UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

 

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☑ 

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☐ 

Definitive Additional Materials

☐ 

Soliciting Material Pursuant to Section 240.14a-12

JACK IN THE BOX INC.

(Name of Registrant as Specified in Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

 

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LOGO

LOGO

JACK IN THE BOX INC.

January 25, 201827, 2020

Dear Fellow Stockholder:

We invite you to attend the Jack in the Box Inc. 20182020 Annual Meeting of Stockholders. The meeting will be held on Tuesday,Friday, February 27, 2018,28, 2020, at 8:30 a.m. Pacific Standard Time at the offices of Jack in the Box Inc., 9330 Balboa Avenue, San Diego, CA 92123. In the following pages, you will find the Notice of Annual Meeting of Stockholders as well as a Proxy Statement describing the business to be conducted at the meeting. We have also enclosed a copy of our Annual Report on FormForm 10-K for the fiscal year ended October 1, 2017,September 29, 2019, for your information.

To assure that your shares are represented at the meeting, please mark your choices on the enclosed proxy card, sign and date the card, and return it promptly in the postage-paid envelope provided. We also offer stockholders the opportunity to vote their shares over the Internet or by telephone. Please see the Proxy Statement and the enclosed proxy card for details about voting. If you hold your shares through an account with a broker, bank, or other financial institution, please follow the instructions you receive from them to vote your shares. If you are able to attend the meeting and wish to vote your shares in person, you may do so at any time before the proxy is voted at the meeting.

Sincerely,

 

LOGO

Leonard A. Comma

Chairman of the Board and Chief Executive Officer

Important notice regarding the availability of proxy materials

for the Annual Meeting of Stockholders to be held on February 27, 201828, 2020

The Jack in the Box Inc. Proxy Statement and Annual Report on FormForm 10-K for the

fiscal year ended October 1, 2017,September 29, 2019, are available electronically at

http://investors.jackinthebox.com

 

INFORMATION REGARDING ADMISSION TO THE ANNUAL MEETING

Everyone attending the 20182020 Annual Meeting of Stockholders will be required to present both proof of ownership of Jack in the Box Inc. Common Stock and a valid picture identification, such as a driver’s license or passport. If your shares are held in the name of a bank, broker or other financial institution, you will need a recent brokerage statement or letter from such entity reflecting your stock ownership as of the record date. If you do not have both proof of ownership of Jack in the Box Inc. stock and a valid picture identification, you may be denied admission to the Annual Meeting.

Cameras, sound or video recording devices, and large bags or packages will not be allowed in the meeting room.

TABLE OF CONTENTS

   Page 

Notice of 20182020 Annual Meeting of Stockholders

   1 

Proxy Summary

   2 

Questions and Answers

   89 

Proxy Materials and Voting Information

   89 

Annual Meeting Information

   1213 

Communications and Stockholder Proposals

   1314 

Proposal 1 — Election of Directors

   1415 

Nominees for Director

   1415 

Director Qualifications and Biographical Information

   1516

Current Director Not Standing for Re-Election

21 

Corporate Governance

   2022 

Directors’ Independence

   2022 

Board Meetings, Annual Meeting of Stockholders and Attendance

   2022 

Determination of Current Board Leadership Structure

   2022 

Lead Director

   2123 

The Board’s Role in Risk Oversight

   2123 

The Board’s Role in Succession Planning

   2224 

Committees of the Board

   2224

Committee Member Independence

25 

Executive Sessions

   2325 

Board Composition and Refreshment

   2326 

Stockholder Recommendations and Board Nominations

   2426 

Code of Conduct

   2527 

Compensation Committee Interlocks and Insider Participation

   2527 

Additional Corporate Governance Principles and Practices

   2527 
Director Compensation and Stock Ownership Guidelines   2629 
Report of the Audit Committee   2932 
Independent Registered Public Accountants Fees and Services   30
Page33 
Proposal 2 — Ratification of the Appointment of Independent Registered Public Accountants   3134 
Proposal 3 — Advisory Vote on Executive Compensation   3235
Page 

Compensation Discussion &and Analysis

   3437 

I.     Executive Summary

   3537 

II.    Compensation Principles and Objectives

   3942 

III.   Compensation Competitive Analysis

   4043 

IV.   Elements of Compensation

   4144 

V.    Compensation Decision-Making Process

   4346 

VI.   Fiscal 20172019 Compensation

   4447 

VII.  Additional Compensation Information

   4852

VIII. CEO Pay Ratio Disclosure

56 

Compensation Committee Report

   5257 

Compensation Risk Analysis

   5358 

Executive Compensation

   5459 

Summary Compensation Table

   5459 

Grants of Plan-Based Awards

   5661 

Outstanding Equity Awards at FiscalYear-End 20172019

   5762 

Option Exercises and Stock Vested in Fiscal 20172019

   5863 

Retirement Plan Benefits

   5863 

Non-Qualified Deferred Compensation

   5964 

Potential Payments on Termination of Employment or Change in Control

   6065 
Security Ownership of Certain Beneficial Owners and Management   66
Other Information6970 

Section 16(a) Beneficial Ownership Reporting ComplianceOther Information

   6972 

Certain Relationships and Related Transactions

   6972
Appendix A — Reconciliation ofNon-GAAP Measurements to GAAP ResultsA-1 
 

JACK IN THE BOX INC.

9330 Balboa Avenue

San Diego, California 92123

 

 

LOGOLOGO

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

To Be Held February 27, 201828, 2020

The 20182020 Annual Meeting of Stockholders of Jack in the Box Inc. will be held on Tuesday,Friday, February 27, 2018,28, 2020, at 8:30 a.m. Pacific Standard Time, at the offices of Jack in the Box Inc., 9330 Balboa Avenue, San Diego, CA 92123 for the following purposes:

 

1.

To elect the nineten Directors specified in this Proxy Statement to serve until the next Annual Meeting of Stockholders and until their respective successors are elected and qualified;

 

2.

To ratify the appointment of KPMG LLP as our independent registered public accountants for the fiscal year ending September 30, 2018;27, 2020;

 

3.

To provide an advisory vote regarding the compensation of our named executive officers (“Say on Pay”) for the fiscal year ended October 1, 2017,September 29, 2019, as set forth in the Proxy Statement; and

 

4.

To consider such other business as may properly come before the meeting and any adjournments or postponements thereof.

These matters are more fully described in the attached Proxy Statement, which is made a part of this notice.

Our Board of Directors recommends a vote“FOR” “FOR” proposals 1 through 3. You are entitled to vote at the 20182020 Annual Meeting of Stockholders (the “Annual Meeting”) only if you were a Jack in the Box Inc. stockholder as of the close of business on December 29, 2017,30, 2019, the record date for the Annual Meeting. A complete list of stockholders entitled to vote at the Annual Meeting will be available for examination by any stockholder, for any purpose relating to the Annual Meeting, at the Annual Meeting, and for a period of ten days prior to the Annual Meeting, during regular business hours at our principal offices located at 9330 Balboa Avenue, San Diego, CA 92123.

Whether or not you plan to attend the Annual Meeting, we urge you to vote your shares via the toll-free telephone number, over the Internet, or by signing, dating, and returning the enclosed proxy card as promptly as possible in the envelope provided.

San Diego, California

January 25, 201827, 2020

By order of the Board of Directors,

 

LOGO

Phillip H. Rudolph

Executive Vice President, Chief Legal & Risk Officer and Corporate Secretary

 

INFORMATION REGARDING ADMISSION TO THE ANNUAL MEETING

Everyone attending the 20182020 Annual Meeting of Stockholders will be required to present both proof of ownership of Jack in the Box Inc. Common Stock and a valid picture identification, such as a driver’s license or passport. If your shares are held in the name of a bank, broker or other financial institution, you will need a recent brokerage statement or letter from such entity reflecting your stock ownership as of the record date. If you do not have both proof of ownership of Jack in the Box Inc. stock and a valid picture identification, you may be denied admission to the Annual Meeting.

Cameras, sound or video recording devices, and large bags or packages will not be allowed in the meeting room.

 

  PROXY SUMMARY  

    

 

PROXY SUMMARY

This is a summary only, and does not contain all of the information that you should consider in connection with this Proxy Statement. Please read the entire Proxy Statement carefully before voting.

Annual Meeting of Stockholders

 

•  Time and Date

  

8:30 a.m. P.S.T., February 27, 201828, 2020

•  Place

  

9330 Balboa Avenue, San Diego, California 92123

•  Record date

  

December 29, 201730, 2019

•  Voting

  

Stockholders as of the record date are entitled to vote. Each share of common stock is entitled to one vote for each director nominee and one vote for each of the proposals.

•  Admission

  

Proof of ownership and picture identification is required to enter Jack in the Box Inc.’s annual meeting.

Voting Matters

 

Stockholders are being asked to vote on the following matters:

 

Items of Business

  Our Board’s Recommendation   

  

1.  Election of Directors (page 14)

15)

  FOR all Nominees

  

2.  Ratification of KPMG LLP as Independent Registered Public Accountants for FY 20182020 (page 31)

34)

  FOR

  

3.  Advisory Vote to Approve Executive Compensation (page 32)

35)

  FOR

Stockholders also will transact any other business that may properly come before the meeting.

How to Vote

 

You are entitled to vote at the 20182020 Annual Meeting of Stockholders if you were a stockholder of record at the close of business on December 29, 2017,30, 2019, the record date for the meeting. On the record date, there were 29,532,155approximately 23,088,516 shares of the Company’s common stock outstanding and entitled to vote at the annual meeting. For more details on voting and the annual meeting logistics, refer to the “Questions and Answers” section of this Proxy Statement.



 

2    JACK IN THE BOX INC.  ï  20182020 PROXY STATEMENT

    

 

  PROXY SUMMARY  

 

Corporate Governance Highlights

 

We areJack in the Box Inc. (“Jack in the Box” or the “Company”) is committed to good corporate governance, which we believe promotes the long-term interests of stockholders and strengthens Board and Management accountability. We believe good governance also fosters trust in the Company by all our stakeholders, including our guests, employees, franchisees, suppliers and the communities we serve. The “Corporate Governance” section of this Proxy Statement describes our governance framework, which includes the following features:

 

•    Annual election of directors, with majority voting

•     Annual assessment of Board leadership structure

•    8 of 9 independent directors

•     Annual Board, committee and individual director evaluations

•    Regular executive sessions of independent directors

•     Policy requiring long-tenured directors (more than 12 years on the Board) to submit voluntary offer to resign and be reviewed by Nominating & Governance Committee with respect to continued effectiveness

•    Annual evaluation of CEO/Chairman by independent directors

•     Lead independent director with restaurant and franchise experience and oversight of independent directors’ executive sessions and information flow to the Board

•    Policy restricting directors to service on no more than three other public company boards

•     Risk oversight by full Board and designated committees

•    No supermajority standards — stockholders may amend bylaws or charter by majority vote

•     No poison pill in place

•    Stockholder right to act by written consent

•     Prohibition of hedging, pledging and short sales by Section 16 officers and directors

•    CEO/Chair and other members of Management regularly meet with the investment community, and Board is informed of feedback through Investor Relations update at each Board meeting

•     Formal ethics Code of Conduct, ethics hotline and ethics training and communications to all employees to reinforce a culture of integrity

Annual election of directors, with majority voting

 

Ten of our 11 directors are independent

Regular executive sessions of independent directors

Annual evaluation of CEO/Chairman by independent directors

Policy restricting directors to service on no more than three other public company boards

No supermajority standards — stockholders may amend bylaws or charter by majority vote

Stockholder right to act by written consent

CEO/Chairman and other members of Management regularly meet with the investment community, and Board is informed of feedback through Investor Relations update at each Board meeting

Annual assessment of Board leadership structure

Annual Board, committee and individual director evaluations

Policy requiring long-tenured directors (more than 12 years on the Board) to submit voluntary offer to resign and be reviewed by Nominating & Governance Committee with respect to continued effectiveness

Lead independent director with restaurant and franchise experience and oversight of independent directors’ executive sessions and information flow to the Board

Risk oversight by full Board and designated committees

No poison pill in place

Prohibition of hedging, pledging and short sales by Section 16 officers and by Company directors.

Formal ethics Code of Conduct, ethics hotline and ethics training and communications to all employees to reinforce a culture of integrity



 

JACK IN THE BOX INC.  ï  20182020 PROXY STATEMENT    3

 

  PROXY SUMMARY  

    

 

Fiscal 20172019 Review

 

Fiscal 2019 was the Company’s first full year as an asset-light, single-brand organization. Several restructuring efforts were completed during the year, including the completion of the transition services agreement with Qdoba Restaurant Corporation. Through implementation of a securitization transaction ("Securitization") in the fiscal year, the Company achieved its target leverage ratio of approximately five times EBITDA. In addition to these structural changes, the Company continued to drive systemwide financial and operational performance. In fiscal 2019, we achieved our ninth consecutive year of same-store sales growth.

Returns to Stockholders

The Company returned more than $165 million to shareholders through stock buybacks and dividends. The Company’sstock price increased 6.2%7.3% to $101.92$90.45 per share at fiscalyear-end (“FYE”) 2017,2019, versus $95.94$83.83 at FYE 2016, on top of a 20.4% increase in FY 2016.2018.

We returned more than $376 million incash to stockholders during fiscal 2017, including over $327 million in share buybacks and over $49 million in dividends.

Financial and Operational Results

While we made progress on key strategic initiatives, fiscal 2017 was a challenging year for the Company.

Systemwide same-store sales grew 0.5% at Jack in the Box (“JIB”), but declined 1.4% at Qdoba.

 

• 

Consolidated restaurant operating marginSystemwide same-store sales (“ROM”)1(1) declined 260 basis points to 17.6%increased 1.3% over prior year, marking the ninth consecutive year of same-store sales with JIB margin down 110 basis points to 20.1% of sales, and Qdoba margins down 450 basis points to 13.6% of sales.growth.

 

• 

Operating Earnings Per Share(2) (“Operating EPS”)2 of $3.88$4.35 per share increased approximately 3% over prior year, excluding the $0.09 benefit14.8% from the 53rd weekprior year.

•

Adjusted EBITDA(3) increased 1.8% to $269.0 million, compared with $264.2 million in fiscal 2016.the prior year.

•

Operating EBIT(4) was $207.8 million, a 6% increase versus $196 million in the prior year.

•

Restaurant Level Margin(5) decreased by 20 basis points to 26.2% of company restaurant sales.

 

The Company made progress onkey strategic initiatives, including reducing our corporate general and administrative expenses (“G&A”), and refranchising 178 JIB restaurants which increased our franchise mix from 82% at the endThrough implementation of fiscal 2016 to 88% at 2017 fiscalyear-end.

Impact on Incentive Compensation

The Operating EPS result was just slightly above the minimum threshold goal for annual incentive compensation.

The Company fell short of its threshold goals on systemwide sales and ROM at both brands.

As a result, the CEO and other Brand Services named executive officers (“NEOs”) received annual incentive payouts of less than 9% of target, and the Jacksecuritization in the Box and Qdoba brand presidents received less than 4%fiscal year, the Company achieved its target leverage of target.approximately five times EBITDA.

OtherIncentive Compensation Outcomes

 

•

For Jack in the Box Operating Earnings Before Interest and Taxes (“Operating EBIT”),(4) the result (weighted 70%) was 149% of target goal, and Jack in the Box Restaurant Level Margin(5) performance (weighted 30%) was 54% of target goal. Accordingly, the CEO and other NEOs received annual incentive payouts of 120.5% of target incentive.

During fiscal 2017, the Company retained Morgan Stanley & Co. LLC to assist our Board of Directors in its evaluation of potential strategic alternatives with respect to the Qdoba business, as well as other ways to enhance shareholder value. Following the completion of a robust process, our Board determined that the sale of Qdoba is the best alternative for enhancing shareholder value and is consistent with our desire to transition to a less capital-intensive business model. In December 2017, we announced that the Company had entered into an agreement to sell Qdoba Restaurant Corporation for approximately $305 million in cash. The transaction is expected to close by April 2018.

Consistent with the fundamental principle that compensation programs should align pay with performance, the Company’s fiscal 2017 performance directly impacted compensation decisions and pay outcomes as described in our Compensation Discussion and Analysis (CD&A) starting on page 34.
•

For PSUs vested and payable in 2019 (granted in November 2016), the Jack in the Box Return on Invested Capital (ROIC)(6) at FYE19 result was 150% of target, and Systemwide Sales results for the three-fiscal year performance period covering fiscal 2017-2019 (the “Performance Period”) (with goals established at the beginning of each fiscal year of the Performance Period) was 40% of target. In total, the CEO and other NEOs received a weighted payout of 95% of the target number of PSUs granted.

 

1(1) 

Restaurant operating marginSystemwide same-store sales represents changes in sales at company and franchise restaurants open more than one year. Franchise sales represent sales at franchise restaurants and are revenues of our franchisees. We do not record franchise sales as revenues; however, our royalty revenues and percentage rent revenues are calculated based on a percentage of franchise sales. We believe system same-store sales information is anon-GAAP measure, and is defined by the Companyuseful to investors as company restaurant sales less expenses incurred directly by our restaurants in generating those sales (food and packaging costs, payroll and employee benefits costs, and occupancy and other costs). Forit has a reconciliation of this measure to consolidated earnings from operations, the most comparable GAAP measure, please see the “Reconciliation ofNon-GAAP Measurements to GAAP Results” attachment todirect effect on the Company’s Current Report on Form8-K and accompanying press release filed November 29, 2017.profitability.

2(2) 

Operating EPSEarnings Per Share is anon-GAAP measure and is defined by the Company asthat represents diluted EPSearnings per share from continuing operations on a GAAP basis excluding restructuring charges and gains or losses on the sale of company operated restaurants, restructuring charges, loss on early termination of interest rate swaps, loss on early extinguishment of debt, the non-cash impact of the Tax Cuts and Jobs Act in fiscal year 2018, and the excess tax benefits from refranchising. For a reconciliationshare-based compensation arrangements. See Appendix A — Reconciliation of this measure to diluted earnings per share from continuing operations, the most comparable GAAP measure, please see the “Reconciliation ofNon-GAAP Measurementsnon-GAAP measurements to GAAP Results” attachmentResults.

(3)

Adjusted EBITDA represents net earnings on a GAAP basis excluding earnings or losses from discontinued operations, income taxes, interest expense, net, gains or losses on the sale of company-operated restaurants, impairment and other charges, net, depreciation and amortization, and the amortization of franchise tenant improvement allowances and other. See Appendix A - Reconciliation of non-GAAP measurements to GAAP Results.

(4)

Operating EBIT is a non-GAAP measure defined by the Company as net earnings before interest expense, net and income taxes, excluding gains or losses on the sale of company operated restaurants, restructuring costs, and earnings or losses from discontinued operations. See Appendix A — Reconciliation of non-GAAP measurements to GAAP Results.

(5)

Restaurant Level Margin is defined as Company restaurant sales less restaurant operating costs (food and packaging, payroll and employee benefits, and occupancy and other costs) and is neither required by, nor presented in accordance with GAAP. Restaurant Level Margin excludes revenues and expenses of our franchise operations and certain costs, such as selling, general, and administrative expenses, depreciation and amortization, impairment and other charges, net, gains or losses on the sale of company-operated restaurants, and other costs that are considered normal operating costs. See Appendix A — Reconciliation of non-GAAP measurements to GAAP Results.

(6)

Adjusted ROIC is calculated as after-tax earnings from operations, excluding gains or losses on the sale of company-operated restaurants and restructuring charges, divided by average invested capital (which excludes accumulated other comprehensive income or loss related to the Company’s Current Report on Form8-K and accompanying press release filed November 29, 2017.retirement plans).



 

4    JACK IN THE BOX INC.  ï  20182020 PROXY STATEMENT

    

 

  PROXY SUMMARY  

 

Board Nominees(Proposal 1)

 

We understand the importance of having a Board comprised of talented people with the highest integrity and the necessary skills and qualifications to oversee our business. The following table provides summary information about our director nominees (all current Directors), who have a diverse and balanced skill set including extensive financial, marketing, consumer brand, franchise, restaurant and retail experience. We encourage you to review the qualifications, skills and experience of each of our Directors on pages15-19.15-21.(1)

 

Name Age   Director  
Since  		 Principal Occupation Independent   Committee
Memberships  		 

Other Public  

Company

Boards

 Age   

Director  

Since  

 Principal Occupation Independent   Committee
Memberships		 

Other Public
Company

Boards

  AC  CC  NG  FC  EC   AC   CC   NG   FC  
    

Leonard A. Comma

(Chairman of the Board)

 48 2014 

CEO,

Jack in the Box Inc.

 No         LOGO - 50    2014    

CEO,

Jack in the Box Inc.

 No         -
    

David L. Goebel

(Lead Director)

 67 2008 

Partner & Faculty Member,

Merryck & Co. Ltd.

 Yes   x x   x Wingstop Inc. 69    2008    Partner & Faculty Member, Merryck & Co. Ltd. Yes   x x   

•  Wingstop Inc.

  

Jean M. Birch

 60    2019    

Director

(Former Chairman and CEO of Papa Murphy’s Holdings, Inc.)

 Yes   x x   

•  CorePoint Lodging Inc.,

•  Forrester Research, Inc.

  

John P. Gainor

 63    2019    

Director

(Former President & CEO, International Dairy Queen)

 Yes   x x   

•  Saia, Inc.      

    

Sharon P. John

 53 2014 

President & CEO,

Build-A-Bear Workshop, Inc. 

 Yes   x x     Build-a-Bear

Workshop, Inc.

 55    2014    

President & CEO,

Build-A-Bear Workshop, Inc.

 Yes   x x   

•  Build-a-Bear Workshop, Inc.

    

Madeleine A. Kleiner

 66 2011 

Director

(Retired hotel & banking

executive attorney)

 Yes   x LOGO     Northrop

Grumman

Corp.

 68    2011    

Director

(Retired hotel & banking executive attorney)

 Yes x   LOGO   

•  Northrop Grumman Corp.

    

Michael W. Murphy

 60 2002 

President & CEO,

Sharp HealthCare

 Yes LOGO   x   x - 62    2002    

Director

(Retired President & CEO

Sharp HealthCare)

 Yes   x   x -
    

James M. Myers

 60 2010 

Chairman of the Board,

Petco

 Yes x     x   - 62    2010    

Director

(Retired retail CEO and

Board Chair)

 Yes x     LOGO -
   

David M. Tehle

 61 2004 

Director

(Retired retail CFO)

 Yes x     LOGO   Genesco Inc.,
US Foods Holding
Corp.,
National Vision, Inc.		 63    2004    

Director

(Retired retail CFO)

 Yes LOGO     x 

•  US Foods Holding Corp.,

•  National Vision, Inc.

   

John T. Wyatt

 62 2010 

CEO, Knowledge Universe

— United States

 Yes   LOGO   x   -
  

Vivien M. Yeung

 45 2017 General Manager, Venture, Lululemon Athletica Inc. Yes x   x       47    2017    

Director

Strategy consultant forcompanies and non-profits

 Yes x   x   -

 

LOGOLOGO    Chair

  

AC    Audit Committee

    

FC    Finance Committee

x Member

  

CC    Compensation Committee

    

EC    Executive Committee

  

NG    Nominating and Governance Committee

    

Director Attendance— During the time each director nominee served on the Board in fiscal 2017,2019, each attended more than 75% of the meetings of the Board and committees on which he or she sits.

Board Composition — Our Board has a mix of relatively newer and longer-tenured directors. The charts below show Board makeup by various characteristics. For more information on our philosophy regarding the recruitment and diversity of Board members and our Board refreshment policies, please see pages23-25.served.

 

LOGO

(1)

Director John T. Wyatt, the current Compensation Committee Chair, will not be standing forre-election at the Annual Meeting and will be departing as a Director immediately following the Meeting. Mr. Wyatt’s departure is in no way due to any disagreement with the Company nor is it the result of a removal “for cause.” Prior to the Annual Meeting, it is anticipated that the Board will elect to reduce the number of Board seats from eleven to ten. Following the Annual Meeting it is expected that the Company will have no open Director seats.



