DEF 14A of Brinker International, Inc
Filed Sep 27, 2024 · FY20240001193125-24-227394
INFORMATION ABOUT THE BOARD OF DIRECTORS
INFORMATION ABOUT THE BOARD OF DIRECTORS
ELECTION OF DIRECTORS
ELECTION OF DIRECTORS The Board of Directors recommends that you vote FOR the election of all the nominees named below. Each person nominated for election has agreed to serve if elected, and we have no reason to believe that any nominee will be unavailable to serve. However, if any nominee becomes unable or unwilling to serve as a nominee at the time of the Annual Meeting, the individuals named as proxies may vote for a substitute nominee selected by the Board of Directors. Alternatively, the Board of Directors may reduce the size of the Board of Directors, or leave a vacancy that the Board of Directors may fill at a later date. All nominees are currently serving as directors of the Company and all were last elected by the shareholders at the 2023 annual meeting of shareholders except for Frank Liberio who was appointed to the Board of Directors on July 1, 2024. Mr. Liberio was recommended to the Board by the Governance & Nominating Committee after a search conducted by a third-party firm and an interview process.
Information About Nominees
Information About Nominees We are furnishing below certain biographical information about each of the ten nominees for director, including public company directorships held during the last five years. Also included is a description of the experience, qualifications, attributes and skills of each nominee that led to the Board’s and Governance & Nominating Committee’s conclusion that he or she should serve as a director, considering the Company’s current business and structure:
Information About Nominees
| ∎ Frances L. Allen | | Ms. Allen served as Chief Executive Officer of Checkers Drive-In Restaurants, Inc., one of the largest chains of double drive-thru restaurants in the U.S., from February 2020 until her retirement in September 2024 to focus on her board work. Previously, Ms. Allen served as Chief Executive Officer of Boston Market Corp., a fast casual restaurant, from May 2018 to February 2020, and President of Jack in the Box, Inc., a quick-service restaurant chain, from October 2014 to February 2018. Ms. Allen previously served on the Board of Directors of Checkers Drive-In Restaurants, Inc. from 2020 to 2024 and MarineMax, Inc. from 2013 to 2015. She also serves as a member of the Advisory Board of No Kid Hungry. |
Information About Nominees
| Director since 2020 Age: 62 Board Committees: Audit and Governance & Nominating Other Public Company Boards: None | Director Qualifications | | | Ms. Allen brings a wealth of expertise derived from her leadership of various consumer brands, including most recently as chief executive officer or president of three different restaurant brands. She has more than 10 years of experience working closely with the boards of directors of publicly-traded companies. Her experience spanning over several retail segments, including 17 years in the restaurant industry, gives her valuable insight into consumer behavior, restaurant operations, corporate strategy, marketing and restaurant financial matters. |
Information About Nominees
| ∎ Cynthia L. Davis | | | Ms. Davis is a former Nike executive where she served as Vice President of Nike, Inc., a global provider of athletic footwear and apparel, and President of Nike Golf from September 2008 to October 2014, after having served in various other positions with Nike since January 2005. Prior to that, Ms. Davis was Senior Vice President at Golf Channel, a division of Comcast Corporation, from January 2001 to December 2004, and was formerly President and Chief Executive Officer of Arnold Palmer Golf Management, LLC from March 1998 to December 2000. Ms. Davis serves on the Board of Directors of Deckers Outdoor Corporation and Kennametal, Inc., and is also a member of the Board of Trustees at Furman University. She previously served on the Board of Directors of Buffalo Wild Wings, Inc. from 2015 to 2018. | | | Director since 2019 Age: 62 Board Committees: Talent & Compensation and Governance & Nominating Other Public Company Boards: Deckers Outdoor Corporation and Kennemetal, Inc. | Director Qualifications | | | Ms. Davis brings extensive experience as a senior officer of multiple national and international companies, including service as the president of a division of a large, publicly traded retail company. She has a broad understanding of corporate strategy, sales, marketing, brand management and operations, and has served on boards of several publicly traded companies, including a casual dining chain restaurant company. |
Information About Nominees
| 4 | Brinker International • 2024 Notice & Proxy | Making People Feel Special |
Information About Nominees
| ∎ Joseph M. DePinto | | Mr. DePinto is Chairman of the Board of Directors of the Company, serving in this position since November 2013. He is President and Chief Executive Officer of 7-Eleven, Inc., a large multi-unit retail company that is a private wholly owned subsidiary of 7 & i Holdings Co., Ltd., serving in this position since December 2005. Previously, Mr. DePinto served as President of GameStop Corporation from March 2005 to December 2005. Prior to GameStop, he was employed by 7-Eleven, Inc. from 2002 to 2005 in various roles. Mr. DePinto currently serves on the Board of Directors of 7-Eleven, Inc. and 7 & i Holdings Co., Ltd. He also serves on the Board of Directors of the Johnny Mac Soldiers Fund and is a council member of the Kellogg School of Management Global Advisory Board and the Dallas Stars Ownership Advisory Group. Mr. DePinto previously served on the Boards of OfficeMax, Inc., Geniant Corp., Jo-Ann Stores, Inc., DHC Acquisition Corp., the Business Executives for National Security, the National Association of Convenience Stores, the UT Southwestern Medical Foundation, the Japan America Society of DFW, and the Dallas Citizens Council. He also served as a council member of the George W. Bush Presidential Center’s Military Service Initiative. Mr. DePinto is a United States Army veteran and in December 2017, was appointed a Civilian Aide to the Secretary of the Army. Mr. DePinto holds a Bachelor of Science degree from The United States Military Academy at West Point and a Master of Business Administration from the Kellogg School of Management at Northwestern University. |
Information About Nominees
| Director since 2010 Age: 61 Board Committees: None Other Public Company Boards: 7 & i Holdings Co. | Director Qualifications | | | Mr. DePinto brings his skills and knowledge as chief executive officer of a large multi-unit retail company operating in domestic and international markets, as well as his experience serving on the boards of other large or public companies. He provides a significant broad-based understanding of leading a large public company, as well as a unique understanding of all aspects of retailing, including operations, marketing, finance and strategic planning. |
Information About Nominees
| ∎ Harriet Edelman | | | Ms. Edelman is Vice Chairman of Emigrant Bank, a private financial institution, having served in this role since November 2010. Previously, Ms. Edelman served as Advisor to the Chairman of Emigrant Bank from June 2008 through October 2010. Prior to Emigrant Bank, Ms. Edelman served in numerous executive leadership positions over a 25-year career at Avon Products, Inc. until 2008. She served as Senior Vice President and Chief Information Officer from January 2000 through March 2008, as Senior Vice President, Global Supply Chain from May 1996 to January 2000, and previously in executive roles in sales, marketing, customer service, strategy, business transformation and as a member of the executive committee. Ms. Edelman serves as a management participant of the Board of Emigrant Bank. She serves on the Board of Directors of Assurant, Inc. Ms. Edelman formerly served as Chairman of the Board of Directors of Bed Bath & Beyond Inc. from 2020 to 2023, and on the Board of Directors of UCB Pharma from 2012 until 2017. She also served as Vice Chairman on the Board of Trustees of Bucknell University until she stepped down in June 2020. | | | Director since 2008 Age: 68 Board Committees: Audit and Talent & Compensation Other Public Company Boards: Assurant, Inc. | Director Qualifications | | | Ms. Edelman brings over 20 years of experience serving on large public company boards in the U.S. and Europe; working as a senior officer in a worldwide retail company in areas of marketing, sales, information technology, risk management, e-commerce, supply chain management and global business operations; and leading a banking enterprise with responsibility for finance, IT and loan servicing. Ms. Edelman has additional expertise in risk management, compliance, regulatory, government relations, and activist investor situations. Ms. Edelman has served on the Nominating and Governance, Technology, Compensation, Audit, and Executive Committees of the organizations she has served and held board Chair and committee leadership positions for Audit, Compensation, Nominating & Governance and Technology committees. Ms. Edelman is credentialed by NACD in board oversight of cybersecurity and by the Diligent Institute in AI Ethics and Governance. |
Information About Nominees
| Making People Feel Special | Brinker International • 2024 Notice & Proxy | 5 |
Information About Nominees
| ∎ William T. Giles | | Mr. Giles served as the Chief Financial Officer and Executive Vice President—Finance, Information Technology and Store Development, Customer Satisfaction for AutoZone, Inc., a specialty retailer and distributor of automotive replacement parts and accessories, from 2007 until his retirement in December 2020. He joined AutoZone in 2006 as Chief Financial Officer and Executive Vice President—Finance. From 1991 to May 2006, he held several positions with Linens ‘n Things, Inc., a retailer of home textiles, housewares and decorative home accessories, most recently as the Executive Vice President and Chief Financial Officer. Prior to 1991, he worked for Melville, Inc. and PricewaterhouseCoopers. Mr. Giles currently serves on the Board of Directors for Floor & Decor Holdings, Inc., Constellation Brands Inc. and Autism Speaks, and is a member of the Alfred University Board of Trustees. |
Information About Nominees
| Director since 2013 Age: 65 Board Committees: Audit and Talent & Compensation Other Public Company Boards: Floor & Decor Holdings, Inc. and Constellation Brands, Inc. | Director Qualifications | | | Mr. Giles brings more than 30 years of financial proficiency and business leadership in the retail products industry and skills as chief financial officer of a public company. He provides unique insights into the strategic, risk management, governance and financial issues facing public companies in a consumer-facing industry. |
Information About Nominees
| ∎ Kevin D. Hochman | | Mr. Hochman is Chief Executive Officer and President of the Company and President of Chili’s Grill & Bar, the flagship brand of the Company, having been appointed to this position in June 2022. Mr. Hochman most recently served as President and Chief Concept Officer of KFC, U.S., a division of Yum! Brands, Inc., an operator of quick-service restaurant brands, from March 2017 to May 2022, where he oversaw KFC’s overall brand strategy and business performance in the United States. He concurrently served as Interim President of Pizza Hut U.S., a fast-food restaurant chain, from December 2019 to January 2022, where he was responsible for driving profitable same-store sales, franchise operations, and overall performance for the U.S. business. He also served as Chief Marketing Officer for KFC U.S. from January 2014 to February 2017. Prior to joining Yum! Brands, Mr. Hochman spent 18 years at Procter & Gamble and held various senior leadership roles during his tenure. |
Information About Nominees
| Director since 2022 Age: 50 Board Committees: None Other Public Company Boards: None | Director Qualifications | | | Mr. Hochman brings extensive experience of leading and growing brands in both the retail and restaurant sector, including most recently as president of two large U.S. restaurant chains. He provides unique strategic vision, innovative thinking, marketing expertise, and a broad understanding of restaurant operations and consumer behavior. |
Information About Nominees
| 6 | Brinker International • 2024 Notice & Proxy | Making People Feel Special |
Information About Nominees
| ∎ Ramona T. Hood | | | Ms. Hood is the former President and CEO of FedEx Custom Critical®, a leading North American transportation provider that offers a range of transportation capabilities, having served in this role from January 2020 through July 2024. Previously, Ms. Hood served as Vice President, Operations, Strategy & Planning, for FedEx Custom Critical from June 2018 to December 2019, and as Vice President, Transportation Management, for FedEx Supply Chain from August 2016 to May 2018. She joined FedEx in 1991 and served in leadership roles for numerous FedEx operating companies, including FedEx Custom Critical, FedEx Supply Chain and FedEx Truckload Brokerage. Ms. Hood serves as a Class C Director for the Cleveland Federal Reserve Bank and on the Board of Directors for Summa Health Systems. She formerly served on the Board for Welty Building Company. | | | Director since 2022 Age: 52 Board Committees: Audit and Talent & Compensation Other Public Company Boards: None | Director Qualifications | | | Ms. Hood brings experience as a chief executive officer of a division of a large, publicly-traded company. She has significant experience in areas of operations, safety, supply chain sourcing, sales, marketing, innovation, strategy and global business. |
