. The $930.0 million annual performance target at which level an award in excess of a named executive officer’s annual performance incentive target could be earned reflects an 8.5% increase from the prior year’s actual results and a 1.3% decrease from the prior year’s performance target. |
Components of Total Direct Compensation
| | 2023 Target Annual Performance Incentive | | Plan Achievement | 2023 Actual Payout | | | Executive | % of Salary | Dollar Value | % | % | Dollar Value | | Russell J. Weiner | 200% | $1,750,000 | 100.63% | 106.3% | $1,860,250 | | Sandeep Reddy | 100% | $685,000 | 100.63% | 106.3% | $728,155 | | Joseph H. Jordan | 150% | $945,000 | 100.63% | 106.3% | $1,004,535 | | Kelly E. Garcia | 100% | $525,000 | 100.63% | 106.3% | $558,075 | | Arthur P. D’Elia | 100% | $525,000 | 100.63% | 106.3% | $558,075 |
Components of Total Direct Compensation
Long-term Incentive Compensation. The Compensation Committee believes that an equity component of executive compensation and participation in the Company’s long-term incentive compensation program accomplishes the objective of linking each named executive officer’s opportunity for financial gain to Company performance and serves to align our named executive officers’ interests with the interests of our shareholders, thereby creating value for those shareholders as reflected by the market price of the Company’s common stock. To that end, the Company maintains the EIP, a long-term equity-based incentive compensation program. The Compensation Committee believes that the use of PSUs, RSUs and stock options that vest over a multi-year period focuses executives on the Company’s long-term interests without leading to imprudent risk-taking and demonstrates our continued commitment to paying for performance. In addition, we believe time-vesting and performance-based PSUs and time-vesting RSUs represent an efficient method of delivering long-term stock compensation with a value that is directly tied to Company operational and/or stock price performance. Grants of awards to our CEO and other named executive officers are approved by the Compensation Committee and are ratified by our Board of Directors. In March 2023, our Compensation Committee approved, and our Board of Directors ratified, the following awards under the EIP to our named executive officers after considering the Company’s internal equity grant guidelines and the Meridian Analysis and after reviewing each named executive officer’s total direct compensation as described in “—Compensation Setting Process” above. The grant date fair value of annual long-term incentive awards granted under the EIP to our named executive officers in 2023 increased as compared to the grant date fair value of awards made in 2022 and our historical award levels. In determining the size of these awards, the Compensation Committee considered past grant levels and the competitiveness of the proposed grants with market levels, based on the Meridian Analysis, taking into account each executive’s unvested equity amounts as compared to recommended market levels and the fact that the executives were maturing into their leadership roles. The Compensation Committee intended that the grants would create further alignment with shareholder interests, serve as an additional mechanism for incentivizing a return to the Company’s strong historical performance in a challenging macroeconomic environment, and create additional retentive value for these highly-skilled executives in the highly-competitive labor market. The awards also reflected in part the increased weighting to PSUs.
Components of Total Direct Compensation
| | Time-Vesting Restricted Stock Units (RSUs) | | Performance-Based Restricted Stock Units (PSUs)(1) | | Stock Options | | | Executive | Granted (#) | Grant Value(2) | Granted (#)(3) | Grant Value(4) | Granted (#) | Grant Value(5) | | Russell J. Weiner | 5,831 | $1,750,233 | 11,661 | $3,570,482 | 19,179 | $1,750,084 | | Sandeep Reddy | 3,235 | $971,018 | 3,235 | $990,525 | 10,640 | $970,900 | | Joseph H. Jordan | 3,749 | $1,125,300 | 3,749 | $1,147,906 | 12,329 | $1,125,021 | | Kelly E. Garcia | 2,499 | $750,100 | 2,499 | $765,169 | 8,220 | $750,075 | | Arthur P. D’Elia | 2,499 | $750,100 | 2,499 | $765,169 | 8,220 | $750,075 |
Components of Total Direct Compensation
| (1) The grant date fair value of PSUs is reported based on the probable outcome of the performance conditions (target) on the grant date. |
Components of Total Direct Compensation
| (3) Represents the target number of PSUs. A named executive officer can earn between 0% and 200% of his target award. The number of PSUs earned is then subject to a relative TSR modifier, which operates to, in certain circumstances, increase or decrease the total number of shares earned by 25% based on the Company’s TSR relative to the TSR of the constituents of the S&P Composite 1500 Restaurants Sub-Index. |
Components of Total Direct Compensation
| (4) Reflects the aggregate grant date fair value of the March 10, 2023 PSU awards as determined for financial reporting purposes (based on a grant date fair value of $306.19 using the Monte-Carlo simulation pricing method). The underlying valuation assumptions for the PSUs are further discussed in Note 9 to our consolidated financial statements filed with our 2023 10-K. |
Components of Total Direct Compensation
| (5) Based on a Black-Scholes value on March 10, 2023 of $91.25 per share. The underlying valuation assumptions for stock option awards are further discussed in Note 9 to our consolidated financial statements filed with our 2023 10-K. |
Components of Total Direct Compensation
In 2023, the relative target mix of PSUs granted to the named executive officers under the EIP was increased to provide additional emphasis on the long-term performance incentive portion of the EIP. The target mix of equity awards granted to Mr. Weiner, our CEO, under the EIP in 2023 was comprised of approximately 50% PSUs (at target), 25% RSUs and 25% stock options, representing a change from the target mix in 2022 of approximately 33% PSUs (at target), 33% RSUs and 33% stock options. For our other named executive officers, the target mix in 2023 was comprised of approximately 33% PSUs (at target), 33% RSUs and 33% stock options, representing a change from the target mix in 2022 of approximately 25% PSUs (at target), 50% RSUs and 25% stock options. The Compensation Committee believes this change enhances our performance-based compensation program and further ties executive compensation to the creation of long-term shareholder value. Long-Term Performance-Based Restricted Stock Units (PSUs). As discussed and reflected in the table above, the Compensation Committee continued the use of PSUs as an additional vehicle for long-term incentive compensation in 2023 and increased the weighting of such PSUs in the respective equity mixes of our named executive officers to further provide additional emphasis on the long-term performance incentive portion of the EIP. In 2021 and 2022, our named executive officers were granted PSUs that were based on the achievement of adjusted total segment income and global retail sales, excluding foreign currency impact goals on a cumulative basis, over a three-year performance period. Awards granted in 2023 contained performance goals that will be measured on a constant growth rate basis, with three individual annual targets for each performance goal established at the onset of the three-year performance period expressed as a growth rate over the previous year’s actual result. Such shift recognizes an evolution in the prevailing market practice for goal setting for multi-year performance awards and the inherent difficulty in setting three-year cumulative goals, especially in the current operating and macroeconomic environment, and is also designed to ensure that participants remain sufficiently motivated over the full three-year performance period and are not disproportionately impacted, either positively or negatively, by an outlier year within the performance period. The TSR modifier, discussed below, is still measured over the full three-year performance period. These PSUs, which are granted annually at the beginning of a three-year performance period, reinforce our named executive officers’ accountability for the achievement of the Company’s longer-term financial and strategic goals. PSUs awarded in 2023 are earned based on the achievement of challenging goals for each year within the three-year performance period, consisting of:
Components of Total Direct Compensation
The PSUs are also subject to a relative three-year cumulative total shareholder return (“TSR”) modifier, which is a relative return metric that can increase or decrease the total number of shares earned by 25% based on the Company’s TSR relative to the TSR of the constituents of the S&P Composite 1500 Restaurants Sub-Index. Shares that are earned following the determination of the adjusted total segment income and global retail sales, excluding foreign currency impact growth, metrics will increase by 25% if the Company’s three-year relative TSR rank during the performance period falls at or above the 75th percentile and will decrease by 25% if such relative TSR rank during the performance period falls at or below the 25th percentile. The weight of the relative TSR modifier applicable to the PSUs was increased from 15% to 25% in 2023 to better align with market practice and place more emphasis on cumulative stock price performance over the three-year performance period (with such TSR modifier continuing to measure cumulative stock price performance over the three-year performance period following which period all earned awards, if any, will be subject to applicable adjustment based on TSR results in order to strengthen the link with long-term shareholder interests). Additionally, the comparison index was changed to the S&P Composite 1500 Restaurants Sub-Index in 2023 from the S&P 500 Index to better assess the Company’s performance as compared to its peers within the restaurant sector. The Compensation Committee believes these changes to the PSUs further improve the alignment between executive compensation and the long-term interests of shareholders. Performance Metrics
Components of Total Direct Compensation
| Step 1 | | Step 2 | | Level of Metric Performance (1) | Payout as a Percentage of Target (2) | Relative TSR Modifier | | Below Threshold | 0% | At or above the 75th percentile: Increase by 25% | | Threshold | 0% | | | Target | 100% | At or Below the 25th percentile: Reduce by 25% | | Maximum | 200% | | | 1 Performance level expressed as a percent of target based on annual adjusted total segment income growth (70%) and annual global retail sales, excluding foreign currency impact growth (30%), for each year in the fiscal 2023-2025 performance period. | | | | 2 Before TSR modifier. Payout levels based on performance for each metric will be measured independently on an annual basis and interpolated on a straight-line basis for performance between threshold and target or between target and maximum to determine the performance versus the growth rate targets. | | |
Components of Total Direct Compensation
If the PSUs become earned upon satisfaction of the performance metrics described above, they will be delivered in the form of unrestricted common stock following the end of the applicable three-year performance period, generally subject to continued employment through the end of the performance period. The PSUs are eligible to receive dividend equivalents in cash, which will accumulate and pay out, if at all, if and when the PSUs are earned and the underlying shares of common stock are distributed to the named executive officers. The performance period for the 2023 award of PSUs began on January 2, 2023 and ends on December 28, 2025. The specific annual adjusted total segment income and annual global retail sales, excluding foreign currency impact, growth rate targets for each year in the performance period for the PSUs granted in 2023 will be disclosed at the end of the performance period. We believe that the design of our existing PSU program furthers our pay for performance compensation objective by emphasizing a longer-term performance period, multiple performance metrics and increased performance sensitivity. Payout for PSUs for Performance Period Ending in 2023. The three-year performance period for PSUs granted in 2021 ended on December 31, 2023. PSUs were earned based on the achievement of pre-established challenging goals at the end of the performance period, consisting of:
PSUs for Fiscal 2021-2023 Performance Period Goals and Results(1)
PSUs for Fiscal 2021-2023 Performance Period Goals and Results(1)
(Figures in Millions)
| | Threshold | Target | Maximum | Actual | | | Cumulative Adjusted Total Segment Income (70% of Total Target Award) | $2,511.0 | $2,790.0 | $2,999.25 | $2,732.1 | | | Percentage of target | 90% | 100% | 107.5% | 97.93 | | | Payout opportunity (as a % of target) | 50% | 100% | 200% | 89.63 | %(2) | | | Threshold | Target | Maximum | Actual | | | Cumulative Global Retail Sales, excluding foreign currency impact (30% of Target Total Award) | $49,830.3 | $55,367.0 | $59,519.53 | $56,162.1 | | | Percentage of target | 90% | 100% | 107.5% | 101.44 | | | Payout opportunity (as a % of target) | 50% | 100% | 200% | 119.15 | %(2) |
(Figures in Millions)
| 1 | These PSUs are also subject to a relative TSR modifier, which is a relative return metric that can increase or decrease the total number of shares earned by 15% based on the Company’s TSR relative to the TSR of the constituents of the S&P 500 Index. Shares that are earned following the determination of the cumulative adjusted total segment income and cumulative global retail sales, excluding foreign currency impact, metrics would increase by 15% if the Company’s three-year relative TSR rank during the performance period falls at or above the 75th percentile and would decrease by 15% if such relative TSR rank during the performance period falls below the 25th percentile. The Company’s relative TSR rank for the performance period was at the 32nd percentile and as a result, the total shares earned were not adjusted. |
(Figures in Millions)
| 2 | Actual payout percentage reflects interpolation on a straight-line basis of performance between threshold and target or between target and maximum, as applicable. |
(Figures in Millions)
Based on the Company’s achievement of the goals above, the PSUs granted in fiscal 2021 for the January 4, 2021 – December 31, 2023 performance period paid out at 98.5% of target. Time-Vesting Restricted Stock Units (RSUs). As discussed and reflected in the table above, the Compensation Committee continued the use of RSUs as a vehicle for long-term incentive compensation in 2023. RSU awards are full value awards that are subject to time-based vesting conditions. The awards vest ratably over three years in three separate vesting tranches, generally subject to continued employment (with exceptions for certain termination events, such as qualified retirement). The RSUs will convert to unrestricted common stock and be distributed upon the vesting of the applicable tranche of the award. The Compensation Committee decided to grant RSUs to encourage retention by providing some value to the named executive officers who remain employed by the Company. The Compensation Committee believes that it is important for retention to have a portion of long-term incentive awards that is not tied to the achievement of performance goals or future stock price appreciation but is still at-risk with the value fluctuating based on changes in stock price. The RSUs are also eligible to receive dividend equivalents in cash, which will accumulate and pay out, if at all, if and when the RSUs vest and the underlying shares of common stock are distributed to the named executive officers. The actual value of the shares that are earned, if any, will depend on our stock price at the time the RSUs vest. These awards generally also contain provisions for accelerated vesting upon the retirement of holders who have achieved specified service and age requirements. Stock Options. As discussed and reflected in the table above, the Compensation Committee continued its use of stock options as a vehicle for long-term incentive compensation in 2023 with a vesting period of three years that aligns with the performance period of the PSUs and the vesting period of the RSUs. Recipients of stock option grants do not receive a benefit from the stock options unless and until the market price of the Company’s common stock increases above the exercise price, the stock options vest and the recipient exercises such stock options. Options are intended to provide long-term performance-based compensation tied specifically to increases in the price of the Company’s stock, aligning the interests of executives and shareholders. We continued to use stock options because we believe they encourage employee retention through the use of a time-based vesting schedule and serve to align the interests of our shareholders and those of our named executive officers by only providing value if the price of our common stock increases after the stock options are granted.