Director Tenure Average Tenure: 7.5 years Average Age: 58 years Independence Gender

 

JACK IN THE BOX INC.  ï  20182020 PROXY STATEMENT    5

 

  PROXY SUMMARY  

    

 

Board Composition — The charts below show Board makeup for 2019 by various characteristics. For more information on our philosophy regarding the recruitment and diversity of Board members and our Board refreshment policies, please see pages 26-27.

LOGO

Auditors(Proposal 2)

 

 

We are asking our stockholders to ratify the selection of KPMG LLP as our independent registered public accountants for fiscal 2018.2020. Although stockholder ratification of the appointment is not required, the Audit Committee believes it is appropriate to seek such ratification. Additional information is provided onpages 29-31.33-34.

 

2017
2019 Auditor Fees

  Audit Fees

  

$1,098,414  

1,118,963  

  Qdoba Audit Fees (1)

 

880,000  

  Tax or Other Fees

$              0  

  Securitization Related Audit Fees

  

          612  

$   265,000  

  KPMG Total Fees

  

$1,979,026  

(1)

Qdoba Audit Fees are described in the “Independent Registered Public Accountants Fees and Services” section.

1,383,963  
 

Executive Compensation Highlights(Proposal 3)

The Company seeks anon-binding advisory vote from its stockholders to approve the compensation of our NEOs for fiscal 2017 (“Say on Pay”). The Board values stockholders’ opinions, and the Compensation Committee will take into account the outcome of the advisory vote when considering future executive compensation decisions.

Our CD&A describes the compensation decision-making process, details our programs and policies, and includes an illustration of ourcompensation framework and key fiscal 2017 performance measures and pay actions on page 36.

Our executivecompensation programs are built on the following principles and objectives:

Competitive target pay structure, including base salary, annual incentive, and long-term incentives that enable us to attract and retain talented, experienced executives who can drive long-term stockholder value.

Pay for performance alignment,with a higher percentage of executive pay in the form of annual and long-term incentives that directly tie payouts to the achievement of incentive goals.

Comprehensive goal setting,with financial, operating, and strategic performance metrics that drive long-term stockholder value.

Executive alignment with stockholders, through stock ownership and holding requirements.

Incentivizingbalanced short- and long-term executive decision-making, through variable compensation components using varying timeframes.

Sound governance practices and principles in plan design and pay decisions, with the Compensation Committee considering both what and how performance is achieved.

Management of compensation risk, by establishing incentive goals that avoid placing too much emphasis on any one metric or performance time horizon, thereby discouraging excessive or unwise risk-taking.

Our stockholders approved each of the prior four years’ Say on Pay proposals by over 96% of votes cast.



 

6    JACK IN THE BOX INC.  ï  20182020 PROXY STATEMENT

    

 

  PROXY SUMMARY  

 

Executive Compensation(Proposal 3)

The Company seeks anon-binding advisory vote from its stockholders to approve the compensation of our NEOs for fiscal 2019 (“Say on Pay”). The Board values stockholders’ opinions, and the Compensation Committee will take into account the outcome of the advisory vote when considering future executive compensation decisions.

Our CD&A, starting at page 37, describes the compensation decision-making process, details our programs and policies, and includes an illustration of our compensation framework and key fiscal 2019 performance measures and pay actions.

Our executive compensation programs are built on the following principles and objectives:

Competitive target pay structure, including base salary, annual incentive, and long-term incentives that enable us to attract and retain talented, experienced executives who can deliver successful business performance and drive long- term stockholder value.

Pay for performance alignment, with the largest proportion of executive pay in the form of annual and long-term incentives that directly tie payouts, if any, to the achievement of corporate goals and strategies.

Comprehensive goal setting, with financial, operational, and strategic performance metrics that drive long-term stockholder value.

Executive alignment with stockholders, through stock ownership and holding requirements that build and maintain an executive’s equity investment in the company.

Incentivizing balanced short-term and long-term executive decision-making, through variable compensation components (cash and stock) using varying timeframes.

Sound governance practices and principles in plan design and pay decisions, with the Compensation Committee considering both what and how performance is achieved.

Management of compensation risk, by establishing incentive goals that avoid placing too much emphasis on any one metric or performance time horizon, thereby discouraging excessive or unwise risk-taking.

Our stockholders approved each of the prior five years’ Say on Pay proposals by over 98% of votes cast.



JACK IN THE BOX INC.ï  2020 PROXY STATEMENT7

  PROXY SUMMARY  

Compensation Governance Practices

 

The company has several governance practices that we believe support the soundness and efficacy of our compensation programs. In short:

LOGO What We Do

 

☑LOGO  What We Do

☒   What We Don’t Do

✓Compensation Committee composed entirely of independent directors, who meet regularly in executive session without Management present.Pages 22, 4325, 46.

 

LOGO

☒  Section 16 officers and directors are prohibited from hedging, pledging or holding Company stock in margin accounts.Page 49.

✓Independent compensation consultant who works exclusively for the Compensation Committee (no other work for the Company).Page 4346.

 

LOGO

☒  No dividends or dividend equivalents are paid on unvested restricted stock units (RSUs) or performance share units. Page 41.

✓Robust stock ownership and holding requirements.Page 4852.

 

LOGO

☒  Nore-pricing of equity without stockholder approval.Page 33.

✓Compensation Risk Committee that analyzes compensation plans, programs, policies and practices.Page 5358.

 

LOGO

☒  The Company ceased providing taxgross-up provisions in compensation arrangements entered into in 2009 and later, except related to relocation expenses (which require Compensation Committee approval in the case of executive officers).Page 51.

✓Compensation Committee discretion to reduce payouts under incentive plans.Page 5358.

 

LOGO

☒  No single trigger change in control accelerated vesting of RSUs and options. Since 2014, all RSUs and options awards that provide for vesting upon a change in control require a “double trigger” (termination and consummation of the change in control).Page 61.

✓Clawback policy providing ability to recover incentive cash compensation and performance-based equity awards based on financial results that were subsequently restated due to fraud or intentional misconduct.Page 5058.

LOGO

What We Don’t Do

☒

Section 16 officers and directors are prohibited from hedging, pledging or holding Company stock in margin accounts.Pages 53, 58.

☒

No dividends or dividend equivalents are paid on unvested restricted stock units (RSUs) or performance shares.Page 44.

☒

Nore-pricing of equity is permitted without stockholder approval.Page 36.

☒

The Company does not provide taxgross-ups except related to qualified relocation expenses (which require Compensation Committee approval in the case of executive officers).Page 48.

☒

From 2014 through the end of fiscal 2019, no RSUs or options awards provide for vesting upon a change in control without a “double trigger” (termination and consummation of the change in control) unless the award is not assumed or substituted for by the acquirer.Page 65-66.

 

 

Additional Information

 

Please see the “Questions“Questions and Answers” section that immediately follows for important information about the proxy materials, voting, the annual meeting, Company documents, communications and the deadlines to submit stockholder proposals for the 20192021 Annual Meeting of Stockholders.



 

8JACK IN THE BOX INC.  ï  20182020 PROXY STATEMENT7

  QUESTIONS AND ANSWERS  

    

  QUESTIONS AND ANSWERS  

 

JACK IN THE BOX INC.

9330 Balboa Avenue

San Diego, California 92123

PROXY STATEMENT

ANNUAL MEETING OF STOCKHOLDERS

February 27, 201828, 2020

QUESTIONS AND ANSWERS

Proxy Materials and Voting Information

 

1.

Why am I receiving these materials?

 

 

We sent you these proxy materials because the Board of Directors (sometimes referred to as the “Board”) of Jack in the Box Inc. (sometimes referred to as the “Company,” “Jack in the Box,” “we,” “us,” or “our”) is soliciting your proxy to vote at the 20182020 Annual Meeting of Stockholders (the “Annual Meeting”) and at any postponements or adjournments of the Annual Meeting. The Annual Meeting will be held on February 27, 2018,28, 2020, at 8:30 a.m. Pacific Standard Time at our corporate headquarters located at 9330 Balboa Avenue, San Diego, CA 92123. If you held shares of our common stock on December 29, 201730, 2019 (the “Record Date”), you are invited to attend the Annual Meeting and vote on the proposals

described below under the heading “What are my voting choices for each of the items to be voted on at the 20182020 Annual Meeting?” However, you do not need to attend the Annual Meeting to vote your shares. Instead, you may complete, sign, date, and return the enclosed proxy card. You may also vote over the Internet or by telephone.

The Notice of Annual Meeting of Stockholders (the “Notice”), Proxy Statement, the enclosed proxy card, and our Annual Report on FormForm 10-K for the fiscal year ended October 1, 2017,September 29, 2019, will be mailed to stockholders on or about January 25, 2018.27, 2020.

 

 

2.

Who can vote at the Annual Meeting?

 

 

If you were a holder of Jack in the Box common stock (the “Common Stock”) either as astockholder of recordor as thebeneficial owner of shares held in Street nameas of the close of business on December 29, 2017,30, 2019, the Record Date for the Annual Meeting, you may vote your shares at the Annual Meeting. As of the Record Date, there were 29,532,155approximately

23,088,516 shares of Common Stock outstanding, excluding treasury shares. Company treasury shares will not be voted. Each stockholder has one vote for each share of Common Stock held as of the Record Date. As summarized below, there are some distinctions between shares held of record and those owned beneficially in Street name.

 

 

3.

What does it mean to be a “stockholder of record”?

 

 

If, on the Record Date, your shares were registered directly in your name with the Company’s transfer agent, Computershare, then you are a “stockholder of record.” As a stockholder of record, you may vote in person at the Annual

Meeting or vote by proxy. Whether or not you plan to attend the Annual Meeting, we urge you to fill out and return the enclosed proxy card, or vote by telephone or Internet, to ensure your vote is counted.

 

 

8    JACK IN THE BOX INC.ï   2018 PROXY STATEMENT

  QUESTIONS AND ANSWERS  

4.

What does it mean to beneficially own shares in “Street name”?

 

 

If, on the Record Date, your shares were held in an account at a broker, bank, or other financial institution (we will refer to

those organizations collectively as “broker”), then you are the beneficial owner of shares held in “Street name” and these

JACK IN THE BOX INC.ï  2020 PROXY STATEMENT9

  QUESTIONS AND ANSWERS  

proxy materials are being forwarded to you by that broker. The broker holding your account is considered the stockholder of record for purposes of voting at the Annual Meeting. As the beneficial owner, you have the right to direct your broker on how to vote the shares in your account. As a beneficial owner, you are invited to attend the Annual Meeting. However, since you are not a stockholder of record, you may not vote your shares in person at the Annual Meeting unless you request

and obtain a valid legal proxy from your broker giving you the legal right to vote the shares at the Annual Meeting, as well as

satisfy the Annual Meeting admission criteria set out in the Notice. Under the rules that govern brokers, your broker is not permitted to vote on your behalf on any matter to be considered at the Annual Meeting (other than the ratification of the appointment of KPMG LLP as our independent registered public accountants for fiscal 2018)2020) unless you provide specific instructions to the broker as to how to vote. As a result, we encourage you to communicate your voting decisions to your broker before the date of the Annual Meeting to ensure that your vote will be counted.

 

 

5.

What are my voting choices for each of the items to be voted on at the 20182020 Annual Meeting?

 

 

Item 1: Election of Directors

   

•  Vote in favor of all nominees;

 

•  Vote in favor of specific nominees;

 

•  Vote against all nominees;

 

•  Vote against specific nominees;

 

•  Abstain from voting with respect to nominees; or

 

•  Abstain from voting with respect to specific nominees.

 

The Board recommends a voteFOR all Director nominees.

   
Item 2: Ratification of the Appointment of KPMG LLP as Independent Registered Public Accountants   

•  Vote in favor of ratification;

 

•  Vote against the ratification; or

 

•  Abstain from voting on the ratification.

 

The Board recommends a voteFOR the ratification.

   
Item 3: Advisory Vote to Approve Executive Compensation (“Say on Pay”)   

•  Vote in favor of the advisory proposal;

 

•  Vote against the advisory proposal; or

 

•  Abstain from voting on the advisory proposal.

 

The Board recommends a voteFOR the advisory approval of executive compensation.

 

6.

What if I return the proxy card to the Company but do not make specific choices?

 

If you return a signed, dated, proxy card to the Company without making any voting selections, the Company will vote your shares as follows:

 

“FOR” the election of all director nominees;

 

“FOR” the ratification of the appointment of KPMG LLP as our independent registered public accountants for the fiscal year ending September 30, 2018;27, 2020; and

“FOR,” on an advisory basis, approval of the compensation awarded to our named executive officers for the fiscal year ended October 1, 2017,September 29, 2019, as set forth in this Proxy Statement.

 

 

JACK IN THE BOX INC.ï  2018 PROXY STATEMENT9

  QUESTIONS AND ANSWERS  

7.

Could any additional matters be raised at the 20182020 Annual Meeting?

 

 

We are not aware of any other matters to come before the Annual Meeting. If any matter not mentioned herein is properly brought before the Annual Meeting, the persons named in the

enclosed proxy will have discretionary authority to vote all proxies with respect thereto and in accordance with their best judgment.

 

 

10    JACK IN THE BOX INC.ï  2020 PROXY STATEMENT

  QUESTIONS AND ANSWERS  

8.

What does it mean if I received more than one proxy card?

 

 

If you receive more than one proxy card, your shares are registered in more than one name or are registered in different

accounts. Please complete, sign and return each proxy card to ensure that all of your shares are voted.

 

 

9.

How are votes counted?

 

 

Votes will be counted by the inspector of election appointed for the Annual Meeting, who will separately count “FOR,” “AGAINST,” abstentions and brokernon-votes. A “brokernon-vote” occurs when your broker submits a proxy card for your shares of Common Stock held in Street name but does not vote on a particular proposal because the broker has not received voting instructions from you and does not have the authority to vote on that matter without instructions. Under the rules that govern brokers who are voting shares held in Street name, brokers have the discretion to vote those shares on routine matters but not onnon-routine matters.

For purposes of these rules, the only routine matter in this Proxy Statement is the ratification of the appointment of our independent registered public accountants. Therefore, if you hold your shares in Street name and do not provide voting instructions to your broker, your broker does not have discretion to vote your shares on any of the proposals at the Annual Meeting except the ratification of the appointment of independent registered public accountants. However, your shares will be considered present at the Annual Meeting for purposes of determining the existence of a quorum, as provided below.

 

 

Proposal  

Number

 Item   Votes Required for Approval Abstentions Uninstructed
Shares
      
1 

Election of 910 Directors

  

Majority of votes cast.

 No effect. No effect.
     
  
      
2 Ratification of the Appointment of KPMG LLP as Independent Registered Public Accountants  Majority of the voting power of the shares present in person or by proxy and entitled to vote.vote on the proposal. 

Count as

votes against.

 Discretionary voting by broker permitted.
     
  
      
3 

Advisory Vote to Approve Executive Compensation

  Majority of the voting power of the shares present in person or by proxy and entitled to vote.vote on the proposal. 

Count as

votes against.

 No effect.
     
      

 

10.

How many shares must be present or represented to conduct business at the Annual Meeting?

 

 

A quorum of stockholders is necessary to hold a valid annual meeting. A quorum will be present if the holders of at least a majority of the total number of shares of Common Stock entitled to vote are present, in person or by proxy, at the Annual Meeting. Abstentions and shares represented by

brokernon-votes are counted for the purpose of determining whether a quorum is present. If there are insufficient votes to constitute a quorum at the time of the Annual Meeting, we may adjourn the Annual Meeting to solicit additional proxies.

 

 

10JACK IN THE BOX INC.  ï  20182020 PROXY STATEMENT11

  QUESTIONS AND ANSWERS  

    

  QUESTIONS AND ANSWERS  

 

11.

How do I vote my shares of Jack in the Box Common Stock?

 

 

If you are a stockholder of record, you can vote in the following ways:

 

• 

By Internet:by following the Internet voting instructions included in the proxy card at any time up until 11:59 p.m., Eastern Time, on February 26, 2018.27, 2020.

 

• 

By Telephone:by following the telephone voting instructions included in the proxy card at any time up until 11:59 p.m., Eastern Time, on February 26, 2018.27, 2020.

 

• 

By Mail:if you have received a printed copy of the proxy materials from us by mail, you may vote by mail by marking, dating, and signing your proxy card in accordance with the instructions on it and returning it by mail in thepre-addressed reply envelope provided with the proxy materials. The proxy card must be received prior to the Annual Meeting.

 

• 

In Person:if you satisfy the admission requirements to the Annual Meeting, as described in the Notice, you may vote your shares in person at the meeting. Even if you plan to

 

attend the Annual Meeting, we encourage you to vote in advance by Internet, telephone or mail so that your vote will be counted in the event you later decide not to attend the Annual Meeting.

If you are a beneficial owner, you can vote in the following way:

If your shares are held in Street name or through a benefit or compensation plan, your broker or your plan trustee should give you instructions for voting your shares. In these cases, you may vote by Internet, telephone or mail, as instructed by your broker, trustee, or other agent. Shares beneficially held through a benefit or compensation plan cannot be voted in person at the Annual Meeting. You may vote your shares beneficially held through your broker in person if you satisfy the admission requirements to the Annual Meeting, as described in the Notice, and you obtain a valid legal proxy from your broker giving you the legal right to vote the shares at the Annual Meeting.

 

 

12.

May I change my vote or revoke my proxy?

 

Yes.

 

If you are a stockholder of record, you may change your vote or revoke your proxy by:

 

filing a written statement to that effect with our Corporate Secretary before the taking of the vote at the Annual Meeting;

 

voting again via the Internet or telephone but before the closing of those voting facilities at 11:59 p.m. Eastern Time on February 26, 2018;27, 2020;

 

attending the Annual Meeting, revoking your proxy and voting in person (attendance at the Annual Meeting, in and of itself, will not constitute a revocation of a proxy); or

 

timely submitting a properly signed proxy card with a later date that is received at or prior to the Annual Meeting.

The written statement or subsequent proxy should be delivered to Jack in the Box Inc., 9330 Balboa Avenue,9357 Spectrum Center Blvd., San Diego, CA 92123, Attention: Corporate Secretary, or hand delivered to the Corporate Secretary before the taking of the vote at the Annual Meeting.

If you are a beneficial owner and hold shares through a broker, bank, or other financial institution,you may submit new voting instructions by contacting your broker, bank, or other nominee. You may also change your vote or revoke your voting instructions in person at the Annual Meeting if you obtain a signed legal proxy from the broker, bank, or other nominee giving you the right to vote the shares.

 

 

12JACK IN THE BOX INC.  ï  20182020 PROXY STATEMENT11

  QUESTIONS AND ANSWERS  

    

  QUESTIONS AND ANSWERS  

 

13.

Who will pay for the cost of soliciting proxies?

 

 

The Company will pay the cost of preparing, printing, and mailing the Notice and the proxy materials. Copies of solicitation materials will be furnished to banks, brokerage houses, fiduciaries, and custodians holding shares of Common Stock beneficially owned by others, to forward to such beneficial owners. The Company may reimburse persons representing beneficial owners of Common Stock for their costs of forwarding solicitation materials to the beneficial owners. If you choose to access proxy materials or vote over the Internet or by telephone, you are responsible for Internet or

telephone charges. We have engaged Innisfree M&A Incorporated (“Innisfree”), a proxy-solicitation firm, to provide advice to the Company with respect to the 20182020 Annual Meeting of Stockholders and to assist us in the solicitation of proxies, for which the Company will pay a fee of $15,000 plus reimbursement of certainout-of-pocket expenses. In addition to solicitation by mail, proxies may be solicited personally, by telephone, or by Innisfree. They may also be solicited by directors, officers, or employees of the Company, who will receive no additional compensation for such activities.

 

 

14.

How can I find out the results of the Annual Meeting?

 

 

Preliminary voting results will be announced at the Annual Meeting. We will publish final results in a Current Report on FormForm 8-K that we expect to file with the Securities and Exchange Commission (“SEC”) within four business days of the Annual Meeting. After the FormForm 8-K is filed, you may

obtain a copy by visiting the SEC’s website atwww.sec.gov,

visiting our website or contacting our Investor Relations Department by writing to Investor Relations Department, Jack in the Box Inc., 9330 Balboa Avenue, San Diego, CA 92123, or by sending an email toinvestor.relations@jackinthebox.com.

 

 

15.

How can I obtain copies of the proxy statement or10-K?

 

 

A copy of this Proxy Statement and the Company’s Annual Report on FormForm 10-K (“Form10-K”) for the fiscal year ended October 1, 2017,September 29, 2019, are available free of charge on our website. These filings and all of our filings that are made electronically with the SEC, including FormsForms 10-K,10-Q and8-K may be found athttp://investors.jackinthebox.com. Form10-K, excluding exhibits, may also be obtained by stockholders without charge by written request sent to Investor Relations Department, Jack in the Box Inc., 9330 Balboa Avenue,9357 Spectrum Center Blvd., San Diego, CA 92123.

As permitted by SEC rules, if your stock is held by a brokerage firm or bank, a single copy of this Proxy Statement may be delivered to an address shared by two or more stockholders. If you prefer to receive separate copies of a Proxy Statement and/or Annual Report either now or in the future, please contact your brokerage or bank. The voting instruction sent to a Street-name stockholder should provide information on how to request (i) householding of future Company materials or (ii) separate materials if only one set of documents is being sent to a household.

 

 

Annual Meeting Information

 

16.

How do I attend the 20182020 Annual Meeting of Stockholders in person?

 

 

IMPORTANT NOTE: If you plan to attend the Annual Meeting, you must follow these instructions to gain admission.

All attendees will need to present proof of ownership of Jack in the Box Inc. Common Stock and a valid pictureidentification, such as a driver’s license or passport. If you do not have both proof of ownership of Jack in the Box Inc. stock and a valid picture identification, you may be denied admission to the Annual Meeting.

Beneficial owners:If you are a beneficial owner, you will need to bring the notice or voting instruction form you received from your bank, broker or other nominee to be admitted to the meeting. You also may bring your bank or brokerage account statement reflecting your ownership of Common Stock as of December 29, 2017.30, 2019.

Attendance at the meeting is limited to stockholders as of the Record Date (December 29, 2017)30, 2019) or their authorized named representatives. Cameras, sound or video recording devices, and large bags or packages will not be allowed in the meeting room.

 

 

12JACK IN THE BOX INC.  ï  20182020 PROXY STATEMENT13

  QUESTIONS AND ANSWERS  

    

  QUESTIONS AND ANSWERS  

 

Communications and Stockholder Proposals

 

17.

How can I communicate with the Company’s Directors?

 

 

The Board is committed to continuing to engage with stockholders and encourages an open dialogue about compensation, governance and other matters. We value your input, your investment and your support. The Board has established a process to facilitate communication by stockholders with Directors.

Stockholders or others who wish to communicate any concern of any nature to the Board of Directors, any Committee of the Board, or any individual director or group of directors, may write to a director or directors in care of the Office of the Corporate Secretary, Jack in the Box Inc., 9330 Balboa Avenue,9357 Spectrum Center Blvd., San Diego, CA 92123, or telephone888-613-5225. Your letter should indicate whether or not you are a stockholder of the Company.

Comments or questions regarding our accounting, internal controls or auditing matters will be referred to members of our

Audit Committee. Comments or questions regarding the nomination of directors and other corporate governance matters will be referred to members of the Nominating and Governance Committee. For all other matters, our Corporate Secretary will, depending on the subject matter:

 

forward the communication to the director or directors to whom it is addressed;

 

forward the communication to the appropriate management personnel;

 

attempt to handle the inquiry directly, for example where it is a request for information about our Company, or it is a stock-related matter; or

 

not forward the communication if it is primarily commercial in nature or if it relates to an improper or irrelevant topic.

 

 

18.

How do I submit a proposal for action at the 20192021 Annual Meeting?