Information About Nominees
| ∎ James C. Katzman | | | Mr. Katzman is Senior Vice President, Corporate Development, for GE Aerospace, a world-leading provider of jet and turboprop engines, as well as integrated systems for commercial, military, business, and general aviation aircraft, having served in this position since October 2021. Mr. Katzman is a retired Partner of Goldman Sachs, having served in that role from December 2004 to March 2015. Prior to being appointed Partner, he served as a Managing Director from December 2000 to November 2004. Mr. Katzman currently sits on the Board of Directors of the Hershey Trust Company, Milton Hershey School, and Boys & Girls Clubs of The Valley (AZ). He also serves on the Advisory Board of the Program for Financial Studies at Columbia Business School. Mr. Katzman formerly served as a director of The Hershey Company from 2018 to 2024 and the President’s Leadership Council of Dartmouth College from 2010 to 2023. | | | Director since 2018 Age: 57 Board Committees: Audit and Governance & Nominating Other Public Company Boards: None | Director Qualifications | | | Mr. Katzman brings extensive experience in the multinational investment banking industry and corporate development. He also provides valuable knowledge of complex corporate financial matters, merger transactions, and risk management oversight, as well as experience in public company board service. |
Information About Nominees
| ∎ Frank D. Liberio | | Mr. Liberio served as Executive Vice President and Global Chief Information Officer for Restaurant Brands International, a multinational quick-service restaurant holding company, from November 2019 to March 2023. Mr. Liberio formerly served as Senior Vice President and Global Chief Information Officer and in various other leadership roles at McDonald’s Corporation, a multinational quick-service restaurant chain, from 2001 to 2017. Mr. Liberio served as Co-Chair on the Merchant Advisory Group Executive Tech Advisory Board from July 2019 to February 2023. |
Information About Nominees
| Director since 2024 Age: 61 Board Committees: None Other Public Company Boards: None | Director Qualifications | | | Mr. Liberio brings extensive experience in the restaurant industry. He also provides valuable knowledge of global business information technology, including, digital transformation development and deployment. |
Information About Nominees
| Making People Feel Special | Brinker International • 2024 Notice & Proxy | 7 |
Information About Nominees
| ∎ Prashant N. Ranade | | | Mr. Ranade is the Co-Founder of IndusSME LLC, a technology and financial services provider, serving in this role since June 2020. Mr. Ranade formerly served as a mentor for leaders at Atos Syntel (formerly Syntel, Inc.), a multinational provider of integrated technology and business services, from October 2018 to May 2020, the Co-Chairman of the Board for Syntel, Inc. from November 2016 to October 2018, after serving as Executive Vice Chairman from April 2014 to November 2016, and as Chief Executive Officer and President from February 2010 to April 2014. Prior to working with Syntel, Mr. Ranade held several senior leadership roles with Siemens Logistics and Assembly Systems, Inc., Siemens Medical Solutions, Rockwell Automation, and Dematic Corp. Mr. Ranade is a member of the National Association of Corporate Directors and served as an adjunct professor at Grand Valley State University. | | | Director since 2019 Age: 71 Board Committees: Talent & Compensation and Governance & Nominating Other Public Company Boards: None | Director Qualifications | | | Mr. Ranade brings senior management and chief executive officer experience in the automation/manufacturing, technology, healthcare and supply chain/logistics domains of global businesses. His experience enables him to provide strength in strategy, leadership development, technology, sales and marketing, risk management and operations management. |
Information About Nominees
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE NOMINEES FOR DIRECTOR.
Information About Nominees
| 8 | Brinker International • 2024 Notice & Proxy | Making People Feel Special |
ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION
| • | motivating our leaders to create long-term value for our shareholders; and |
APPROVAL OF 2024 STOCK OPTION AND INCENTIVE PLAN
APPROVAL OF 2024 STOCK OPTION AND INCENTIVE PLAN At the Company’s 2024 Annual Meeting, you are being asked to approve the Brinker International, Inc. 2024 Stock Option and Incentive Plan (the “2024 Plan”) for employees. Our Board approved the 2024 Plan on September 20, 2024, subject to stockholder approval. If approved, the 2024 Plan will replace our current stockholder-approved Stock Option and Incentive Plan (as amended, the “Current Plan”), and no further awards will be granted under the Current Plan. For clarification, the Company maintains a separate plan for non-employee directors and consultants, the 1999 Stock Option and Incentive Plan for Non-Employee Directors and Consultants (the “1999 Plan”), and that plan will continue in effect. If stockholder approval is not obtained, the 2024 Plan will not be effective, and the Current Plan will continue in effect in accordance with its terms.
Key Data
| Year | Weighted Common Shares Outstanding at FYE | Stock Options Granted | Restricted Stock Units Granted | Performance- Based Restricted Stock Units Granted (at Target) | Performance- Based Restricted Stock Units Earned | Annualized Burn Rate | | 2024 | 44,400,000 | — | 531,967 | 136,010 | 55,083 | 1.32% | | 2023 | 44,100,000 | — | 548,707 | 216,678 | 58,717 | 1.38% | | 2022 | 44,800,000 | — | 317,306 | 140,619 | 153,388 | 1.05% | | | | | 3-Year Average Burn Rate | | | 1.25% |
Key Data
| Number of shares requested to be authorized under the 2024 Plan | 3,515,000 | | Number of shares available for awards under the Current Plan as of August 31, 2024(1) | 950,077 | | Number of shares available for awards under the 1999 Plan as of August 31, 2024 | 304,520 | | Total number of shares of Common Stock outstanding as of August 31, 2024 | 45,169,000 | | Number of shares subject to outstanding stock options as of August 31, 2024(2) | 211,050 | | Weighted average remaining term of outstanding stock options as of August 31, 2024 in years | 2.0 | | Weighted average exercise price of outstanding options as of August 31, 2024 | $35.91 | | Number of shares underlying outstanding performance-based RSUs as of August 31, 2024(3) | 424,021 | | Number of shares underlying outstanding time-based RSUs as of August 31, 2024(4) | 1,163,186 |
Key Data
| (2) All such stock options were granted under the Current Plan and are fully vested. |
Key Data
| (3) Assuming target performance. All such performance-based RSUs were granted under the Current Plan. |
Key Data
| (4) Of this total, 981,606 RSUs were granted under the Current Plan and 181,580 RSUs were granted under the 1999 Plan. |
Corporate Governance Best Practices
| • | No Repricing of Options or SARs and No Reload Options: The 2024 Plan prohibits, other than in connection with a change in the Company’s capitalization, amending the terms of outstanding awards to (a) reduce the exercise price of outstanding stock options and SARs or take any other action that is treated as a re-pricing under generally accepted accounting principles, or (b) at any time when the exercise price of an option or SAR is above the market value of a share of the Company’s Common Stock, cancel, exchange, buyout or surrender outstanding stock options in exchange for cash, other awards or stock options or SARs with an exercise price that is less than the exercise price of the original stock options, without stockholder approval. Reload options are also expressly prohibited under the 2024 Plan. |
Corporate Governance Best Practices
| • | No Liberal Share Recycling: Shares withheld or delivered to the Company to satisfy a tax withholding obligation on any award, shares delivered to the Company or withheld to satisfy the exercise price on a stock option or SAR, shares subject to an SAR that are not issued in connection with the stock settlement of the SAR, and shares repurchased on the open market with the proceeds from the exercise of a stock option will not again be made available for issuance under the 2024 Plan. |
Corporate Governance Best Practices
| • | No Dividends or Dividend Equivalents Paid on Unvested Awards: Any dividends and dividend equivalents accrued on awards granted under the 2024 Plan will be subject to the same underlying vesting conditions as the award to which they relate. No dividends or dividend equivalents may accrue on stock options or SARs granted under the 2024 Plan. |
Corporate Governance Best Practices
| • | Term and Exercise Price of Stock Options and SARs: Stock options and SARs granted under the 2024 Plan are subject to a maximum term of 10 years, and may not be issued with an exercise price below the fair market value of a share of the Company’s common stock on the date of grant. |
Corporate Governance Best Practices
| • | Minimum Vesting Provision. Subject to limited exceptions, the 2024 Plan generally requires that 95% or more of the shares subject to equity-based awards granted under the 2024 Plan have a one-year minimum vesting period. |
Awards
Awards The 2024 Plan allows the grant of stock options, stock appreciation rights (“SARs”), and other stock awards, including, but not limited to, restricted shares, performance shares and RSUs, to eligible participants.
Stock Options
Stock Options The 2024 Plan permits the grant of stock options, which entitle the participant to receive, upon exercise, shares of Common Stock upon payment of the exercise price established by the Committee. Options may be subject to conditions, restrictions and contingencies established by the Committee, which may include continuous service requirements and/or the achievement of performance measures. The exercise price of an option will be payable in cash, by withholding shares of Common Stock otherwise deliverable upon exercise, or by tendering shares of Common Stock, or in any combination thereof, as determined by the Committee. Options will be exercisable in accordance with methods, terms and conditions established by the Committee. Additionally, the Committee may permit a Participant to elect to pay the exercise price by authorizing a third party to sell shares of Common Stock (or a sufficient portion of the shares) acquired upon exercise of the option and remit to the Company a sufficient portion of the sale proceeds to pay the exercise price. The 2024 Plan provides that no option may be granted with a time period for exercise greater than 10 years from the date of grant. Options granted under the 2024 Plan may not accrue or receive dividends or dividend equivalents until the participant has become the holder of record of the shares of Common Stock subject to the options. Both options intended to qualify as incentive stock options under Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”) (“ISOs”) and non-qualified stock options that are not intended to qualify as ISOs may be granted under the 2024 Plan. The 2024 Plan requires that the exercise price of an option will not be less than 100% of the fair market value of the Common Stock on the date of the grant of the option. No ISO may be granted under the 2024 Plan to anyone who owns more than 10% of the outstanding Common Stock unless the exercise price is at least 110% of the fair market value of the Common Stock on the date of grant and the option is not exercisable more than five years after it is granted. No participant may be granted ISOs that first become exercisable during a calendar year for the purchase of stock with an aggregate fair market value (determined as of the date of grant of each option) in excess of $100,000.
Stock Awards
Stock Awards The 2024 Plan permits the grant of stock awards, which are grants of shares of Common Stock or of a right to receive shares of Common Stock (or their cash equivalent or a combination of both) in the future and include restricted stock, RSUs and performance shares. Stock awards may be subject to any conditions, restrictions and contingencies established by the Committee, which may include continuous service requirements and/or the achievement of performance measures. A Stock Award may provide the Participant with the right to accrue dividends or dividend equivalent payments with respect to Common Stock that underlies the award, which will be credited to an account for the participant, and may be settled in cash or Common Stock as determined by the Committee. Any such settlements will be subject to the same conditions, restrictions and contingencies as the award in respect of which the dividends or dividend equivalents accrue and shall only be settled as and when the related award is settled, and any such crediting
Stock Awards
of dividends or dividend equivalents or reinvestment in shares of Common Stock, may be subject to such other conditions, restrictions and contingencies as the Committee may establish, including the reinvestment of such credited amounts in Common Stock equivalents. Minimum Vesting Requirement. Awards granted under the 2024 Plan will be subject to a minimum vesting period of one year from the date of grant. Notwithstanding the foregoing, (i) such minimum vesting provision will not apply to the accelerated vesting of an award in the event of a participant’s death, disability, involuntary termination, retirement or the occurrence of a change in control of the Company, and (ii) the Committee may grant awards covering 5% or fewer of the total number of shares of Common Stock authorized for issuance under the 2024 Plan without regard to the above-described minimum vesting requirements.