(Figures in Millions)
All options awarded under the EIP are granted with an exercise price equal to the closing price of the Company’s common stock on the grant date of the award, have a ten-year term, vest ratably over three years and become fully exercisable upon vesting of each tranche. These awards also contain provisions for accelerated vesting upon the retirement of holders who have achieved specified service and age requirements. Vested options are exercisable for a limited period of time after termination of employment. Historical Performance Shares (2020 and earlier). No performance shares were granted in 2023 after the Compensation Committee discontinued the use of performance shares as a vehicle for long-term incentive compensation in 2021 and instead made the determination to grant PSUs and RSUs. However, performance shares granted in prior years will continue to be included in total compensation for the named executive officers as and to the extent applicable tranches of such performance shares vest. Performance share awards vest ratably over four years in four separate vesting tranches, generally subject to continued employment, and each vesting tranche is subject to a one-year performance-based vesting condition that is established annually by the Compensation Committee. Performance shares vest only if the Company achieves 90% or more of the annual performance target (with no additional performance shares earned for performance above 90% of the annual performance target). As part of the January 2023 actions discussed above, performance shares granted with a 2024 vesting tranche vested if the Company achieved 85% or more of the $905.0 million annual performance target (with no additional performance shares earned for performance above 85% of the annual performance target). For the outstanding performance shares granted in prior years, the measurement of performance established by the Compensation Committee was Segment Income as defined by the Company under ASC 280, with certain adjustments (resulting in the same “adjusted total segment income” used by the Company for annual performance incentives, as described above). If the achievement of adjusted total segment income is less than 90% (85% in the case of performance shares granted with a 2024 vesting tranche) of the annual performance target, each vesting tranche for that fiscal year is canceled and forfeited for no consideration. The performance share awards do not contain a provision for partial vesting. All unvested performance shares are generally canceled upon termination of employment, subject to certain exceptions. The performance target with respect to the 2022 fiscal year was utilized for all performance shares previously granted with a 2023 vesting tranche; such performance target was achieved at 94.98% of target and as a result all performance shares subject to a 2023 vesting tranche vested in full. Accelerated Vesting. Following a termination of employment, equity awards and other benefits are governed by the terms of those programs, as described under “Executive Compensation Tables – Potential Post-Employment Payments to Named Executive Officers” below.
Other Elements of Compensation
Other Elements of Compensation Employee Stock Payroll Deduction Plan. The Company maintains the Employee Stock Payroll Deduction Plan (the “ESPDP”), adopted in July 2004, to provide employees, including our named executive officers, with an opportunity to purchase shares of the Company’s common stock through payroll deductions at a 15% discount from the market price. The ESPDP is a qualified plan under Section 423 of the Internal Revenue Code. Shares of the Company’s common stock purchased under the ESPDP have a one-year holding period requirement before employees can sell the shares. The Compensation Committee believes the ESPDP is an attractive benefit that assists the Company in retaining key employees, securing new qualified employees and providing incentives for employees to work towards achieving the Company’s key objectives because it gives employees access to the Company’s equity at a discounted price and provides additional ties to shareholder value creation. Pension and Post-Retirement Benefits. The Company does not maintain a defined benefit pension or retiree medical plan for our named executive officers, though we have agreed to provide reimbursement of certain medical expenses to certain individuals who had previously served as our Chief Executive Officer. Deferred Compensation. The Company maintains the Domino’s Pizza Deferred Compensation Plan (the “DCP”), a non-qualified elective deferred compensation plan, under which our named executive officers, a select group of
Other Elements of Compensation
| Compensation Discussion and Analysis (continued) | |
Other Elements of Compensation
management or highly compensated employees and our directors are permitted to defer their own compensation. Deferred amounts under the DCP are notionally invested in mutual funds or other investments available under the DCP. The Company does not provide an employer match for amounts deferred in the DCP or otherwise make employer contributions to the DCP. The DCP is described more fully under “Non-Qualified Deferred Compensation” below. Perquisites. The Company makes a limited number of perquisites available to our named executive officers. The Company covers expenses for each participating named executive officer for the completion of an annual comprehensive physical for the executive and their spouse. The Company also covers an executive’s annual membership fee for a physician group where the annual physical is provided, along with other preventive care. The Company also reimburses each named executive officer for their purchases of Domino’s food items. Named executive officers may also receive certain relocation benefits in connection with their hire. Our CEO is also entitled to a certain number of hours of personal use of the Company’s aircraft, as described below. Detailed information regarding the perquisites provided to our named executive officers is set forth in the Summary Compensation Table in this Proxy Statement. Other Benefits. The Company also maintains a benefits program comprised of retirement income and group insurance plans. The objective of the program is to provide our named executive officers and certain other eligible employees with reasonable and competitive levels of benefits for the four contingencies (retirement, death, disability and illness) that will interrupt the eligible employee’s employment and/or income received as an active employee. The retirement program consists of two savings plans: (i) a non-qualified deferred compensation plan (the DCP referenced above), and (ii) a tax-qualified 401(k) savings plan, which includes a Roth savings option (the “Domino’s Pizza 401(k) Savings Plan”). As of December 31, 2023, the Domino’s Pizza 401(k) Savings Plan was open to all employees age 18 or older who have also worked at least 1,000 hours for the Company. Beginning in fiscal 2024, employees age 18 or older who have also worked at least 60 days for the Company will be eligible to participate in the Domino’s Pizza 401(k) Savings Plan. The Company provides a match on employee 401(k) contributions equal to 100% on the first 5% of eligible compensation contributed by employees into their 401(k) accounts. The Company’s group insurance program consists of life, disability and health insurance benefit plans that are offered to employees who work at least 30 hours each week. Additionally, umbrella insurance premiums are paid by the Company for participating named executive officers, and the amounts paid are recorded as compensation (and included in the Summary Compensation Table) for such named executive officers. This umbrella insurance provides high limits of liability to protect the named executive officer against a catastrophic liability loss and stacks on top of the executive’s homeowners, personal auto, watercraft, and any other underlying liability policies.
Compensation for Chief Executive Officer
Compensation for Chief Executive Officer Mr. Weiner’s base salary of $875,000 became effective with his promotion to Chief Executive Officer, which commenced on May 1, 2022, and was unchanged by the Compensation Committee for the 2023 fiscal year. Mr. Weiner’s employment agreement provides for an annual performance incentive targeted at 200% of his annual base salary, the actual amount of which is based on the Company’s achievement of applicable performance targets under the AIP. The employment agreement also grants Mr. Weiner an annual allotment of 45 hours of personal use of the Company’s corporate aircraft at no charge to him during the term of the agreement. Mr. Weiner entered into a time-sharing agreement with the Company requiring him to reimburse the Company for personal use over his allotted hours based upon a statutory formula. Mr. Weiner is not provided with a tax gross-up with respect to his personal use of the Company’s corporate aircraft. In March 2023, the Compensation Committee approved long-term incentive compensation in the form of an equity grant under the EIP to Mr. Weiner consisting of: (i) a PSU award of 11,661 stock units (at target) with a three-year performance period, (ii) an RSU award of 5,831 stock units that vest equally over a three-year period in separate tranches and (iii) a stock option award of 19,179 shares that vest equally over a three-year period, has a ten-year term and an exercise price equal to the closing price of the Company’s common stock on the date of grant. The PSUs, RSUs and stock options have the same terms and conditions as those described under “—Long-term Incentive Compensation” above.
Compensation for Chief Executive Officer
Based on the Meridian Analysis, Mr. Weiner’s annual base salary in 2023 was below the market median, his 2023 annual performance incentive target was above the market median and his long-term incentive compensation was below the market median, resulting in his total direct compensation being below the market median. The Compensation Committee evaluates Mr. Weiner’s compensation in relation to market data and other factors, including his limited tenure as CEO. While the Compensation Committee generally positions target total direct compensation at the median level of the applicable benchmark, as described above, it believes that Mr. Weiner’s compensation is appropriate in relation to his limited tenure as CEO, experience, scale of the Company and other relevant market data. Further, the Compensation Committee believes Mr. Weiner’s compensation package effectively links shareholder and financial performance to his total direct compensation through the use of long-term incentive compensation awards and cash compensation that is primarily based on Company performance. In December 2023, Meridian provided the Meridian Analysis, which the Compensation Committee considered, among other factors, when it increased Mr. Weiner’s annual base salary in February 2024 from $875,000 to $925,000 for 2024.