 

 

A proposal for action to be presented by any stockholder at the 20192021 Annual Meeting of Stockholders will be acted upon only:

 

If a proposal is to be included in the proxy statement, pursuant to RuleRule 14a-8 under the Securities Exchange Act of 1934, as amended, the proposal is received by the Corporate Secretary no later than 120 calendar days prior to the anniversary of this year’s mailing date, so no later than 5:00 p.m. Pacific Time, onSeptember 27, 2018.29, 2020.

 

If the proposal is not to be included in the proxy statement, the proposal is delivered to the Corporate Secretary not less than 120 days and not more than 150 days prior to the first anniversary of the date of the previous year’s Annual Meeting, or not later than October 30, 2018,31, 2020, and not earlier than September 30, 2018;October 1, 2020; in addition, such proposal is, under

  

Delaware General Corporation Law, an appropriate subject for stockholder action; and must also comply with the procedures and requirements set forth in as well as the applicable requirements of our Bylaws.

In addition, the stockholder proponent, or a representative who is qualified under state law, must appear in person at the 20192021 Annual Meeting of Stockholders to present such proposal.

All proposals must be in writing and should be sent to Jack in the Box Inc., to the attention of Phillip H. Rudolph, Corporate Secretary, at 9330 Balboa Avenue,9357 Spectrum Center Blvd., San Diego, CA 92123.

A copy of the Bylaws may be obtained by written request to the Corporate Secretary at the same address. The Bylaws are also available athttp://investors.jackinthebox.cominvestors.jackinthebox.com.

 

 

14JACK IN THE BOX INC.  ï  20182020 PROXY STATEMENT13

 

  PROPOSAL ONE — ELECTION OF DIRECTORS  

 

PROPOSAL ONE — ELECTION OF DIRECTORS

All of the directors of the Company are elected annually and serve until the next Annual Meeting and until their respective successors are elected and qualified. The current nominees for election as directors (each of whom is currently serving as a Director of the Company) are set forth below. All of the nominees have indicated their willingness to serve and have consented to be named in the Proxy Statement. If any should be unable or unwilling to stand for election, the shares represented by proxies may be voted for a substitute designated by the Board, unless a contrary instruction is indicated in the proxy.

Nominees for Director

 

The following table provides certain information about each nominee for director as of January 1, 2018.2020(1).

 

Name    Age     Position(s) with the Company    

Director

Since

     

Age

 

     

Position(s) with the Company

 

    

Director

Since

 

 

Leonard A. Comma

     48     Chairman of the Board & Chief Executive Officer     2014      

 

50

 

 

 

    

Chairman of the Board & Chief Executive Officer

 

     

 

2014

 

 

 

David L. Goebel

     67     Independent Director     2008      

 

69

 

 

 

    

Independent Lead Director

 

     

 

2008

 

 

 

Jean M. Birch

     

 

60

 

 

 

    

Independent Director

 

     

 

2019

 

 

 

John P. Gainor

     

 

63

 

 

 

    

Independent Director

 

     

 

2019

 

 

 

Sharon P. John

     53     Independent Director     2014      

 

55

 

 

 

    

Independent Director

 

     

 

2014

 

 

 

Madeleine A. Kleiner

     66     Independent Director     2011      

 

68

 

 

 

    

Independent Director

 

     

 

2011

 

 

 

Michael W. Murphy

     60     Independent Director     2002      

 

62

 

 

 

    

Independent Director

 

     

 

2002

 

 

 

James M. Myers

     60     Independent Director     2010      

 

62

 

 

 

    

Independent Director

 

     

 

2010

 

 

 

David M. Tehle

     61     Independent Director     2004      

 

63

 

 

 

    

Independent Director

 

     

 

2004

 

 

 

John T. Wyatt

     62     Independent Director     2010 

Vivien M. Yeung

     45     Independent Director     2017      

 

 

47

 

 

 

 

 

    

Independent Director

 

     

 

2017

 

 

 

Vote Required for Approval

In the election of directors, you may vote FOR, AGAINST, or ABSTAIN. The Company’s Bylaws require that, in an election such as this, where the number of director nominees does not exceed the number of directors to be elected, each director will be elected by the vote of the majority of the votes cast (in person or by proxy) with respect to the director. A “majority of votes cast” means that the number of shares cast “FOR” a director’s election exceeds the number of votes cast “AGAINST” that director. For purposes of determining the votes cast, only those votes cast “FOR” or “AGAINST” are included. Neither a vote to ABSTAIN nor a brokernon-vote will count as a vote cast FOR or AGAINST a director nominee and, as a result, will have no direct effect on the outcome of the election of directors. Abstentions and brokernon-votes will be counted for the purpose of determining whether a quorum is present.

In an uncontested election, a nominee who does not receive a majority of the votes cast will not be elected. An incumbent director who is not elected because he or she does not receive a majority of the votes cast will continue to serve but shall tender his or her resignation to the Board. The Nominating and Governance Committee will take action to determine whether to accept or reject the director’s resignation, or whether other action is appropriate, and will make a recommendation to the Board. Within ninety (90) days following the date of the certification of the election results, the Board will act on the Committee’s recommendation and publicly disclose its decision and the rationale for such decision.

ON PROPOSAL ONE, ELECTION OF DIRECTORS, THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” ALL NOMINEES.

 

(1)

Director John T. Wyatt, the current Compensation Committee Chair, will not be standingfor re-election at the Annual Meeting and will be departing as a Director immediately following the Meeting. Mr. Wyatt’s departure is in no way due to any disagreement with the Company nor is it the result of a removal “for cause.” Prior to the Annual Meeting, it is anticipated that the Board will elect to reduce the number of Board seats from eleven to ten. Following the Annual Meeting it is expected that the Company will have no open Director seats.

14JACK IN THE BOX INC.  ï  20182020 PROXY STATEMENT15

 

  PROPOSAL ONE — ELECTION OF DIRECTORS  

 

Director Qualifications and Biographical Information

 

Our Board includes individuals with expertise in executive leadership and management, accounting and finance, marketing and branding, and across restaurant, franchise, hospitality, retail, manufacturing, and healthcare industries. Our Directors have a diversity of backgrounds and experiences. We believe that, as a group, they work effectively together in overseeing our business, hold themselves to the highest standards of integrity, and are committed to representing the long-term best interests of our stockholders.

Biographical information for each of the Director nominees, including the key qualifications, experience, attributes, and skills that led our Board to the conclusion that each of the Director nominees should serve as a director, is set forth on the pages below. In addition to the business and professional experiences described below, our Director nominees also serve on the boards of various civic and charitable organizations.

Director Nominees

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Leonard A. Comma

 

Director Since January 2014

Mr. Comma was appointed a Director, Chairman of the Board and Chief Executive Officer, effective January 1, 2014, and since that date has served as a member of the Executive Committee. From May 2012 until October 2014, Mr. Comma served as President, and from November 2010 to January 1, 2014, as Chief Operating Officer of Jack in the Box Inc. Mr. Comma joined the Company in 2001 as Director of Convenience Store & Fuel Operations for the Company’s proprietary chain of Quick Stuff convenience stores, which included more than 60 locations at the time it was sold in 2009. In 2004, he was promoted to Division Vice President of Quick Stuff Operations, and in 2006 he was promoted to Regional Vice President of Quick Stuff and the Company’s Southern California region, which included more than 150 Jack in the Box restaurants. In 2007, Mr. Comma was promoted to Vice President of Operations, Division II, and had oversight of nearly 1,200 company and franchised Jack in the Box restaurants in the Western U.S. Prior to joining Jack in the Box Inc., Mr. Comma worked for ExxonMobil Corporation since 1989, with his last position as a Regional Manager with responsibility for supporting more than 300 franchisees.

Qualifications:

 

Mr. Comma has more than 25 years of experience at two major public companies with extensive retail and franchise operations, including for the past fourfive years as Chairman and CEO of Jack in the Box Inc. In his prior executive-level role as President and Chief Operating Officer for Jack in the Box Inc., Mr. Comma was responsible for the operations of all Company and franchised Jack in the Box restaurants — more than 2,200 locations — as well as: Menu Innovation, including Menu Strategy, Operations Support, and Research & Development; Marketing Communications, including Merchandising; Consumer Intelligence & Analytics; and Internal Brand Communications. Mr. Comma also gained extensive experience in restaurant and retail operations and franchising in his previous roles with the Company as well as with ExxonMobil. His professional expertise and knowledge of our business, our competition and our competitive positioning, along with his deep understanding of our values and culture, bring an important Company perspective to the Board.

 

 

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  PROPOSAL ONE — ELECTION OF DIRECTORS  

 

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David L. Goebel

 

Lead Director;

Director Since December 2008

Mr. Goebel has been a director of the Company since December 2008, and currently serves as Lead Director. He is a partner and Faculty Member for Merryck & Co. Ltd., a worldwide firm that provides peer to peer mentoring services for CEOs and senior business executives. He has held that position since May 2008. In 2008, Mr. Goebel became the founding principal and President of Santoku, Inc., a private company that operates sandwich shops under the name Goodcents® Deli Fresh Subs (“Goodcents”), catering and cafeteria operations under the name Y-Leave Cafe, catering services under the name Prime Catered Events, and a fast-casual pizza concept under the name Pie Five® Pizza Company. Mr. Goebel also served as acting President and CEO of Mr. Goodcents Franchise Systems, Inc., the franchisor of Goodcents, from 2010 until December 2014. From 2001 until 2007, he served in various executive positions at Applebee’s International, Inc., including as President and Chief Executive Officer in 2006-2007, during which time the company operated nearly 2,000 restaurants in the United States and internationally. Previous to that, Mr. Goebel was President of Summit Management, Inc., a consulting group specializing in executive development and strategic planning. Prior to that, he was the Chief Operating Officer of Finest Foodservice, LLC, a Boston Chicken/Boston Market franchise that he founded andco-owned, which was responsible for developing 80 restaurants within a seven-state area from 1994 until 1998. In NovemberSince 2017, Mr. Goebel joinedhas served on the board of directors of Wingstop Inc. which operates and franchises more than 1,000 fast-casual restaurant locations across the United States and internationally. He served on Wingstop’s Audit Committee until August 2018.

Qualifications:

 

Mr. Goebel has more than 40 years of experience in the retail, food service, and hospitality industries. Mr. Goebel’s qualifications to serve on our Board include: his business, operational, management, and leadership development experience in the retail, food service, and hospitality industries; his work as an executive consultant; his relevant industry experience, including his experience in restaurant operations, restaurant and concept development, supply chain management, franchising, executive development, risk assessment, risk management, succession planning, executive compensation and strategic planning; and his service on other private and public boards.

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Jean M. Birch

Director Since May 2019

Ms. Birch has been a director of the Company since May 2019. She served as a member of the Board of Papa Murphy’s Holdings, Inc., a franchisor and operator of the largest Take ‘n’ Bake pizza chain in the U.S., from April 2015 until May 2019, and served as Chair of the Board of Papa Murphy’s from September 2016 until May 23, 2019, when the company was sold to MTY Food Group. Ms. Birch was appointed President and CEO of Papa Murphy’s in December 2016 and served in that position until July 2017. From 2009 to 2012, Ms. Birch was President of IHOP Restaurants, Inc., a division of DineEquity, Inc. Prior to that, Ms. Birch was President of Romano’s Macaroni Grill from January 2005 to August 2007 and President of Corner Bakery Café from August 2003 to December 2004, both divisions of Brinker International, Inc. From 1991 to 2003, Ms. Birch held various roles with YUM! Brands, Inc., a global quick-service restaurant company, including VP, Operations for Taco Bell, Inc. and Senior Director, Concept Development for Pizza Hut, Inc. Since 2007, Ms. Birch has also served as CEO and President of her own strategy and leadership consulting practice, Birch Company, LLC. Since February 2018, she’s been a director of Forrester Research, a global research and advisory firm, where she currently serves as Chair of that board’s Audit Committee. In addition, since September 2018, Ms. Birch has been a director of CorePoint Lodging Inc., a real estate investment trust, where she currently serves on that board’s Audit Committee.

Qualifications:

Ms. Birch’s qualifications to serve on our Board include her extensive operational experience as an executive officer across multiple national restaurant chains. She brings more than 20 years of experience leading major business affairs at national restaurants, including experience related to strategy and business development, franchising, marketing and brand building, product development, supply chain, finance and capital markets, labor relations, human resources and compensation, organizational development and succession planning. She has public company board experience currently serving as a director of CorePoint Lodging and Forrester Research in addition to previously serving as Chair of Papa Murphy’s Holdings.

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  PROPOSAL ONE — ELECTION OF DIRECTORS  

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John P. Gainor

Director Since May 2019

Mr. Gainor has been a director of the Company since May 2019. He served as the President and CEO of International Dairy Queen, a subsidiary of Berkshire Hathaway, from 2008 until his retirement in 2017. Mr. Gainor was with International Dairy Queen starting in 2003 and served as its Chief Supply Chain Officer prior to being named President and CEO. From 2000 to 2003, Mr. Gainor was President andCo-Founder of Supply Solutions, Inc., a company that focused on designing and implementing supply chain solutions and business expansion models for major restaurant chains and consumer products companies. Mr. Gainor has also held various executive positions focusing on logistics, supply chain and transportation with Consolidated Distribution Corporation, ProSource Inc., AmeriServe Distribution Corporation, and Warner Lambert Corporation. He currently serves as a director on the board of Saia, Inc. — a leading regional and inter-regional less-than-truckload carrier that services 43 states, Canada, Mexico and Puerto Rico. He serves on the company’s Audit Committee. He is a National Association of Corporate Directors (NACD) Board Leadership Fellow.

Qualifications:

Mr. Gainor has more than 40 years of experience in foodservice and consumer product industries including over 9 years serving as President and CEO of a leading global fast-food restaurant chain, International Dairy Queen. He has extensive experience working directly with franchisees. He brings significant experience in franchising, product development, brand building, logistics, supply chain, transportation and business expansion to our Board based on his executive roles at well-known restaurant and consumer product companies. In addition to his vast operational experience, Mr. Gainor brings additional public company board experience to our Board.

 

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Sharon P. John

 

Director Since September 2014

Ms. John has been a director of the Company since September 2014. Ms. John has been the Chief Executive Officer, President and a member of the Board of Directors ofBuild-A-Bear Workshop, Inc. since June 2013. From January 2010 through May 2013, Ms. John served as President of Stride Rite Children’s Group LLC, a division of Wolverine Worldwide, Inc., a global designer, manufacturer and marketer of footwear and apparel. From 2002 through 2009, she held positions of broadened portfolio and increased responsibility at Hasbro, Inc., a multinational toy and board game company, including as General Manager & Senior Vice President of its U.S. Toy Division from 2006 to 2008 and General Manager & Senior Vice President of its Global Preschool unit from June 2008 through 2009. Ms. John also founded and served as Chief Executive Officer of Checkerboard Toys; served as Vice President, U.S. Toy Division with VTech Industries, Inc.; and served in a range of roles at Mattel, Inc. She started her career in advertising.the advertising industry.

Qualifications:

 

Ms. John’s qualifications to serve on our Board include her current role as CEO and director of a publicly traded global retail company and her broad merchandising, marketing, branding, sales and executive management experience, including key roles at well-known consumer brands.

 

 

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  PROPOSAL ONE — ELECTION OF DIRECTORS  

 

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Madeleine A. Kleiner

 

Director Since September 2011

Ms. Kleiner has been a director of the Company since September 2011 and is currently Chair of the Nominating and Governance Committee. From 2001 to 2008, Ms. Kleiner was Executive Vice President, General Counsel and Corporate Secretary for Hilton Hotels Corporation, a hotel and resort company. At Hilton, Ms. Kleiner oversaw the company’s legal affairs and the ethics, privacy and government affairs functions. She was also a member of the executive committee with significant responsibility for board of directors matters. From 1999 through 2001, Ms. Kleiner served as a director of a number of Merrill Lynch mutual funds operating under the Hotchkiss and Wiley name. From 1995 to 1998, Ms. Kleiner served as Senior Executive Vice President, Chief Administrative Officer and General Counsel of H. F. Ahmanson & Company and its subsidiary, Home Savings of America, where she was responsible for oversight of legal, human resources, legislative and government affairs and corporate communications. Previous to that, from 1977 to 1995, Ms. Kleiner was with the law firm of Gibson, Dunn & Crutcher, including as partner from 1983 to 1995, where she advised corporations and their boards primarily in the areas of mergers and acquisitions, corporate governance, securities transactions and compliance. Ms. Kleiner has served on the board of directors of Northrop Grumman Corporation since 2008, where she is a member of the audit committee.Audit Committee.

Qualifications:

 

Ms. Kleiner’s qualifications to serve on our Board include her experience as general counsel for two public companies, as outside counsel to numerous public companies and her past and current experience on public company boards. She brings to our Board experience as an executive for a major franchisor in the hospitality industry, as well as expertise in corporate governance, risk management, securities laws disclosure, securities transactions, mergers and acquisitions, Sarbanes-OxleySarbanes- Oxley compliance, human resources and executive compensation, government relations and crisis management.

 

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Michael W. Murphy

 

Director Since September 2002

Mr. Murphy has been a director of the Company since September 2002, and is currently Chair of the Audit Committee. Since April 1996,2002. Mr. Murphy has beenserved as President and Chief Executive Officer of Sharp HealthCare from April 1996 until his retirement in February 2019, and as member of the Sharp Board from 2007 through his retirement. Sharp is a comprehensive healthcare delivery system in San Diego which has been recognized with the Malcolm Baldrige National Quality Award, the nation’s highest Presidential honor for quality and organizational performance excellence. Prior to his appointment to President and Chief Executive Officer, Mr. Murphy served as Senior Vice President of Business Development and Legal Affairs for Sharp HealthCare. He began his career at Sharp in 1991 as Chief Financial Officer of Grossmont Hospital before moving to a system-wide role as Vice President of Financial Accounting and Reporting. Prior to this, Mr. Murphy provided certified public accounting services, including as a partner at Deloitte.

Qualifications:

 

Mr. Murphy’s qualifications to serve on our Board include his business and management experience leading Sharp HealthCare, an integrated healthcare delivery system with multiple facilities and more than 18,000 employees, his experience as a senior financial officer of Sharp HealthCare, and his experience as a Certified Public Accountant, and former partner at Deloitte. He also serves on the Board of Directors and executive committee of the California Chamber of Commerce. The Board benefits from Mr. Murphy’s extensive experience in accounting, finance, financial reporting, auditing, governance, labor relations, human resources and compensation, marketing, risk assessment and risk management, strategic planning and quality initiatives.

 

 

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  PROPOSAL ONE — ELECTION OF DIRECTORS  

    

 

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James M. Myers

 

Director Since December 2010

Mr. Myers has been a director of the Company since December 2010.2010 and is currently Chair of the Finance Committee. Mr. Myers has served as Chairman of the Board of Petco, the national pet supplies retailer sincefrom July 2015 until September 2018 and was also Petco’s Chief Executive Officer from 2004 until February 1, 2017. Previously, Mr. Myers held the following positions at Petco: President from 2011 until 2015; Chief Financial Officer from 1998 to 2004; and Vice President and Controller from 1990. Prior to that, Mr. Myers was a Certified Public Accountant with KPMG LLP. Mr. Myers serves on the board of the Retail Industry Leaders Association, and previously served on the board of Provide Commerce, ane-commerce retailer and public company, from 2004 to 2006, when Provide Commerce was acquired. Mr. Myers served on the audit committee at Provide Commerce.

Qualifications:

 

Mr. Myers’ qualifications to serve on our Board include more than 35 years of financial and retail operations experience, including 10 years as a CPA and public company auditor with KPMG LLP and 25 years with Petco, a national specialty retail chain with more than 1,500 stores in all 50 states, Puerto Rico and Mexico. Mr. Myers brings to the Board his experience with marketing and consumer brands, human resources and compensation, mergers and acquisitions, capital markets, financial reporting, financial oversight, and the financial and strategic issues facing public and private companies, as well as prior experience of serving on a public company board and audit committee.

 

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David M. Tehle

 

Director Since December 2004

Mr. Tehle has been a director of the Company since December 2004 and is currently Chair of the FinanceAudit Committee. He served as Executive Vice President and Chief Financial Officer of Dollar General Corporation, a publicly traded company, from June 2004 until his retirement in June 2015. Prior to that, Mr. Tehle served from 1997 to 2004 as Executive Vice President and Chief Financial Officer of Haggar Corporation, a manufacturing, marketing, and retail corporation. From 1996 to 1997, he was Vice President of Finance for a division of The Stanley Works, one of the world’s largest manufacturer of tools, and from 1993 to 1996, he was Vice President and Chief Financial Officer of Hat Brands, Inc. Since February 2016, Mr. Tehle has served on the board of directors of Genesco, Inc., a specialty retailer, selling footwear, headwear, sports apparel and accessories, where he serves on the audit committee. from February 2016 through June 2019. Since July 2016, he has served on the board of US Foods Holding Corp., where he chairs the audit committee. InAudit Committee; and since July 2017, Mr. Tehle joinedon the Board of National Vision, Inc. where he also chairs the audit committee.Audit Committee.

Qualifications:

 

Mr. Tehle’s qualifications to serve on our Board include his lengthy experience in senior financial management at public companies in the retail and manufacturing industries, and his service on three other boards of public companies in the retail and food service sectors. As an active CFO through June 2015, he was responsible for the overall financial management of a large retail organization. Mr. Tehle has experience in the oversight of strategic planning, human resources and compensation, finance, accounting, information systems, investor relations, treasury and internal audit functions. He brings valuable financial expertise and retail and management experience to the Board.

 

 

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  PROPOSAL ONE — ELECTION OF DIRECTORS  

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Vivien M. Yeung

Director Since April 2017

Ms. Yeung has been a director of the Company since April 2017. Ms. Yeung is currently an independent consultant working with companies and non-profits on strategy development. From January 2018 until November 29, 2019 Ms. Yeung served as General Manager, Venture at Lululemon Athletica Inc, a healthy lifestyle inspired athletic apparel company. She previously served as that company’s Chief Strategy Officer from May 2015, to January 2018, and as Vice President, Strategy from November 2011 to May 2015. From 2008 until 2011, Ms. Yeung was an independent consultant working with philanthropies, non-profit organizations and small to medium-sized enterprises on strategy development. From 2002 to 2008, she held positions with increasing responsibilities at Starbucks Coffee Company, a global premium food and beverage retailer, leading strategy development and process improvement for its North America, International, and Global Product organizations. Ms. Yeung started her career with Bain & Company, a global strategy consulting firm, advising clients on growth, operational and investment strategies across Greater China, Southeast Asia and Australia.

Qualifications:

•

Ms. Yeung’s qualifications to serve on our Board include her current strategic consulting work and recent strategic roles at publicly traded global retail companies, as well as her broad background in strategy development across channel development, marketing, product management, international growth, pricing and new business development, including at Lululemon, Starbucks and as a consultant at Bain.

Current Director Not Standing for Re-Election

 

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John T. Wyatt

 

Director Since May 2010

Mr. Wyatt has been a director of the Company since May 2010, and is currently Chair of the Compensation Committee. Mr. Wyatt has served as the Chief Executive Officer of KinderCare Education, an early childhood education company, since February 2012, and on the company’s board since 2012. From 2008 through February 2012, Mr. Wyatt was president of the Old Navy division of Gap Inc. He joined Gap Inc. in 2006, and previously served as President of the company’s GapBody division, and President of the company’s Outlet division. From 2004 to 2006, Mr. Wyatt was President and Chief Executive Officer at Cutter & Buck Inc., a designer and marketer of upscale apparel, including serving on the publicly held company’s board of directors. From 2002 to 2004, he served as President of Warnaco Intimate Apparel, a global designer and manufacturer, and from 1999 to 2002, he was Executive Vice President for Strategic Planning and eBusiness Strategies in the Saks family of companies. Additionally, Mr. Wyatt spent more than 20 years with VF Corporation, serving ultimately as President of Vanity Fair Intimates and Vanity Fair Intimates Coalition.