Effectiveness and Term; Amendments and Termination
| • | reduce the exercise price of a stock option or SAR or take any other action that is treated as a repricing under generally accepted accounting principles or permit or permit a cash buyout of an underwater stock option or SAR or permit the grant of an option or SAR for, or in connection with, the cancellations or surrender of an option, SAR granted under the 2024 Plan having a higher option or exercise price, or |
Tax Status of Stock Options
Tax Status of Stock Options In general, no taxable income will be recognized by the recipient, and no deduction will be allowed to us, upon the grant of an option. Incentive Stock Options. All stock options that qualify under the rules of Section 422 of the Code will be entitled to favorable tax treatment described below, provided that the recipient does not dispose of the acquired stock (i) within two years after the option is granted, or (ii) within one year after exercise (a “disqualifying disposition”). In addition, the individual must have been an employee of the Company for the entire time from the date of grant of the ISO until three months (one year if the team member is disabled) before the date of the exercise. The requirement that the individual be an employee and the two-year and one-year holding periods are waived in the case of death of the recipient. If all such requirements are met, no tax will be imposed upon exercise of the option, and any gain upon sale of the stock will be entitled to capital gain treatment. The participant’s gain on exercise (the excess of fair market value of the Common Stock at the time of exercise over the exercise price) of an ISO is a tax preference item and, accordingly, is included in the computation of alternative minimum taxable income. If a participant does not meet the two-year and one-year holding requirements, the disposition will be a disqualifying disposition and the participant will recognize ordinary income at the time of exercise and the company will receive a corresponding deduction at the time of sale equal to the lesser of (i) the excess of the fair market value of the Common Stock on the date of exercise over the option exercise price and (ii) the excess of the amount received upon such disposition of the Common Stock over the option exercise price. Any remaining gain or loss on sale will be short-term or a long-term capital gain or loss, depending on the holding period of the stock. A participant’s option award agreement may permit payment for stock upon the exercise of an ISO to be made with other shares of Common Stock. In such a case, in general, if the participant uses stock acquired pursuant to the exercise of an ISO to acquire other stock in connection with the exercise of an ISO, it may result in ordinary income if the stock so used has not met the minimum statutory holding period necessary for favorable tax treatment as an ISO. Non-Qualified Stock Options. Upon exercise of a non-qualified stock option, a participant will recognize ordinary income (and we will be entitled to a corresponding tax deduction) in an amount equal to the excess of the fair market value of the shares on the exercise date over the exercise price. Any additional gain or loss after exercise realized by a participant on subsequent disposition of such shares generally is a capital gain or loss and does not result in a tax deduction to us.
Tax Status of Stock Awards
Tax Status of Stock Awards If awards are made in the form of restricted shares or RSUs, no income generally will be recognized by the participant upon grant of such award. When restricted shares vest and when RSUs settle, the participant will recognize ordinary income equal to the then fair market value of the shares or RSUs. With regard to awards of restricted stock, a participant may elect to make a “Section 83(b) election” under the Code, in which case the participant will recognize income on the fair market value of the restricted stock at the time the shares are granted. A Section 83(b) election must be made within 30 days after the restricted stock is granted. If a participant makes a Section 83(b) election with respect to shares that are subsequently forfeited, he or she will not be entitled to deduct any amount previously included in taxable income by reason of such election. If a Section 83(b) election has not been made, any dividends accrued with respect to shares of Common Stock subject to restrictions will be treated as additional compensation income and not as dividend income. We generally will be entitled to a federal income tax deduction at the time the team member recognizes income on the restricted stock or RSUs.
Code Section 280G
Code Section 280G In connection with a change in control of the Company, and depending upon the terms and conditions of awards granted under the 2024 Plan and upon the individual circumstances of the participants, certain amounts with respect to awards granted under the 2024 Plan may constitute “excess parachute payments” under the “golden parachute” provisions of Section 280G of the Code. Under these provisions, a participant will be subject to a 20% excise tax on any “excess parachute payment” and the Company will be denied any deduction with respect to such payment.
Equity Compensation Plan Information
Equity Compensation Plan Information The following table summarizes, as of June 26, 2024, the options, performance shares, and RSUs outstanding and shares available for issuance to our officers and team members under the Current Plan and to our directors under the 1999 Plan, without giving any effect to the proposed 2024 Plan:
Equity Compensation Plan Information
| 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 ($)(1) | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (#) | | Equity compensation plans approved by security holders | 1,847,491(2) | 38.03 | 1,500,381(3) | | Equity compensation plans not approved by security holders | — | — | — | | Total | 1,847,491 | — | 1,500,381(3) |
Equity Compensation Plan Information
| (1) The amounts shown in this column relate only to options exercisable for common shares. |
Equity Compensation Plan Information
| (2) The amount shown includes 1,604,682 shares issuable in respect of RSUs and performance shares (assuming target achievement of applicable performance metrics). |
Equity Compensation Plan Information
| (3) The amount shown (i) excludes the number of securities to be issued upon exercise of outstanding options, warrants and rights reported in the first column of this table, and (ii) is comprised of 1,189,494 shares available for issuance under the Current Plan and 310,887 shares available for issuance under the 1999 Plan. |
INFORMATION ABOUT THE BOARD OF DIRECTORS AND
INFORMATION ABOUT THE BOARD OF DIRECTORS AND
Directors’ Compensation
Directors’ Compensation The Governance & Nominating Committee annually reviews and periodically benchmarks the Board’s compensation to assure that non-employee directors are being fairly and reasonably compensated in relation to the restaurant industry and to comparable U.S. public companies. The public companies in the peer group used for benchmarking Board compensation are the same as the peer group used for our named executive officers (“NEOs”) (identified in more detail in the Competitive Market Data and Compensation Mix section of the Compensation Discussion and Analysis of this Proxy Statement). As a result of this annual review, the Board approved a $10,000 increase to the annual retainer and a $30,000 increase to the value of the annual restricted stock units (“RSUs”) to be granted to the non-employee directors commencing with payments occurring in the first quarter of fiscal 2024. Following this increase, non-employee directors received the following compensation in addition to reimbursement for costs incurred in attending meetings of the Board for fiscal 2024:
Directors’ Compensation
| | Annual Retainer | Annual Restricted Stock Units | | Chairman of the Board (non-employee) | $275,000(1) | $140,000 | | Other Non-employee Directors | $85,000(2) | $140,000 |
Directors’ Compensation
| (1) The Chairman of the Board elected to have the entire annual retainer paid in RSUs. |
Directors’ Compensation
| (2) Paid or granted in a combination of cash or RSUs in quarterly installments, as elected by each director. |
Directors’ Compensation
Each director, other than the Chairman of the Board, has a choice between cash and RSUs for the annual retainer, thus allowing each director to receive compensation in a manner that best fits individual needs. The Chairman of the Board is required to take at least 50% of his annual retainer in RSUs. Providing a combination of equity and cash provides incentive for our directors to focus on long-term performance and shareholder value while still recognizing their energy and effort throughout the year. Equity grants are typically made in February, May, August, and November following the Company’s quarterly earnings releases.
Directors’ Compensation
Directors are expected to attend Board meetings and their respective committee meetings. No additional compensation was paid for attendance at these meetings. Restricted Stock Unit Distribution Timing Each of the directors may elect one of five distribution timing options for their RSUs: (i) one year after date of grant, (ii) four years after date of grant, (iii) upon the director’s departure from the Board, (iv) one year following the director’s departure from the Board, or (v) two years following the director’s departure from the Board. Directors also have the ability to further defer settlement of RSUs that would otherwise be distributed for additional five-year period(s), provided they elect to defer receipt of those units at least 12 months before the previously scheduled distribution date. For fiscal 2024, directors received variable distribution dates for their RSUs ranging from one year after grant to two years after the director’s departure from the Board. Stock Ownership Guidelines We have stock ownership guidelines for our Board to align director interests with shareholders. Guidelines are reviewed annually by the Board, including a comparison of market prevalence and guideline designs. The guidelines require directors to maintain stock ownership in a value equal to five times their base annual retainer. The guidelines for our directors define stock ownership to include the value of any shares currently owned and the value of unvested restricted stock or RSUs. Directors have four years from the time they join the Board to accumulate the necessary shares. Currently, all directors are in compliance with the guidelines or are within the initial four-year time period to meet the guidelines.
Fiscal 2024 Director Compensation Table
Fiscal 2024 Director Compensation Table
Fiscal 2024 Director Compensation Table
| Name(1) | Fees Earned or Paid in Cash ($)(2) | Stock Awards ($)(3) | Total ($) | | Frances L. Allen(4) | 115,000 | 139,978 | 254,978 | | Cynthia L. Davis(4) | 117,500 | 139,978 | 257,478 | | Joseph M. DePinto(4) | 137,500 | 277,419 | 414,919 | | Harriet Edelman(4) | 129,500 | 139,978 | 269,478 | | William T. Giles(4) | 132,500 | 139,978 | 272,478 | | Ramona T. Hood(4) | 117,500 | 139,978 | 257,478 | | James C. Katzman(4) | 115,000 | 139,978 | 254,978 | | Prashant N. Ranade(4) | 107,500 | 139,978 | 247,478 |
Fiscal 2024 Director Compensation Table
| (1) Mr. Hochman is omitted from the Director Compensation Table because he does not receive additional compensation for serving on our Board. His compensation is reflected in the Summary Compensation Table of this Proxy Statement. Mr. Liberio is omitted from the Director Compensation Table because he did not serve on the Board during fiscal 2024. |
Fiscal 2024 Director Compensation Table
| (2) Reflects the aggregate dollar amount of all fees earned or paid in fiscal 2024 for which the director could have elected cash payment (whether or not the director actually elected to be paid in cash or in the form of equity) for service as a director, including annual retainer, committee retainers and committee chair retainers. Mr. DePinto, as Chairman of the Board, had the option to receive up to $137,500 of his calendar year annual retainer in cash or RSUs (with the remaining $137,500 required to be paid in RSUs, which are discussed below), while the other directors had the option to receive any portion of their $85,000 calendar year annual retainer in cash or RSUs. |
Fiscal 2024 Director Compensation Table
| (3) Reflects the grant date fair value of annual RSU awards granted to each director in fiscal 2024 and the portion of the Chairman of the Board’s annual retainer required to be paid in RSUs, as follows: |
Fiscal 2024 Director Compensation Table
| • | Each director was granted an aggregate of 3,481 RSUs, representing four quarterly installments of the $140,000 annual grant for the last two quarters of calendar year 2023 and the first two quarters of calendar year 2024. |
Fiscal 2024 Director Compensation Table
| 22 | Brinker International • 2024 Notice & Proxy | Making People Feel Special |
Fiscal 2024 Director Compensation Table
| • | Mr. DePinto, as Chairman of the Board, was also granted 3,418 RSUs representing two quarterly installments of the $137,500 portion of his annual retainer for each of calendar year 2023 and 2024, for four quarterly installments in total, required to be taken in RSUs. |
Fiscal 2024 Director Compensation Table
| • | The grant date fair value of the RSUs granted to the directors is determined pursuant to Financial Accounting Standards Board Accounting Standards Codification Topic 718 (“ASC Topic 718”). For RSUs, dividends, if declared, are accumulated while RSUs are outstanding and paid upon settlement. |
Fiscal 2024 Director Compensation Table
| (4) None of our non-employee directors held any outstanding stock options or unvested equity awards at fiscal year-end given that all our RSUs are non-forfeitable when granted. |
Fiscal 2024 Performance Highlights
Fiscal 2024 Performance Highlights During fiscal 2024, we focused our efforts and investments towards 4 strategic pillars—Team Members, Food & Drink, Hospitality and Atmosphere. We also significantly increased our advertising after first returning to high-impact national advertising in fiscal 2023. These investments translated into significantly increased sales and profits which we believe will position us to continue growing over a long-term period. In fiscal 2024, our total shareholder return was among industry leaders, with our growth in share price leading our entire peer group used for benchmarking. We balanced these guest-facing and team-member initiatives with investments in technology modernization and with applying cash toward debt repayment to reduce our leverage. Some of our strategies, initiatives and results are highlighted below.