Employment Agreements
Employment Agreements Each of our named executive officers is party to a written agreement that governs their employment with the Company and includes both severance provisions as well as restrictive covenants that apply for two years following termination of employment. The provisions of the employment agreements relating to termination of employment and severance are described in more detail under “Potential Post-Employment Payments to Named Executive Officers.” We believe entering into non-competition and non-solicitation arrangements with our named executive officers is important to protect the Company following the cessation of their employment and we also believe that severance provisions help attract and retain top-performing executive officers in a competitive market environment.
Summary Compensation Table for 2023
Summary Compensation Table for 2023 The table below summarizes the total compensation earned by our named executive officers in fiscal 2023, and, to the extent applicable to the individual, 2022 and 2021. A description of each component of our executive compensation package is described under the heading “Compensation Discussion and Analysis,” which begins on page 30. All information set forth in this table reflects compensation earned by these individuals for services with the Company.
Summary Compensation Table for 2023
| Name and Principal Position | Year | Salary ($)(1) | Bonus ($) | Stock Awards ($)(2) | Option Awards ($)(3) | Non-Equity Incentive Plan Compensation ($) | Change in Pension Value and Non- qualified Deferred Compensation Earnings ($) | All Other Compensation ($)(4) | Total ($) | | Russell J. Weiner Chief Executive Officer | 2023 | 875,000 | — | 5,320,715 | 1,750,084 | 1,860,250 | — | 329,814 | 10,135,862 | | | 2022 | 840,385 | — | 3,095,217 | 1,458,441 | 800,870 | — | 441,819 | 6,636,731 | | | 2021 | 775,000 | — | 1,790,857 | 387,579 | 1,610,063 | — | 51,418 | 4,614,916 | | Sandeep Reddy Executive Vice President, Chief Financial Officer | 2023 | 682,692 | — | 1,961,542 | 970,900 | 728,155 | — | 73,555 | 4,416,844 | | | 2022 | 495,865 | 1,000,000 | 3,517,181 | 421,985 | 336,150 | — | 109,609 | 5,880,790 | | | 2021 | — | — | — | — | — | — | — | — | | Joseph H. Jordan President, U.S. & Global Services | 2023 | 623,077 | — | 2,273,206 | 1,125,021 | 1,004,535 | — | 522,018 | 5,547,857 | | | 2022 | 561,923 | — | 1,181,101 | 375,065 | 399,768 | — | 830,833 | 3,348,689 | | | 2021 | 490,000 | — | 741,433 | 183,836 | 678,650 | — | 515,141 | 2,609,060 | | Kelly E. Garcia Executive Vice President, Chief Technology Officer | 2023 | 519,231 | — | 1,515,269 | 750,075 | 558,075 | — | 38,743 | 3,381,393 | | | 2022 | 482,692 | — | 820,451 | 250,043 | 249,000 | — | 31,491 | 1,833,678 | | | 2021 | — | — | — | — | — | — | — | — | | Arthur P. D’Elia Executive Vice President, International | 2023 | 519,231 | — | 1,515,269 | 750,075 | 558,075 | — | 37,667 | 3,380,317 | | | 2022 | 487,308 | — | 800,910 | 250,043 | 249,000 | — | 40,147 | 1,827,409 | | | 2021 | — | — | — | — | — | — | — | — |
Summary Compensation Table for 2023
| (1) Reflects increases in base salary that took effect during 2023 as described under “Compensation Discussion and Analysis—Components of Total Direct Compensation—Annual Base Salary.” |
Summary Compensation Table for 2023
| (2) The dollar amounts listed do not necessarily reflect the dollar amounts of compensation actually realized or that may be realized by our named executive officers. The stock awards for 2023 reflect the aggregate grant date fair value of awards of RSUs and PSUs granted pursuant to our EIP in 2023, determined in accordance with ASC 718 and, in the case of PSUs, based upon the probable outcome of the applicable performance conditions. The grant date fair value of PSUs is based on the probable outcome of the performance conditions on the grant date, which assumes that the performance conditions were satisfied at target. The aggregate grant date fair value of the PSUs granted in 2023, assuming the highest level of the performance conditions is met, was $7,140,963 for Mr. Weiner; $1,981,049 for Mr. Reddy; $2,295,813 for Mr. Jordan; $1,530,338 for Mr. Garcia and $1,530,338 for Mr. D’Elia. The number of PSUs earned is subject to a relative TSR modifier, which operates by, in certain circumstances, increasing or decreasing the total number of shares earned by 25% based on the Company’s TSR relative to the TSR of the constituents of the S&P Composite 1500 Restaurants Sub-Index. The grant date fair value of RSUs is based on the number of RSUs subject to the award multiplied by the closing price of the Company’s common stock on the NYSE on the date of grant. The stock awards for 2022 reflect the aggregate grant date fair value of awards of RSUs and PSUs granted pursuant to our EIP in 2022 and also include the fourth tranche of the performance share awards granted in 2020 (or the number of shares in each award that were valued for accounting purposes as of January 1, 2023, the last day of the Company’s 2022 fiscal year). The stock awards for 2021 reflect the aggregate grant date fair value of awards of RSUs and PSUs granted pursuant to our EIP in 2021 and also include the third tranche of the performance share awards granted in 2020 and the fourth tranche of the performance share awards granted in 2019 (or the number of shares in each award that were valued for accounting purposes as of January 2, 2022, the last day of the Company’s 2021 fiscal year). The assumptions used in the calculation of these amounts are included in Note 9 to the Company’s consolidated financial statements for the fiscal year ended December 31, 2023 included in the 2023 10-K. |
Summary Compensation Table for 2023
| (3) The dollar amounts listed do not necessarily reflect the dollar amounts of compensation actually realized or that may be realized by our named executive officers. The amounts listed reflect the grant date fair value of stock option awards granted pursuant to our EIP, determined in accordance with ASC 718, and, with respect to stock options granted in fiscal 2023, are based on a Black-Scholes value on March 10, 2023 of $91.25 per share. The assumptions used in the calculation of these amounts are included in Note 9 to the Company’s consolidated financial statements for the fiscal year ended December 31, 2023 included in the 2023 10-K. |
Summary Compensation Table for 2023
| (4) The 2023 amounts listed for all named executive officers are further described in the All Other Compensation table below. |
Summary Compensation Table for 2023
| Executive Compensation Tables (continued) | |
Summary Compensation Table for 2023
The following table below shows amounts under the All Other Compensation column for 2023:
Summary Compensation Table for 2023
| Name | Year | Perquisites and Other Personal Benefits ($)(1) | Insurance Premiums / Medical Reimbursements ($)(2) | Company Contributions to Retirement, 401(k) and Health Savings Plans ($)(3) | Tax Reimbursements ($)(4) | Dividends ($)(5) | Total ($) | | Russell J. Weiner | 2023 | 262,069 | 11,750 | 16,500 | 11,672 | 27,823 | 329,814 | | Sandeep Reddy | 2023 | 14,013 | 9,218 | 16,500 | 17,854 | 15,970 | 73,555 | | Joseph H. Jordan | 2023 | 5,428 | 9,011 | 16,500 | 480,563 | 10,516 | 522,018 | | Kelly E. Garcia | 2023 | 3,726 | 4,703 | 16,500 | 4,568 | 9,246 | 38,743 | | Arthur P. D’Elia | 2023 | 1,604 | 8,303 | 15,335 | 4,044 | 8,381 | 37,667 |
Summary Compensation Table for 2023
| (1) Amounts in this column include personal usage of corporate aircraft, relocation expenses, employee recognition gifts and purchases of Domino’s food items. None of the amounts in this column individually exceeded the greater of $25,000 or 10% of the total amount of these perquisites and other personal benefits shown in this column for each named executive officer, except with respect to the cost of personal use of corporate aircraft by Mr. Weiner ($258,039). The amount reported for Mr. Weiner’s personal usage of the corporate aircraft is based on the incremental cost method. The incremental cost is based on the variable operating costs to the Company for operating the airplane, including, but not limited to fuel costs, parking, landing fees, travel fees, catering and other miscellaneous direct costs. The total annual variable costs are divided by the annual number of flight hours flown by the airplane to calculate an average variable cost per flight hour. This average variable flight cost per flight hour is then multiplied by the number of flight hours of personal use to calculate the incremental cost for the executive. For tax purposes, income is imputed to the executive for personal travel based on a multiple of the Standard Industry Fare Level (“SIFL”) rates. Executives are not provided with a tax gross-up on personal usage of the corporate aircraft. The table does not include any amounts related to the use of tickets for sporting events by the named executive officers because no incremental costs are incurred by the Company in providing these benefits. The Company purchases season tickets to sporting events for business outings with franchisees and other business partners. If the tickets are not being used for business purposes, the named executive officers and other team members may have opportunities to use these tickets. This table does not include any amount attributable to spousal travel in connection with business usage of corporate aircraft because no incremental costs are incurred by the Company in connection with the spouse accompanying the named executive officer on the aircraft. |
Summary Compensation Table for 2023
| (2) Mr. Weiner’s amount represents Company-paid premiums of $3,893 for umbrella liability insurance, Company-paid premiums of $4,257 for group term life insurance and Company-paid premiums of $3,600 for executive physicals. Mr. Reddy’s amount represents Company-paid premiums of $3,893 for umbrella liability insurance, Company-paid premiums of $1,725 for group term life insurance and Company-paid premiums of $3,600 for executive physicals. Mr. Jordan’s amount represents Company-paid premiums of $3,893 for umbrella liability insurance, Company-paid premiums of $1,518 for group term life insurance and Company-paid premiums of $3,600 for executive physicals. Mr. Garcia’s amount represents Company-paid premiums of $3,893 for umbrella liability insurance and Company-paid premiums of $810 for group term life insurance. Mr. D’Elia’s amount represents Company-paid premiums of $3,893 for umbrella liability insurance, Company-paid premiums of $810 for group term life insurance and Company-paid premiums of $3,600 for executive physicals. |
Summary Compensation Table for 2023
| (3) Represents the amount of the Company match made to the Domino’s Pizza 401(k) Savings Plan described above for each named executive officer. |
Summary Compensation Table for 2023
| (4) Mr. Weiner’s amount represents a tax gross-up on umbrella liability insurance premium payments in the amount of $2,985, a tax gross-up on Company-paid medical expenses in the amount of $2,760 and a tax gross-up on certain other perquisites in the amount of $5,927. Mr. Reddy’s amount represents a tax gross-up on umbrella liability insurance premium payments in the amount of $2,985, a tax gross-up on Company-paid medical expenses in the amount of $2,760, a tax gross-up on benefits in relation to his relocation assistance of $4,297 and a tax gross-up on certain other perquisites in the amount of $7,812. Mr. Jordan’s amount represents a tax gross-up on umbrella liability insurance premium payments in the amount of $1,544, a tax gross-up on Company-paid medical expenses in the amount of $1,428, a tax gross-up on benefits in relation to his expatriate assignment of $77,493, tax reimbursements in relation to his expatriate assignment of $395,026 and a tax gross-up on certain other perquisites in the amount of $5,072. Mr. Garcia’s amount represents a tax gross-up on umbrella liability insurance premium payments in the amount of $1,544 and a tax gross-up on certain other perquisites in the amount of $3,024. Mr. D’Elia’s amount represents a tax gross-up on umbrella liability insurance premium payments in the amount of 1,544, a tax gross-up on Company-paid medical expenses in the amount of $1,428 and a tax gross-up on certain other perquisites in the amount of $1,072. Executives are not provided with a tax gross-up on personal usage of the corporate aircraft. |
Summary Compensation Table for 2023
| (5) Represents dividends paid by the Company on a quarterly basis on stock awards, including dividends accrued on unvested restricted stock units and unvested performance shares, that were paid during 2023 at the time of vesting of such restricted stock units or performance shares, as applicable. |
Summary Compensation Table for 2023
| Executive Compensation Tables (continued) | |
Grants of Plan-Based Awards
Grants of Plan-Based Awards The following table sets forth information concerning non-equity incentive plan awards and individual awards of stock options, RSUs and PSUs granted during the fiscal year ended December 31, 2023 to each of the named executive officers.