Qualifications:

Mr. Wyatt’s qualifications to serveWyatt will not be standing for re-election at the Annual Meeting, as described at Note 1 on our Board include his experience in senior management for major consumer brands in large global retail companies, including strategypages 5 and business development, marketing and brand building, product development, supply chain, finance and capital markets, labor relations, human resources and compensation, organizational development and succession planning, and his prior public company board experience. He brings extensive experience in growing consumer brands to the Board.15.

 

LOGO

Vivien M. Yeung

 

Director Since April 2017

Ms. Yeung has been a director of the Company since April 2017. Ms. Yeung has served as General Manager, Venture at Lululemon Athletica Inc, a healthy lifestyle inspired athletic apparel company, since December 2017. She previously served as that company’s Chief Strategy Officer since May 2015, and as Vice President, Strategy from November 2011 to May 2015. From 2008 until 2011, Ms. Yeung was an independent consultant working with philanthropies,non-profit organizations and small to medium enterprises on strategy development. From 2002 to 2008, she held positions with increasing responsibilities at Starbucks Coffee Company, a global premium food and beverage retailer, leading strategy development and process improvement for its North America, International, and Global Product organizations. Ms. Yeung started her career with Bain & Company, a global strategy consulting firm, advising clients on growth, operational and investment strategies across Greater China, Southeast Asia and Australia.

Qualifications:

Ms. Yeung’s qualifications to serve on our Board include her current and recent strategic roles at a publicly traded global retail company, as well as her broad background in strategy development across channel development, marketing, product management, international growth, pricing and new business development, including at Starbucks and as a consultant at Bain.

 

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  CORPORATE GOVERNANCE  

    

 

CORPORATE GOVERNANCE

We operate within a comprehensive corporate governance structure driving and expecting the highest standards of professional and personal conduct. Our Corporate Governance Principles and Practices, our ethics Code of Conduct: “The Integrity Playbook,” the charters for our Audit, Compensation, Finance, and Nominating and Governance Committees, and other corporate governance information, are available athttp://investors.jackinthebox.com. These materials are also available in print to any stockholder upon written request to the Company’s Corporate Secretary, Jack in the Box Inc., 9330 Balboa Avenue,9357 Spectrum Center Blvd., San Diego, CA 92123. The information on our website is not a part of this Proxy Statement and is not incorporated into any of our filings made with the Securities and Exchange Commission.

Directors’ Independence

 

 

The Jack in the Box Inc. Director Independence Guidelines provide that a director is not independent if he or she is: (a) a director, executive officer, partner or owner of 5% or greater interest in a company that either purchases from or makes sales to our Company that total more than one percent of the consolidated gross revenues of such company for that fiscal year; (b) a director, executive officer, partner or owner of 5% or greater interest in a company from which our Company borrows an amount equal to or greater than one percent of the consolidated assets of either our Company or such other company; or (c) a trustee, director or executive officer of a charitable organization that has received in that fiscal year discretionary donations from our Company that total more

than 1% of the organization’s latest publicly available national annual charitable receipts.

The Board has analyzed the independence of each Director. It has determined that all but Mr. Comma are independent directors under the NASDAQ Listing Rules, as well as the additional Director Independence Guidelines adopted by the Board. As part of its analysis, the Board determined that none of these Directors have a material relationship with the Company. Mr. Comma is our current Chief Executive Officer and an employee, and therefore he is not considered “independent” as that term is defined by the relevant listing rules and governance guidelines.

 

 

Board Meetings, Annual Meeting of Stockholders, and Attendance

 

 

In fiscal 2017,2019, each director attended more than 75% of the meetings of the Board and of the committees on which he or she served. The Board held seventen meetings in fiscal 2017.2019.

All ofWhile we do not have a formal attendance policy regarding attendance by our directors at our annual stockholder meetings, all the directors standing for election in 20182020 and who were Company directors at the time attended the 2017 Annual Meeting, and we currently expect all of our directors standing for election to be present at the 20182019 Annual Meeting.

 

 

Determination of Current Board Leadership Structure

 

 

The Nominating and Governance Committee’s Charter provides that the Committee will annually assess the leadership structure of the Board and recommend a structure to the Board for approval. In November 2017,2019, the Board of Directors, with input from the Nominating and Governance Committee, conducted this assessment, including assessing whether (i) the roles of Chief Executive Officer (“CEO”) and Chairman of the Board should continue to be combined, and (ii) the Board should continue to have an independent Lead Director. Based on the recommendation of the Nominating and Governance Committee, the Board believes that continuing with a combined Chairman/CEO is in the best interests of the Company and its stockholders.

The Board determinedstockholders in that having one individual servesuch a structure at Jack in both rolesthe Box provides for clear leadership, accountability, and alignment on corporate strategy. TheSpecifically, the Board believes that combining the roles of

Chairman and CEO puts Mr. Comma in the best positionenables that leader to use hisin-depth or her knowledge ofand expertise regarding our industry our business and its challenges, and our stakeholders, including our stockholders, employees, franchisees and guests, to provide the Board with the information and leadership needed to set agendas and direction for the Company. The Board does not believe that having an independent Chairman would make the Board’s risk oversight processes more effective. The Board noted that, during the tenures of Mr. Comma’s tenureComma and Linda Lang, his predecessor as ChairmanChair and CEO and of Mr. Goebel’s service as Lead Director, the Board has received timely and relevant information regarding the Company’s business.business and has operated smoothly, efficiently, and appropriately in fulfilling its obligations to the company’s stockholders. As noted earlier, the Board assesses its leadership structure on a regular basis and would revisit the current structure should it deem a change in that structure appropriate.

 

 

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  CORPORATE GOVERNANCE  

 

In reaching its conclusion, the Board also considered the longstanding policies and practices at Jack in the Box Inc. for strong, independent oversight, including:

 

a Board with a high degree of independence, including only onenon-independent member;

 

Board Committees (other than the Executive Committee) that are composed entirely of independent directors;

 

Board Committee Chairs who review and approve agendas before Committee meetings;

 

an annual evaluation of the performance of the Chairman and Chief Executive Officer by the Compensation Committee, which evaluation is then discussed with the independent directors of the Board in executive session;

regular executive sessions held by the Board and key Board Committees, attended only by independent directors;

 

the ability of the independent directors to call meetings of the Board and recommend agenda topics to be considered by the Board; and

 

a strong, independent Lead Director who has oversight responsibility for executive sessions and information flow to the Board.

Based on these factors, the Board has concluded that retaining the current Board leadership structure provides valuable stability and effective leadership.

 

 

Lead Director

 

 

The independent directors have appointed Mr. Goebel to serve as Lead Director. Our Corporate Governance Principles and Practices provide for the Lead Director to fulfill the following functions:

 

set agendas for the executive sessions of the Board;

 

serve on the Executive Committee;

preside at the executive sessions of the independent directors held following each scheduled board meeting;

 

act as a key communication channel between the Board and the CEO;

lead the Board in determining the format and adequacy of information the directors receive;

provide the Chairman with input on agendas for Board meetings and the schedule of meetings in order to assure sufficient time for discussion of all agenda items;

 

call meetings of independent directors; and

 

if requested by major stockholders, ensure that he or she is available for consultation and direct communication.

The Lead Director may perform other functions as the Board may direct.

 

 

The Board’s Role in Risk Oversight

 

 

Management is responsible for the Company’sday-to-day risk management. The Board’s role is to provide oversight of the processes designed to identify, assess and monitor key risks and risk mitigation activities. The Board fulfills its risk oversight responsibilities through (i) quarterly reports from the Vice PresidentHead of Internal Audit (VP, Internal Audit)(Internal Audit Head) to the Audit Committee relating to risk management and oversight; (ii) annualongoing enterprise risk management discussions by the full Board with the VP,Director of Internal Audit and Company leadership; (iii) receiving reports directly from managersemployees responsible for the management of particular business risks; and (iv) reports by each Committee Chair regarding the respective Committee’s oversight of specific risk topics.

The Board reviews cybersecurity risk with the Chief Information Officer regularly and has delegated oversight of

other specific risk areas to Committees of the Board. For example, the Audit Committee discusses with Management the Company’s major financial risk exposures and the steps Management has taken to monitor and mitigate those risks. As another example, the Compensation Committee discusses with its independent consultant, Management and the Compensation Risk Committee the risks arising in connection with the design of the Company’s compensation programs and succession planning. The risk oversight responsibility of each Board Committee is described in its committee charter available athttp://investors.jackinthebox.cominvestors.jackinthebox.com.

A more detailed discussion of the Compensation Committee’s oversight of compensation risk is found in the Section “Compensation Risk Analysis” contained later in this proxy.

 

 

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  CORPORATE GOVERNANCE  

    

 

The Board’s Role in Succession Planning

 

 

The Board expects Management to have an ongoing program for effective senior leadership development and succession. As reflected in our Corporate Governance Principles and Practices, the Board’s practice is to have the CEO review annually with the full Board the abilities of the key senior managers and their likely successors. The Board also considers management succession issues when meeting in executive session at each Board meeting. Additionally, the

Board oversees ongoing plans for management development and retention, as well as executive succession, including CEO succession. At times, the Board will delegate to the Compensation Committee or, as it has recently done, to an Ad Hoc Succession Planning Committee of the Board, responsibility to review and advise on succession planning, in which case the Board expects the Committee to review such

plans with Management and the Board and to make recommendations to the Board with respect thereto.

As announced on December 11, 2019, the Board has retained an executive search consulting firm to assist the Company and the Ad Hoc Succession Planning Committee of the Board in identifying an individual to succeed its current Chairman and Chief Executive Officer, Lenny Comma. Although Mr. Comma has not set a specific date to leave the Company, he has informed the Board he believes it is an appropriate time for the Company to move forward with identifying a successor with whom Mr. Comma can work on a smooth and efficient transition of leadership. The Board’s search is expected to include both internal and external candidates.

 

 

Committees of the Board

 

 

The Board of Directors has fivefour standing committees: Audit, Compensation, Nominating and Governance, Finance, and Executive.Finance. The Board decided to disband the Executive Committee in fiscal year 2019. The Board considers new committee and chair assignments, and the designation of a Lead Director, effective each February. Effective February 2017,2019, the Board of Directors approved the Board Committee assignments for the year andre-designated David Goebel as the Lead Director. Ms. Yeung joined the Board in April and was appointed to Committees in May. The current committee makeup is provided in the “Board Nominees” table in the Proxy Summary. In November 2019, the Board approved updates to the Committee assignments which will take effect following the 2020 annual meeting.

The authority and responsibility of each Committee is summarized below. A more detailed description of the functions of the Audit, Compensation, Nominating and Governance, and Finance Committees is included in each Committee charter available athttp://investors.jackinthebox.com.

Committee Member Independence. The Board has determined that each member of the Audit, Compensation, Nominating and Governance, and Finance Committees is an independent director for purposes of the NASDAQ Listing Rules as well as under the additional Director Independence Guidelines adopted by the Board. In addition, the members of the Audit Committee are all independent as required underRule 10A-3(b)(1)(ii) under the Securities Exchange Act of 1934, and the members of the Compensation Committee meet the definitions of (i) a“non-employee director” within the meaning of Rule16b-3 under the Securities Exchange Act of 1934, as amended, (ii) an “outside director” within the meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended (“IRC”), and (iii) the requirements ofRule 10C-1 under the Securities Exchange Act of 1934.

Executive Committee. The Executive Committee is authorized to exercise all powers of the Board in the management of the business and affairs of the Company while the Board is not in session. The Executive Committee did not meet in fiscal 2017.

Audit Committee..As more fully described in its charter, the Audit Committee assists the Board of Directors with overseeing:

 

the integrity of the Company’s financial reports;

the Company’s compliance with legal and regulatory requirements;

 

the independent registered public accountant’s performance, qualifications and independence;

 

the performance of the Company’s internal auditors; and

 

the Company’s processes for identifying, evaluating, and addressing major financial, legal, regulatory compliance, and enterprise risks.

The Audit Committee has sole authority to select, evaluate, and, when appropriate, replace the Company’s independent registered public accountants. The Audit Committee has appointed KPMG LLP (“KPMG”) as its independent registered public accountants for fiscal 20182020 and is asking the stockholders to ratify this appointment in Proposal 2. In the event the stockholders fail to ratify the appointment, the Audit Committee will reconsider the selection to determine, in its discretion, whether to retain KPMG or to select a different registered public accountant. Even if the selection is ratified, the Audit Committee in its discretion may direct the appointment of a different independent auditing firm at any time during the year.

The Audit Committee meets at least each quarter with KPMG, Management and the Company’s VP, Internal Audit Head, to review the Company’s annual and interim consolidated financial results before the publication of quarterly earnings press releases and the filing of quarterly and annual reports with the Securities and Exchange Commission. The Audit Committee also meets at least each quarter in private sessions with KPMG, Management, and the VP, Internal Audit.Audit Head. The Audit Committee also oversees the Company’s Business Ethics Program, which includes receiving a quarterly report from the Ethics Officer. The Board of Directors has determined that each member of the Audit Committee qualifies as an “audit committee financial expert” as defined by SEC rules.

The Audit Committee held sixfour meetings in fiscal 2017.2019. Additional information regarding the Audit Committee is set forth in the “Report of the Audit Committee” section of this proxy.

 

 

2224    JACK IN THE BOX INC.  ï  20182020 PROXY STATEMENT

    

 

  CORPORATE GOVERNANCE  

 

 

Compensation Committee.Committee. As more fully described in its charter, the Compensation Committee assists the Board in discharging the Board’s responsibilities relating to Director and executive officer compensation, and it oversees the performance evaluation of Management. The Compensation Committee reviews and approves the Company’s compensation philosophy, and the compensation of executive officers, including short- and long-term goals, and metric and compensation components (e.g., cash, equity and other forms of compensation). The Compensation Committee discusses with Management and reports to the Board any significant risks associated with the design and administration of the Company’s compensation programs and succession planning, and actions taken by Management to mitigate such risks. The Committee has approved the disclosures in the Company’s “Compensation Discussion and Analysis” section of this Proxy Statement. The Compensation Committee held six meetings in fiscal 2017.2019.

Finance Committee.As more fully described in its charter, the Finance Committee assists the Board in advising and consulting with Management concerning financial matters of importance to the Company. Topics considered by the Committee include the Company’s capital structure, financing arrangements, stock repurchase programs, capital investment policies, investment performance oversight for the Company’s retirement plans, the budget process, and the financial implications of major acquisitions and divestitures. The Finance Committee discusses with Management and reports to the Board major risk exposures and the monitoring and mitigation activities undertaken by Management in connection with the matters overseen by the Committee, including proposed major transactions, capital structure, investment portfolio including employee benefit plan investments, financing arrangements, and share repurchase programs. The Finance Committee held fivesix meetings in fiscal 2017.2019.

Nominating and Governance Committee.As more fully described in its charter, the Nominating and Governance Committee duties include assessing the makeup and diversity of the Board, identifying and recommending qualified candidates to be nominated for election as directors at the Annual Meeting or to be appointed by the Board to fill an existing or newly created vacancy on the Board; recommending members of the Board to serve on each Board committee; and annually reviewing and recommending the leadership structure of the Board. The Nominating and Governance Committee discusses with Management and reports to the Board major risk exposures in connection with matters overseen by the Committee. Its activities include:

 

evaluating director candidates for nomination;

 

evaluating the appropriate Board size;

 

reviewing and recommending corporate governance guidelines to the Board;

 

providing oversight with respect to the annual evaluation of Board, Committee and individual director performance;

 

���

overseeing the Company’s political and charitable contributions;

overseeing the Company’s political and charitable contributions;

 

assisting the Board in its oversight of the Company’s insider trading compliance program; and

 

recommending director education.

All nominees for election as directors currently serve on the Board of Directors and are known to the Nominating and Governance Committee in that capacity. The Nominating and Governance Committee held five meetings in fiscal 2017.2019.

Committee Member Independence

The Board has determined that each member of the Audit, Compensation, Nominating and Governance, and Finance Committees is an independent director for purposes of the NASDAQ Listing Rules as well as under the additional Director Independence Guidelines adopted by the Board. In addition, the members of the Audit Committee are all independent as required under Rule10A-3(b)(1)(ii) under the Securities Exchange Act of 1934, and the members of the

Compensation Committee meet the definitions of (i) a“non-employee director” within the meaning of Rule16b-3 under the Securities Exchange Act of 1934, as amended, (ii) an “outside director” within the meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended (“IRC”), and (iii) the requirements of Rule10C-1 under the Securities Exchange Act of 1934.

 

 

Executive Sessions

 

 

Our independent,non-employee Directors meet in executive session without Management present at each regularly scheduled meeting of the Board. Mr. Goebel is currently designated by the Board to act as the Lead Director for such executive sessions.

The Audit Committee also holds executive sessions at each regularly scheduled meeting, and the other Committees of the Board meet in executive session as they deem appropriate.

 

 

JACK IN THE BOX INC.ï  2020 PROXY STATEMENT25

  CORPORATE GOVERNANCE  

Board Composition and Refreshment

 

 

Policy Regarding Consideration of Director Candidates and Makeup and Diversity of the Board.The Nominating and Governance Committee has the responsibility to identify, screen, and recommend qualified candidates to the Board for nomination as directors. In evaluating director candidates, the Nominating and Governance Committee considers the qualifications listed in the Jack in the Box Inc. Corporate Governance Principles and Practices, which are available athttp://investors.jackinthebox.cominvestors.jackinthebox.com.

The following are some of the factors generally considered by the Nominating and Governance Committee in evaluating director candidates:

 

the appropriate size of the Board;

 

the perceived needs of the Company for particular skills, background, and business experience;

 

JACK IN THE BOX INC.ï  2018 PROXY STATEMENT23

  CORPORATE GOVERNANCE  

the skills, background, reputation and experience of the nominees, including whether those qualities add to a diversity of experiences, backgrounds, individuals, viewpoints and perspectives on the Board;

 

leadership, character and integrity;

 

independence from Management and from potential conflicts of interest with the Company;

 

experience with accounting rules and practices;

 

experience with executive compensation;

 

applicable regulatory and listing requirements, including independence requirements and legal considerations;

interpersonal and communications skills and the benefits of a constructive working relationship among directors; and

 

the desire to balance the considerable benefits of continuity with the periodic injection of the fresh perspective provided by new members.

The Nominating and Governance Committee may also consider such other factors as it may deem are in the best interests of the Company and its stockholders.

Retirement Policy. The Board has adopted a retirement policy under which directors may not stand for election or be appointed after age 73. The Board does not believe it should establish term limits which could disadvantage the Company by forcing out directors whose tenure and experience continue to add value to the workings of the Board.

Board Tenure Review Policy. The Company has a tenure review policy pursuant to which any director who has served more than 12 years on the Board shall submit to the Committee his or her voluntary offer to resign from the Board. The Committee undertakes a thorough review of any such director’s continued effectiveness and appropriateness for service and recommends to the full Board that it either accept or reject the offer of resignation; in the latter event, the long-tenured director may continue to serve on the Board and mustre-submit his or her resignation offer every three years for subsequent review.

 

 

Stockholder Recommendations and Board Nominations

 

 

In order to be evaluated pursuant to the Nominating and Governance Committee’s established procedures, stockholder recommendations for candidates for the Board must be sent in writing to the following address at least 120 days prior to the first anniversary of the date of the previous year’s Annual Meeting of Stockholders:

Nominating and Governance Committee of the Board of

Directors c/o Office of the Corporate Secretary

Jack in the Box Inc.

9330 Balboa Avenue9357 Spectrum Center Blvd.

San Diego, CA 92123

Any recommendation submitted by a stockholder to the Nominating and Governance Committee must include the same information concerning the potential candidate and the recommending stockholder as would be required under Article III, Section 3.16 of the Jack in the Box Inc. Bylaws if the stockholder wished to nominate the candidate directly.

The Committee considers all candidates regardless of the source of the recommendation. In addition to stockholder recommendations, the Committee considers recommendations from current directors, Company personnel and others. The Company generally retains a search firm to assist it in identifying and screening candidates, and in conducting reference checks. The Committee applies the same standards in evaluating candidates submitted by stockholders as it does in evaluating candidates submitted by other sources.

A candidate nominated by a stockholder for election at an Annual Meeting of Stockholders will not be eligible for election unless the stockholder proposing the nominee has provided timely notice of the nomination in accordance with the deadlines (at least 120 days and no more than 150 days prior to the first anniversary of the date of the previous year’s Annual Meeting of Stockholders) and other requirements set forth in the Company’s Bylaws. Article III, Section 3.16 of the Company’s Bylaws provides that, in order to be eligible for

26    JACK IN THE BOX INC.ï  2020 PROXY STATEMENT

  CORPORATE GOVERNANCE  

election as a director, a candidate must deliver to the Corporate Secretary statements indicating whether the candidate:

 

is a party to any voting commitment that has not been disclosed to the Company;

 

is a party to any voting commitment that could limit the nominee’s ability to carry out a director’s fiduciary duties;

 

is a party to any arrangements for compensation, reimbursement, or indemnification in connection with service as a director and has committed not to become a party to any such arrangement; and

will comply with the Company’s publicly disclosed policies and guidelines.

The foregoing is a summary of provisions of the Company’s Bylaws and is qualified by reference to the actual provisions of Article III, Section 3.16.

 

24    JACK IN THE BOX INC.ï   2018 PROXY STATEMENT

  CORPORATE GOVERNANCE  

 

Code of Conduct

 

 

Jack in the Box Inc. is committed to establishing and maintaining an effective ethics and compliance program that is intended to increase the likelihood of preventing, detecting, and correcting ethical lapses and violations of law or Company policy. In 1998, the Company adopted a Code of Conduct (the “Code”) which applies to all officers, and employees, as well as to our Board of Directors. The Company also provides our franchisees and significant vendors with our Code and with procedures for communicating any ethics or compliance concerns to the Company. The Code is revised from time to time, most recently in May 2017, when it wasre-named “The Integrity Playbook.”2018, following the sale of Qdoba Restaurant Corporation.

The Code is available on the Company’s website athttp://investors.jackinthebox.com.investors.jackinthebox.com. We will disclose amendments to, or waivers of our Code that are required to be disclosed under the securities rules, by posting such information on the Company’s website,www.jackintheboxinc.com. Any waiver of our Code for directors or executive officers must be approved by the Board of Directors. The Company did not grant any such waivers in fiscal 20172019 and does not anticipate granting any such waiver in fiscal 2018.2020.

 

 

Compensation Committee Interlocks and Insider Participation

 

 

No member of our Compensation Committee is an officer, former officer, or employee of the Company. During fiscal 2017,2019, no member of the Compensation Committee had any relationship with the Company requiring disclosure under Item 404 of RegulationRegulation S-K. During fiscal 2017,2019, no interlocking

interlocking relationship existed between any of our executive officers or Compensation Committee members, on the one hand, and the executive officers or Compensation Committee members of any other entity, on the other hand.

 

 

Additional Corporate Governance Principles and Practices

 

The Company has adopted Corporate Governance Principles and Practices which contain general principles and practices regarding the functioning of the Board of Directors and the Board Committees. The Nominating and Governance Committee regularly reviews the Principles and Practices and recommends revisions if and as appropriate. The full text of the Principles and Practices may be found athttp://investors.jackinthebox.com. The Principles and Practices address many of the items discussed above, and also include the following items:

Limitation on Other Board Service.Non-employee directors may not serve on the boards of more than three other public companies. Our corporate officersCorporate Officers are generally limited to serving on no more than one outside public company board, taking into consideration the time commitment and potential business conflicts inherent in such service.

Review of Director Skill Matrix.The Nominating and Governance Committee annually utilizes a skill matrix to assess the capabilities of the current directors and any needs for the Board as a whole. The matrix itself is updated if and as necessary to assure that it remains relevant to the evolving needs of the Company and the Board.

Board, Committee, and Individual Director EvaluationsEvaluations..The directors annually participate in a robust evaluation process focusing on an assessment of Board operations as a whole and the service of each director. Additionally, each of the Audit, Compensation, Finance, and Nominating and

Governance Committees conducts a separate evaluation of its own performance and the adequacy of its charter. The Nominating and Governance Committee coordinates the evaluation of individual directors and of the Board operations, and reviews and reports to the Board on the outcome of

JACK IN THE BOX INC.ï  2020 PROXY STATEMENT27

  CORPORATE GOVERNANCE  

these self-evaluations. As part of the evaluation process most years, the Lead Director will meet individually with each director to generate and discuss any ideas for improving the effectiveness of the director and/or the Board.