Named Executive Officers
All NEOs were compensated under the same compensation plans in fiscal 2024, except that Mr. Taylor received 100% of his long-term incentive compensation as time-vested RSUs.
Fiscal 2024 NEO Pay Results
| • | A fiscal 2024 short-term incentive payout at 178.26% of target for NEOs; and |
Fiscal 2024 NEO Pay Results
| • | A fiscal 2022-2024 performance share payout at 51.37% of target (for NEOs who received the grant at the beginning of Fiscal 2022). |
Compensation Philosophy and Strategy
| • | Establishes incentive plan payout levels that provide an opportunity for participants to earn compensation above median levels when performance goals are exceeded and our stock price increases; |
Compensation Philosophy and Strategy
| • | Utilizes both cash and equity elements with varying time horizons and performance metrics to motivate and reward sustained performance that is aligned with shareholder interests; and |
Summary of Fiscal 2024 Compensation Actions
| • | The Committee approved merit-based salary, short-term incentive plan, and long-term equity incentive compensation increases for some of the NEOs in order to reward their strong performance and to help align their compensation with the median for their respective positions and roles among our benchmarking peer group. Mr. Hochman’s base salary increased by 5.6%, his short-term incentive target increased from 110% of salary to 135% of salary, and his target annual equity award increased by 18.1%. Mr. Taylor’s base salary increased by 4.3%. Ms. White’s base salary increased by 23.5%, her short-term incentive target increased from 65% of salary to 70% of salary, and her target annual equity award increased by 25.0%. Mr. Felix’s base salary increased by 4.3% and his target annual equity award increased by 21.1%. Mr. Bertolone did not receive any compensation increases because he joined the Company in December 2023. |
Summary of Fiscal 2024 Compensation Actions
| • | The Committee maintained the short-term incentive plan design, which uses profit and revenue metrics as the Committee believes these metrics are most closely aligned while creating long-term shareholder value. |
Summary of Fiscal 2024 Compensation Actions
| • | The Committee maintained a higher level of performance based long-term incentive compensation for NEOs except Mr. Taylor, with long-term equity awards for fiscal 2024 weighted as 60% performance shares and 40% time-vested RSUs. Mr. Taylor received 100% of his long-term incentive compensation as time-vested RSUs for retention purposes, as more fully detailed below. |
Summary of Fiscal 2024 Compensation Actions
| • | At the beginning of fiscal 2024, Mr. Taylor was 64 years old and had more than 24 years of tenure with the Company. Mr. Taylor was eligible for retirement benefits with the Company, and the Committee was aware of Mr. Taylor’s eventual desire to retire from his position as CFO. In order to retain Mr. Taylor over the coming fiscal year while the Committee worked on a succession plan, the Committee altered the mix and terms of his long-term equity award in two ways: (1) by modifying the mix of Mr. Taylor’s annual long-term equity grant to be 100% time-vested, and (2) by altering the retirement provisions of Mr. Taylor’s RSU award such that no portion of the award would vest if Mr. Taylor retired earlier than one year after the award date. Although this action removed the performance-based element of Mr. Taylor’s annual equity award, the Committee created a powerful incentive for Mr. Taylor to continue with the Company by removing the dependency of his equity award on performance of the Company after his anticipated retirement, and by simultaneously requiring continued service with the Company for at least one-year while a successor CFO was identified. |
Summary of Fiscal 2024 Compensation Actions
| • | For all other NEOs, the Committee modified the design of the time-based RSUs to vest ratably in three equal installments over a three-year period rather than cliff vesting at the conclusion of the three-year period in order to achieve a more balanced overall vesting schedule that better aligned with market practices. |
Structure and Responsibilities of the Talent & Compensation Committee
| • | Reviews competitive market data, with the assistance of Pearl Meyer, to determine competitive compensation levels based on a peer group that represents restaurant companies with whom we compete for talent; |
Structure and Responsibilities of the Talent & Compensation Committee
| • | Recommends to the Board for approval and ratification the design and performance metrics used in our incentive plans; |
Competitive Market Data and Compensation Mix
Competitive Market Data and Compensation Mix Pearl Meyer provides the Committee with market data regarding base salary, short-term incentive targets, long-term incentive values and total compensation. A portion of the market data is from a peer group that was carefully selected based on criteria including restaurant and brand product industries, operating structure, location and size. As of the time the peer group below was selected, the Company was just above the median of our peer group in terms of revenue size. Compensation data for our peer group was collected from public filings and supplemented with data from reputable retail and general industry surveys, to provide us with market data that we believe accurately reflects the market in which we compete for executive talent. The Committee evaluated the fiscal 2023 Compensation Peer Group with support from Pearl Meyer, and decided to remove McDonald’s Corporation from the previous list because its revenue size was an outlier from the remaining peers. The following table lists the resulting companies used as our peer group in setting fiscal 2024 compensation: Peer Group
Competitive Market Data and Compensation Mix
| BJ’s Restaurants, Inc. | Darden Restaurants, Inc. | Restaurant Brands International, Inc. | | Bloomin’ Brands, Inc. | Denny’s Corporation | Texas Roadhouse, Inc. | | The Cheesecake Factory, Inc. | Dine Brands Global, Inc. | The Wendy’s Company | | Chipotle Mexican Grill, Inc. | Domino’s Pizza, Inc. | Yum! Brands, Inc. | | Cracker Barrel Old Country Store, Inc. | Red Robin Gourmet Burgers, Inc. | |
Competitive Market Data and Compensation Mix
Pearl Meyer’s market data was considered when establishing targeted total compensation (base salary + target short-term cash incentives + target long-term equity incentives) for Executive Officers. We strive to be competitive in the marketplace by trying to provide targeted total compensation near the market median. This effort includes appropriately balancing all elements of compensation (short-term versus long-term and fixed versus variable) while recognizing our performance, as well as the individual’s performance, criticality and experience, and internal pay equity. There is no fixed percentage which determines the mix between cash and non-cash compensation, but compensation is significantly weighted towards variable compensation (short- and long-term). The table below shows the percentage of fixed versus variable compensation elements for fiscal 2024 targeted total compensation, excluding one-time signing awards paid or granted to NEOs.
Compensation Principles and Long-Term Performance Results
Compensation Principles and Long-Term Performance Results
Highlights of Our Compensation Programs
| What We Do: | | What We Do Not Do: | | | ✓ | Pay for Performance | ✗ | Gross-Ups for Excise Taxes | | ✓ | Annual Say-on-Pay Vote | ✗ | Reprice Stock Options | | ✓ | Clawback Policies, including Ability to Recoup in the Event of Misconduct | ✗ | Fixed Term Employment Agreements | | ✓ | Short- and Long-Term Incentives/Performance Metrics | ✗ | Allow Hedging/Pledging of Securities | | ✓ | Independent Compensation Consultant | ✗ | Defined Benefit Pensions | | ✓ | Stock Ownership Guidelines | ✗ | Dividend Payment on Unvested Equity Awards | | ✓ | Use “At Risk” Equity | ✗ | Excessive Perquisites | | ✓ | Double-Trigger Change in Control Provisions | ✗ | Grant Stock Options with Exercise Prices Below the Closing Stock Price on Date of Grant | | ✓ | Mitigate Inappropriate Risk Taking | | | | ✓ | Review Market Data from a Relevant Peer Group | ✗ | Grant Spring-Loaded Equity Awards | | ✓ | Shareholder Outreach | | |
Pay for Performance
Pay for Performance The Company’s compensation programs are aligned with our business initiatives and have been designed to pay commensurate with the level of performance generated. This philosophy is most evident in the mix of pay used to compensate our executives. Our fiscal 2024 compensation packages for our CEO and other NEOs were heavily weighted towards variable compensation. Long-term incentives constituted the largest portion of the target total direct compensation opportunity for our CEO. The graphs below show the target pay mix for the CEO and the average target pay mix for the other NEOs based on annual salary levels, annual short-term incentive at target and the economic value (at the time of grant) of RSUs and performance shares granted during the year. The graphs exclude any one-time awards paid or granted to NEOs during the fiscal year.
Performance Results under Prior Long-Term Compensation Plans
Performance Results under Prior Long-Term Compensation Plans Performance shares granted toward the beginning of fiscal 2022 were paid in August 2024 based on the Company’s Adjusted EBITDA as compared to a target Adjusted EBITDA for fiscal 2024. At the time the performance shares were granted in fiscal 2022, the Committee set an Adjusted EBITDA target of $520 million for the performance share plan, which required significant growth in profitability over the performance period and would be challenging to achieve. The applicable payout percentage for achieving the target Adjusted EBITDA in fiscal 2024 would have been 100% with a maximum potential payout of 200% of the target award if the Company achieved $560 million in Adjusted EBITDA and a threshold payout of 50% of the target award if the Company achieved $460 million in Adjusted EBITDA. The 2022 Performance Share Plan sets forth the calculation for Adjusted EBITDA and excludes items recorded in the Company’s “other gains and charges” caption on its consolidated statement of comprehensive income. After several challenging quarters at the beginning of the three-year performance period, management began to successfully implement new strategies to grow sales and profitability. The Company achieved Adjusted EBITDA of $461 million in fiscal 2024, which equated to an earned payout of 51.37% of the target award. Accordingly, Mr. Taylor and Ms. White earned 51.37% of their respective performance shares, which awards which were settled in August 2024. Mr. Hochman, Mr. Felix and Mr. Bertolone were not employed by the Company at the time the performance shares were granted in fiscal 2022 and therefore did not receive any awards under this performance share plan.
Performance Results under Prior Long-Term Compensation Plans
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Fiscal 2024 Executive Compensation and Benefit Components
| • | Short-Term Incentives |
Fiscal 2024 Executive Compensation and Benefit Components
| • | Long-Term Incentives |
Fiscal 2024 Executive Compensation and Benefit Components
In the sections that follow we detail what each element of compensation is intended to reward and how each component of compensation is determined. It is important to note that, while each individual component is reviewed, all decisions are made in a total compensation context. Base Salary Annually, we review base salaries together with competitive market data. An individual’s base salary is dependent on the size and scope of the position, his or her experience and, most importantly, his or her performance. The Committee approved merit-based salary increases for all of the NEOs except Mr. Bertolone, including a 5.6% increase for Mr. Hochman, a 23.5% increase for Ms. White, and a 4.3% increase for each of Mr. Taylor and Mr. Felix. Mr. Bertolone did not receive an increase because he joined the Company in December 2023. Short-Term Incentives Our short-term Bonus Plan is a cash-based annual incentive arrangement in which the NEOs, together with all restaurant support center team members participated for fiscal 2024. This plan measures both financial performance and achievement of a KPI. The short-term Bonus Plan included the following features for fiscal 2024.