Grants of Plan-Based Awards
| | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards | | | Estimated Future Payouts Under Equity Incentive Plan Awards | | | All Other Stock Awards: Number of Shares of Stock or Units (#) | All Other Option Awards: Number of Securities Underlying Options (#)(4) | Exercise or Base Price of Option Awards ($/Sh)(5) | Grant Date Fair Value of Stock and Option Awards ($)(6) | | Name | Grant Date | Threshold ($)(1) | Target ($)(2) | Maximum ($)(3) | Threshold (#) | Target (#) | Maximum (#) | | | | | | Russell J. Weiner | | | | | | | | | | | | | AIP | | 0 | 1,750,000 | 4,375,000 | — | — | — | — | — | — | — | | Stock Options | 3/10/2023 | — | — | — | — | — | — | — | 19,179 | 300.16 | 1,750,084 | | RSUs(7) | 3/10/2023 | — | — | — | — | — | — | 5,831 | — | — | 1,750,233 | | PSUs(8) | 3/10/2023 | — | — | — | 5,831 | 11,661 | 23,322 | — | — | — | 3,569,782 | | Sandeep Reddy | | | | | | | | | | | | | AIP | | 0 | 685,000 | 1,712,500 | — | — | — | — | — | — | — | | Stock Options | 3/10/2023 | — | — | — | — | — | — | — | 10,640 | 300.16 | 970,900 | | RSUs(7) | 3/10/2023 | — | — | — | — | — | — | 3,235 | — | — | 971,018 | | PSUs(8) | 3/10/2023 | — | — | — | 1,618 | 3,235 | 6,470 | — | — | — | 990,525 | | Joseph H. Jordan | | | | | | | | | | | | | AIP | | 0 | 945,000 | 2,362,500 | — | — | — | — | — | — | — | | Stock Options | 3/10/2023 | — | — | — | — | — | — | — | 12,329 | 300.16 | 1,125,021 | | RSUs(7) | 3/10/2023 | — | — | — | — | — | — | 3,749 | — | — | 1,125,300 | | PSUs(8) | 3/10/2023 | — | — | — | 1,875 | 3,749 | 7,498 | — | — | — | 1,147,906 | | Kelly E. Garcia | | | | | | | | | | | | | AIP | | 0 | 525,000 | 1,312,500 | — | — | — | — | — | — | — | | Stock Options | 3/10/2023 | — | — | — | — | — | — | — | 8,220 | 300.16 | 750,075 | | RSUs(7) | 3/10/2023 | — | — | — | — | — | — | 2,499 | — | — | 750,100 | | PSUs(8) | 3/10/2023 | — | — | — | 1,250 | 2,499 | 4,998 | — | — | — | 765,169 | | Arthur P. D’Elia | | | | | | | | | | | | | AIP | | 0 | 525,000 | 1,312,500 | — | — | — | — | — | — | — | | Stock Options | 3/10/2023 | — | — | — | — | — | — | — | 8,220 | 300.16 | 750,075 | | RSUs(7) | 3/10/2023 | — | — | — | — | — | — | 2,499 | — | — | 750,100 | | PSUs(8) | 3/10/2023 | — | — | — | 1,250 | 2,499 | 4,998 | — | — | — | 765,169 |
Grants of Plan-Based Awards
| (1) Represents the amount to which such executive would be entitled if the Company had achieved 85% of its annual performance target under the AIP, as described above under “Compensation Discussion and Analysis – Annual Performance Incentives.” |
Grants of Plan-Based Awards
| (2) Represents the amount to which such executive would be entitled if the Company had achieved 100% of its annual performance target under the AIP. |
Grants of Plan-Based Awards
| (3) Represents the annual maximum amount that such executive would be entitled to receive under the AIP, which is calculated as the lesser of (i) 250% of the executive’s annual performance incentive target and (ii) $5,000,000. |
Grants of Plan-Based Awards
| (4) Represents stock option awards awarded in March 2023 under the EIP, as described under “Compensation Discussion and Analysis – Long-term Incentive Compensation” above. |
Grants of Plan-Based Awards
| (5) Determined based on the closing price of the Company’s common stock on the NYSE on the date of grant. |
Grants of Plan-Based Awards
| (6) Represents the total ASC 718 grant date fair value of the option awards, determined in accordance with ASC 718, and the total ASC 718 grant date fair value of the RSUs and PSUs awards. The grant date fair value of PSUs is reported based on the probable outcome of the performance conditions on the grant date (which assume that the performance conditions were satisfied at target) multiplied by the grant date fair value of $306.19 using the Monte-Carlo simulation pricing method and the grant date fair value of RSUs is based on the number of RSUs subject to the award multiplied by the closing price of the Company’s common stock on the NYSE on the date of grant. The assumptions used in the calculation of these amounts are included in Note 9 to the Company’s consolidated financial statements for the fiscal year ended December 31, 2023 included in the 2023 10-K. See footnotes (2) and (3) to the Summary Compensation Table above. |
Grants of Plan-Based Awards
| (7) Represents RSUs awarded in March 2023 under the EIP, as described under “Compensation Discussion and Analysis – Long-term Incentive Compensation” above. |
Grants of Plan-Based Awards
| (8) Represents PSUs awarded in March 2023 under the EIP, as described under “Compensation Discussion and Analysis – Long-term Incentive Compensation” above. The maximum number of shares does not give effect to the relative TSR modifier, which can increase or decrease the total number of shares earned by 25% based on the Company’s TSR relative to the TSR of the constituents of the S&P Composite 1500 Restaurants Sub-Index. In order for the PSUs to vest, the performance conditions associated with such awards must be achieved at least at a threshold level and the named executive officer must be an employee of the Company on the third anniversary of the date of grant (March 10, 2026), except as described under “—Potential Post-Employment Payments to Named Executive Officers” below. |
Grants of Plan-Based Awards
| Executive Compensation Tables (continued) | |
Outstanding Equity Awards at Fiscal Year-End
Outstanding Equity Awards at Fiscal Year-End The following table sets forth information on outstanding option and stock awards for each of the named executive officers as of December 31, 2023:
Outstanding Equity Awards at Fiscal Year-End
| | Option Awards | | | | Stock Awards | | | | | | Number of Securities Underlying Unexercised Options (#) | Number of Securities Underlying Unexercised Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#)(1) | Market Value of Shares or Units of Stock That Have Not Vested ($)(2) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(3) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(4) | | Name | Exercisable | Unexercisable | | | | | | | | Russell J. Weiner | 15,960 | 0 | 73.04 | 7/16/2024(5) | — | — | — | — | | | 11,780 | 0 | 118.54 | 7/15/2025(5) | — | — | — | — | | | 10,850 | 0 | 136.89 | 7/20/2026(5) | — | — | — | — | | | 7,330 | 0 | 212.52 | 7/19/2027(5) | — | — | — | — | | | 10,030 | 0 | 283.68 | 7/18/2028(5) | — | — | — | — | | | 12,240 | 0 | 275.35 | 7/10/2029(5) | — | — | — | — | | | 5,325 | 1,775 | 413.68 | 7/15/2030(5) | — | — | — | — | | | 2,764 | 1,383 | 367.79 | 3/31/2031(6) | — | — | — | — | | | 4,475 | 8,952 | 393.14 | 3/10/2032(6) | — | — | — | — | | | 0 | 19,179 | 300.16 | 3/10/2033(6) | — | — | — | — | | | — | — | — | — | — | — | 455(7) | 187,565 | | | — | — | — | — | 703(8) | 289,798 | — | — | | | — | — | — | — | 2,474(9) | 1,019,857 | — | — | | | — | — | — | — | 5,831(10) | 2,403,713 | — | — | | | — | — | — | — | — | — | 1,038(11) | 427,895 | | | — | — | — | — | — | — | 3,710(12) | 1,529,373 | | | — | — | — | — | — | — | 11,661(13) | 4,807,014 | | Sandeep Reddy | 1,229 | 2,460 | 397.18 | 4/1/2032(6) | — | — | — | — | | | 0 | 10,640 | 300.16 | 3/10/2033(6) | — | — | — | — | | | — | — | — | — | 1,417(14) | 584,130 | — | — | | | — | — | — | — | 2,832(15) | 1,167,435 | — | — | | | — | — | — | — | 3,235(10) | 1,333,564 | — | — | | | — | — | — | — | — | — | 1,063(16) | 438,200 | | | — | — | — | — | — | — | 3,235(13) | 1,333,564 | | Joseph H. Jordan | 2,630 | 0 | 118.54 | 7/15/2025(5) | — | — | — | — | | | 3,100 | 0 | 136.89 | 7/20/2026(5) | — | — | — | — | | | 2,350 | 0 | 136.89 | 7/20/2026(5) | — | — | — | — | | | 4,870 | 0 | 168.21 | 11/7/2026(5) | — | — | — | — | | | 2,450 | 0 | 212.52 | 7/19/2027(5) | — | — | — | — | | | 3,620 | 0 | 232.43 | 4/9/2028(5) | — | — | — | — | | | 3,520 | 0 | 275.35 | 7/10/2029(5) | — | — | — | — | | | 1,687 | 563 | 413.68 | 7/15/2030(5) | — | — | — | — | | | 1,311 | 656 | 367.79 | 3/31/2031(6) | — | — | — | — | | | 1,151 | 2,302 | 393.14 | 3/10/2032(6) | — | — | — | — | | | 0 | 12,329 | 300.16 | 3/10/2033(6) | — | — | — | — | | | — | — | — | — | — | — | 145(7) | 59,773 | | | — | — | — | — | 334(8) | 137,685 | — | — | | | — | — | — | — | 1,272(9) | 524,357 | — | — | | | — | — | — | — | 3,749(10) | 1,545,450 | — | — |
Outstanding Equity Awards at Fiscal Year-End
| Executive Compensation Tables (continued) | |
Outstanding Equity Awards at Fiscal Year-End
| | Option Awards | | | | Stock Awards | | | | | | Number of Securities Underlying Unexercised Options (#) | Number of Securities Underlying Unexercised Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#)(1) | Market Value of Shares or Units of Stock That Have Not Vested ($)(2) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(3) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(4) | | Name | Exercisable | Unexercisable | | | | | | | | | — | — | — | — | — | — | 493(11) | 203,229 | | | — | — | — | — | — | — | 954(12) | 393,267 | | | — | — | — | — | — | — | 3,749(13) | 1,545,450 | | Kelly E. Garcia | 2,200 | 0 | 118.54 | 7/15/2025(5) | — | — | — | — | | | 1,950 | 0 | 136.89 | 7/20/2026(5) | — | — | — | — | | | 4,870 | 0 | 168.21 | 11/7/2026(5) | — | — | — | — | | | 1,540 | 0 | 212.52 | 7/19/2027(5) | — | — | — | — | | | 1,370 | 0 | 283.68 | 7/18/2028(5) | — | — | — | — | | | 1,010 | 0 | 275.35 | 7/10/2029(5) | — | — | — | — | | | 290 | 0 | 275.35 | 7/10/2029(5) | — | — | — | — | | | 502 | 168 | 413.68 | 7/15/2030(5) | — | — | — | — | | | 135 | 45 | 413.68 | 7/15/2030(5) | — | — | — | — | | | 255 | 85 | 433.78 | 10/2/2030(5) | — | — | — | — | | | 758 | 379 | 367.79 | 3/31/2031(6) | — | — | — | — | | | 767 | 1,535 | 393.14 | 3/10/2032(6) | — | — | — | — | | | 0 | 8,220 | 300.16 | 3/10/2033(6) | — | — | — | — | | | — | — | — | — | — | — | 129(7) | 53,178 | | | — | — | — | — | — | — | 35(7) | 14,428 | | | — | — | — | — | — | — | 24(17) | 9,894 | | | — | — | — | — | 193(8) | 79,560 | — | — | | | — | — | — | — | 848(9) | 349,571 | — | — | | | — | — | — | — | 2,499(10) | 1,030,163 | — | — | | | — | — | — | — | — | — | 285(11) | 117,486 | | | — | — | — | — | — | — | 636(12) | 262,178 | | | — | — | — | — | — | — | 2,499(13) | 1,030,163 | | Arthur P. D’Elia | 1,190 | 0 | 275.35 | 7/10/2029(5) | — | — | — | — | | | 1,545 | 515 | 413.68 | 7/15/2030(5) | — | — | — | — | | | 794 | 397 | 367.79 | 3/31/2031(6) | — | — | — | — | | | 767 | 1,535 | 393.14 | 3/10/2032(6) | — | — | — | — | | | 0 | 8,220 | 300.16 | 3/10/2033(6) | — | — | — | — | | | — | — | — | — | — | — | 134(7) | 55,239 | | | — | — | — | — | 202(8) | 83,270 | — | — | | | — | — | — | — | 848(9) | 349,571 | — | — | | | — | — | — | — | 2,499(10) | 1,030,163 | — | — | | | — | — | — | — | — | — | 298(11) | 122,845 | | | — | — | — | — | — | — | 636(12) | 262,178 | | | — | — | — | — | — | — | 2,499(13) | 1,030,163 |
Outstanding Equity Awards at Fiscal Year-End
| (1) Awards of RSUs as described under “Compensation Discussion and Analysis – Long-term Incentive Compensation” above. RSUs vest equally over three years in separate vesting tranches. In order for each tranche to vest the named executive officer must generally be an employee of the Company on such vesting date, except as described under “—Potential Post-Employment Payments to Named Executive Officers” below. |