New Director Orientation and Continuing Education.The Board works with Management to schedulenew-director orientation programs and continuing education programs for

directors. Orientation is designed to familiarize new directors with the Company and the franchise restaurant industry as well as Company personnel, facilities, strategies and challenges, and corporate governance practices, including board ethics. Continuing education programs may includein-house and third-party presentations and programs.

 

 

28JACK IN THE BOX INC.  ï  20182020 PROXY STATEMENT25

 

  DIRECTOR COMPENSATION AND STOCK OWNERSHIP GUIDELINES  

 

DIRECTOR COMPENSATION AND STOCK OWNERSHIP GUIDELINES

The Compensation Committee of the Board of Directors (the “Committee”) is responsible for reviewing and recommending to the Board the form and amount of compensation for ournon-employee directors. The following discussion of compensation and stock ownership guidelines applies only to ournon-employee directors and does not apply to Mr. Comma. Mr. Comma is an employee of the Company, compensated as an executive officer, and does not receive additional compensation for service as a director.

The Board believes that total compensation for directors should reflect the work required in both (i) their ongoing oversight and governance role and (ii) their continuous focus on driving long-term performance and stockholder value. The compensation program is designed to provide pay that is competitive with directors in the Company’s Peer Group. (The methodology used in determining the companies in the Fiscal 2019 Peer Group, and thethose companies, in the Fiscal 2017 Peer Group are described in Section III.b of the Compensation Discussion & Analysis (“CD&A”) in this Proxy Statement). The program consists of a combination of cash retainers and equity awards in the form of time-vested restricted stock units (“RSUs”). “Competitive” is defined as approximating the 50th50th percentile of pay of Peer Group directors.

Director Compensation Program Review and Changes

 

 

Director compensation is reviewed periodically bywith an independent compensation consultant. Any changes to director cash retainers and/or annual stock award values

generally occur only after such review. There

In 2018, the Committee engaged the services of an independent consulting firm (other than its regular independent executive compensation consultant) to evaluate director compensation for future fiscal years. No changes were no changesmade to director compensation for fiscal 2017.2019.

 

 

Annual Compensation Program

 

a. Cash Retainers

 

Each director receives an annual cash retainer for his or her service on the Board, service on Board committees, service as chair of a Board committee, and service as Lead Director, as applicable. There are no meeting fees. Retainers are paid in a single installment on the first business day of the month following the Annual Stockholder Meeting each year. Each new director receives a prorated retainer that is paid on the first business day of the month following his or her appointment to the Board.

20172019 RETAINERS

 

Annual Board Service:

   

$65,000

       

 

$65,000

 

 

 

Lead Director:

   

$17,500

       

 

$17,500

 

 

 

Committee  Committee
Chair(1)		   Committee
Membership		   Committee
Chair(1)		   Committee
Membership		 

Audit

  

 

$

 

 

25,000

 

 

 

 

  

 

$

 

 

10,000

 

 

 

 

   

 

$25,000

 

 

 

   

 

$10,000

 

 

 

Compensation

  

 

$

 

 

25,000

 

 

 

 

  

 

$

 

 

7,500

 

 

 

 

   

 

$25,000

 

 

 

   

 

$  7,500

 

 

 

Finance

  

 

$

 

 

12,500

 

 

 

 

  

 

$

 

 

5,000

 

 

 

 

   

 

$12,500

 

 

 

   

 

$  5,000

 

 

 

Nominating & Governance

  

 

$

 

 

12,500

 

 

 

 

  

 

$

 

 

5,000

 

 

 

 

   

 

$12,500

 

 

 

   

 

$  5,000

 

 

 

(1)

Includes Committee membership retainer

Directors may elect to defer receipt of some or all of their cash retainers in the form of Common Stock equivalents under the

under the Jack in the Box Inc. Deferred Compensation Plan forNon-Management Directors (the “Director Deferred Compensation Plan”). The number of Common Stock equivalents credited to a director’s account is based on a per share price equal to the average of the closing price of Common Stock on the NASDAQ Stock Market for the 10 trading days immediately preceding the date the deferred compensation is credited to the director’s account. Under the Director Deferred Compensation Plan, to the extent dividends are paid, dividend equivalents and fractions thereof are converted to additional Common Stock equivalents and are credited to a director’s deferred compensation account as of the dividend payment dates. Each director’s account is settled in an equal number of shares of Common Stock upon the director’s termination of service from the Board. The Director Deferred Compensation Plan is anon-qualified plan under the IRC.Internal Revenue Code.

b. Expenses

The Company reimburses directors for customary and usual travel andout-of-pocket expenses incurred in connection with attendance at Board and committee meetings.

 

 

26JACK IN THE BOX INC.  ï  20182020 PROXY STATEMENT29

 

  DIRECTOR COMPENSATION AND STOCK OWNERSHIP GUIDELINES  

 

c. Annual Equity Grant — Restricted Stock Units

 

Each director receives an annual grant of RSUs under the Jack in the Box Inc. 2004 Stock Incentive Plan (“2004 Stock Incentive Plan”). We grant RSUs for the following reasons:

 

RSUs cause the value of directors’ share ownership to rise and fall with that of other stockholders, serving the objective of alignment with stockholder interests.

 

RSUs are a prevalent form of director compensation among the Company’s Peer Group.

The Company determines the number of RSUs to be granted by dividing the annual equity award value of $90,000 by the

closing price of Common Stock on the date of the annual

grant, which is the dayshortly after the annual meeting of stockholders, provided the director is providing services to the Company on the date of grant. RSUs vest on the earlier of the first business day 12 months from the date of grant (unless deferred) or upon the director’s termination of service with the Board. Directors may elect to defer receipt of shares issuable under RSU awards to termination of their Board service; and beginning with the February 2015 RSU awards, shares that have vested and been deferred earn a dividend (in the form of Common Stock equivalents) to the same extent the Company pays a dividend on outstanding shares.

 

 

Director Ownership and Stock Holding Requirements

 

The Board believes that all directors should maintain a meaningful personal financial stake in the Company to align their long-term interests with those of our stockholders. Pursuant to our Corporate Governance Principles and Practices, the Board desires that, within a reasonable period after joining the Board, eachnon-employee director hold Common Stock with a value of at least three times the annual cash Board service retainer. Direct holdings, unvested and deferred RSUs, and Common Stock equivalents count toward ownership value. In addition, each director is required to hold at least 50% of the shares resulting from RSU grants until termination of his or her Board service. The table below shows eachnon-employee director’s ownership value as of fiscalyear-end 2017, 2019, based on a closing stock price of $101.92$90.45 on the last trading day of fiscal 2017,2019, September 29, 2017.27, 2019. Each of our directors meets the stock holding requirement, except Ms. YeungBirch and Mr. Gainor who joined the board in April 2017, meetsMay 2019 and are still within the stock holding requirement.transition period for compliance.

 

Name  Board Service
Effective Date		   

Direct Holdings/

Unvested RSUs

   Deferred
Units &
Common Stock
Equivalents		   

Total

Value

   

Board Service

Effective Date

   Direct Holdings/
Unvested RSUs		   Deferred
Units &
Common Stock
Equivalents		   

Total

Value

 

Ms. Birch

  

 

May 2019

 

  

 

$     74,531

 

  

 

$              0

 

  

$

74,531

 

Mr. Gainor

  

 

May 2019

 

  

 

$   128,801

 

  

 

$              0

 

  

$

128,801

 

Mr. Goebel

  

 

 

 

 

Dec. 2008

 

 

 

 

  

 

$

 

 

1,665,067

 

 

 

 

  

 

$

 

 

482,082

 

 

 

 

  

 

$

 

 

2,147,149

 

 

 

 

  

 

Dec. 2008

 

  

 

$1,054,828

 

  

 

$   834,673

 

  

$

1,889,501

 

Ms. John

  

 

 

 

 

Sept. 2014

 

 

 

 

  

 

$

 

 

345,509

 

 

 

 

  

 

$

 

 

0

 

 

 

 

  

 

$

 

 

345,509

 

 

 

 

  

 

Sept. 2014

 

  

 

$   322,997

 

  

 

$   181,352

 

  

$

504,349

 

Ms. Kleiner

  

 

 

 

 

Sept. 2011

 

 

 

 

  

 

$

 

 

765,725

 

 

 

 

  

 

$

 

 

578,090

 

 

 

 

  

 

$

 

 

1,343,815

 

 

 

 

  

 

Sept. 2011

 

  

 

$   695,922

 

  

 

$   697,641

 

  

$

1,393,563

 

Mr. Murphy

  

 

 

 

 

Sept. 2002

 

 

 

 

  

 

$

 

 

165,722

 

 

 

 

  

 

$

 

 

6,063,934

 

 

 

 

  

 

$

 

 

6,229,656

 

 

 

 

  

 

Sept. 2002

 

  

 

$   163,443

 

  

 

$5,834,749

 

  

$

5,998,192

 

Mr. Myers

  

 

 

 

 

Dec. 2010

 

 

 

 

  

 

$

 

 

693,056

 

 

 

 

  

 

$

 

 

941,945

 

 

 

 

  

 

$

 

 

1,635,001

 

 

 

 

  

 

Dec. 2010

 

  

 

$   631,431

 

  

 

$1,228,582

 

  

$

1,860,013

 

Mr. Tehle

  

 

 

 

 

Dec. 2004

 

 

 

 

  

 

$

 

 

354,376

 

 

 

 

  

 

$

 

 

4,726,540

 

 

 

 

  

 

$

 

 

5,080,916

 

 

 

 

  

 

Dec. 2004

 

  

 

$   507,877

 

  

 

$4,310,666

 

  

$

4,818,543

 

Mr. Wyatt

  

 

 

 

 

May 2010

 

 

 

 

  

 

$

 

 

713,542

 

 

 

 

  

 

$

 

 

880,385

 

 

 

 

  

 

$

 

 

1,593,927

 

 

 

 

  

 

May 2010

 

  

 

$   649,612

 

  

 

$   970,800

 

  

$

1,620,412

 

Ms. Yeung

  

 

 

 

 

April 2017

 

 

 

 

  

 

$

 

 

0

 

 

 

 

  

 

$

 

 

0

 

 

 

 

  

 

$

 

 

0

 

 

 

 

  

 

April 2017

 

  

 

$   102,932

 

  

 

$   268,003

 

  

$

370,935

 

 

30JACK IN THE BOX INC.  ï  20182020 PROXY STATEMENT27

 

  DIRECTOR COMPENSATION AND STOCK OWNERSHIP GUIDELINES  

 

Fiscal 20172019 Compensation

 

The table below shows the compensation amounts for each of the Company’snon-employee directors.directors who served in fiscal 2019. Each director received an annual equity award of 9571,138 RSUs, valued at $90,000 on the date of grant (March 1, 2017)4, 2019), except Ms. YeungBirch and Mr. Gainor who joined the Board in April 2017.May 2019 and received a prorated award. The RSUs vest 100% on the earlier of the first business day 12 months from the date of grant or upon the director’s termination of service with the Board.

For fiscal 2017,2019, the average annual compensation of directors was $177,857,$176,875, comprised of (i) $87,857$86,875 in cash and (ii) $90,000 in RSUs. This average excludes dividend payments on deferred accounts and thepro-rated prorated compensation paid to Ms. Yeung.Birch and Mr. Gainor.

 

Name  Fees Earned or
Paid in Cash  (1)		   Stock
Awards (2)		   All Other
Compensation (3)		   Total   

Fees Earned or

Paid in Cash (1)

   

Stock

Awards (2)

   

All Other

Compensation (3)

   Total 

Ms. Birch

  

 

$58,125

 

  

 

$67,500

 

  

$

0

 

  

$

125,625

 

Mr. Gainor

  

 

$58,125

 

  

 

$67,500

 

  

$

0

 

  

$

125,625

 

Mr. Goebel

  

 

$

 

 

95,000

 

 

 

 

  

 

$

 

 

90,000

 

 

 

 

  

 

$

 

 

6,564

 

 

 

 

  

 

$

 

 

191,564

 

 

 

 

  

 

$95,000

 

  

 

$90,000

 

  

$

13,883

 

  

$

198,883

 

Ms. John

  

 

$

 

 

77,500

 

 

 

 

  

 

$

 

 

90,000

 

 

 

 

  

 

$

 

 

0

 

 

 

 

  

 

$

 

 

167,500

 

 

 

 

  

 

$77,500

 

  

 

$90,000

 

  

$

2,936

 

  

$

170,436

 

Ms. Kleiner

  

 

$

 

 

85,000

 

 

 

 

  

 

$

 

 

90,000

 

 

 

 

  

 

$

 

 

1,508

 

 

 

 

  

 

$

 

 

176,508

 

 

 

 

  

 

$87,500

 

  

 

$90,000

 

  

$

4,498

 

  

$

181,998

 

Mr. Murphy

  

 

$

 

 

95,000

 

 

 

 

  

 

$

 

 

90,000

 

 

 

 

  

 

$

 

 

78,852

 

 

 

 

  

 

$

 

 

263,852

 

 

 

 

  

 

$77,500

 

  

 

$90,000

 

  

$

87,313

 

  

$

254,813

 

Mr. Myers

  

 

$

 

 

80,000

 

 

 

 

  

 

$

 

 

90,000

 

 

 

 

  

 

$

 

 

11,315

 

 

 

 

  

 

$

 

 

181,315

 

 

 

 

  

 

$87,500

 

  

 

$90,000

 

  

$

18,354

 

  

$

195,854

 

Mr. Tehle

  

 

$

 

 

87,500

 

 

 

 

  

 

$

 

 

90,000

 

 

 

 

  

 

$

 

 

53,412

 

 

 

 

  

 

$

 

 

230,912

 

 

 

 

  

 

$95,000

 

  

 

$90,000

 

  

$

55,895

 

  

$

240,895

 

Mr. Wyatt

  

 

$

 

 

95,000

 

 

 

 

  

 

$

 

 

90,000

 

 

 

 

  

 

$

 

 

3,202

 

 

 

 

  

 

$

 

 

188,202

 

 

 

 

  

 

$95,000

 

  

 

$90,000

 

  

$

6,833

 

  

$

191,833

 

Ms. Yeung

  

 

$

 

 

70,769

 

 

 

 

  

 

$

 

 

0

 

 

 

 

  

 

$

 

 

0

 

 

 

 

  

 

$

 

 

70,769

 

 

 

 

  

 

$80,000

 

  

 

$90,000

 

  

$

4,049

 

  

$

174,049

 

 (1) 

“Fees Earned or Paid in Cash” reflects Board and Committee retainers paid to each director in 20172019 either (a) in cash or (b) deferred at the director’s election.election (in the case of Ms. Yeung, and Messrs. Goebel and Myers). Ms. Birch and Mr. Gainor, who joined the Board in April 2017,May 2019, each received apro-rated prorated retainer payment and equity award of 824 RSUs, valued at $67,500 on the date of grant (June 3, 2019) for board and committee service from April 2017May 2019 through the next annual stockholder meeting in February 2018.2020.

 
 (2)

“Stock Awards” reflects the grant date fair value of RSUs granted under the 2004 Stock Incentive Plan, computed in accordance with ASC 718.

 
 (3)

The amount reported in the “All Other Compensation” column reflects four dividend payments made during fiscal 20172019 that were credited to the applicable directors’ common stock equivalent accounts, in connection with (1) the respective director’s prior deferral of cash retainers, under the Director Deferred Compensation Plan described in the above section “a. Cash Retainers” and/or (2) beginning with the February 2015 RSU award, vested deferred RSUs as described in section c. “Annual Equity Grant – Restricted Stock Units.” Dividends are paid only to the same extent the Company pays a dividend on outstanding shares.

 

Outstanding Equity at FiscalYear-End

 

The table below sets forth the aggregate number of unvested and deferred RSUs held by ournon-employee directors at the end of fiscal 2017.2019.

 

Name  

Unvested

RSUs

   

Deferred

RSUs

   

Unvested

RSUs

   

Deferred

RSUs

 

Ms. Birch

  

 

824

 

  

 

0

 

Mr. Gainor

  

 

824

 

  

 

0

 

Mr. Goebel

  

 

 

 

 

957

 

 

 

 

  

 

 

 

 

2,333

 

 

 

 

  

 

1,138

 

  

 

4,290

 

Ms. John

  

 

 

 

 

957

 

 

 

 

  

 

 

 

 

0

 

 

 

 

  

 

1,138

 

  

 

1,957

 

Ms. Kleiner

  

 

 

 

 

957

 

 

 

 

  

 

 

 

 

5,647

 

 

 

 

  

 

1,138

 

  

 

7,604

 

Mr. Murphy

  

 

 

 

 

957

 

 

 

 

  

 

 

 

 

11,471

 

 

 

 

  

 

1,138

 

  

 

13,428

 

Mr. Myers

  

 

 

 

 

957

 

 

 

 

  

 

 

 

 

2,957

 

 

 

 

  

 

1,138

 

  

 

4,914

 

Mr. Tehle

  

 

 

 

 

957

 

 

 

 

  

 

 

 

 

14,640

 

 

 

 

  

 

1,138

 

  

 

14,640

 

Mr. Wyatt

  

 

 

 

 

957

 

 

 

 

  

 

 

 

 

8,596

 

 

 

 

  

 

1,138

 

  

 

10,553

 

Ms. Yeung

  

 

 

 

 

0

 

 

 

 

  

 

 

 

 

0

 

 

 

 

  

 

1,138

 

  

 

1,000

 

 

28JACK IN THE BOX INC.  ï  20182020 PROXY STATEMENT31

  REPORT OF THE AUDIT COMMITTEE  

    

  REPORT OF THE AUDIT COMMITTEE  

 

REPORT OF THE AUDIT COMMITTEE

 

The following is the report of the Audit Committee with respect to Jack in the Box Inc.’s audited consolidated financial statements for the fiscal year ended October 1, 2017.September 29, 2019.

The Audit Committee has reviewed and discussed the annual consolidated financial statements with Management and KPMG LLP (“KPMG”), the Company’s independent registered public accounting firm (the “independent auditor”). Management is responsible for the financial reporting process, the system of internal controls, including internal control over financial reporting, risk management and procedures designed to ensure compliance with accounting standards and applicable laws and regulations. The independent auditor is responsible for performing an independent audit of the consolidated financial statements and expressing an opinion on the conformity of those financial statements with accounting principles generally accepted in the United States of America, as well as expressing an opinion on the effectiveness of internal control over financial reporting. The Audit Committee is responsible for the appointment, compensation and oversight of the independent auditor. The Committee was also involved in selection of the firm’s lead engagement partner for fiscal 2017.

The Audit Committee met on sixfour occasions in the fiscal year ended October 1, 2017. TheSeptember 29, 2019. At each such meeting, the Audit Committee met with the independent auditor, with and without Management present, to discuss the results of its auditsaudit and quarterly reviews of the Company’s financial statements. The Audit Committee also discussed with the independent auditor the matters required to be discussed by Public Company Accounting Oversight Board (PCAOB) Statement on Auditing Standards No. 161301Communications with Audit Committees.The Audit Committee also received from the Company’s independent auditor the written disclosures and the letter required by applicable requirements of the PCAOB regarding their communications with the Audit Committee concerning independence and has discussed with the independent

auditor its independence from the

Company. The Audit Committee also has considered whether the provision ofnon-audit services to the Company is compatible with the independence of the independent auditor.

In connection with the Company’s evaluation of potential alternatives with respect to the Qdoba brand, during 2017August 2019, the Audit Committee approved the scope and fees for the engagement of KPMG to perform additional audit services in connection with the Qdoba business on a separate,carved-out basis.Company’s completed securitization transaction that closed in July 2019.

In performing its functions, the Audit Committee acts only in an oversight capacity and necessarily relies on the work and assurances of the Company’s Management and internal audit group as well as the Company’s independent auditor whose reports express opinions on the conformity of the Company’s annual financial statements with U.S. generally accepted accounting principles and on the effectiveness of internal control over financial reporting.

Based on the reviews and discussions referred to above, and the reports of KPMG, the Audit Committee recommended to the Board of Directors, and the Board of Directors approved, the inclusion of the audited consolidated financial statements in the Company’s Annual Report on FormForm 10-K for the fiscal year ended October 1, 2017,September 29, 2019, for filing with the SEC.

THE AUDIT COMMITTEE

Michael W. Murphy,David M. Tehle, Chair

Madeleine Kleiner

James M. Myers

David M. Tehle

Vivien M. Yeung

This report is not deemed to be incorporated by reference in any filing by the Company under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that the Company specifically incorporates this report by reference.

 

 

32JACK IN THE BOX INC.  ï  20182020 PROXY STATEMENT29

 

  INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS FEES AND SERVICES  

 

INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS FEES AND SERVICES

 

The following table presents fees billed for professional services rendered by KPMG, the Company’s independent registered public accountants, for the fiscal years ended October 1, 2017September 29, 2019 and October 2, 2016.September 30, 2018.

 

    2017   2016 

 

Audit Fees (1)

 

  

 

$

 

 

1,098,414

 

 

 

 

  

 

$

 

 

1,003,001

 

 

 

 

 

Qdoba Audit Fees(2)

 

  

 

 

 

 

880,000

 

 

 

 

  

 

 

 

 

—

 

 

 

 

 

Tax Fees (3)

 

  

 

 

 

 

612

 

 

 

 

  

 

 

 

 

8,750

 

 

 

 

 

All Other Fees

 

  

 

 

 

 

—

 

 

 

 

  

 

 

 

 

—

 

 

 

 

 

KPMG Total Fees

 

  

 

$

 

 

1,979,026

 

 

 

 

  

 

$

 

 

1,011,751

 

 

 

 

    2019   2018 

Audit Fees (1)

  $ 1,118,963   $1,185,987 

Securitization Related Audit Fees(2)

  $265,000   

 

—

 

Qdoba Audit Fees(3)

  

 

—

 

  $305,000 

Tax and other Fees(4)

  

 

—

 

  $12,314 

KPMG Total Fees

  $ 1,383,963   $1,503,301 
(1)

Audit Fees include fees for the audit of the Company’s consolidated annual financial statements and the audit of the effectiveness of internal controls over financial reporting. Audit Fees also include fees for review of the interim financial statements included in our Form10-Q quarterly reports and the issuance of consents and services that are normally provided by the independent registered public accounting firm in connection with statutory and regulatory filings or engagements.

(2)

Securitization Related Audit Fees include fees for the July 8, 2019 opening balance sheet audit of Different Rules, LLC, the fiscal 2019 audit of Jack in the Box SPV Guarantor, LLC and Subsidiaries, and comfort letter services.

(3)

Qdoba Audit Fees include fees for the audit of the Qdoba Restaurant Corporation’s (“QRC’s”)carved-out financial statements for fiscal years 2014, 2015year 2017 and 2016. Qdoba Audit Fees also include fees for review of the QRC’scarved-out interim financial statements and work performed byfor the independent registered public accounting firm through October 1, 2017 related to the audit of the QRC’scarved-out financial statements for fiscal year 2017.first quarter ended January 21, 2018.

(3)(4) 

Tax feesand other Fees include fees for services rendered for sales tax audit defense, and additionally in fiscal 2016, tax advice in connection with amendment to the Company’s credit facility and interest rate swaps.in fiscal 2018.

Registered Public Accountants’ Independence.The Audit Committee has considered whether the provision of the above-noted services, other than audit services, is compatible with maintaining KPMG’s independence, and has determined that the provision of such services has not adversely affected KPMG’s independence.

Policy on Audit CommitteePre-Approval of Services.The Company and its Audit Committee are committed to ensuring the independence of the independent registered public accountants, both in fact and in appearance. In this regard, the Audit Committee has established apre-approval policy in accordance with applicable securities rules. The Audit Committee’spre-approval policy is set forth in the Audit CommitteePre-Approval Policy, which is available on our website athttp://investors.jackinthebox.com.