Fiscal 2024 Executive Compensation and Benefit Components
| • | The financial performance portion of the Bonus Plan paid out based on Adjusted PBT (defined below) actually achieved compared to target Adjusted PBT. |
Fiscal 2024 Executive Compensation and Benefit Components
| • | The KPI portion of the Bonus Plan paid out based on a revenue KPI. |
Fiscal 2024 Executive Compensation and Benefit Components
Adjusted PBT (60% Weighting) Sixty percent of the Bonus Plan payout opportunity was based on achievement of Adjusted PBT compared to a target Adjusted PBT set by the Committee. Adjusted PBT is defined as the Company’s income before taxes adjusted to exclude certain items recorded in the Company’s “other gains and charges” caption on its consolidated statement of comprehensive income (such as impairment charges, severance and certain unplanned legal liability) and is calculated as set forth in the plan document. The potential payout of the financial measure portion of the Bonus Plan was 100% for achieving the target Adjusted PBT, 50% for achieving a minimum Adjusted PBT and a maximum of 200% for achieving or exceeding a maximum Adjusted PBT amount. The payout percentage of results between the minimum, target and maximum was measured on the payout slope approved by the Committee and the Board between such values. For fiscal 2024, the Committee set the minimum Adjusted PBT for a threshold achievement higher than the Company’s fiscal 2023 actual Adjusted PBT, and set the target and maximum Adjusted PBT at levels that required significant growth from the prior year. The fiscal 2024 Adjusted PBT target, minimum, maximum and actual achievement are set forth in the chart below, together with the resulting payout multiplier for this component of the Bonus Plan based on the payout scale set by the Committee.
Fiscal 2024 Executive Compensation and Benefit Components
| Brinker Maximum Revenue (000s) | Brinker Target Revenue (000s) | Brinker Minimum Revenue (000s) | Brinker Actual Revenue (000s) | Brinker Revenue KPI Payout Multiplier | | $4,532,430 | $4,316,600 | $4,100,770 | $4,415,100 | 145.65% |
Fiscal 2024 Executive Compensation and Benefit Components
| Brinker Profits Multiplier | Brinker Revenue KPI | Bonus Achieved as a % of Bonus Target | | 200.00% | 145.65% | 178.26% |
Fiscal 2024 Executive Compensation and Benefit Components
The following table details the final short-term incentive payout for fiscal 2024 versus the annual targets set for each of the NEOs. The annual targets are prorated based on actual salary earned and the targeted percent of salary in effect at the time of the earnings, rather than ending salary and target bonus percentage.
Fiscal 2024 Short-Term Incentive Payout versus Target
Fiscal 2024 Short-Term Incentive Payout versus Target
Fiscal 2024 Short-Term Incentive Payout versus Target
| Name | Position | Short-Term Incentive Actual Payout for Fiscal 2024 | Short-Term Incentive Target Payout for Fiscal 2024 | | Kevin D. Hochman | CEO | $2,184,525 | $1,225,471 | | Joseph G. Taylor | Former EVP, CFO | $804,986 | $451,580 | | Aaron M. White | EVP, CPO | $622,385 | $349,144 | | George S. Felix | SVP, CMO | $430,782 | $241,659 | | Dominique J. Bertolone | SVP, President of Maggiano’s | $300,814 | $168,750 |
Fiscal 2024 Short-Term Incentive Payout versus Target
Long-Term Incentives The Committee approved a mix of time-vested RSU and performance share stock awards for all NEOs in fiscal 2024, except Mr. Taylor as discussed in the section Summary of Fiscal 2024 Compensation Actions above. Brinker did not grant any stock options in fiscal 2024. We believe compensation programs that reward executives for performance with Company equity further align the interests of executives and shareholders and motivate executives to create long-term shareholder value. Target long-term incentive values were determined by the Committee after analyzing benchmark data, performance, program cost and total compensation targets. For fiscal 2024, the Committee approved awards for all NEOs other than Mr. Taylor consisting of 60% of their target equity value in the form of performance shares, with the remaining 40% granted as time-vested RSUs. Mr. Taylor’s entire target equity award was granted in time-vested RSUs. All annual equity-based awards are generally granted during the first quarter of the fiscal year within one to three weeks after the Company has filed its Annual Report on Form 10-K for the most recently completed fiscal year. The number of RSUs or performance shares granted each year fluctuates based on our stock price and approved targeted award values. Performance Shares We grant performance shares to emphasize our pay for performance philosophy. The Committee targets a certain dollar value for each performance share grant. The target number of performance shares awarded is then determined based on the targeted value divided by the stock price at date of grant multiplied by the relevant Monte Carlo factor. Performance shares granted in fiscal 2024 will be earned based on the Company’s Adjusted EBITDA as compared to a target Adjusted EBITDA in fiscal 2026, which is the last year of the three-year performance period. The Company’s Adjusted EBITDA was approximately $345.6 million for fiscal year 2023 prior to this plan being adopted. The Committee set the target Adjusted EBITDA at a level that would require significant growth in profitability over the three-year performance period and be challenging for management to achieve. Adjusted EBITDA will be calculated in accordance with the terms of the underlying plan document, which requires the Committee to make adjustments in order to include or exclude the effects of certain items such as acquisitions, dispositions and extraordinary events.
Fiscal 2024 Short-Term Incentive Payout versus Target
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Fiscal 2024 Short-Term Incentive Payout versus Target
The target performance share award is adjusted by the payout percentage determined after the end of the performance period. The payout percentage for achieving the target Adjusted EBITDA in fiscal 2026 is 100%, with the Board also designating a minimum and maximum level of achievement for performance that falls below or exceeds the target Adjusted EBITDA. If Adjusted EBITDA for the last year of the measurement period is at or less than the minimum, the payout percentage will be 0%. The payout percentage for achieving or exceeding the maximum Adjusted EBITDA will be 200%. The payout percentage between the minimum, target and maximum Adjusted EBITDA values will be measured based on the payout slope approved by the Committee and the Board. The minimum, target and maximum values are set forth in the table below.
Fiscal 2024 Short-Term Incentive Payout versus Target
| | Company Adjusted EBITDA | Payout Percentage | | Less than Minimum | | —% | | Minimum | $376.6 million | —% | | Target Adjusted EBITDA | $443.0 million | 100% | | Maximum or greater | $509.5 million | 200% |
Fiscal 2024 Short-Term Incentive Payout versus Target
As was the case with the fiscal 2023 performance shares, the payout percentage is further subject to a relative TSR modifier for the fiscal 2024 performance share plan that compares the Company’s TSR over the three-year performance period to a comparison group consisting of the S&P 1500 Hotels, Restaurants and Leisure Index. The relative TSR modifier increases the achievement up by 25% if Brinker’s TSR percentile ranks within the top quartile of the comparison group, and decreases the achievement by 25% if Brinker’s TSR percentile ranks within the bottom quartile of the comparison group. If Brinker’s TSR ranks between the 75th and 25th percentiles no modifier will apply, as shown in the table below. In no event will the earned shares exceed 200% after any applicable modification.
Fiscal 2024 Short-Term Incentive Payout versus Target
| Company’s TSR Percentile Rank | Payout Percentage Modifier | | At or above the 75th percentile | 1.25 | | Between the 75th and 25th percentile | No Modifier | | At or below the 25th percentile | 0.75 |
Fiscal 2024 Short-Term Incentive Payout versus Target
Earned performance shares are further subject to continued employment through completion of the three-year performance period (except in the case of qualified retirement, death, disability or certain involuntary terminations) and are distributed shortly thereafter. Earned shares are not subject to further vesting requirements, although they may need to be retained to meet stock ownership guidelines (see discussion below). Restricted Stock Units In fiscal 2024 we granted RSUs to enhance retention incentives, to increase executive stock ownership and shareholder alignment and to more closely align our grant mix with peers. We transitioned from RSUs that cliff vest after three years of service to RSUs that vest ratably with continued employment over three years, with one-third vesting on the first, second and third anniversaries of the grant date. RSUs are subject to acceleration in the event of qualified retirement, death, disability or certain involuntary terminations. Hiring Incentives The Committee recognizes that the Company operates in a competitive market when it comes to finding the best qualified executives who are able to create and execute successful long-term strategies that increase shareholder value. In addition, external candidates often have to forfeit outstanding sizable equity awards at their prior employers if they choose to accept employment with Brinker. In fiscal 2023 and fiscal 2024, the Committee used bonuses in the form of cash and equity when hiring executives in order to make the executives’ whole for certain lost value attributable to outstanding equity awards at their prior employers and to attract the best executives possible. As disclosed in the Company’s proxy statement for fiscal 2023, the Company granted Mr. Felix a cash sign-on bonus in July 2022, of which $100,000 was paid during fiscal 2024 upon completion of one year of employment by Mr. Felix. In fiscal 2024, the Company hired Mr. Bertolone and granted him (i) a $550,000 RSU make-whole award (“Make Whole RSUs”), and (ii) a $100,000 cash sign-on bonus, to make him whole for certain foregone compensation from his prior employer.
Fiscal 2024 Short-Term Incentive Payout versus Target
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Fiscal 2024 Short-Term Incentive Payout versus Target
Benefits and Perquisites Health and Welfare Benefits All of our salaried employees are eligible for health and welfare benefits, including the NEOs. Our salaried employees, including the NEOs, also receive term life, short-term disability and long-term disability insurance. The level of Company-provided coverage for NEOs is provided at a higher level than is provided for other employees for some Company-provided benefits. We have provided detailed information in the chart below for the NEOs.
Company-Paid Benefits for the Named Executive Officers
| | Life Insurance | AD&D Insurance | Long-Term Disability | Long-Term Care | | Benefit | Up to 4× Salary, max. $3.5M benefit | 2× Salary up to $1M | 60% Wage Replacement up to $30K per month | $201 daily benefit amount |
Other Executive Compensation Program Elements
Other Executive Compensation Program Elements Retiree Medical Benefits Select officers, including the NEOs, are eligible to receive retiree medical insurance from us upon termination if they are otherwise retirement eligible (described below in the section titled Retirement Definitions and Payouts). This fully insured policy is paid for by both the retiree and the Company. The cost split between the retiree and the Company mimics that of the cost split for our active employees and their medical benefits. Currently, that percentage is approximately 75% of the cost paid by the Company and 25% of the cost paid by the participant. Participants are eligible to receive this coverage until age 65. Career Equity Career Equity was an RSU program implemented as a retention device since the units granted only vest upon a qualifying retirement. Detailed information concerning our retirement provisions can be found below in the section of this proxy statement titled Retirement Definitions and Payouts. The program was discontinued after fiscal 2016, but certain NEOs still have outstanding unvested RSUs under this program.
Summary of Fiscal 2025 Compensation Plan Changes
Summary of Fiscal 2025 Compensation Plan Changes Since the end of fiscal 2024, the Committee has approved increases to salaries, bonus targets and annual equity awards for our NEOs to reward high performance and to bring certain NEO’s total compensation closer to the median among our peer group, consistent with our compensation philosophy. As part of these adjustments, Mr. Hochman’s base salary increased by 5.3%, his bonus target increased from 135% of salary to 150% of salary, and his target annual equity award increased by 44%. Ms. White’s base salary increased by 5.7%, and her target annual equity award increased by 3.3%. Mr. Felix’s base salary increased by 5.0%, his bonus target increased from 55% of salary to 65% of salary, and his target annual equity award increased by 4.3%. Mr. Bertolone’s base salary increased by 4.0%, and his target annual equity award increased by 11%.