Outstanding Equity Awards at Fiscal Year-End
| (2) Value based on the closing price of the Company’s common stock on the NYSE on December 29, 2023, the last business day of fiscal 2023 ($412.23). |
Outstanding Equity Awards at Fiscal Year-End
| (3) Awards of performance shares or PSUs, as indicated, as described under “Compensation Discussion and Analysis – Long-term Incentive Compensation” above. Awards are shown assuming the performance conditions are satisfied at target. |
Outstanding Equity Awards at Fiscal Year-End
| Executive Compensation Tables (continued) | |
Outstanding Equity Awards at Fiscal Year-End
| (4) Value based on the closing price of the Company’s common stock on the NYSE on December 29, 2023, the last business day of fiscal 2023 ($412.23). |
Outstanding Equity Awards at Fiscal Year-End
| (5) Option awards granted ten years prior to the option expiration date that vest in equal annual installments over four years beginning on the first anniversary of the grant date. Vesting is accelerated upon certain employment terminations and covered transactions, as described under “—Potential Post-Employment Payments to Named Executive Officers” below. |
Outstanding Equity Awards at Fiscal Year-End
| (6) Option awards granted ten years prior to the option expiration date that vest in equal annual installments over three years beginning on the first anniversary of the grant date. Vesting is accelerated upon certain employment terminations and covered transactions, as described under “—Potential Post-Employment Payments to Named Executive Officers” below. |
Outstanding Equity Awards at Fiscal Year-End
| (7) Represents final tranche of performance shares granted in July 2020 that are eligible to vest on July 15, 2024, subject to the achievement of applicable performance conditions and generally subject to the named executive officer’s continued employment through such vesting date, except as described under “—Potential Post-Employment Payments to Named Executive Officers” below. |
Outstanding Equity Awards at Fiscal Year-End
| (8) Represents final tranche of RSUs awarded in March 2021 that are eligible to vest on March 31, 2024, generally subject to the named executive officer’s continued employment through such vesting date, except as described under “—Potential Post-Employment Payments to Named Executive Officers” below. |
Outstanding Equity Awards at Fiscal Year-End
| (9) Represents final two tranches of RSUs awarded in March 2022 that are eligible to vest in two equal installments on each of March 10, 2024 and March 10, 2025, generally subject to the named executive officer’s continued employment through such vesting date, except as described under “—Potential Post-Employment Payments to Named Executive Officers” below. |
Outstanding Equity Awards at Fiscal Year-End
| (10) Represents RSUs awarded in March 2023 that are eligible to vest in three equal installments on each of March 10, 2024, March 10, 2025 and March 10, 2026, generally subject to the named executive officer’s continued employment through such vesting date, except as described under “—Potential Post-Employment Payments to Named Executive Officers” below. |
Outstanding Equity Awards at Fiscal Year-End
| (11) Represents PSUs awarded in March 2021. The final payout of 98.5% for these PSUs awarded in March 2021 was certified by the Compensation Committee in January 2024 as described further in “Compensation Discussion and Analysis—Components of Total Direct Compensation—Payout for PSUs for Performance Period Ending in 2023” above and amounts reported in this table represent the actual number of PSUs earned by the named executive officers following such certification. |
Outstanding Equity Awards at Fiscal Year-End
| (12) Represents PSUs awarded in March 2022 (reported in this table based on the target number of shares subject to the award). Assuming applicable performance conditions based on cumulative adjusted total segment income and cumulative global retail sales, excluding foreign currency impact, are satisfied, PSUs will vest and convert to shares of common stock in or around March 2025 and are generally subject to the named executive officer’s continued employment through March 10, 2025, except as described under “—Potential Post-Employment Payments to Named Executive Officers” below. Actual payout for PSUs could range from 0% to 200% depending on performance, subject to a relative TSR modifier, which can increase or decrease the total number of shares earned by 15% based on the Company’s TSR relative to the TSR of the constituents of the S&P 500 Index. The final payout will be determined by the Compensation Committee and may be greater or less than the amount shown. |
Outstanding Equity Awards at Fiscal Year-End
| (13) Represents PSUs awarded in March 2023, as described under “Compensation Discussion and Analysis – Long-term Incentive Compensation” above (reported in this table based on the target number of shares subject to the award). Assuming applicable performance conditions based on adjusted total segment income growth and global retail sales, excluding foreign currency impact growth, are satisfied, PSUs will vest and convert to shares of common stock in or around March 2026 and are generally subject to the named executive officer’s continued employment through March 10, 2026, except as described under “—Potential Post-Employment Payments to Named Executive Officers” below. Actual payout for PSUs could range from 0% to 200% depending on performance, subject to a relative TSR modifier, which can increase or decrease the total number of shares earned by 25% based on the Company’s TSR relative to the TSR of the constituents of the S&P Composite 1500 Restaurants Sub-Index. The final payout will be determined by the Compensation Committee and may be greater or less than the amount shown. |
Outstanding Equity Awards at Fiscal Year-End
| (14) Represents final two tranches of RSUs awarded in April 2022 that are eligible to vest in two equal installments on each of April 1, 2024 and April 1, 2025, generally subject to the named executive officer’s continued employment through such vesting date, except as described under “—Potential Post-Employment Payments to Named Executive Officers” below. |
Outstanding Equity Awards at Fiscal Year-End
| (15) Represents final tranche of a special, sign-on equity award of RSUs awarded in April 2022 that is eligible to vest on April 1, 2024, generally subject to the named executive officer’s continued employment through such vesting date, except as described under “—Potential Post-Employment Payments to Named Executive Officers” below. |
Outstanding Equity Awards at Fiscal Year-End
| (16) Represents PSUs awarded in April 2022 (reported in this table based on the target number of shares subject to the award). Assuming applicable performance conditions based on cumulative adjusted total segment income and cumulative global retail sales, excluding foreign currency impact, are satisfied, PSUs will vest and convert to shares of common stock in or around March 2025 and are generally subject to the named executive officer’s continued employment through March 10, 2025, except as described under “—Potential Post-Employment Payments to Named Executive Officers” below. Actual payout for PSUs could range from 0% to 200% depending on performance, subject to a relative TSR modifier, which can increase or decrease the total number of shares earned by 15% based on the Company’s TSR relative to the TSR of the constituents of the S&P 500 Index. The final payout will be determined by the Compensation Committee and may be greater or less than the amount shown. |
Outstanding Equity Awards at Fiscal Year-End
| (17) Represents final tranche of performance shares awarded in October 2020 that are eligible to vest on October 2, 2024, generally subject to the named executive officer’s continued employment through such vesting date, except as described under “—Potential Post-Employment Payments to Named Executive Officers” below. |
Outstanding Equity Awards at Fiscal Year-End
| Executive Compensation Tables (continued) | |
Option Exercises and Stock Vested
Option Exercises and Stock Vested The following table provides information relating to stock vested for each of the named executive officers during 2023; no options were exercised by our named executive officers during 2023:
Option Exercises and Stock Vested
| | Option Awards | | Stock Awards | | | Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($)(1) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(2) | | Russell J. Weiner | — | — | 3,123 | $1,061,313 | | Sandeep Reddy | — | — | 3,541 | $1,193,423 | | Joseph H. Jordan | — | — | 1,324 | $440,733 | | Kelly E. Garcia | — | — | 1,035 | $352,982 | | Arthur P. D’Elia | — | — | 972 | $328,074 |
Option Exercises and Stock Vested
| (1) Equals the closing price of the Company’s common stock on the NYSE on the exercise date minus the option exercise price multiplied by the number of shares acquired on exercise. |
Option Exercises and Stock Vested
| (2) Equals the closing price of the Company’s common stock on the NYSE on the vesting date multiplied by the number of shares vesting, plus any accrued cash dividends paid on such vesting date in respect of such shares. |
Non-Qualified Deferred Compensation
Non-Qualified Deferred Compensation A select group of management or highly compensated employees, as defined by the Employee Retirement Income and Security Act of 1974, as amended, as well as the Company’s directors, are eligible to participate in the Domino’s Pizza Deferred Compensation Plan, or the DCP. The purpose of the DCP is to provide supplemental retirement income and to permit eligible employees to defer receipt of compensation pursuant to the terms of the plan. Participants are able to defer a portion of eligible compensation (including annual base salary and the annual performance incentive or, in the case of our directors, annual retainers and/or annual equity awards). Participants elect a specific date or event (such as termination of employment or Board service) for payment of deferred compensation and the form of the payment, either lump sum or installments. Participants are able to notionally invest their deferrals in mutual funds selected by them from a lineup of options. The options available under the DCP for the fiscal year ended December 31, 2023 were as follows: American Funds EuroPacific Growth Fund BNY Mellon MidCap Index Fund Boston Trust Small Cap Fund Credit Suisse Commodity Return Strategy Fund Dodge and Cox International Stock Fund Fidelity 500 Index Fund Fidelity Government Money Market Fund Fidelity Puritan Fund Harding Loevner Emerging Markets Portfolio Invesco Comstock Fund MainStay Large Cap Growth Fund PIMCO All Asset Fund PIMCO Total Return Fund Vanguard Inflation-Protected Securities Fund Vanguard Real Estate Index Fund Vanguard Total Bond Market Index Fund Vanguard Total International Stock Index Fund
Non-Qualified Deferred Compensation