 

 

30JACK IN THE BOX INC.  ï  20182020 PROXY STATEMENT33

 

  PROPOSAL TWO — RATIFICATION OF THE APPOINTMENT OF INDEPENDENT  REGISTERED PUBLIC ACCOUNTANTS  

 

PROPOSAL TWO — RATIFICATION OF THE APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS

The Audit Committee has appointed the firm of KPMG LLP as the Company’s independent registered public accountants for fiscal year 2018.2020. Although action by stockholders in this matter is not required, the Audit Committee believes it is appropriate to seek stockholder ratification of this appointment.

KPMG LLP has served as the Company’s independent auditor since 1986. One or more representatives of KPMG LLP is expected to be present at the Annual Meeting and will have the opportunity to make a statement and to respond to appropriate questions from stockholders present at the meeting. The following proposal will be presented at the Annual Meeting:

Action by the Audit Committee appointing KPMG LLP as the Company’s independent registered public accountants to conduct the annual audit of the consolidated financial statements of the Company and its subsidiaries for the fiscal year ending September 30, 2018,27, 2020, is hereby ratified, confirmed and approved.

Vote Required for Ratification

Ratification requires the affirmative vote of a majority of the votes present in person or represented by proxy at the Annual Meeting and entitled to vote on such proposal. Abstentions will be included in the number of shares present and entitled to vote and will have the same effect as a vote “AGAINST” this proposal. Brokers have discretionary authority to vote uninstructed shares on this matter.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” RATIFICATION OF THE APPOINTMENT OF KPMG LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS.

 

34JACK IN THE BOX INC.  ï  20182020 PROXY STATEMENT31

 

  PROPOSAL THREE — ADVISORY VOTE ON EXECUTIVE COMPENSATION  

 

PROPOSAL THREE — ADVISORY VOTE ON EXECUTIVE COMPENSATION

As required under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”), stockholders have the opportunity to cast an advisory vote on the compensation of our named executive officers (“NEOs”) as disclosed in the CD&A, the compensation tables, narrative disclosures, and related footnotes included in this Proxy Statement. This “Say on Pay” vote is advisory, and therefore nonbinding on the Company; however, the Compensation Committee of the Board of Directors, which is comprised entirely of independent directors, values the opinions of our stockholders and will take into account the outcome of the vote when considering future executive compensation decisions. We received a 96.3%98.1% favorable vote on Say on Pay at our February 2017March 2019 Annual Meeting of Stockholders.

The Compensation Committee engages the services of an independent compensation consultant to advise on executive compensation matters, including competitive compensation targets within the marketplace, and Company performance goals and analysis.

As discussed in more detail in the CD&A, our executive compensation program is designed to attract and retain a talented team of executives who can deliver on our commitment to build long-term stockholder value. The Compensation Committee believes our program is competitive in the marketplace, links pay to performance by rewarding our NEOs for achievement of short-term and long-term financial and operational goals (and, in some years, strategic goals), and aligns our NEOs’ interests with the long-termlong- term interests of our stockholders by providing a mix of performance and service-based equity awards. Specifically, a significant portion of compensation paid to our NEOs is based on the Company’s business performance.

Our fiscal 20172019 NEOs consist of three Brand Services executives supporting both brands, namelywere our Chief Executive Officer (CEO); Executive Vice President (EVP), Chief Financial Officer (CFO); EVP, Chief of Staff and Strategy; EVP, Chief Legal and Risk Officer; and Vice President, Chief Operating Officer (CLO), and the Jack in the Box Brand President and the Qdoba Brand President.(COO).

The Compensation Committee believes stockholders should consider the following key components of our compensation programs and governance practices when voting on this proposal:

 

Pay for Performance Orientation

 

• 

Competitive, Targeted PayPay.. We target executive base salary, total cash compensation, and total direct compensation to deliver competitive pay for performance that meets expectations, and the opportunity for higher pay only if performance exceeds expectations.

 

• 

Pay MixMix.. Our executive compensation program includes a mix of fixed and variable compensation, with a majoritysignificant portion of target compensation in the form of annual and long-term incentives that directly tie to achievement of key Company goals and drive long-term stockholder value.

 

• 

Long-Term Incentives (“LTI”).. Annual equity awards for our NEOs in fiscal 2019 included aan equal mix of stock options, performance shares (“PSUs”) and time-vested restricted stock units (“RSUs”) with holding requirements. The PSUs vest three years after the grant, depending on the Company’s achievement of goals over a three-fiscal year period. The grant guidelines, goals, and performance metrics for the LTIPSU awards granted in November 20162018 for the performance period fiscal 2017-20192019-2021 are further described in the CD&A.

• 

20172019 Annual IncentivesIncentives.. In 2017,2019, our NEOs’ annual incentive opportunity was based partly on (1) Operating Earnings Per Share (“EPS”EBIT (weighted 70%), with (a) the Brand Services executives’and (2) Restaurant Level Margin (weighted 30%). The incentive also partlypayout was based on a consolidatedthe Company performing between target and maximum performance on the Operating EBIT financial goal, and between threshold and target performance on the Restaurant OperatingLevel Margin (“ROM”) target; and (b)financial goal, as determined by the Jack in the Box and Qdoba Brand Presidents’ incentive opportunity partly based on their respective brand’s Earnings from Operations and ROM.Compensation Committee.

The three Brand Services NEOs earned an annual incentive payment based on the Company performing just above its threshold financial performance target for EPS. As the Company did not achieve its threshold consolidated ROM target (on a consolidated basis or by either brand), there was no payout for ROM.

The Jack in the Box and Qdoba Brand Presidents earned an annual incentive payment based on the Company’s EPS achievement, which was a smaller proportion of their total incentive opportunity than it was for the Brand Services executives. As neither brand met its threshold financial targets on Earnings from Operations or ROM, there was no payout for these metrics.

 

 

32JACK IN THE BOX INC.  ï  20182020 PROXY STATEMENT35

 

  PROPOSAL THREE — ADVISORY VOTE ON EXECUTIVE COMPENSATION  

 

Alignment with Long-Term Stockholder Interests

 

• 

Equity Awards. The largest portion of our NEOs’ total pay is delivered in equity awards (including options,(for fiscal 2019, PSUs and RSUs), with such equity awards accounting for 68% of the CEO’s targeted total direct compensation in fiscal 2017.2019.

Option awards and time-vested RSUs have multi-year vesting; performance awards are based on achievement of financial goals over a three-fiscal year period.

All RSUs, and PSUs beginning in fiscal 2016, are subject to a holding requirement

Time-vested RSUs have multi-year vesting; performance awards are typically based on achievement of financial goals over a three-fiscal year period. All RSUs, and earned PSUs beginning with the fiscal 2016 PSU award, are subject to a holding requirement under which our NEOs and other executive officers must hold at least 50% ofafter-tax net shares until termination or retirement.

• 

Stock Ownership Requirement. Our NEOs and other senior executivesexecutive officers are required to own a significant amount of the Company’s stock, based on a multiple of salary.

 

• 

No Evergreen – No Repricing. We do not have an evergreen plan, and we prohibit repricing equity awards without stockholder approval.

 

• 

No Pledging or HedgingHedging.. We As described in greater detail in the CD&A, we prohibit Section 16 officers (including our NEOs and Corporate Vice Presidentsother executive officers) from pledging Company stock as collateral for any obligation or engaging in hedging transactions involving our stock.

 

 

Recommendation

With the assistance of its independent compensation consultant, the Compensation Committee has thoughtfully developed our executive compensation programs, setting NEO compensation that links pay to performance and provides an appropriate balance of short-term and long-term incentives that are aligned with long-term stockholder interests. Accordingly, the Board of Directors recommends that you vote in favor of the following resolution:

“RESOLVED, that Jack in the Box Inc. stockholders approve, on an advisory basis, the compensation of the Company’s named executive officers as described in the Company’s Compensation Discussion and Analysis, tabular disclosures, and other narrative disclosures in this Proxy Statement for the 20182020 Annual Meeting of Stockholders.”

Approval of the Say on Pay proposal requires the affirmative vote of a majority of the shares present in person or represented by proxy at the Annual Meeting and entitled to vote on such proposal. Abstentions will be included in the number of shares present and entitled to vote and will have the same effect as a vote “AGAINST” the proposal. Brokernon-votes will not count as votes cast “FOR” or “AGAINST” the proposal and will not be included in calculating the number of votes necessary for approval for this proposal.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE APPROVAL OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS, AS DISCLOSED IN THIS PROXY STATEMENT.

 

36JACK IN THE BOX INC.  ï  20182020 PROXY STATEMENT33

 

  CD&A — I. EXECUTIVE SUMMARY  

 

COMPENSATION DISCUSSION AND ANALYSIS

This Compensation Discussion and Analysis (“CD&A”) explains the key elements of our executive compensation program and compensation decisions for our named executive officers (“NEOs”) in fiscal 2017.2019. The Compensation Committee of our Board of Directors (the “Committee”), with input from its independent compensation consultant, oversees these programs and determines compensation for our NEOs.

Our fiscal year 20172019 NEOs are:

 

•

  

Leonard A. Comma

  

Chairman and Chief Executive Officer (“CEO”), our principal executive officer

•

  

Jerry P. RebelLance F. Tucker

  

Executive Vice President, Chief Financial Officer (“CFO”), our principal financial officer

•

  

Frances L. AllenMark H. Blankenship (1)

  

Jack in the Box BrandFormer Executive Vice President, Chief of Staff and Strategy (“JIB President”CSS”)

•

  

Keith M. Guilbault

Qdoba Brand President (“Qdoba President”)

•

Phillip H. Rudolph(1)

  

Executive Vice President, Chief Legal and Risk Officer (“CLO”) and Corporate Secretary

•

Marcus D. Tom

Vice President, Chief Operating Officer (“COO”)

(1)

In connection with our restructuring following our completed sale of Qdoba Restaurant Corporation and other events, Dr. Blankenship ceased to be an officer and employee of the company following his January 3, 2020 separation date, and Mr. Rudolph is expected to cease to be an officer and employee following his anticipated February 28, 2020 separation date.

Quick Reference Guide

 

Executive Summary

   Section I 

Compensation Principles and Objectives

   Section II 

Compensation Competitive Analysis

   Section III 

Elements of Compensation

   Section IV 

Compensation Decision-Making Process

   Section V 

Fiscal 20172019 Compensation

   Section VI 

Additional Compensation Information

   Section VII 

34    JACK IN THE BOX INC.ï   2018 PROXY STATEMENT

CEO Pay Ratio Disclosure

  Section VIII 

  CD&A — I. EXECUTIVE SUMMARY  

I. EXECUTIVE SUMMARY

 

Jack in the Box is committed to responsibly building long-term stockholder value. Our executive compensation program is designed to deliver on this commitment by using a balanced performance measurement framework that is aligned with the key drivers of Company performance and stockholder value creation. This executive summary provides an overview of our fiscal 20172019 performance, compensation framework and pay actions, targeted total direct compensation, and CEO pay for performance alignment.

a. Fiscal 20172019 Review

Fiscal 2019 was the Company’s first full year as an asset-light, single-brand organization. Several restructuring efforts were completed during the year, including the completion of the transition services agreement with Qdoba. Through implementation of the Securitization in the fiscal year, the Company achieved its target leverage ratio of approximately five times EBITDA. In addition to these structural changes, the Company continued to drive systemwide financial and operational performance. In fiscal 2019, we achieved our ninth consecutive year of same-store sales growth.

Returns to Stockholders

The Company returned more than $165 million to shareholders through stock buybacks and dividends. The Company’s stock price increased 6.2%7.3% to $101.92$90.45 per share at fiscalyear-end (“FYE”) 2017,2019, versus $95.94$83.83 at FYE 2016, on top of a 20.4% increase in FY 2016.

Cumulative total shareholder return increased year over year, and increased for the sixth consecutive year in fiscal 2017. TheTSR-CEOpay-for-performance alignment graph in Section I.d. below illustrates how CEO pay has corresponded to performance over the last five years.

Financial and Operational Results

While we made progress on key strategic initiatives, fiscal 2017 was a challenging year for the Company.

Systemwide same-store sales grew 0.5% at Jack in the Box (“JIB”), but declined 1.4% at Qdoba.

•

Consolidated restaurant operating margin (“ROM”)1 declined 260 basis points to 17.6% of sales, with JIB margin down 110 basis points to 20.1% of sales, and Qdoba margins down 450 basis points to 13.6% of sales.

•

Operating Earnings Per Share (“Operating EPS”)2 of $3.88 per share increased approximately 3% over prior year, excluding the $0.09 benefit from the 53rd week in fiscal 2016.

The Company made progress onkey strategic initiatives, including reducing our corporate general and administrative expenses (“G&A”), and refranchising 178 JIB restaurants which increased our franchise mix from 82% at the end of fiscal 2016 to 88% at 2017 fiscalyear-end.

Impact on Incentive Compensation

The Operating EPS result was just slightly above the minimum threshold goal for annual incentive compensation.

The Company fell short of its threshold goals on systemwide sales and ROM at both brands.

As a result, the CEO and other Brand Services NEOs received annual incentive payouts of less than 9% of target, and the Jack in the Box and Qdoba brand presidents received below 4% of target.

Other

During fiscal 2017, the Company retained Morgan Stanley & Co. LLC to assist our Board of Directors in its evaluation of potential strategic alternatives with respect to the Qdoba business, as well as other ways to enhance shareholder value. Following the completion of a robust process, our Board determined that the sale of Qdoba is the best alternative for enhancing shareholder value and is consistent with our desire to transition to a less capital-intensive business model. In December 2017, we announced that the Company had entered into an agreement to sell Qdoba Restaurant Corporation for approximately $305 million in cash. The transaction is expected to close by April 2018.

1

As set forth in Note 1 in the Proxy Summary, restaurant operating margin is a non-GAAP measure. For a reconciliation of this measure to the most comparable GAAP measure, please refer to the Company’s Current Report on Form 8-K and accompanying press release filed November 29, 2017.

2

As set forth in Note 2 in the Proxy Summary, Operating EPS is anon-GAAP measure. For a reconciliation of this measure to the most comparable GAAP measure, please refer to the Company’s Current Report on Form8-K and accompanying press release filed November 29, 2017.

 

JACK IN THE BOX INC.  ï  20182020 PROXY STATEMENT3537

 

  CD&A — I. EXECUTIVE SUMMARY  

    

 

Financial and Operational Results

•

Systemwide same-store sales(1) increased 1.3% over prior year, marking the ninth consecutive year of same-store sales growth.

•

Operating Earnings Per Share(2) (“Operating EPS”) of $4.35 per share increased 14.8% from the prior year.

•

Adjusted EBITDA(3) increased 1.8% to $269.0 million, compared with $264.2 million in the prior year.

•

Operating EBIT(4) was $207.8 million, a 6% increase versus $196 million in the prior year.

•

Restaurant Level Margin(5) decreased by 20 basis points to 26.2% of company restaurant sales.

Through implementation of a securitization in the fiscal year, the Company achieved its target leverage of approximately five times EBITDA.

Incentive Compensation Outcomes

•

For the fiscal 2019 annual incentive plan, the Jack in the Box Operating Earnings Before Interest and Taxes (“Operating EBIT”)(4) result (weighted 70%) was 149% of target goal, and the Jack in the Box Restaurant Level Margin performance (weighted 30%) was 54% of target goal. In total, the CEO and other NEOs received an annual incentive payout of 120.5% of target payout.

•

For PSUs vested and payable in 2019 (granted in November 2016), the Jack in the Box Return on Invested Capital (ROIC)(6) FYE19 result was 150% of target, and the Systemwide Sales result for the Performance Period covering fiscal 2017-2019 (with goals established at the beginning of each fiscal year of the Performance Period) was 40% of target. In total, the CEO and other NEOs received a weighted payout of 95% of the target number of PSUs granted.

(1)

Systemwide same-store sales represent changes in sales at company and franchise restaurants open more than one year. Franchise sales represent sales at franchise restaurants and are revenues of our franchisees. We do not record franchise sales as revenues; however, our royalty revenues and percentage rent revenues are calculated based on a percentage of franchise sales. We believe system same-store sales information is useful to investors as it has a direct effect on the Company’s profitability.

(2)

Operating Earnings Per Share is a non-GAAP measure that represents diluted earnings per share from continuing operations on a GAAP basis excluding gains or losses on the sale of company operated restaurants, restructuring charges, loss on early termination of interest rate swaps, loss on early extinguishment of debt, the non-cash impact of the Tax Cuts and Jobs Act in fiscal year 2018, and the excess tax benefits from share-based compensation arrangements. See Appendix A — Reconciliation of non-GAAP measurements to GAAP Results.

(3)

Adjusted EBITDA represents net earnings on a GAAP basis excluding earnings or losses from discontinued operations, income taxes, interest expense, net, gains or losses on the sale of company-operated restaurants, impairment and other charges, net, depreciation and amortization, and the amortization of franchise tenant improvement allowances and other.

(4)

Operating EBIT is a non-GAAP measure defined by the Company as net earnings before interest expense, net and income taxes, excluding gains or losses on the sale of company operated restaurants, restructuring costs, and earnings or losses from discontinued operations. See Appendix A — Reconciliation of non-GAAP measurements to GAAP Results.

(5)

Restaurant Level Margin is defined as Company restaurant sales less restaurant operating costs (food and packaging, payroll and employee benefits, and occupancy and other costs) and is neither required by, nor presented in accordance with GAAP. Restaurant Level Margin excludes revenues and expenses of our franchise operations and certain costs, such as selling, general, and administrative expenses, depreciation and amortization, impairment and other charges, net, gains or losses on the sale of company-operated restaurants, and other costs that are considered normal operating costs. See Appendix A — Reconciliation of non-GAAP measurements to GAAP Results.

(6)

Adjusted ROIC is calculated as after-tax earnings from operations, excluding gains or losses on the sale of company-operated restaurants and restructuring charges, divided by average invested capital (which excludes accumulated other comprehensive income or loss related to the Company’s retirement plans).

38    JACK IN THE BOX INC.ï  2020 PROXY STATEMENT

  CD&A — I. EXECUTIVE SUMMARY  

b. Fiscal 20172019 Compensation Framework and Key Pay Actions

Our executive compensation program is designed to motivate, engage, and retain a talented executive leadership team and to appropriately reward them for their contributions to our business. Our performance measurement framework consists of a combination of financial and operationalmultiple performance metrics, varying time horizons, and multiple equity vehicles. The largest portion of our executives’ compensation is variable and is directly tied to the achievement of annual and longer-term financial and operating goals. In combination, these metrics and variables provide a balanced and comprehensive view of performance and drive the Committee’s executive compensation decisions.

Consistent with the fundamental principle that compensation programs should align pay with performance, the Company’s fiscal 20172019 performance directly impacted compensation decisions and pay outcomes, as shown in the chart below that summarizes the compensation framework, key fiscal 20172019 performance measures and 2017 pay actions.

Performance Measurement Framework with 2019 Pay

 

LOGO

In fiscal 2017, the Company only gave pay increases to restaurant employees – no increases were given to NEOs, executives and staff as part of an enterprise-wide cost savings initiative. Base Salary Annual Incentive BRAND SERVICES CEO, CFO, CLO 70% Jack in the Box Inc. Operating Earnings Per Share (EPS) 30% Consolidated Restaurant Operating Margin (ROM) JACK IN THE BOX Brand President 30% Jack in the Box Inc. Operating Earnings Per Share (EPS) 40% JIB Earnings from Operations 30% JIB Restaurant Operating Margin (ROM) QDOBA Brand President 30% Jack in the Box Inc. Operating Earnings Per Share (EPS) 40% Qdoba Earnings from Operations 30% Qdoba Restaurant Operating Margin (ROM) 2017 Results Annual incentives were paid at 8.8% of target payout, based on the weighted results below. EPS was just above the minimum threshold goal (8.8% of target payout). Consolidated ROM did not reach the minimum threshold goal (No payout). 2017 Results Annual incentives were paid at 3.8% of target payout, based on the weighted results below. EPS was just above the minimum threshold goal (3.8% of target payout). JIB Earnings from Operations did not reach the minimum threshold goal (No payout). JIB ROM did not reach the minimum threshold goal (No payout). 2017 Results Annual incentives were paid at 3.8% of target payout, based on the weighted results below. EPS was just above the minimum threshold goal (3.8% of target payout). Qdoba Earnings from Operations did not reach the minimum threshold goal (No payout). Qdoba ROM did not reach the minimum threshold goal (No payout). Long-Term Incentive 34% Stock Options 33% vesting per year 7 year term 33% Performance Share Units (PSUs) Vesting based on performance goal achievement over three-fiscal year performance period, with 50% holding requirement 33% Restricted Stock Units (RSUs) 25% vesting per year, with 50% holding requirement ROIC Goal (50%) Return on Invested Capital From Operations (“ROIC”) Sales Goal (50%) Consolidated Systemwide Sales (All Restaurants) 2017 Actions For the FY 2017-2019 PSU grant, the Committee established two goals: (1) an adjusted ROIC from Operations measure based on the third fiscal year of the three-fiscal year performance period (FY 2019), and (2) Consolidated Systemwide Sales Growth, with goals set annually at the beginning of each fiscal year of the three-fiscal year performance period. For the FY 2015-2017 PSU grant, the Committee certified goal achievement and approved a payout of 118.6% of target PSUs granted based on performance during the three-fiscal year performance period, as described in Section VI.c.
Base Salary

Long-Term Incentive

Following a review of total direct compensation relative to competitive market data of our Compensation Peer Group, and consideration that the Company was in the midst of its restructuring as a single brand and the evaluation of strategic alternatives, including a potential sale, the Committee determined not to make changes to the base salaries of our NEOs in fiscal 2019.

For fiscal 2019, due to the additional trading volatility resulting from the Company’s potential sale, the Committee awarded equity grants consisting only of Performance Shares and Restricted Stock Units, weighted equally, and did not grant stock options.

•50% Performance Shares (PSUs)

Vesting based on achievement over a three-fiscal year performance period (FY 2019–2021), with 50% holding requirement

• ROIC Goal (50%)

(Return on Invested Capital from Operations)

• Systemwide Sales Goal (50%)

(Company and Franchise Restaurants)

•50% Restricted Stock Units (RSUs)

25% vesting per year over four years, with 50% holding requirement

Annual Incentive

•Performance Goals

•  Operating EBIT (70%)

•  Restaurant Level Margin (30%)

•Fiscal 2019 Results

Annual incentives were paid at120.5% of target payout based on the weighted results below:

•   JIB Operating EBIT performance was between target and maximum, resulting in 149% of target payout for this goal

•   Restaurant Level Margin was between threshold and target, resulting in 54% of target payout for this goal

Fiscal 2019 Actions Relating to PSU Grants

• For the FY 2019-2021 PSU grant, the Committee established two goals (1) an adjusted ROIC from Operations measure, based on the third fiscal year of the three-fiscal year performance period (FY 2021), and (2) Systemwide Sales growth, with goals set annually at the beginning of each fiscal year of the three-fiscal year performance period.

•For the FY 2017-2019 PSU grant, the Committee certified goal achievement and approved a payout of 95.0% of target PSUs granted based on performance during the three-fiscal year performance period, as described in Section VI.d. of the CD&A.

 

36JACK IN THE BOX INC.  ï  20182020 PROXY STATEMENT39

  CD&A — I. EXECUTIVE SUMMARY  

c. Fiscal 2019 Pay Mix

As reflected in the following charts, a significant percentage of our NEO’s target total direct compensation (“TDC”) (consisting of base salary, target annual incentive, and target long-term incentive) is in the form of variable at-risk, rather than fixed, compensation. Consistent with our compensation principles and objective of pay for performance alignment, the largest proportion of target TDC is in the form of annual incentives and long-term incentives (through equity awards in the form of PSUs and RSUs) that represented 84% of TDC for our CEO and an average of 66% of TDC for our Other NEOs. For fiscal 2019, 50% of our long-term incentives were delivered in PSUs and 50% were delivered in RSUs — as a result, explicitly at-risk components (annual incentive and PSUs) represented 50% of TDC for our CEO and an average of 44% of TDC for our Other NEOs.