Compensation Policies and Practices as They Relate to the Company’s Risk Management
Compensation Policies and Practices as They Relate to the Company’s Risk Management We believe that our compensation policies and practices for all team members, including officers, do not create risks that are reasonably likely to have a material adverse effect on the Company. We believe that the Company has appropriate safeguards in place with respect to the compensation programs that assist in mitigating excessive risk-taking that could harm our value or reward poor judgment by our officers and team members. These safeguards include managing pay opportunities to market levels through peer benchmarking; balancing performance focus between near-term objectives and long-term shareholder value creation; issuing equity awards that vest over multi-year time horizons; capping cash incentive plan payments; maintaining stock ownership guidelines for our executive officers; and maintaining no fixed-term employment agreements. Furthermore, the Committee retains its own independent compensation consultant to provide input on executive pay matters, meets regularly, and approves all performance goals, award vehicles and pay opportunity levels. In fiscal 2024, the Committee reviewed the concept of risk as it relates to our compensation programs and determined that our programs do not encourage excessive or inappropriate risk. In reaching this conclusion, the Committee noted that long-term incentives are predominately equity-based and tied to shareholder returns, market comparisons are used, ownership guidelines are applied, and the majority of variable pay is tied to Company performance.
FISCAL 2024 SUMMARY COMPENSATION TABLE
FISCAL 2024 SUMMARY COMPENSATION TABLE
FISCAL 2024 SUMMARY COMPENSATION TABLE
| Name and Principal Position | Year | Salary ($)(1) | Bonus ($)(2) | Stock Awards ($)(3) | Non-Equity Incentive Plan Compensation ($)(4) | Change in Pension Value and Nonqualified Deferred Compensation Earnings($)(5) | All Other Compensation ($)(6) | Total ($) | | Kevin D. Hochman | 2024 | 939,808 | — | 4,499,985 | 2,184,525 | — | 77,281 | 7,701,599 | | CEO, President | 2023 | 900,000 | 150,000 | 3,809,892 | 992,574 | — | 442,581 | 6,295,047 | | | 2022 | 38,077 | 250,000 | 1,499,972 | 16,228 | — | 21,980 | 1,826,257 | | Joseph G. Taylor(7) | 2024 | 645,114 | — | 999,978 | 804,986 | — | 42,267 | 2,492,345 | | Former EVP, CFO | 2023 | 620,308 | 300,000 | 999,960 | 435,344 | — | 25,543 | 2,381,155 | | | 2022 | 596,923 | — | 999,936 | 81,365 | — | 18,214 | 1,696,438 | | Aaron M. White | 2024 | 504,615 | — | 749,964 | 622,385 | — | 49,247 | 1,926,211 | | EVP, CPO | 2023 | 384,908 | 200,000 | 568,714 | 235,237 | — | 44,199 | 1,433,058 | | George S. Felix | 2024 | 439,381 | 100,000 | 574,973 | 430,782 | — | 37,338 | 1,582,474 | | SVP, CMO | 2023 | 387,404 | 100,000 | 674,954 | 213,626 | — | 23,646 | 1,399,630 | | Dominique J. Bertolone(8) | 2024 | 259,615 | 100,000 | 812,478 | 300,814 | 61 | 83,116 | 1,556,084 | | SVP, President of Maggiano’s | | | | | | | | |
FISCAL 2024 SUMMARY COMPENSATION TABLE
| (1) The amounts shown represent all salary received during the applicable fiscal year. Our salaries are paid on a bi-weekly basis. |
FISCAL 2024 SUMMARY COMPENSATION TABLE
| (2) The amount shown for Mr. Felix for fiscal 2024 represents the second installment of his sign-on bonus and the amount shown for Mr. Bertolone for fiscal 2024 represents the amount of his sign-on bonus, both of which were paid in fiscal 2024. |
FISCAL 2024 SUMMARY COMPENSATION TABLE
| (3) The amounts shown represent the fair market value on the grant date of equity granted to the NEOs in the applicable fiscal year as determined pursuant to ASC Topic 718. For additional information on the assumptions used in valuing our equity awards see Note 1 and Note 11 to our Consolidated Financial Statements filed on Form 10-K for the fiscal year ended June 26, 2024. These amounts do not include any reduction in the value for the possibility of forfeiture. These amounts for all NEOs, except for Mr. Taylor, include grant date fair values for the fiscal 2024 performance shares at target payout based on the probable outcome of the performance condition, determined as of the grant date, without any modification based on the Company’s relative TSR. The maximum potential value of these performance shares is 200% of target. For fiscal 2024, Mr. Hochman’s target grant date fair value for such performance shares is $2,699,999 and the maximum value would be $4,844,093, Ms. White’s target grant date fair value is $449,994 and the maximum value would be $807,338, Mr. Felix’s target grant date fair value is $344,979 and the maximum value would be $618,930, and Mr. Bertolone’s target grant date fair value is $157,486 and the maximum value would be $282,519. |
FISCAL 2024 SUMMARY COMPENSATION TABLE
| (4) The amounts shown were earned under the short-term Bonus Plan. Details about the plan can be found in the Compensation Discussion and Analysis under the section titled Short-Term Incentives of this Proxy Statement. |
FISCAL 2024 SUMMARY COMPENSATION TABLE
| (5) The amount shown for Mr. Bertolone reflects the above market interest rate paid to him in the Deferred Plan. The market rate is the applicable federal long-term rate published under Internal Revenue Code Section 1274, Revenue Ruling 2024-12. The applicable federal long-term rate for June 2024 was 5.61%. Our Deferred Plan paid 6.25% in calendar 2023 and 8.50% in calendar 2024. |
FISCAL 2024 SUMMARY COMPENSATION TABLE
| (6) The amounts shown in this column reflect the value of benefits and perquisites provided to the NEOs during the year. These include: car allowance, financial planning, dining discount, health club reimbursement, annual executive physical, company matching contributions to the qualified 401(k) Plan, life insurance, executive retiree medical insurance, long-term care insurance, and relocation expenses for Mr. Hochman and Mr. Bertolone which are detailed in the table below. |
FISCAL 2024 SUMMARY COMPENSATION TABLE
| | All Other Compensation Included in the Summary Compensation Table for Fiscal 2024 | | | | | | Name | Company Matching Contributions to the 401(k) Plan ($) | Car Allowance ($) | Company Provided Life, Retiree Medical, and Long Term Care Insurance Premiums ($)(a) | Other Compensation ($)(b) | Total All Other Compensation ($) | | Kevin D. Hochman | 13,700 | — | 16,449 | 47,132 | 77,281 | | Joseph G. Taylor | — | 9,600 | 18,356 | 14,311 | 42,267 | | Aaron M. White | 13,991 | 9,600 | 6,440 | 19,216 | 49,247 | | George S. Felix | 14,079 | 8,400 | 9,171 | 5,688 | 37,338 | | Dominique J. Bertolone | 3,462 | 4,523 | 4,977 | 70,154 | 83,116 |
FISCAL 2024 SUMMARY COMPENSATION TABLE
| (a) Represents benefit premiums paid to a third party for Company-provided life insurance, executive retiree medical insurance and long-term care insurance. |
FISCAL 2024 SUMMARY COMPENSATION TABLE
| (b) Represents the value of perquisites and benefits paid directly to or on the NEOs’ behalf for annual executive physical, financial planning, dining discount, and health club reimbursement. Mr. Hochman’s other compensation also includes $36,477 in expenses related to his relocation from a different state to a location near the Company’s headquarters following being hired by the Company as CEO. Mr. Bertolone’s other compensation also includes $69,949 in expenses related to his relocation from a different state to a location near the Company’s headquarters. |
FISCAL 2024 SUMMARY COMPENSATION TABLE
| (7) Mr. Taylor retired from the Company on September 6, 2024. |
FISCAL 2024 SUMMARY COMPENSATION TABLE
| (8) Mr. Bertolone was appointed Senior Vice President and President of Maggiano’s Little Italy on December 1, 2023. |
FISCAL 2024 SUMMARY COMPENSATION TABLE
| 38 | Brinker International • 2024 Notice & Proxy | Making People Feel Special |
Fiscal 2024 Grants of Plan-Based Awards Table
Fiscal 2024 Grants of Plan-Based Awards Table
Fiscal 2024 Grants of Plan-Based Awards Table
| (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | (k) | | | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | | | Estimated Future Payouts Under Equity Incentive Plan Awards | | | All Other Stock Awards: Number of Shares of Stock or Units (#) | Grant Date Fair Value of Stock Awards ($)(2) | | Name | Committee Action Date | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | | | | Kevin D. Hochman | | | | | | | | | | | | RSUs(3) | 8/30/2023 | 8/31/2023 | | | | | | | 54,995 | 1,799,986 | | Performance Shares(4) | 8/30/2023 | 8/31/2023 | | | | 772 | 77,209 | 154,418 | | 2,699,999 | | Bonus Plan | | N/A | 367,641 | 1,225,471 | 2,450,942 | | | | | | | Joseph G. Taylor | | | | | | | | | | | | RSUs(5) | 8/30/2023 | 9/6/2023 | | | | | | | 32,647 | 999,978 | | Bonus Plan | | N/A | 135,474 | 451,580 | 903,160 | | | | | | | Aaron M. White | | | | | | | | | | | | RSUs(3) | 8/30/2023 | 8/31/2023 | | | | | | | 9,165 | 299,970 | | Performance Shares(4) | 8/30/2023 | 8/31/2023 | | | | 129 | 12,868 | 25,736 | | 449,994 | | Bonus Plan | | N/A | 104,743 | 349,144 | 698,288 | | | | | | | George S. Felix | | | | | | | | | | | | RSUs(3) | 8/30/2023 | 8/31/2023 | | | | | | | 7,027 | 229,994 | | Performance Shares(4) | 8/30/2023 | 8/31/2023 | | | | 99 | 9,865 | 19,730 | | 344,979 | | Bonus Plan | | N/A | 72,498 | 241,659 | 483,318 | | | | | | | Dominique J. Bertolone | | | | | | | | | | | | RSUs(3) | 11/16/2023 | 12/13/2023 | | | | | | | 2,524 | 104,998 | | RSUs(6) | 11/16/2023 | 12/13/2023 | | | | | | | 13,221 | 549,994 | | Performance Shares(4) | 11/16/2023 | 12/13/2023 | | | | 35 | 3,543 | 7,086 | | 157,486 | | Bonus Plan | | N/A | 50,625 | 168,750 | 337,500 | | | | | |
Fiscal 2024 Grants of Plan-Based Awards Table
| (1) The amounts shown in column (d) reflect the threshold payment level under the Bonus Plan applicable to the NEO. The threshold award level is 30% of target (e) and the maximum award (f) is 200% of target (e). The threshold award level of 30% of target represents threshold achievement of 50% on the financial performance component and 0% achievement of the Revenue KPI. |
Fiscal 2024 Grants of Plan-Based Awards Table
| (2) The amounts shown represent the fair market value at grant date for financial reporting purposes in fiscal 2024 of stock awards as determined pursuant to ASC Topic 718. For additional information on the assumptions used in valuing our equity awards see Note 1 and Note 11 to our Consolidated Financial Statements filed with the Company’s Annual Report on Form 10-K for the fiscal year ended June 26, 2024. |
Fiscal 2024 Grants of Plan-Based Awards Table
| (3) These RSUs were granted to NEOs as part of their annual equity award and vest in three equal annual installments on each of the first, second and third anniversaries of the date of grant. |
Fiscal 2024 Grants of Plan-Based Awards Table