| Executive Compensation Tables (continued) | |
Non-Qualified Deferred Compensation
The following table provides information on the DCP for our named executive officers as of December 31, 2023:
Non-Qualified Deferred Compensation
| Name | Executive Contributions in Last Fiscal Year ($)(1) | Registrant Contributions in Last Fiscal Year ($) | Aggregate Earnings in Last Fiscal Year ($)(2) | Aggregate Withdrawals / Distributions ($) | Aggregate Balance at Last Fiscal Year-End ($)(3) | | Russell J. Weiner | — | — | — | — | — | | Sandeep Reddy | 337,189 | — | 99,854 | — | 631,885 | | Joseph H. Jordan | — | — | — | — | — | | Kelly E. Garcia | — | — | — | — | — | | Arthur P. D’Elia | — | — | — | — | — |
Non-Qualified Deferred Compensation
| (1) This entire amount is included in salary for Mr. Reddy in the Summary Compensation Table on page 49. |
Non-Qualified Deferred Compensation
| (2) Reflects dividends, interest and aggregate market-based earnings on amounts deferred by plan participants. |
Non-Qualified Deferred Compensation
| (3) Represents the participant’s account balance as of December 31, 2023, which includes $194,842 in compensation reported for fiscal year 2022, as adjusted for applicable changes in market value of the notional investment of such amounts. |
Non-Qualified Deferred Compensation
No other named executive officers participated in or had balances under the Domino’s Pizza Deferred Compensation Plan for the fiscal year ended December 31, 2023. The balances under the DCP for our directors are listed below under “Non-Qualified Deferred Compensation of Directors.”
Pay Versus Performance
Pay Versus Performance As required by Item 402(v) of Regulation S-K, we are providing the following information about the relationship between executive compensation actually paid and certain financial performance of the Company. For further information concerning the Company’s pay-for-performance philosophy and how the Company’s executive compensation aligns with the Company’s performance, refer to “Compensation Discussion and Analysis.” The Compensation Committee did not consider the Compensation Actually Paid measure below in making its compensation decisions for any of the years shown below.
Pay Versus Performance
| | | | | | | | Value of Initial Fixed $100 Investment Based on (4) : | | | | | Year | Summary Compensation Table Total for Richard E. Allison, Jr. (1) ($) | Summary Compensation Table Total for Russell J. Weiner (1) ($) | Compensation Actually Paid to Richard E. Allison, Jr. (1)(2)(3) ($) | Compensation Actually Paid to Russell J. Weiner (1)(2)(3) ($) | Average Summary Compensation Table Total for Non-PEO NEOs (1) ($) | Average Compensation Actually Paid to Non-PEO NEOs (1)(2)(3) ($) | Total Shareholder Return ($) | Peer Group Total Shareholder Return ($) | Net Income ($ Millions) | Adjusted Total Segment Income ($ Millions) (5) | | 2023 | — | 10,135,862 | — | 14,374,311 | 4,181,603 | 5,957,664 | 146.45 | 153.95 | 519.1 | 935.8 | | 2022 | 1,577,173 | 6,636,731 | (5,565,349) | (27,849) | 3,222,641 | 2,114,168 | 121.37 | 133.03 | 452.3 | 894.7 | | 2021 | 7,138,002 | — | 18,863,088 | — | 2,669,548 | 4,929,996 | 195.37 | 145.93 | 510.5 | 893.1 | | 2020 | 6,295,230 | — | 11,228,320 | — | 2,549,825 | 3,491,928 | 131.65 | 119.57 | 491.3 | 821.3 |
Pay Versus Performance
| (1) Richard E. Allison, Jr. was our principal executive officer (“PEO”) from July 2018 to April 30, 2022. Russell J. Weiner became our PEO on May 1, 2022. The individuals comprising the Non-PEO named executive officers (“NEOs”) for each year presented are listed below. |
Pay Versus Performance
| 2020 | 2021 | 2022 | 2023 | | Stuart A. Levy | Russell J. Weiner | Sandeep Reddy | Sandeep Reddy | | Russell J. Weiner | Joseph H. Jordan | Joseph H. Jordan | Joseph H. Jordan | | Joseph H. Jordan | Kevin S. Morris | Kelly E. Garcia | Kelly E. Garcia | | Kevin S. Morris | Stuart A. Levy | Arthur P. D’Elia | Arthur P. D’Elia | | Jeffrey D. Lawrence | | | | | J. Kevin Vasconi | | | |
Pay Versus Performance
| (2) The amounts shown for Compensation Actually Paid have been calculated in accordance with Item 402(v) of Regulation S-K and do not reflect compensation actually earned, realized or received by the Company’s NEOs. These amounts reflect the Summary Compensation Table total with certain adjustments as described in footnote 3 below. |
Pay Versus Performance
| (3) Compensation Actually Paid reflects the exclusions and inclusions of certain amounts for the PEOs and the Non-PEO NEOs as set forth below. Equity values are calculated in accordance with ASC 718. Amounts in the Exclusion of Stock Awards and Option Awards column are the totals from the Stock Awards and Option Awards columns set forth in the Summary Compensation Table. To calculate Compensation Actually Paid, the totals included in the Exclusion of Stock Awards and Option Awards column were subtracted and the totals in the Inclusion of Equity Values column were added to the Summary Compensation Table Total for the PEOs and the Non-PEO NEOs. |
Pay Versus Performance
| Year | Summary Compensation Table Total for Richard E. Allison, Jr. ($) | Exclusion of Stock Awards and Option Awards for Richard E. Allison, Jr. ($) | Inclusion of Equity Values for Richard E. Allison, Jr, ($) | Compensation Actually Paid to Richard E. Allison, Jr. ($) | | 2022 | 1,577,173 | (196,857) | (6,945,665) | (5,565,349) | | 2021 | 7,138,002 | (3,460,131) | 15,185,216 | 18,863,088 | | 2020 | 6,295,230 | (2,401,324) | 7,334,414 | 11,228,320 | | Year | Summary Compensation Table Total for Russell J. Weiner ($) | Exclusion of Stock Awards and Option Awards for Russell J. Weiner ($) | Inclusion of Equity Values for Russell J. Weiner ($) | Compensation Actually Paid to Russell J. Weiner ($) | | 2023 | 10,135,862 | (7,070,798) | 11,309,247 | 14,374,311 | | 2022 | 6,636,731 | (4,553,658) | (2,110,922) | (27,849) |
Pay Versus Performance
| Executive Compensation Tables (continued) | |
Pay Versus Performance
| Year | Average Summary Compensation Table Total for Non-PEO NEOs ($) | Average Exclusion of Stock Awards and Option Awards for Non-PEO NEOs ($) | Average Inclusion of Equity Values for Non-PEO NEOs ($) | Average Compensation Actually Paid to Non-PEO NEOs ($) | | 2023 | 4,181,603 | (2,715,339) | 4,491,400 | 5,957,664 | | 2022 | 3,222,641 | (1,904,195) | 795,722 | 2,114,168 | | 2021 | 2,669,548 | (1,136,067) | 3,396,515 | 4,929,996 | | 2020 | 2,549,825 | (1,040,910) | 1,983,013 | 3,491,928 |
Pay Versus Performance
The amounts in the Inclusion of Equity Values in the tables above are derived from the amounts set forth in the following tables:
Pay Versus Performance
| Year | Year-End Fair Value of Equity Awards Granted During Year That Remained Unvested as of Last Day of Year for Richard E. Allison, Jr. ($) | Change in Fair Value from Last Day of Prior Year to Last Day of Year of Unvested Equity Awards for Richard E. Allison, Jr. ($) | Change in Fair Value from Last Day of Prior Year to Vesting Date of Unvested Equity Awards that Vested During Year for Richard E. Allison, Jr. ($) | Fair Value at Last Day of Prior Year of Equity Awards Forfeited During Year for Richard E. Allison, Jr. ($) | Total - Inclusion of Equity Values for Richard E. Allison, Jr. ($) | | 2022 | — | (692,267) | (6,253,398) | — | (6,945,665) | | 2021 | 5,462,058 | 7,624,249 | 2,098,909 | — | 15,185,216 | | 2020 | 1,989,134 | 3,628,559 | 1,716,721 | — | 7,334,414 | | Year | Year-End Fair Value of Equity Awards Granted During Year That Remained Unvested as of Last Day of Year for Russell J. Weiner ($) | Change in Fair Value from Last Day of Prior Year to Last Day of Year of Unvested Equity Awards for Russell J. Weiner ($) | Change in Fair Value from Last Day of Prior Year to Vesting Date of Unvested Equity Awards that Vested During Year for Russell J. Weiner ($) | Fair Value at Last Day of Prior Year of Equity Awards Forfeited During Year for Russell J. Weiner ($) | Total - Inclusion of Equity Values for Russell J. Weiner ($) | | 2023 | 10,957,111 | 627,305 | (275,169) | — | 11,309,247 | | 2022 | 3,584,162 | (2,645,641) | (3,049,443) | — | (2,110,922) | | Year | Average Year- End Fair Value of Equity Awards Granted During Year That Remained Unvested as of Last Day of Year for Non- PEO NEOs ($) | Average Change in Fair Value from Last Day of Prior Year to Last Day of Year of Unvested Equity Awards for Non-PEO NEOs ($) | Average Change in Fair Value from Last Day of Prior Year to Vesting Date of Unvested Equity Awards that Vested During Year for Non-PEO NEOs ($) | Average Fair Value at Last Day of Prior Year of Equity Awards Forfeited During Year for Non-PEO NEOs ($) | Total - Average Inclusion of Equity Values for Non-PEO NEOs ($) | | 2023 | 4,285,464 | 277,603 | (71,667) | — | 4,491,400 | | 2022 | 1,559,241 | (573,013) | (190,506) | — | 795,722 | | 2021 | 1,380,101 | 1,658,217 | 590,885 | (232,688) | 3,396,515 | | 2020 | 493,333 | 817,596 | 672,084 | — | 1,983,013 |
Pay Versus Performance
| (4) The Peer Group TSR set forth in this table utilizes the S&P Composite 1500 Restaurants Sub-Index (“Index”), which we also utilize in the stock performance graph required by Item 201(e) of Regulation S-K included in the 2023 10-K. The comparison assumes $100 was invested for the period starting December 31, 2019, through the end of the listed year in the Company’s common stock and in the Index, respectively. TSR is calculated by dividing the sum of the cumulative amount of dividends for the measurement period, assuming dividend reinvestment, and the difference between the Company’s share price at the end and the beginning of the measurement period by the Company’s share price at the beginning of the measurement period. Historical stock performance is not necessarily indicative of future stock performance. |
Pay Versus Performance
| (5) We determined Adjusted Total Segment Income to be the most important financial performance measure used to link Company performance to Compensation Actually Paid to our PEOs and Non-PEO NEOs in fiscal 2023. Adjusted Total Segment Income is measured as Segment Income as defined by the Company under ASC 280 with certain adjustments as described under “Compensation Discussion and Analysis—Components of Total Direct Compensation—Annual Performance Incentives.” This performance measure may not have been the most important financial performance measure for fiscal years 2021 and 2020 and we may determine a different financial performance measure to be the most important financial performance measure in future years. |
Pay Versus Performance
| Executive Compensation Tables (continued) | |
Analysis of the Information Presented in the Pay Versus Performance Table