LOGOLOGO

(1)

The target TDC excludes a) the special bonuses awarded to Messrs. Rudolph and Tom, and b) the special retention equity awards made to Messrs. Tucker and Tom, as described more fully in section VI.c. and VI.d. respectively.

CEO - 2019 Total Direct Compensation

For fiscal 2019, the Committee determined that the target TDC for our CEO would be $5.85 million (consisting of base salary of $925,000, target annual incentive of $925,000, and target long-term incentive of $4.0 million), which aligned with the median TDC “Market” compensation based on market data and advice provided by the Committee’s independent consultant (as described in CD&A Section III.a. “Compensation Competitive Analysis”).

  

 

  Target   SCT 

Salary

  $925,000   $925,000 

Annual Incentive

  $925,000   $1,114,625 

Long-Term Incentive (LTI)

  $4,000,000   $3,905,997 

Fiscal 2019 Annual TDC

  $5,850,000   $5,945,622 

The SCT column at left shows the CEO’s actualTDC-- as reflected in the “Summary Compensation” (“SCT”) and “Grants of Plan-Based Awards” tables. The difference between Target and SCT compensation is attributable to: (a) on the Annual Incentive, Mr. Comma’s fiscal 2019 payout amounting to 120.5% of target (due to the Company performing above target performance overall on its goals); and (b) on the LTI: (i) the difference in stock price of the long-term incentive awards between the price on the actual grant date and the earlier60-day average price used by the Committee to establish the number of RSUs and PSUs to be granted; and (ii) the SCT use of the grant date fair value for RSU and PSU awards, as described in the footnotes to those tables.

The LTI components are described in detail in proxy Section VI.d. “Fiscal 2019 Compensation — Long-Term Incentive Compensation.”

40    JACK IN THE BOX INC.ï  2020 PROXY STATEMENT

    

 

  CD&A — I. EXECUTIVE SUMMARY  

 

c. Fiscal 2017 Targeted Total Direct Compensation Mix

The chart below shows the percentage breakdown of targeted total direct compensation (“TDC”) (consisting of base salary, target annual incentive, and target long-term incentive) for each NEO in fiscal 2017. Target TDC is set within a competitive range of the median of “Market” compensation based on market data and advice provided by the Committee’s independent consultant (as described in Section III.a “Compensation Competitive Analysis”). Consistent with our objective of pay for performance alignment (described in Section II “Compensation Principles and Objectives”), the largest portion of compensation is variable,at-risk pay in the form of annual and long-term incentives, including annual incentive, stock options and PSUs. In fiscal 2017, 61.5% of our CEO’s pay was at risk, and54%-55% of pay for our other NEOs was at risk.

LOGO

CEO — 2017 TDC

For fiscal 2017, the Committee determined that the target TDC for our CEO would be $5.7 million (consisting of base salary of $900,000, target annual incentive of $900,000, and target long-term incentive of $3.9 million), which was approximately 7% below the TDC Market median.

    Target   SCT (1) 

Salary

  $900,000   $900,000 

Annual Incentive

  $900,000   $78,660 

Long-Term Incentive (LTI)

  $3,900,000   $3,654,992 

FY 2017 Annual TDC

  $5,700,000   $4,633,652 
(1)

This column shows the CEO’s actualTDC-- as reflected in the “Summary Compensation” (“SCT”) and “Grants of Plan-Based Awards” tables. The difference between Target and SCT compensation is due to: (a) on the Annual Incentive, Mr. Comma’s fiscal 2017 payout amounting to only 8.8% of target (due to the Company substantially under-performing target performance on its goals); and (b) on the LTI: (i) the difference in stock price between the price on the actual grant date of the long-term incentive awards and the earlier60-day average price used by the Committee to establish the number of options, RSUs and PSUs to be granted; and (ii) the SCT use of the grant date fair value for RSU and PSU awards, as described in the footnotes to those tables.

The LTI components are described in detail in proxy Section VI.d “Fiscal 2017 Compensation — Long-Term Incentive Compensation.”

JACK IN THE BOX INC.ï  2018 PROXY STATEMENT37

  CD&A — I. EXECUTIVE SUMMARY  

d. CEO Compensation and Pay for Performance Alignment

Each year, the Committee assesses our CEO’s actual compensation relative to the Company’s performance. The following graph shows the relationship of our CEO’s actual TDC (as reflected in the SCT) compared to our cumulative total shareholder return (TSR) performance in each of the last five fiscal years. Actual TDC in this chart includes base salary, actual annual incentive earned for the year, and the long-term incentive value based on the stock price at the time of grant, as detailed in the section immediately above. Pay for performance alignment is shown relative to the TDC of our current CEO, Mr. Comma, for fiscal 2014-2017, and relative to our former CEO, Ms. Lang, for fiscal 2013.

As illustrated, pay and performance are generally aligned — with higher pay in the Company’searlier years and in fiscal 2019 given strong financial and TSR performance, has increased each year, and CEO compensation was generally aligned with the Company’s TSR. However, CEOlower pay decreased despite an increase in TSR in fiscal 2014 (during the transition from the former CEO to the current CEO). And inwhen financial performance did not meet goals (in fiscal 2017 CEO pay decreased fromand 2018) and TSR declined (in fiscal 2016 due to the Company failing to achieve internal performance targets (our CEO earned 167% of target on his annual incentive in FY 2016, but less than 9% of target in FY 2017)2018). Even without the impact of the 2016 special award described in Note 2 to the chart, ongoing CEO total direct compensation decreased from 2016 to 2017.

 

 

LOGOLOGO

(1)

(1)    The graph above shows the cumulative return to holders of the Company’s Common Stock at September 30th of each year assuming $100 was invested on September 30, 2012,2014, and assumes reinvestment of dividends. The Company began paying dividends in fiscal 2014.

(2)

(2)    2016 Special Retention Award: In fiscal 2016, the CEO was awarded a special stock award (reflected in the top portion of the FY 2016 bar) to recognize the criticality of his role and the Company’s strong performance under his leadership, and to incentivize him to remain with the Company while providing measured increases to ongoing, target TDC. Thisone-time RSU grant (detailed in our 2017 Proxy Statement), which cliff vests 50% four years from the grant date and the remaining 50% five years from grant, is not included in “total direct compensation.”grant.

e.Say-on-Pay Feedback from Stockholders

In 2017,2019, we sought an advisory vote from our stockholders regarding our executive compensation program and received a 96.3%98.1% favorable vote supporting the program. Each year, the Committee considers the results of the advisory vote as it completes its annual review of each pay element and the compensation provided to our NEOs and other executives. Given the significant level of stockholder support and our stockholder outreach throughout the year, the Committee concluded that our executive compensation program continues to align executive pay with stockholder interests and provides competitive pay that encourages retention and effectively incentivizes performance of talented NEOs and executives. Accordingly, the Committee determined not to make any significant changes to our programs as a result offollowing the vote. The Committee will continue to consider the outcome of oursay-on-pay votes and our stockholders’ views when making future compensation decisions for the NEOs and executives.

 

38JACK IN THE BOX INC.  ï  20182020 PROXY STATEMENT41

 

  CD&A — II. COMPENSATION PRINCIPLES AND OBJECTIVES  

 

II. COMPENSATION PRINCIPLES AND OBJECTIVES

 

The Committee focuses on the following principles and objectives in determining and measuring the various components of our executive compensation programs:

 

Competitive target pay structure, including base salary, annual incentive, and long-term incentives that enable us to attract and retain talented, experienced executives who can deliver successful business performance and drive long-term stockholder value.

 

Pay for performance alignment, with a higher percentagethe largest proportion of executive pay in the form of annual and long-term incentives that directly tie payouts, if any, to the achievement of incentive goals.corporate goals and strategies.

 

Comprehensive goal setting, with financial, operational, and/orand strategic performance metrics that drive long-term stockholder value.

 

Incentivizing balanced short-term and long-term executive decision making, through variable compensation components (cash and stock) using varying timeframes.

 

Executive alignment with stockholder interests, through stock ownership and holding requirements.requirements that build and maintain an executive’s equity investment in the company.

 

Sound governance practices and principles in plan design and pay decisions, with the Committee considering both what and how performance is achieved.

 

Management of compensation risk, by establishing incentive goals that avoid placing too much emphasis on any one metric or performance time horizon, thereby discouraging excessive or unwise risk-taking.

Internal Pay Equity

Our compensation programs are designed so that potential compensation opportunities are appropriate relative to each executive’s level of responsibility and impact. While program design is similar for executives at the same level, actual pay may vary based on job scope and individual performance over time. In fiscal 2017,2019, our CEO’s targeted TDC was approximately 3.12.23 times higher than the next highest paid executive.

 

42JACK IN THE BOX INC.  ï  20182020 PROXY STATEMENT39

 

  CD&A — III. COMPENSATION COMPETITIVE ANALYSIS  

 

III. COMPENSATION COMPETITIVE ANALYSIS

 

a. Competitive Analysis

 

Each year the Committee relies on multiple data points to assess the competitiveness of our executive compensation program and the individual compensation of our executives. Information the Committee uses to perform this analysis includes:

 

The Company’s performance against its financial and operationalperformance goals;

 

The mix of short-term and long-term compensation in the form of cash and equity-based compensation;

A review of “Market” compensation by the Committee’s independent consultant, which includes data from (a) proxy statement disclosures of our Peer Group (described below), and (b) a restaurant industry compensation survey, and (c) general industry data from national compensation surveys; and

 

The Company’s financial performance relative to our Peer Group.

 

 

b. Fiscal 20172019 Peer Group

 

We useThe Committee reviews and approves a Peer Group to assess thefor use in conducting competitive pay levelsmarket analysis of compensation for our NEOs and other executives, and to evaluate program design elements. TheFollowing fiscal 2018, with Jack in the Box completing its sale of Qdoba and increasing its franchise restaurant mix to 94%, the Committee believesdetermined that the fiscal 2019 Peer Group should consistwould be comprised solely of restaurant companies (rather than a combination of restaurant and retail companies, because these areas in prior years) to better reflect our business and the primary companies withmarket in which we compete for senior executive talent. For 2019, the Committee’s independent consultant recommended removing the seven retail companies that were in the 2018 Peer group and adding seven restaurant companies comparable to Jack in the Box in size.

Our practice in selecting Peer Group companies is to look for companies in the restaurant industry that are generally comparable on an aggregated basis in size (GAAPfor systemwide sales, generally 0.3x to 3.0x Jack in the Box Inc., and for GAAP revenue, market capitalization and systemwide sales) generally between 0.5x and 2.0x0.2x to 5.0x Jack in the Box Inc. The Committee also considers market capitalization, number of locations, business models and consumer focus. In reviewing systemwide sales comparisons, the Committee focuses on the eleven restaurant companies in

The table below shows key financial information of the Peer Group (for which comparative data is applicable). Given the small number of

public restaurant companies that meet the above criteria, our Peer Group also includes retail companies, using the same criteria described above.

For 2017, the Committee’s independent consultant recommended that no changes be made to the Peer Group. At the time the Committeere-affirmed using the same Peer Group for fiscal 2017, the Peer Group members’ median trailing four-quarter revenue was $2.3 billion and the median market capitalization (as most recently reported) was $2.4 billion, compared with projected Jack in the Box Inc. trailing four-quarter revenue of $1.5 billion and market cap of $2.8 billion. Forat the time the Committee approved the 2019 Peer Group restaurant companies, median systemwide sales (as of their most recently completedin late fiscal year) was $4.4 billion, compared to $4.5 billion projected2018, based on the then-available information for Jack in the Box.Box, and the most recently reported financial information for each peer company at that time.

 

 

20172019 Peer Group

  Company Name

RestaurantRetail

BJ’s Restaurants, Inc.(New)

Bloomin Brands’, Inc.(New)

Bojangles’ Inc.(1)(New)

Brinker International, Inc.

Chico’s FAS Inc.

Buffalo Wild Wings, Inc.

Children’s Place Retail Stores Inc.

The Cheesecake Factory Incorporated

DSW Inc.

Chipotle Mexican Grill, Inc.

Express, Inc.

Cracker Barrel Old Country Store, Inc.

Finish Line,Denny’s Corporation(New)

Dine Brands Global, Inc.

DineEquity, Inc

 

Genesco Inc.

Domino’s Pizza, Inc.

Urban Outfitters,Dunkin’ Brands Group, Inc.(New)

Panera Bread Company

Papa John’s International, Inc.

Red Robin Gourmet Burgers, Inc.(New)

Sonic Corp. (1)

Texas Roadhouse, Inc.(New)

The Cheesecake Factory, Inc.

The Wendy’s Company

 

Systemwide
Sales

GAAP Revenue
(Trailing 4Qtrs)

Market
Capitalization

(As of 4/1/18)

# Locations

(As of 4/1/18)

  Jack in the Box

$3.6MM

(projected)

$853M

(projected)

$2.5MM2,251

  Peer Group Median

$3.4MM$1.6MM$2.0MM1,705

Sonic Corporation

 

The Wendy’s Company

 (1)

Subsequent to constructing the Fiscal 2019 Peer Group, Bojangles’ Inc. and Sonic Corp. were acquired by private equity firms, in early 2019 and December 2018 respectively.

 

40JACK IN THE BOX INC.  ï  20182020 PROXY STATEMENT43

 

  CD&A — IV. ELEMENTS OF COMPENSATION  

 

IV. ELEMENTS OF COMPENSATION

 

Our executive compensation programs consist of the elements summarized below, and are designed to (a) achieve our compensation principles and objectives, (b) enable the Company to attract, retain, motivate, engage, and reward our NEOs and other executives, and (c) encourage an appropriate level of risk taking, as discussed later in this CD&A.

 

Element /

Type of Plan

  Link to Compensation Objectives  Key Features

Current Year Performance

  

Base Salary

 

(Cash)

  Fixed compensation amount of compensation for performingday-to-day job responsibilities. Provides financial stability and security, and represents the smallest portion of TDC.security.  Competitive pay that is targeted to approximate a reasonable range of the median of the Market, taking into account job scope and complexity, criticality of position, knowledge, skills and experience. Generally, executivesBase salary levels are eligible for an annual salary increase, dependingreviewed annually and may be adjusted if appropriate based on individual performance, market pay changes, and internal equity.

Annual

Incentive

 

(Cash)

  Variable compensation component.compensation. Motivates and rewards for achievement of annual financial and operationalperformance goals and in some years, other annual strategic objectives.that drive long-term stockholder value.  Incentives are targeted to approximate a reasonable range of the Market median. Total potential payouts range fromExecutives can earn 0% - 200% of target payout.payout based on achievement ofpre-established performance targets. Goals and weighting are set annually to align with specific financial, operational, and/or strategic performance objectives, andaligned with the Company’s operational plan and budget.Fiscal 20172019 goals are described in Section VI.b.

Multi-Year Performance

  

Long-Term

Incentive (LTI)

 

(Equity)

  

Variable compensation component.compensation. Motivates and rewards for sustained long-term financial and operational performance designed to increase long-term stockholder value.

 

Encourages continued employment through required vesting periods in order to obtain shares.shares of stock.

 

Stock ownership and holding requirements align the financial interests of our executives with the financial interests of our stockholders.

  

LTI guidelines are reviewed annually and set to result in total pay that is within a reasonable range of the Market median. Actual grants may vary from the LTI guideline based on individual performance. No dividends are paid on unvested RSUs or PSUs.

 

Stock Options: Historically represented a portion of the LTI guideline, but no options were granted in fiscal 2019 due principally to the announcement in 2018 that the Company was exploring strategic alternatives.

Performance Shares (PSUs): In fiscal 2017, option awards represented 34% of each executive’s LTI guideline; they vest 33% per year over three years and expire seven years from the grant date. The exercise price is equal to the closing price of Jack in the Box Common Stock on the date of grant.

Performance Shares (PSUs): In fiscal 2017,2019, PSUs represented 33%50% of the LTI guideline; they vest at the end of three years, and are payable in stock, with the amount vesting based upon achievement ofpre-established performance goals (ranging from zero to 150% of the target number of sharesPSUs granted). Since fiscal 2016, PSUs have beenare subject to a holding requirement (executives must hold 50% ofafter-tax net shares resulting from the vesting of PSUs until termination of service).The goals for the FY 2017-20192019-2021 grant are described in Section VI.c.VI.d.

 

Restricted Stock Units (RSUs): In fiscal 2017,2019, RSUs represented 33%50% of the LTI guideline, vest 25% per year over four years, and are payable in stock. RSUs are subject to a holding requirement (executives must hold 50% ofafter-tax net shares resulting from the vesting of RSUs until termination of service). Prior to FY 2016, RSU awards were generally subject to a50-100% holding requirement depending on whether the recipient had met their stock ownership guideline at the time of grant.

Attraction & Retention

  

Perquisites

 

(Cash)

  

Provides a limited cash value for certain other benefits that are typically offered to executives.

  A taxable benefit provided to executives and paidbi-weekly. This benefit is intended to assist with each executive’s expenses for financial planning and use of their personal automobile and cell phone for business purposes.
purposes, and to assist with financial planning.

Other

 Other (2019)

  

2017 Qdoba President Conditional Transaction Bonus

Retention Award (Equity)

  

In connection

Messrs. Tucker and Tom, each hired in 2018, received a specialone-time RSU award to increase their equity stake in the Company in recognition of the criticality of their roles and the importance of retaining each of them in position. These equity awards are described in CD&A Section VI.d “2019 Special Equity Awards”

Special Cash Bonuses (Cash) (2 NEOs)

Mr. Rudolph received a special cash bonus in recognition of his significant role in the execution of strategic and financing alternatives, specifically the completion of the privately placed business securitization transaction. Mr. Tom received a special cash bonus in recognition of his leadership in the development and execution of an improved communications process with the Company’s evaluation of strategic alternatives with respect to Qdoba, the Committee approved a conditional cash bonus to the Qdoba President to assure his continued employment with the Company, payable on the earlier of (a) January 2, 2018 or (b) the consummation of any sale orspin-off of Qdoba.franchise organization. These bonuses are described more fully in sections VI.c — “Special One-Time Cash Bonuses”.

 

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  CD&A — IV. ELEMENTS OF COMPENSATION  

 

Element /

Type of Plan

  Link to Compensation Objectives  Key Features

Retirement

Benefits

 

(Pension, SERP, 401(k) (401(k),  Deferred  Compensation)Compensation,  Pension,  SERP)

  Provides for retirement income to reward service and commitment to the Company and to encourage retention.  

Pension — The Company’s employee pension plan, that provides benefits based on years of service and earnings up to IRC limitations, was closed to employees hired on or after January 1, 2011, and was “sunset” on December 31, 2015 (after which time participants no longer accrue added benefits based on additional pay or service). Four NEOs are participants in the plan.

Supplemental Executive Retirement Plan (“SERP”) — The SERP was closed to new participants in 2007. One NEO, who was hired into an Officer position prior to 2007, is a participant in the plan. The plan provides retirement income on anon-qualified basis, without regard to IRC limitations.

401(k) Plan — The 401(k) Plan is a qualified deferred compensation plan that is available to all employees who are at least age 21. The 401(k) Plan includes a Company matching contribution of up to 4% of compensation deferred by employees, subject to annual IRC limits.

 

Executive Deferred Compensation Plan (“EDCP”) — The EDCP is anon-qualified deferred compensation plan that is offered to highly-compensated employees. Prior to January 1, 2016, the EDCP included a Company matching contribution of up to 3% of compensation deferred, and beginning January 1, 2016, was replaced withParticipants may receive an annual restoration matching contribution for participants whoseif their deferrals to the 401(k) planPlan (and related Company matching contributions) are limited due to tax code limits applicable to the 401(k) plan.Plan. A participant must be employed on the last day of the calendar year to receive the restoration matching contribution. Executives

Pension — The Company’s employee pension plan, that provides benefits based on years of service and earnings up to IRC limitations, was closed to employees hired on or after January 1, 2011, and was “sunset” on December 31, 2015 (after which time participants no longer accrue added benefits based on additional pay or service). Three NEOs are participants in the pension plan.

Supplemental Executive Retirement Plan (“SERP”) — The SERP was closed to new participants in 2007. One NEO was promoted tointo an Officerofficer position afterprior to 2007 and not eligible foris a participant in the SERP (including four NEOs), also receiveplan. The plan provides retirement income on a Company contributionnon-qualified basis, without regard to the EDCP for ten years from their hire date dates, equal to 4% of their base salary and annual incentive. In January 2017, Mr. Comma reached the maximum ten years of Company contributions to the EDCP and ceased receiving the enhanced EDCP Company contribution.IRC limitations.

 

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  CD&A — V. COMPENSATION DECISION-MAKING PROCESS  

 

V. COMPENSATION DECISION-MAKING PROCESS

 

 

a. Role of the Compensation Committee

The Committee works closely with its independent consultant and meets regularly, including in executive session without members of Managementthe executive team (“Management”) present, to make decisions on our executive compensation program and on the compensation of our CEO and other executives. The Committee reviews a variety of market data and information, including Company, Peer Group, restaurant/retailrestaurant industry, and general industry compensation information, and considers the recommendations of its independent consultant when making compensation decisions. The Committee Chair reports the actions of the Committee to the Board at each regular meeting. The Committee’s responsibilities include reviewing and approving:

 

The Peer Group;

 

Our compensation principles and objectives;

 

The amount and form of executive compensation (pay increases, equity grants);

 

CEO performance and compensation, and executive officer compensation;

 

Annual and long-term incentive plans and benefit plans;

 

Performance metrics and goals, and the achievement of annual and long-term incentive plan goals;

 

Board compensation; and

 

Annual proxy statement/CD&A disclosure.

b. Role of the Independent Compensation Consultant

The Committee has retained Semler Brossy Consulting Group, LLC (“Semler Brossy” or the “Consultant”) as its independent compensation consultant since January 2010. The Consultant reports directly to the Committee and performs no other work for the Company. The Committee has analyzed whether the work of Semler Brossy as a compensation consultant raises any conflict of interest, taking into consideration the following factors: (i) whether Semler Brossy provides any other services to the Company; (ii) the amount of fees paid by the Company to Semler Brossy as a percentage of Semler Brossy’s total revenue; (iii) Semler Brossy’s policies and procedures that are designed to prevent conflicts of interest; (iv) any business or personal relationship of Semler Brossy or the individual compensation advisors employed by the firm with any executive officers of the Company; (v) any business or personal relationship of the individual compensation advisors with any member of the Committee; and (vi) any stock of the Company owned by Semler Brossy or the individual compensation advisors whom it employs. The Committee has determined, based on its analysis of the above factors, that the work of Semler Brossy

and the individual compensation advisors employed by

Semler Brossy as compensation consultants to the Committee has not created any conflict of interest.

The Consultant does the following for the Committee:

 

Attends Committee meetings;

 

Provides independent advice to the Committee on current trends and best practices in compensation design and program alternatives, and advises on plans or practices that may improve effectiveness of our compensation program;

 

Provides and discusses peer group and survey data for competitive comparisons and, based on this information, offers independent recommendations on CEO and NEO compensation;

 

Reviews the CD&A and other compensation-related disclosures in our proxy statements;

 

Offers recommendations, insights and perspectives on compensation related matters;

 

Evaluates and advises the Committee regarding enterprise and related risks associated with executive compensation components, plans and structures; and

 

Assists the Committee in designing executive compensation programs that are competitive and align the interests of our executives with those of our stockholders.

In fiscal 2017,2019, Semler Brossy attended all Committee meetings in person or by telephone, including executive sessions as requested, and consulted frequently with the Committee Chair between meetings.

c. Role of the CEO in Compensation Decisions

When making decisions on executive compensation, the Committee considers input from the Company’s CEO, who reviews the performance of the other NEOs and executives and provides his recommendations to the Committee on NEOs’ and other executives’ compensation. The Company’s Chief People, CultureHuman Resources Officer, Compensation and Corporate Strategy Officer (“CPO”), compensation and benefits department,Benefits Department, and the CFO and finance departmentFinance Department also provide information and answer the Committee’s questions regarding Company financial targets and projections. The CEO meets privately with the Committee and its Consultant to discuss his executive pay recommendations and provides his insight and perspectives to the Committee on the reports and recommendations of the Committee’s Consultant relating to plan design and strategies, goal setting, payout structure, stock grants and holding requirements, and related topics.