| (4) These performance shares are detailed in the Compensation Discussion and Analysis under the section titled Long-Term Incentives of this Proxy Statement. The amounts in columns (g)–(i) reflect the number of shares the individual would receive for (g) a payout percentage at 1% of the target award (i.e., Threshold), (h) equal to the target award and (i) at the maximum payout percentage (i.e., 200% of the target). The August 30, 2023 dates reflect the dates the target awards were established for the performance shares. The actual awards will not be earned until the end of fiscal 2026, and only then if the performance metrics are achieved. The target award will be achieved if the Company’s Adjusted EBITDA is $443 million, the threshold payout percentage is not achieved unless Adjusted EBITDA exceeds $376.6 million and the maximum payout percentage is achieved at $509.5 million in Adjusted EBITDA. |
Fiscal 2024 Grants of Plan-Based Awards Table
| (5) These RSUs were granted to Mr. Taylor as his annual equity award for fiscal 2024 and will settle in three equal annual installments on each of the first, second, and third anniversaries of the date of grant. |
Fiscal 2024 Grants of Plan-Based Awards Table
| (6) These RSU’s were granted to Mr. Bertolone to make him whole for certain foregone compensation from his prior employer and vest in three equal annual installments on each of the first, second and third anniversaries of the date of grant. |
Fiscal 2024 Grants of Plan-Based Awards Table
| Making People Feel Special | Brinker International • 2024 Notice & Proxy | 39 |
Fiscal 2024 Outstanding Equity Awards at Fiscal Year-End Table
Fiscal 2024 Outstanding Equity Awards at Fiscal Year-End Table
Fiscal 2024 Outstanding Equity Awards at Fiscal Year-End Table
| | Option Awards | | | Stock Awards | | | | | Name | Number of Securities Underlying Unexercised Options (#)(1) Exercisable | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($)(2) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(2) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(2) | | Kevin D. Hochman | | | | 54,995(3) | 4,007,486 | 154,418 | 11,252,440 | | | | | | 53,624(4) | 3,907,581 | 142,958 | 10,417,349 | | | | | | 50,881(5) | 3,707,698 | | | | Joseph G. Taylor | | | | 32,647(6) | 2,378,987 | 37,522 | 2,734,228 | | | | | | 14,074(4) | 1,025,572 | 5,733 | 417,764 | | | | | | 7,440(4) | 542,153 | | | | | | | | 195(7) | 14,210 | | | | | | | | 216(7) | 15,740 | | | | | | | | 260(7) | 18,946 | | | | | | | | 350(7) | 25,505 | | | | | | | | 400(7) | 29,148 | | | | | | | | 800(7) | 58,296 | | | | | | | | 800(7) | 58,296 | | | | | | | | 800(7) | 58,296 | | | | | | | | 500(7) | 36,435 | | | | Aaron M. White | 4,304 | 38.51 | 8/29/2027 | 9,165(3) | 667,854 | 25,736 | 1,875,382 | | | 3,661 | 43.35 | 8/30/2026 | 1,298(8) | 94,585 | 21,340 | 1,555,046 | | | 898 | 44.73 | 5/3/2026 | 6,685(4) | 487,136 | 2,723 | 198,425 | | | | | | 100(9) | 7,287 | | | | | | | | 3,534(4) | 257,523 | | | | George S. Felix | | | | 7,027(3) | 512,057 | 19,730 | 1,437,726 | | | | | | 6,685(4) | 487,136 | 17,822 | 1,298,690 | | | | | | 7,037(10) | 512,786 | | | | Dominique J. Bertolone | | | | 2,524(3) | 183,924 | 7,086 | 516,356 | | | | | | 13,221(11) | 963,414 | | |
Fiscal 2024 Outstanding Equity Awards at Fiscal Year-End Table
| (1) Vested options have a maximum eight-year term. Each option was granted eight years prior to the expiration date. |
Fiscal 2024 Outstanding Equity Awards at Fiscal Year-End Table
| (2) RSUs and performance shares are valued based on the $72.87 closing price of the Company’s common stock as of the end of our fiscal year, June 26, 2024. The fiscal 2024 - fiscal 2026 and fiscal 2023 - fiscal 2025 performance shares reflect achieving maximum performance as performance is currently tracking above target. The fiscal 2022 - fiscal 2024 performance shares reflect actual performance, and were paid out on August 19, 2024 at 51.37% of target. |
Fiscal 2024 Outstanding Equity Awards at Fiscal Year-End Table
| (3) These RSUs were granted to NEOs as part of their annual equity award and vest in three equal annual installments on each of the first, second and third anniversaries of the date of grant. |
Fiscal 2024 Outstanding Equity Awards at Fiscal Year-End Table
| (4) These RSUs were granted to NEOs as part of their annual equity awards in prior years and cliff vest after three years or upon a qualifying retirement from the Company if earlier. Mr. Taylor’s RSU’s are fully vested as of his retirement from the Company on September 6, 2024. |
Fiscal 2024 Outstanding Equity Awards at Fiscal Year-End Table
| (5) These RSUs were granted to Mr. Hochman to make him whole for certain foregone compensation from his prior employer and cliff vest after three years. |
Fiscal 2024 Outstanding Equity Awards at Fiscal Year-End Table
| (6) These RSUs were granted to Mr. Taylor as his annual equity award for fiscal 2024 and will settle in three equal annual installments on each of the first, second, and third anniversaries of the date of grant. |
Fiscal 2024 Outstanding Equity Awards at Fiscal Year-End Table
| (7) These RSUs were granted to NEOs under the Career Equity program as described in the Compensation Discussion and Analysis under the section titled Other Executive Compensation Program Elements of this Proxy Statement and vest upon a qualifying retirement from the Company. |
Fiscal 2024 Outstanding Equity Awards at Fiscal Year-End Table
| (8) These RSUs were granted to Ms. White as a result of an increase in her annual compensation due to her appointment as Executive Vice President and Chief People Officer and cliff vest after three years. |
Fiscal 2024 Outstanding Equity Awards at Fiscal Year-End Table
| (9) These RSUs were granted to Ms. White as compensation for signing a non-compete agreement and cliff vest after three years. |
Fiscal 2024 Outstanding Equity Awards at Fiscal Year-End Table
| (10) These RSUs were granted to Mr. Felix to make him whole for certain foregone compensation from his prior employer and cliff vest after three years. |
Fiscal 2024 Outstanding Equity Awards at Fiscal Year-End Table
| (11) These RSU’s were granted to Mr. Bertolone to make him whole for certain foregone compensation from his prior employer and vest in three equal annual installments on each of the first, second and third anniversaries of the date of grant. |
Fiscal 2024 Outstanding Equity Awards at Fiscal Year-End Table
| 40 | Brinker International • 2024 Notice & Proxy | Making People Feel Special |
FISCAL 2024 OPTION EXERCISES AND STOCK VESTED TABLE
FISCAL 2024 OPTION EXERCISES AND STOCK VESTED TABLE
FISCAL 2024 OPTION EXERCISES AND STOCK VESTED TABLE
| | Option Awards | | Stock Awards | | | Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($)(1) | Number of Shares Acquired on Vesting (#)(2) | Value Realized on Vesting ($)(3) | | Kevin D. Hochman | — | — | — | — | | Joseph G. Taylor | 54,588 | 914,503 | 24,565 | 825,183 | | Aaron M. White | — | — | 11,786 | 393,888 | | George S. Felix | — | — | — | — | | Dominique J. Bertolone | — | — | — | — |
FISCAL 2024 OPTION EXERCISES AND STOCK VESTED TABLE
| (1) Reflects the difference between the market price of our common stock at the date and time of exercise and the exercise price of the option. |
FISCAL 2024 OPTION EXERCISES AND STOCK VESTED TABLE
| (2) Reflects the vesting of (i) the RSUs granted in fiscal 2021 and (ii) for Mr. Taylor, the performance shares granted under the fiscal 2021 - fiscal 2023 Performance Share Plan. |
FISCAL 2024 OPTION EXERCISES AND STOCK VESTED TABLE
| (3) The value realized is based upon the fair market value of our common stock on the date of vesting multiplied by the number of units which vested. |
FISCAL 2024 NONQUALIFIED DEFERRED COMPENSATION TABLE
FISCAL 2024 NONQUALIFIED DEFERRED COMPENSATION TABLE The Deferred Plan is a non-qualified deferred compensation plan for all of our officers, including the NEOs. Deferred Plan participants elect the percentage of their salary and bonus, not to exceed 50%, they wish to defer into their Deferred Plan account. Of our NEOs, only Mr. Bertolone participates in the Deferred Plan.
FISCAL 2024 NONQUALIFIED DEFERRED COMPENSATION TABLE
| Name | Executive Contributions in Last Fiscal Year ($) | Registrant Contributions in Last Fiscal Year ($) | Aggregate Earnings in Last Fiscal Year ($)(1) | Aggregate Withdrawals /Distributions ($) | Aggregate Balance at Last Fiscal Year-End ($) | | Kevin D. Hochman | — | — | — | — | — | | Joseph G. Taylor | — | — | — | — | — | | Aaron M. White | — | — | — | — | — | | George S. Felix | — | — | — | — | — | | Dominique J. Bertolone | 38,461 | — | 467 | — | 38,928 |
FISCAL 2024 NONQUALIFIED DEFERRED COMPENSATION TABLE
| (1) Our Deferred Plan pays a fixed rate of interest on participants’ deferrals which is compounded monthly. The interest rate is based on the prime rate on the first business day each November. The rate was 6.25% for calendar 2023, and 8.50% for calendar 2024. |
FISCAL 2024 NONQUALIFIED DEFERRED COMPENSATION TABLE
Company Sponsored Pension Plan The Company does not sponsor a pension plan. Retirement Definitions and Payouts For those executives who remain with us for their career, we want to ensure they are able to benefit from their contributions to our long-term success. Therefore, we have defined retirement provisions that allow for post-employment benefits. Early retirement is defined as age plus years of service equals 70, with a minimum age of 55. Normal retirement is defined as age plus years of service equals 70, with a minimum age of 60; or attainment of age 65 (regardless of service). This definition is applied to all of our equity programs (except for retention and other one-time equity grants), our retiree medical program, and our Bonus Plan. Listed below are our general equity programs and their treatment under early and normal retirement scenarios:
FISCAL 2024 NONQUALIFIED DEFERRED COMPENSATION TABLE
| | Early Retirement | Normal Retirement | | Career Equity | Pro-rated and paid upon retirement | The full award is paid upon retirement | | Performance Shares | Pro-rated and paid at the end of the measurement period based on actual results | The full award is paid at the end of the measurement period based on actual results | | Restricted Stock Units | Pro-rated and paid on the standard vesting schedule | The full award is paid on the standard vesting schedule | | Bonus Plan | Pro-rated and may be paid at end of the fiscal year at the discretion of the Committee | Pro-rated and may be paid at end of the fiscal year at the discretion of the Committee |
FISCAL 2024 NONQUALIFIED DEFERRED COMPENSATION TABLE
| Making People Feel Special | Brinker International • 2024 Notice & Proxy | 41 |
FISCAL 2024 NONQUALIFIED DEFERRED COMPENSATION TABLE
Beginning in fiscal 2022, the RSUs granted to NEOs require NEOs to provide significant advance notice to the chair of the Committee that the NEO is considering retirement in order to qualify for the retirement treatment described above. This notice requirement is intended to assist the Committee with succession planning.