Analysis of the Information Presented in the Pay Versus Performance Table As described in more detail in “Compensation Discussion and Analysis,” the Company’s executive compensation program reflects a commitment to paying for performance and a competitive pay-for-performance package that is designed to incentivize and retain executives. While the Company utilizes several performance measures to align executive compensation with Company performance, all of those Company measures are not presented in the Pay Versus Performance table. Moreover, the Company generally seeks to incentivize long-term performance, and therefore does not specifically align the Company’s performance measures with compensation that is actually paid (as computed in accordance with Item 402(v) of Regulation S-K) for a particular year. In accordance with Item 402(v) of Regulation S-K, the Company is providing the following graphs showing the relationships between information presented in the Pay Versus Performance table.
Analysis of the Information Presented in the Pay Versus Performance Table
| Executive Compensation Tables (continued) | |
Analysis of the Information Presented in the Pay Versus Performance Table
Compensation Actually Paid and Cumulative TSR The following chart sets forth the relationship between Compensation Actually Paid to our PEOs, the average of Compensation Actually Paid to our other NEOs, and the Company’s cumulative TSR over the four most recently completed fiscal years and also compares our cumulative TSR over the four most recently completed fiscal years to that of the S&P Composite 1500 Restaurant Sub-Index TSR over the same period. Compensation Actually Paid and Net Income The following chart sets forth the relationship between Compensation Actually Paid to our PEOs , the average of Compensation Actually Paid to our other NEOs, and our net income during the four most recently completed fiscal years.
Analysis of the Information Presented in the Pay Versus Performance Table
| Executive Compensation Tables (continued) | |
Analysis of the Information Presented in the Pay Versus Performance Table
Compensation Actually Paid and Adjusted Total Segment Income The following chart sets forth the relationship between Compensation Actually Paid to our PEO, the average of Compensation Actually Paid to our other NEOs, and our Adjusted Total Segment Income during the four most recently completed fiscal years. Cumulative TSR of the Company and Cumulative TSR of the Peer Group The Company’s cumulative TSR over the four-year period presented in the table was approximately 46.5%, while the cumulative TSR of the peer group presented for this purpose, the S&P Composite 1500 Restaurants Sub-Index, was approximately 54.0% over this same period. The Company’s cumulative TSR outperformed the S&P Composite 1500 Restaurants Sub-Index during the final year presented in the table, representing the Company’s outperformance as compared to the companies comprising the S&P Composite 1500 Restaurants comparison group in 2023 and corresponded with a significant return to growth and a return to the Company’s historical strong operating performance. For more information regarding the Company’s performance and the companies that the Compensation Committee considers when determining compensation, refer to “Compensation Discussion and Analysis.”
Analysis of the Information Presented in the Pay Versus Performance Table
| Executive Compensation Tables (continued) | |
CEO Pay Ratio
CEO Pay Ratio Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, the SEC requires annual disclosure of the ratio of the median annual total compensation of all of our employees to the annual total compensation of our CEO. To identify the median employee, we used 2023 total cash compensation, which includes annual base salaries or base wages plus annual bonuses, if any, as reported on each employee’s W-2, Box 1, as our consistently applied compensation measure. We used total cash compensation as our consistently applied compensation measure because we do not widely distribute annual equity awards to employees (less than 2% of our employees received annual equity awards). We then measured total cash compensation for all individuals who were employed by us on December 1, 2023, excluding (i) our CEO and (ii) all team members located in countries outside of the United States, pursuant to the de minimis exemption under the pay ratio rules. A total of 273 team members were so excluded and are detailed by each non-U.S. jurisdiction below:
CEO Pay Ratio
| Brazil: 1 | Hong Kong: 3 | Singapore 15 | | Canada: 228 | Mexico: 1 | United Kingdom: 2 | | Dubai: 11 | Netherlands: 12 | |
CEO Pay Ratio
Except as described above, we included all employees, whether employed on a full-time, part-time, seasonal or temporary basis. We did not make any assumptions, adjustments, or estimates with respect to total cash compensation. We did, however, annualize the compensation used for employees who were not employed by us for all of 2023 by taking an employee’s compensation for the number of bi-weekly pay periods for which they were employed and annualizing such amount for the full year of 26 pay periods, which is consistent with the number of bi-weekly pay periods our CEO received in 2023. As of December 1, 2023, we had 10,601 U.S.-based full-time, part-time, seasonal and temporary employees. As of this same date, including our team members located in countries outside the United States, we had 10,874 full-time, part-time, seasonal and temporary employees. As we had an even number of employees excluding our CEO, the methodology resulted in the identification of two median employees. We selected the employee whom we believed had annual total compensation that was more representative of our employee population and general compensation practices. Based on total cash compensation, our median employee was identified as a part-time delivery driver who worked approximately 33 hours per week and was paid on an hourly basis. The median employee’s annual total compensation was calculated using the same methodology we use for our named executive officers as set forth in the Summary Compensation Table for 2023 earlier in this Proxy Statement. Mr. Weiner’s annual total compensation for the 2023 fiscal year was $10,135,862, as reflected in the Summary Compensation Table for 2023 above. Our median employee’s annual total compensation for the 2023 fiscal year, as determined in the same manner as Mr. Weiner’s, was $31,481. As a result, we estimate that Mr. Weiner’s annual total compensation was approximately 322 times that of our median employee. This pay ratio is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K. Because the SEC rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their compensation practices, the pay ratio reported by other companies may not be comparable to the pay ratio reported above. The Compensation Committee did not consider the pay ratio in making its compensation decisions for fiscal 2023.
CEO Pay Ratio
| Proposal Three: Advisory Vote to Approve Named Executive Officer Compensation | |
CEO Pay Ratio
At our 2023 annual meeting of shareholders, the Company provided shareholders with the opportunity to cast an advisory vote regarding the compensation of our named executive officers as disclosed for fiscal year 2022 in our 2023 Proxy Statement. This non-binding advisory vote is commonly referred to as “say-on-pay.” At our 2023 annual meeting, our shareholders approved the proposal with 92.36% of the shares voted in favor of the say-on-pay proposal. At the 2023 annual meeting of shareholders, the Company held an advisory vote on the frequency of future say-on-pay votes. Our shareholders voted in favor of an annual say-on-pay vote and the Company has elected to follow such recommendation. Accordingly, this year we are again asking our shareholders to vote FOR the approval of the compensation we pay to our named executive officers as disclosed in this Proxy Statement. The objectives of our executive compensation program, along with the compensation paid to our named executive officers and the rationale for such compensation, are set forth in the Compensation Discussion and Analysis and the related tables and narrative disclosures in this Proxy Statement. The Board of Directors, as required pursuant to Section 14A of the Exchange Act, is asking shareholders to cast a non-binding, advisory vote FOR the following resolution: “RESOLVED, that the compensation paid to the Company’s named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and any related material contained in this Proxy Statement, is hereby APPROVED.” As we described in the Compensation Discussion and Analysis, our executive compensation program embodies a pay-for-performance philosophy that supports the Company’s business strategy, aligns the interests of our executives with our shareholders and promotes good governance. We believe that our executive compensation program links pay to performance and reflects best practices in governance as follows:
CEO Pay Ratio
| • | Demonstrating the emphasis that the Compensation Committee places on the performance-based components of total direct compensation, in fiscal 2023 approximately 91% of the target total direct compensation for our CEO, and an average of approximately 85% of all other named executive officers’ target total direct compensation, was variable and tied to Company financial and/or stock price performance. |
CEO Pay Ratio
| • | In 2023, the relative target mix of PSUs granted to our CEO under the EIP was increased to 50% of target grant date value to demonstrate additional emphasis on the long-term performance incentive portion of the EIP. |
CEO Pay Ratio
| • | Review of our compensation plans, policies, and significant compensation practices on an annual basis. |
CEO Pay Ratio
| • | Evaluation of the level of risk in incentive compensation design on an annual basis and maintenance of a number of mechanisms to mitigate the chance of our incentive compensation programs encouraging excessive risk taking, including meaningful stock ownership guidelines, a cap on maximum annual performance incentives, maintaining a recoupment policy compliant with SEC and NYSE rules and anti-pledging and anti-hedging provisions contained in our Insider Trading Policy. |
CEO Pay Ratio
In reviewing and assessing our executive compensation program, the Compensation Committee considers shareholder feedback, including feedback received following the transition of our existing long-term incentive compensation program in 2021, which was comprised of performance shares and stock options, to a program comprised of PSUs, RSUs and stock options as described in the Compensation Discussion and Analysis. The Company routinely reviews its compensation programs and engages in discussions with certain major shareholders to solicit their feedback regarding our executive compensation program. The Company has made changes in prior years based upon feedback from this shareholder outreach and plans to continue these engagement efforts in future years. For these reasons, the Board is asking shareholders to again support this say-on-pay proposal. Although the vote we are asking you to cast is non-binding, the Compensation Committee and the Board value the views of our shareholders and will continue to consider the outcome of the vote when determining future compensation arrangements for our named executive officers and in continuing to align the Company’s executive compensation program with the interests of the Company and its shareholders.
CEO Pay Ratio
| Our Board of Directors Unanimously Recommends a Vote FOR this Proposal | ✓ |
CEO Pay Ratio
| Proposal Four: Shareholder Proposal Regarding Simple Majority Vote | |
CEO Pay Ratio
The Company has been advised that John Chevedden, 2215 Nelson Avenue, No. 205, Redondo Beach, California 90278, intends to submit the following proposal at the Annual Meeting. In accordance with applicable proxy regulations, the proposed resolution and supporting statement, for which the Board of Directors and the Company accept no responsibility, are set forth below. The proponent has represented that he beneficially owns at least $2,000 in market value of our common stock. Proposal Four will be required to be voted upon at the Annual Meeting only if properly presented. Approval of this proposal would require the affirmative vote of a majority of the votes properly cast in person or by proxy at the Annual Meeting. If you abstain, your shares will not be counted as having been voted on the matter. After careful consideration, the Board of Directors has determined to make NO RECOMMENDATION regarding this proposal.
Board of Directors’ Response to Shareholder Proposal
| Compensation of Directors | |
Board of Directors’ Response to Shareholder Proposal
| 2023 Director Compensation Summary | | | Annual Retainer | Amount | | Board of Directors | $85,000 | | Presiding Director | $25,000 | | Audit Committee | | | Chairperson | $35,000 | | Member | $15,000 | | Compensation Committee | | | Chairperson | $25,000 | | Member | $10,000 | | Inclusion & Diversity Committee | | | Chairperson | $20,000 | | Member | $10,000 | | Nominating and Corporate Governance Committee | | | Chairperson | $20,000 | | Member | $10,000 |
Board of Directors’ Response to Shareholder Proposal
| Compensation of Directors (continued) | |
Director Compensation Table for 2023
Director Compensation Table for 2023 The following table provides information concerning compensation for the Company’s directors during 2023:
Director Compensation Table for 2023
| Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) | All Other Compensation ($)(2) | Total ($) | | David A. Brandon(3) | 85,000 | 175,034 | — | — | — | 53,896 | 313,929 | | C. Andrew Ballard(4) | 140,000 | 175,034 | — | — | — | 2,138 | 317,172 | | Andrew B. Balson(5) | 106,250 | 175,034 | — | — | — | 2,138 | 283,422 | | Corie S. Barry | 110,000 | 175,034 | — | — | — | 2,138 | 287,172 | | Diana F. Cantor | 108,750 | 175,034 | — | — | — | 2,138 | 285,922 | | Richard L. Federico | 116,250 | 175,034 | — | — | — | 2,138 | 293,422 | | James A. Goldman | 112,500 | 175,034 | — | — | — | 2,138 | 289,672 | | Patricia E. Lopez | 116,250 | 175,034 | — | — | — | 2,138 | 293,422 |
Director Compensation Table for 2023
| (1) Amounts in the “Stock Awards” column reflect the grant date fair value of grants of restricted stock units pursuant to our EIP determined in accordance with ASC 718 and reflect rounding up in the number of restricted stock units granted. Assumptions used in the calculation of these amounts are included in Note 9 to the Company’s audited financial statements for the fiscal year ended December 31, 2023 included in the 2023 10-K. |
Director Compensation Table for 2023
| (2) Amounts in this column represent (i) perquisites and other personal benefits totaling at least $10,000 in the aggregate and (ii) accrued cash dividends on the vesting of restricted stock and restricted stock units. For all directors other than Mr. Brandon, the amounts represent accrued cash dividends on the vesting of restricted stock ($2,138). For Mr. Brandon, the amount includes reimbursements related to post-employment medical and health benefits, Company-paid premiums for umbrella liability insurance, purchases of Domino’s food items and accrued cash dividends on the vesting of restricted stock and restricted stock units ($5,777). None of the amounts for Mr. Brandon’s perquisites or other personal benefits individually exceeded the greater of $25,000 or 10% of the total amount of these perquisites and other personal benefits except with respect to reimbursements related to post-employment medical and health benefits relating to Mr. Brandon’s prior employment with the Company ($42,211). |
Director Compensation Table for 2023
| (3) In his role as the Company’s Executive Chairman, Mr. Brandon serves as an employee of the Company and receives additional compensation in connection with such employment, as described under “Certain Transactions Involving Management or 5% or Greater Shareholders.” |
Director Compensation Table for 2023
| (4) Amount includes compensation received by Mr. Ballard in his role as Presiding Director of the Board of Directors as described above. |
Director Compensation Table for 2023
| (5) Mr. Balson elected to receive his cash retainer fees in the form of Company stock, and to defer distribution of such restricted stock units, pursuant to the DCP. “Fees Earned or Paid in Cash” represents $106,250 in cash retainer fees for which Mr. Balson received an additional 305 restricted stock units pursuant to his election to receive such cash retainer fees in Company stock. |
Non-Qualified Deferred Compensation of Directors
Non-Qualified Deferred Compensation of Directors The following table provides information on the DCP for directors as of December 31, 2023:
Non-Qualified Deferred Compensation of Directors
| Name | Director Contributions in Last Fiscal Year ($)(1) | Registrant Contributions in Last Fiscal Year ($) | Aggregate Earnings in Last Fiscal Year ($)(2) | Aggregate Withdrawals / Distributions ($) | Aggregate Balance at Last Fiscal Year-End ($)(3) | | David A. Brandon(4) | 253,560 | — | 474,641 | — | 3,645,322 | | C. Andrew Ballard | — | — | — | — | — | | Andrew B. Balson | 106,250 | — | 244,427 | — | 1,280,508 | | Corie S. Barry | — | — | — | — | — | | Diana F. Cantor | — | — | — | — | — | | Richard L. Federico | — | — | — | — | — | | James A. Goldman | — | — | 178,323 | — | 1,270,556 | | Patricia E. Lopez | — | — | 66,898 | — | 478,860 |
Non-Qualified Deferred Compensation of Directors
| (1) Entire amounts contributed by participants are included as “Fees Earned or Paid in Cash” in the Director Compensation Table above. For Mr. Brandon, also includes contributions of compensation received as the Company’s Executive Chairman, a role for which he serves as an employee of the Company, as described under “Certain Transactions Involving Management or 5% or Greater Shareholders.” For Mr. Balson, represents amount of cash retainer fees for which he received an additional 305 restricted stock units pursuant to his election to receive such cash retainer fees in Company stock as described in footnote (5) to the Director Compensation table above. |
Non-Qualified Deferred Compensation of Directors
| Compensation of Directors (continued) | |
Non-Qualified Deferred Compensation of Directors
| (2) Reflects dividends, interest and aggregate market-based earnings on amounts deferred by plan participants. |
Non-Qualified Deferred Compensation of Directors
| (3) Represents the participant’s account balance as of December 31, 2023, which includes compensation reported in fiscal years 2013-2022, as applicable, as follows: Mr. Brandon $2,917,121, Mr. Balson $929,831, Mr. Goldman $1,092,233 and Ms. Lopez $411,962, in each case as adjusted for applicable changes in market value of the notional investment of such amounts. |
Non-Qualified Deferred Compensation of Directors
| (4) Represents contributions by Mr. Brandon of compensation received in both his role as a director and in his role as Executive Chairman, as described under “Certain Transactions Involving Management or 5% or Greater Shareholders.” |
Non-Qualified Deferred Compensation of Directors
Under the DCP, a director may irrevocably elect to defer receipt of shares of common stock the director would have received upon vesting of restricted stock units comprising his or her annual retainer and/or annual equity award. The purpose of the plan is to enhance the Company’s ability to attract and retain directors by providing individual financial and tax planning flexibility. Deferred stock resulting from deferrals under the DCP is counted toward meeting the stock ownership requirements for directors of five times their annual retainer fee.
Outstanding Equity Awards of Directors
Outstanding Equity Awards of Directors The following table shows the number of shares underlying outstanding restricted stock units for the Company’s directors as of December 31, 2023:
Outstanding Equity Awards of Directors
| Name | Outstanding Stock Awards (#) | | David A. Brandon | 1,947(1) | | C. Andrew Ballard | 531 | | Andrew B. Balson | 836(2) | | Corie S. Barry | 531 | | Diana F. Cantor | 531 | | Richard L. Federico | 531 | | James A. Goldman | 531 | | Patricia E. Lopez | 531 |
Outstanding Equity Awards of Directors
| (1) Comprised of an annual equity grant of 531 restricted stock units for Mr. Brandon’s service as a director and a grant of 1,416 RSUs awarded in connection with his appointment as Executive Chairman of the Board of Directors and resulting employment with the Company as further described under “Certain Transactions Involving Management or 5% or Greater Shareholders.” |
Outstanding Equity Awards of Directors
| (2) Comprised of an annual equity grant of 531 restricted stock units and an additional 305 restricted stock units representing restricted stock units awarded pursuant to Mr. Balson’s election to receive his cash retainer fees in the form of Company stock, and to defer distribution of such restricted stock units, pursuant to the DCP as described in footnote (5) to the Director Compensation table above. |
Outstanding Equity Awards of Directors
| Equity Compensation Plan Information | |
Outstanding Equity Awards of Directors
The following table sets forth, as of December 31, 2023, the end of the Company’s last fiscal year, (a) the number of securities that could be issued upon exercise of outstanding options under the Company’s equity compensation plans, (b) the weighted-average exercise price of outstanding options under such plans and (c) the number of securities remaining available for future issuance under such plans, excluding securities that could be issued upon exercise of outstanding options and performance shares, RSUs and PSUs that have been issued.
Outstanding Equity Awards of Directors
| Plan Category | Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights | Weighted- Average Exercise Price of Outstanding Options, Warrants and Rights | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in First Column)(1) | | Equity compensation plans approved by shareholders | 935,483(2) | $229.45 | 2,736,505 | | Equity compensation plans not approved by shareholders | — | — | — | | Total | 935,483 | $229.45 | 2,736,505 |
Outstanding Equity Awards of Directors
| (1) Includes 564,086 shares that may be issued under the ESPDP. |
Outstanding Equity Awards of Directors
| (2) Consists of 686,348 options, 6,396 performance share awards and 242,739 PSUs and RSUs (assuming the target performance for PSUs) currently awarded under the EIP. The weighted average exercise price above does not take such performance share awards, PSUs or RSUs into account. |
Board of Directors
Board of Directors