CEO Pay Ratio
CEO Pay Ratio The Committee believes executive pay must be consistent and equitable to motivate our team members to create shareholder value. The Committee reviewed a comparison of annual total compensation of the CEO to the annual compensation of the median team member who was selected from all team members who were employed (other than the CEO) as of the last day of fiscal 2024. The SEC’s 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 employee populations and compensation practices. As a result, the pay ratio reported by other companies may not be comparable to the pay ratio reported below, as other companies have different employee populations and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios. To identify the median team member, we utilized total cash compensation paid during the year, and we annualized the compensation for any permanent team members that were not employed by us for all of fiscal 2024. We believe the use of total cash compensation for all employees as a consistently applied compensation measure is reasonable because a substantial portion of our team members only receive cash compensation. The majority of team members work part-time and as such are not eligible for our bonus or equity plans, and don’t work enough hours to participate in our company-paid benefit plans. After identifying the median team member, we calculated annual total compensation for the team member using the same methodology we use for our NEOs as set forth in the Summary Compensation Table of this Proxy Statement. The compensation for Mr. Hochman, our current CEO, in fiscal 2024 was $7,701,599 as reported in the Summary Compensation Table above. The compensation of our median team member was $23,269. Thus, our CEO’s annualized total compensation was approximately 331 times the pay of our median team member for fiscal 2024.
CEO Pay Ratio
| 50 | Brinker International • 2024 Notice & Proxy | Making People Feel Special |
Pay Versus Performance
Pay Versus Performance As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and 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 aligns executive compensation with the Company’s performance, refer to the Compensation Discussion and Analysis section of this Proxy Statement.
Pay Versus Performance
| (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | (k) | | | | | | | | | Value of Initial Fixed $100 Investment Based On: | | Net Income (in millions)(7) | Pre-tax Income (in millions)(8) | | Year | Summary Compensation Table Total for Mr. Roberts(1) | Compensation Actually Paid to Mr. Roberts(2) | Summary Compensation Table Total for Mr. Hochman(1) | Compensation Actually Paid to Mr. Hochman(2) | Average Summary Compensation Table Total for Non-PEO NEOs(3) | Average Compensation Actually Paid to Non-PEO NEOs(4) | Total Shareholder Return(5) | Peer Group Total Shareholder Return(5)(6) | | | | 2024 | | | $7,701,599 | $25,426,699 | $1,889,279 | $4,464,747 | $309.69 | $162.80 | $155.3 | $164.9 | | 2023 | | | $6,295,047 | $8,012,657 | $1,774,015 | $1,942,847 | $153.85 | $163.00 | $102.6 | $90.8 | | 2022 | $5,933,303 | $(36,452,258) | $1,826,257 | $1,466,528 | $1,272,805 | $(1,887,955) | $95.24 | $128.30 | $117.6 | $115.2 | | 2021 | $6,958,837 | $54,264,076 | | | $1,531,194 | $5,036,832 | $262.86 | $140.63 | $131.6 | $145.2 |
Pay Versus Performance
| (1) The dollar amounts reported in column (b) are the amounts reported for Wyman Roberts, who served as the Company’s Chief Executive Officer for fiscal 2021 and part of fiscal 2022 in the “Total” column of the Summary Compensation Table. The dollar amounts reported in column (d) are the amounts reported for Kevin Hochman, who served as the Company’s Chief Executive Officer for part of fiscal 2022 and all of fiscal 2023 and fiscal 2024, in the “Total” column of the Summary Compensation Table. Mr. Roberts retired from his position as CEO and President of Brinker and President of Chili’s Grill & Bar effective as of June 5, 2022. Mr. Hochman was appointed to serve as CEO and President of Brinker and President of Chili’s Grill & Bar effective as of June 6, 2022. |
Pay Versus Performance
| (2) The dollar amounts reported in columns (c) and (e) represent the amount of “compensation actually paid” to Mr. Roberts and Mr. Hochman, as applicable, as computed in accordance with Item 402(v) of Regulation S-K and do not reflect the total compensation actually realized or received by such individual. In accordance with these rules, these amounts reflect “Total Compensation” as set forth in the Summary Compensation Table for each year, adjusted as shown below for fiscal 2024. Equity values are calculated in accordance with ASC Topic 718, and the methodologies applied in the valuation assumptions used to calculate fair values did not materially differ from those disclosed at the time of grant. Information on prior year calculations is included in our 2023 Proxy Statement. |
Pay Versus Performance
| | Reported Summary Compensation Table Total | [Less] Value of “Stock Awards” Reported in Summary Compensation Table | [Plus] Fair Value at Fiscal Year- End of Outstanding and Unvested Stock Awards Granted in Fiscal Year | [Plus] Change in Fair Value from Prior Fiscal Year-End of Outstanding and Unvested Option Awards and Stock Awards Granted in Prior Fiscal Years | [Plus] Fair Value at Vesting Date of Stock Awards Granted in Fiscal Year that Vested During Fiscal Year | [Plus] Change in Fair Value from Prior Fiscal Year End Vesting Date of Option Awards and Stock Awards Granted in Prior Fiscal Years that Vested During Fiscal Year | [Less] Prior Year-End Fair Value of Option Awards and Stock Awards Granted in Prior Fiscal Years that Failed to Meet Vesting Conditions During Fiscal Year | Compensation Actually Paid to Mr. Hochman | | 2024 | $7,701,599 | $4,499,985 | $10,878,515 | $11,346,570 | $— | $— | $— | $25,426,699 |
Pay Versus Performance
| (3) The dollar amounts reported in column (f) represent the average of the amounts reported for the Company’s other NEOs as a group (excluding Mr. Roberts and Mr. Hochman) in the “Total” column of the Summary Compensation Table in each applicable year. The names of each of the NEOs included for these purposes in each applicable year are as follows: (i) for 2024, Mr. Taylor, Ms. White, Mr. Felix and Mr. Bertolone; (ii) for 2023, Mr. Taylor, Steven D. Provost, Ms. White, Mr. Felix, Richard A. Badgley and Wade R. Allen; (iii) for 2022, Mr. Taylor, Steven D. Provost, Richard A. Badgley and Charles A. Lousignont; and (iv) for 2021, Mr. Taylor, Steven D. Provost, Richard A. Badgley and Douglas N. Comings. |
Pay Versus Performance
| (4) The dollar amounts reported in column (g) represent the average amount of “compensation actually paid” to the NEOs as a group (excluding Mr. Roberts and Mr. Hochman), as computed in accordance with Item 402(v) of Regulation S-K. In accordance with these rules, these amounts reflect “Total Compensation” as set forth in the Summary Compensation Table for each year, adjusted as shown below for fiscal 2024. Equity values are calculated in accordance with ASC Topic 718, and the methodologies applied in the valuation assumptions used to calculate fair values did not materially differ from those disclosed at the time of the grant. |
Pay Versus Performance
| Making People Feel Special | Brinker International • 2024 Notice & Proxy | 51 |
Pay Versus Performance
| | Average Reported Summary Compensation Table Total | [Less] Average Value of “Stock Awards” Reported in Summary Compensation Table | [Plus] Average Fair Value at Fiscal Year- End of Outstanding and Unvested Stock Awards Granted in Fiscal Year | [Plus] Average Change in Fair Value from Prior Fiscal Year-End of Outstanding and Unvested Option Awards and Stock Awards Granted in Prior Fiscal Years | [Plus] Average Fair Value at Vesting Date of Stock Awards Granted in Fiscal Year that Vested During Fiscal Year | [Plus] Average Change in Fair Value from Prior Fiscal Year End Vesting Date of Option Awards and Stock Awards Granted in Prior Fiscal Years that Vested During Fiscal Year | [Less] Average Prior Year-End Fair Value of Option Awards and Stock Awards Granted in Prior Fiscal Years that Failed to Meet Vesting Conditions During Fiscal Year | Average Compensation Actually Paid Non-PEO NEOs | | 2024 | $1,889,279 | $784,348 | $1,761,151 | $1,630,880 | $— | $(32,215) | $— | $4,464,747 |
Pay Versus Performance
| (5) Total Shareholder Return (TSR) is calculated by dividing (a) the sum of (i) the cumulative amount of dividends for the applicable 1-, 2-, 3- or 4- year measurement period, assuming dividend reinvestment, and (ii) the difference between the Company’s share price (or the index price) at the end of each of the Company’s fiscal year shown and the beginning of the measurement period, by (b) the Company’s share price (or the index price) at the beginning of the measurement period. The beginning of the measurement periods is June 25, 2020 for each year in the table. |
Pay Versus Performance
| (6) The peer group used for this purpose is the S&P 500 Restaurants index. |
Pay Versus Performance
| (7) The dollar amounts reported represent the amount of net income reflected in the Company’s audited financial statements for the applicable year. |
Pay Versus Performance
| (8) Pre-tax income was the Company-selected metric. The dollar amounts reported represent the amount of pre-tax income reflected in the Company’s audited financial statements for the applicable year. |
Relationship between Compensation Actually Paid and Performance Measures
Relationship between Compensation Actually Paid and Performance Measures As shown in the charts and further discussed below, the relationship between the Compensation Actually Paid to the PEOs and the Average Compensation Actually Paid to the Non-PEO NEOs over the last four fiscal years (collectively, “NEO Compensation Actually Paid”) to each of (1) TSR, (2) Net Income, and (3) Pre-tax Income demonstrates that such compensation fluctuates to the extent the Company is achieving its goals and increasing value for stockholders in line with the Company’s compensation philosophy and performance-based objectives.
Relationship between Compensation Actually Paid and Performance Measures
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Relationship between Compensation Actually Paid and Performance Measures
In fiscal 2021, the Company executed strategies to achieve strong results in net income and pre-tax income following the initial negative impact of the COVID-19 pandemic. This resulted in significant stock price growth from the prior fiscal year that significantly increased both the fair value of outstanding equity awards granted in prior fiscal years and the total PEO and NEO Compensation Actually Paid. In fiscal 2022, the Company did not achieve expected net income and pre-tax income targets as a result of challenging market and economic conditions. This resulted in a significant stock price decrease from the prior year that significantly decreased both the fair value of outstanding equity awards granted in prior fiscal years and the total PEO and NEO Compensation Actually Paid. In fiscal 2023, under new leadership, the Company established new strategic pillars for long-term growth. Each pillar required investment into the business while the Company continued to be impacted by significant macroeconomic conditions, including high levels of inflation. Although this resulted in lower net income and income, the Company’s trajectory at the end of the fiscal year and prospects for long-term growth were much stronger than the prior fiscal year, resulting in an increased stock price and increases in both the fair value of outstanding equity awards granted in prior fiscal years and the total PEO and NEO Compensation Actually Paid.
Relationship between Compensation Actually Paid and Performance Measures
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Relationship between Compensation Actually Paid and Performance Measures
In fiscal 2024, the Company’s successful marketing initiatives brought new guests to our restaurants while our long-term growth investments continued to improve operations and provide better guest experiences. As a result, the Company’s same restaurant sales increased significantly and outperformed the casual dining industry. The Company’s net income and income also grew significantly, caused dramatic stock price growth from the prior fiscal year, and increased both the fair value of outstanding equity awards granted in prior fiscal years and the total PEO and NEO Compensation Actually Paid. See also the “Compensation Discussion and Analysis” above for additional information regarding our fiscal 2024 NEO compensation. The list below represents the most important financial performance measures used to determine Compensation Actually Paid for fiscal year 2024 as further described in the Compensation Discussion and Analysis within the sections titled “Short-Term Incentives” and “Long-term Incentives”.
Relationship between Compensation Actually Paid and Performance Measures
| 1. | EBITDA |
Relationship between Compensation Actually Paid and Performance Measures
| 2. | Revenues |
Relationship between Compensation Actually Paid and Performance Measures
| 3. | Pre-tax Income |
Relationship between Compensation Actually Paid and Performance Measures
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