The Committee reviews and discusses pay decisions related to the CEO in executive session without the CEO or any other members of Management present.

 

 

46JACK IN THE BOX INC.  ï  20182020 PROXY STATEMENT43

  CD&A — VI. FISCAL 2017 COMPENSATION  

    

  CD&A — VI. FISCAL 2019 COMPENSATION  

 

VI. FISCAL 20172019 COMPENSATION

 

a. Base Salary

InFor fiscal 2017,2019, following a review of total direct compensation relative to competitive market data of our Compensation Peer Group, and consideration that the Company only gave pay increaseswas in the midst of its restructuring as a single brand and its evaluation of strategic alternatives, the Committee determined not to restaurant employees — no increases were givenmake any changes to executives and staff positions as partthe base salaries of an enterprise-wide cost savings initiative. Accordingly, none of the NEOs received a base salary increase.our NEOs.

 

2017 Base Salary — No Increases 
Name  Fiscal 2016 Salary   Fiscal 2017 Salary   % Increase 

 

Mr. Comma (CEO)

 

  

 

 

 

 

$900,000

 

 

 

 

  

 

 

 

 

$900,000

 

 

 

 

  

 

 

 

 

0.0%

 

 

 

 

 

Mr. Rebel (CFO)

 

  

 

 

 

 

$564,000

 

 

 

 

  

 

 

 

 

$564,000

 

 

 

 

  

 

 

 

 

0.0%

 

 

 

 

 

Ms. Allen (JIB President)

 

  

 

 

 

 

$515,000

 

 

 

 

  

 

 

 

 

$515,000

 

 

 

 

  

 

 

 

 

0.0%

 

 

 

 

 

Mr. Guilbault (Qdoba President)

 

  

 

 

 

 

$375,000

 

 

 

 

  

 

 

 

 

$375,000

 

 

 

 

  

 

 

 

 

0.0%

 

 

 

 

 

Mr. Rudolph (CLO)

 

  

 

 

 

 

$512,000

 

 

 

 

  

 

 

 

 

$512,000

 

 

 

 

  

 

 

 

 

0.0%

 

 

 

 

Name  Salary FYE 2018   Salary FYE 2019   % Increase 

Mr. Comma (CEO)

   $925,000    $925,000    0.0% 

Mr. Tucker (CFO)

   $575,000    $575,000    0.0% 

Dr. Blankenship (CSS)

   $378,000    $378,000    0.0% 

Mr. Rudolph (CLO)

   $525,000    $525,000    0.0% 

Mr. Tom (COO)

   $325,000    $325,000    0.0% 

b. Performance-Based Annual Incentive Compensation (Cash)

 

In November 2016,2018, the Committee approved the annual incentive goals for fiscal 20172019 consistent with the Company’s fiscal 20172019 operational plan and budget approved by the Board. For Brand Services executives (Mr. Comma, Mr. Rebel, and Mr. Rudolph), theThe annual goals included:were based on: (1) Operating EPS, using the same calculation that Management and the investment community commonly use to assess the Company’s performance;EBIT and, (2) Consolidated Restaurant OperatingLevel Margin, (ROM),weighted as described below. For the JIB President, Ms. Allen, and the Qdoba President, Mr. Guilbault, the goals included a combination of the Company Operating EPS goal, and specific goals for each of their respective brands.follows:

Operating EBIT(1)

70%

Restaurant Level Margin(2)

30%

When setting fiscal 20172019 annual incentive goals, the Committee considered:used a rigorous process to set challenging, yet reasonably attainable goals aimed at ensuring appropriate and competitive levels of payout relative to performance

achievement. The process included consideration of: (1) the Company’s fiscal 20172019 operational plan and budget that included then-current

economic conditions,conditions; (2) current and projected performance of the restaurant industry in general and companies within our Peer Group, and other potential internal and external events that could impact future sales and earnings levels; (2)(3) a sensitivity analysis of Company and brand performance results relative to the incentive targets; and (3)(4) the advice of the Committee’s Consultant. Based on this review, the Committee set goals based on key financial metrics that it believed would increase stockholder value if achieved, with target and higher goals set at challenging, yet reasonable levels. The plan structure and relative weights of each goal are shown in the table below.

Brand Services Executives JIB/Qdoba Brand Executives

 

70%

 

 

 

Jack in the Box Inc. Operating EPS

 

 

 

30%

 

 

 

Jack in the Box Inc. Operating EPS

 

 

30%

 

 

 

Consolidated ROM

 

 

 

40%

 

 

 

JIB/Qdoba Brand Earnings from Operations

 

    

 

30%

 

 

 

JIB/Qdoba ROM

 

 

 

20172019 Performance Metrics  Why Goal Is Used

Operating EPS (diluted)EBIT 1(1)

  

This is a primary measure of how wellkey performance metric for measuring operational performance. In fiscal 2019, the Company is performing overall, and is a key driver of stockholder return over the long term. This metric excludes restructuring charges andexcluded gains andor losses from refranchising.

the sale of company operated restaurants, restructuring costs, and earnings or losses from discontinued operations.

Consolidated Restaurant OperatingLevel Margin (ROM)(2)

  

Consolidated ROMRestaurant Level Margin measures how effectively the Company manages its business operations and costs and is a key performance metric for alignment with our franchise operators, our franchising strategy, and our stockholders and potential investors.

JIB/Qdoba Brand Earnings from Operations

Brand Earnings from Operations is a key performance metric for measuring operational performance relative to profitability, and is reported in the footnotes to our financial statements as Earnings from Operations by Segment. It includes all earnings for the specified brand — all revenue less costs — before interest and taxes, where such costs include regional administrative costs, but excludes unallocated costs related to shared service functions (such as accounting/finance, information technology, human resources, audit services, legal, tax and treasury) as well as unallocated costs such as restructuring costs, pension expense and share-based compensation.

JIB/Qdoba Restaurant Operating Margin (ROM)2

Brand ROM measures how effectively JIB and Qdoba manage their respective business operations and costs, and is a key performance metric that aligns with the interests of each brand’s franchise operators, as well as with our stockholders and potential investors.

 

1(1)

Operating EBIT is a non-GAAP measure, defined by the Company as earnings net before interest expense, net and income taxes, excluding gains or losses on the sale of company operated restaurants, restructuring costs, and earnings or losses from discontinued operations. See Appendix A — Reconciliation of non-GAAP measurements to GAAP Results.

(2) 

As set forth in Note 25 in the Proxy Summary, Operating EPSRestaurant Level Margin is anon-GAAP measure. For a reconciliation of this measure to the most comparable GAAP measure, please refer to the Company’s Current Report on Form 8-K and accompanying press release filed November 29, 2017.

2

As set forth in Note 1 in the Proxy Summary, restaurant operating margin is a non-GAAP measure. For a reconciliation of this measure to the most comparable GAAP measure, please refer to the Company’s Current Report on Form 8-K and accompanying press release filed November 29, 2017.see Appendix A.

 

44JACK IN THE BOX INC.  ï  20182020 PROXY STATEMENT47

  CD&A — VI. FISCAL 2019 COMPENSATION  

Fiscal 2019 Performance Results

As shown on the chart below, relative to the Company’s fiscal 2019 Operating EBIT goal (weighted 70%), performance achievement ($207.8 million) was between target and maximum goal, resulting in a payout of 149% of target; and, for Restaurant Level Margin (weighted 30%), the performance achievement ($88.3 million) was between threshold and target, resulting in a payout of 54% of target. The overall weighted payout for both financial goals was 120.5% of target.

LOGO

Fiscal 2019 Payouts

The 2019 target and maximum annual incentive payout percentages for NEOs, expressed as a percentage of annual base salary, are shown in the table below. The target potential payout percentages are set by position level, taking into account the compensation competitive analysis described in Section III.a. and each executive’s role in the Company. There were no changes in the 2019 target payout percentages from those in fiscal 2018. There is no minimum amount of incentive payout guaranteed for the NEOs, but the maximum amount is capped at 2x target payout (which is 200% of salary for the CEO, 150% of salary for Messrs. Tucker, Rudolph, and Dr. Blankenship, and 90% for Mr. Tom). The payouts as a percent of target incentive and as a percent of annual salary are shown below.

   Potential Payout
(As Percent of Annual Salary)		    

Target

Incentive

   

Actual Payout

(As Percent of

Target Payout)

  

Actual Payout
(As Percent of
Annualized

Salary)

  

Actual Incentive

Payout

 
  

 

  Target           Max    

Mr. Comma (CEO)

  100%  200%     $925,000    120.5%   120.5%   $1,114,625 

Mr. Tucker (CFO)

     75%  150%     $431,250    120.5%   91.0%   $   519,665 

Dr. Blankenship (CSS)

     75%  150%     $283,500    120.5%   91.0%   $   341,618 

Mr. Rudolph (CLO)

     75%  150%     $393,750    120.5%   91.0%   $   474,469 

Mr. Tom (COO)

     45%     90%     $146,250    120.5%   55.0%   $   176,231 

c. SpecialOne-Time Cash Bonuses

Mr. Rudolph received a special $50,000 bonus in September 2019 for taking on significant additional responsibilities related to the execution of strategic and financing alternatives, specifically the completion of the privately placed business securitization transaction. The Committee determined the amount of his bonus, equal to 9.5% of his base salary, in its discretion and in consultation with its independent compensation consultant. Mr. Tom received a special

$10,000 cash bonus in September 2019, equal to 3% of his base salary, for his leadership in the development and execution of an improved communications process intended to build stronger relationships with the franchise organization. Neither of these bonuses were grossed up, in accordance with Company policy prohibiting tax gross-ups to Executive Officers except for relocation expenses where approved by the Compensation Committee.

48    JACK IN THE BOX INC.ï  2020 PROXY STATEMENT

    

 

  CD&A — VI. FISCAL 20172019 COMPENSATION  

 

Fiscal 2017 Performance Results

The Company and Committee use a rigorous process to set challenging, yet reasonably attainable goals. This process includes (a) aligning annual goals with the fiscal year budget approved by the Board, (b) considering current and projected performance of the restaurant industry in general and companies within our peer group, (c) considering internal and external situations that could impact performance, and (d) ensuring appropriate and competitive levels of payout relative to performance achievement.

Jack in the Box Inc. performance:The Company performed just above its minimum threshold goal set for fiscal 2017 Operating EPS ($3.77), but fell substantially short of target performance ($4.65). The Company did not achieve the minimum threshold goal set for Consolidated ROM (19.7%).

JIB performance:The JIB brand did not achieve the minimum threshold goals set for brand ROM (21.1%) or Earnings from Operations ($284.6 million).

Qdoba performance:The Qdoba brand did not achieve the minimum threshold goals set for Qdoba ROM (17.5%) or Earnings from Operations ($46.4 million).

LOGO

The charts below show actual financial performance relative to target performance for the two corporate goals and the two JIB and Qdoba brand-specific goals, respectively.

LOGO

LOGO

Fiscal 2017 Payouts

The 2017 target and maximum annual incentive payout percentages for the NEOs, expressed as a percentage of annual base salary, are shown in the table below. The payout percentages are set by position level, taking into account the compensation competitive analysis described in Section III.a. and each executive’s role in the Company. There is no minimum amount of incentive payout guaranteed for the NEOs, but the maximum amount is capped at 2x target payout (which is 200% of salary for the CEO, and 150% of salary for the other NEOs). The payouts as a percent of target incentive and as a percent of annual salary are shown below.

   Potential Payout
(As Percent of Annual Salary)		    

Target

Incentive

   

Actual Payout

(As Percent of

Target Payout)

  

Actual Payout

(As Percent of

Annual Salary)

  

Actual Incentive

Payout

 
   Target           Max            

Mr. Comma (CEO)

  100%  200%    $900,000    8.7%   8.7%  $78,660 

Mr. Rebel (CFO)

    75%  150%    $423,000    8.9%   6.7%  $37,506 

Ms. Allen (JIB President)

    75%  150%    $386,250    3.8%   2.9%  $14,678 

Mr. Guilbault (Qdoba President) 

    75%  150%    $281,250    3.8%   2.9%  $10,688 

Mr. Rudolph (CLO)

    75%  150%    $384,000    8.9%   6.7%  $34,048 

JACK IN THE BOX INC.ï  2018 PROXY STATEMENT45

  CD&A — VI. FISCAL 2017 COMPENSATION  

c.d. Long-Term Incentive Compensation

 

In fiscal 2017,2019, the LTI program for all our Company NEOs was comprised of 34% stock options, 33%50% performance shares (“PSUs”), and 33%50% restricted stock units (“RSUs”). TheAs explained in section “IV. Elements of Compensation”, we did not grant stock options in fiscal 2019 due to the additional trading volatility resulting from the company’s potential sale. For fiscal 2019, the Committee chose these forms of equity awardsto equally weight PSUs and weightings toRSUs because (a) provide options which align executive pay with the creation of value for our stockholders through stock price appreciation, (b) provide PSUs that directly link executive pay to achievement of longer-term Company financial and operational goals, and (c) provide time-vested(b) RSUs tovest over time and facilitate stock ownership and retention. All executives (Brand Services, JIB Brand, and Qdoba Brand) share the same PSU goals.

Each year, the Committee’s Consultant advises the Committee on the LTI grant guidelines that reflect approximately the median of Market TDC when combined with base salary and the target annual incentive. For the fiscal 20172019 grant, the Committee considereddetermined the amount of each NEO’s LTI grant, in its discretion, taking into consideration the equity grant guidelines, the Company’s overall performance, each brand’s performance for the prior fiscal year, recommendations from the CEO (except with regard to his own compensation), and input from the Consultant to determine the actual grant value for each NEO.its Consultant. The chart below illustrates our LTI structure and the key elements of each type of award forgranted to our NEOs and other executives for fiscal 2017.2019.

 

 

LOGO

Vests at the end of the 3-fiscal year period based on goal achievement, and settled in stock; beginning fiscal 2016, after-tax net shares subject to stock holding requirement. Two performance metrics: ROIC from Operations (50%) - Measures efficient use of capital on adjusted ROIC from Operations for the third fiscal year of the performance period. Consolidated Systemwide Sales Growth (50%) - Three annual goals set at the beginning of each fiscal year; measures growth in sales of all company and franchise restaurants. 4-year vesting, 25% per year and settled in stock; after-tax net shares subject to stock holding requirement. 3-year vesting, 33% per year, and 7-year term. Exercise price is equal to the closing price of Jack in the Box Common Stock on the date of grant.LOGO

 

46JACK IN THE BOX INC.  ï  20182020 PROXY STATEMENT49

  CD&A — VI. FISCAL 2019 COMPENSATION  

    

  CD&A — VI. FISCAL 2016 COMPENSATION  

 

Performance Shares (PSUs)

 

Performance Shares

PSUs are granted annually, and vest after three years based on achievement of performance metrics that are established for the three-fiscal year performance period (“Performance Period”). The Committee sets specific performance goals (including minimum,threshold, target, and maximum) either (a) at the beginning of the Performance Period, or (b) annually at the beginning of each fiscal year of the Performance Period, depending on the goal; in the latter case, the threshold performance goals set for the second and third years of the Performance Period generally may not be lower than the threshold set for the first year. The Committee believes that for some metrics, setting annual performance goals improves its visibility into the relative attainability and difficulty of the goals and, as a result, better aligns performance and payouts. Vesting ranges from 0% to 150% of the target number of shares granted; the threshold payout (50% of target) requires achieving an established minimum performance requirement (there is no payout if performance doesn’t meet the minimum requirement).

PSUs Granted in Fiscal 20172019: In November 2016,2018, the Committee granted PSU awards to our NEOs and executives for the fiscal 2017-2019three-fiscal-year 2019-2021 Performance Period,Period. The PSU grants are based on two equally-weighted metrics: (a) adjusted ROIC from Operations and (b) Consolidated Systemwide Sales Growth. TheGrowth, with the Committee setting the three-year ROIC performance goals were established for the full Performance Period and will be measuredgoal at the endbeginning of the third fiscal year (fiscal 2019), while thethree-year performance period and setting each annual systemwide sales goals were set only for the first year (fiscal 2017) of the Performance Period. Goals for fiscal 2018 and 2019 will be setgoal at the beginning of each respectivefiscal year.

These two metrics, systemwide sales and ROIC, support the critical drivers of our success: growingtop-line profitable sales, profitably at both brands, and encouraging prudent deployment of capital to drive the business. For each metric, the Committee believes the goals set are appropriately challenging, yet reasonably attainable. The actual goals are not being disclosed before the end of the Performance Period because we believe such disclosure would be competitively harmful.

PSUs Vested in 20172019: PSUs granted in November 20142016 (based on the fiscal 2015-2017three-fiscal-year 2017-2019 Performance Period) vested and were payable in December 2017. Consistent with our pay for performance philosophy, the payout level was determinedNovember 2019 based on the averageachievement of (a)two equally-weighted metrics, Systemwide Sales and ROIC, as follows:

Systemwide Sales

The PSU payout level for Systemwide Sales (50% of the target number of shares) was determined as the average performance level attained in each fiscal year of the Performance Period and included both the Jack in the Box and Qdoba brands in 2017 and only the Jack in the Box brand in 2018 and 2019. The threshold, target, and maximum Systemwide Sales goals were established at the beginning of each fiscal year. The threshold, target, and maximum goals were:

Fiscal 2017 — $4.288 billion, $4.502 billion, and $4.581 billion, respectively

Fiscal 2018 — $3.469 billion, $3.558 billion, and $3.645 billion, respectively

Fiscal 2019 — $3.466 billion, $3.566 billion, and $3.659 billion, respectively.

Actual Systemwide Sales achievement was $4.2912 billion for fiscal 2017, $3.4661 billion for fiscal 2018, and $3.5047 billion for fiscal 2019, resulting in an average payout of 40% for the Consolidated Systemwide Sales measure (weighted 50%) and (b)portion of the award.

ROIC

The PSU payout level for ROIC (50% of the target number of shares) was determined as the performance level attained onin fiscal 2019, the ROIC measure setthird year of the Performance Period. The threshold, target and maximum goals were established at the beginning of the three-year fiscal Performance Period for fiscal 2017, the third year of the Performance Period (weighted 50%).The(in November 2016). The threshold, target, and maximum goals weightingwere 18.2%, 21.4%, and 24.5%, respectively.

Actual ROIC achievement for fiscal 2019 was 30.9%, exceeding the maximum goal and resulting in a payout are shown on the chart below. The achievement level onof 150% of the ROIC from Operations goal was substantially aboveportion of the target of 15.0% (or 146.6% of target). Achievement on the Consolidated Systemwide Sales goal exceeded the maximum in fiscal 2015,award.

PSU Vesting and was above threshold but below target in each of fiscal 2016 and 2017 (resulting in an average achievement level of 90.7% on the sales goals). Payout for Fiscal 2019

Together, thisthese outcomes resulted in a weighted payout of 118.6%95.0% of the target number of PSUs granted to each ofNEOs employed for the NEOs.full Performance Period.

 

 

Fiscal 2015-2017 PSU Goals and Performance50    JACK IN THE BOX INC.ï  2020 PROXY STATEMENT

  CD&A — VI. FISCAL 2019 COMPENSATION  

2019 Special Equity Awards

 

Performance
Period		          Goal  

FY15

Actual

   

FY16

Actual

   

FY17

Actual

 
  Approved Measures  Weight  Threshold  Target  Maximum      

2015-2017

 

  

ROIC from Operations (at FYE2017)

 

  50%

 

  13.2%

 

  15.0%

 

  17.9%

 

             

 

17.7%

 

 

 

2015

  Consolidated Systemwide Sales  50%  $3.926  $4.018  $4.135  $4.149           

2016

  (All Restaurants) ($ in billions)    $4.201  $4.502  $4.610    $4.330    

2017

        $4.288  $4.502  $4.581            $4.291 

In November 2018 when annual equity grants were determined (for fiscal 2019), the Company was in the midst of its evaluation of strategic alternatives, including a potential sale. The Committee recognized that the two NEOs hired in 2018, Mr. Tucker (CFO) and Mr. Tom (COO), had a limited equity stake in the Company and that their services were critical to the ongoing operations of the business and our ability to execute on anticipated potential strategic alternatives. To retain and incentivize these NEOs, the Committee approved special equity awards (“Retention RSUs”) as described below, with each grant and amount determined in consultation with the Committee’s independent consultant:

To CFO, Mr. Tucker, aone-time grant of RSUs with a target value equal to one times his LTI value of $825,000 (10,023 RSUs).

To COO, Mr. Tom, aone-time grant of RSUs with a target value equal to one times his base salary of $325,000 (3,948 RSUs).

Each of the special equity awards vests over three years subject to the NEO’s continued service with the company. The actual grant date fair value and other terms of the special equity awards are detailed in the “Grants of Plan-Based Awards” table shows the LTI awards to each of our NEOs in fiscal 2017.table.

d.e. Cash Perquisite Allowance

 

Executives receive an annual cash perquisite allowance, which was instituted in 2011, and has not increased since 2011, to replace reimbursements under the prior executive medical reimbursement program and to consolidate multiple allowances (in addition to eliminating administrative expenses to the Company). This limited benefit is intended to contribute toprovide assistance towards the executive’s expenses, in the amount the Committee has determined is appropriate, for financial planning, and the executive’sexpenses related to use of their personal automobile and cell phone for business purposes.purposes, and financial planning. However, the perquisite allowance may be used in any manner the executive chooses and the Company does not require to the executive to disclose how they have used the allowance. The annualized allowance, shown in the following table, is paidbi-weekly and is taxable to each executive, andwith no taxgross-up. NEOs employed for less than a full fiscal year

receive a prorated portion of the allowance based on the time of employment with the Company does not provide a related taxgross-up.during fiscal 2019.

Name  Allowance 

Mr. Comma (CEO)

  $66,500 

Mr. Rebel (CFO)

  $52,000 

Ms. Allen (JIB President)

  $52,000 

Mr. Guilbault (Qdoba President)

  $52,000 

Mr. Rudolph (CLO)

  $52,000 

NameAnnualized Allowance

Mr. Comma (CEO)

$66,500

Mr. Tucker (CFO)

$52,000

Dr. Blankenship (CSS)

$52,000

Mr. Rudolph (CLO)

$52,000

Mr. Tom (COO)

$24,600
 

 

JACK IN THE BOX INC.  ï  20182020 PROXY STATEMENT4751

 

  CD&A — VII. ADDITIONAL COMPENSATION INFORMATION  

    

 

VII. ADDITIONAL COMPENSATION INFORMATION

 

a. Executive Stock Ownership and Holding Requirements

 

Our senior vice presidents and higher, including four of our NEOs, are subject to stock ownership guidelines. The guidelines are intended to assure that these executives maintain a meaningful financial stake in the Company in order to promote a long-term perspective in managing the business, and to align their long-term financial interests with those of our stockholders. Our stock ownership guidelines consist of (1) an ownership requirement set as a multiple of salary and (2) a holding requirement.

1.Stock Ownership Guideline

 

Position  Minimum Ownership
(multiple of base salary)salary multiple)		 

Chairman and CEO

   5.0x 

Executive Vice President

   3.0x 

JIB and Qdoba Brand Presidents

3.0x

Senior Vice President

   1.5x 

2.Holding Requirements

Beginning in fiscal 2014 for RSU grants and in fiscal 2016 for PSU grants, executivesExecutives are required to hold until termination of service 50% ofafter-tax net shares resulting from the vesting of RSUs and PSUs. (For shares resulting from RSU grants prior to fiscal 2014, executives who had not yet met their ownership guideline are required to hold 100% of net shares.)

Prior to 2011, the executive stock ownership program consisted ofone-time grants of restricted stock units that executives must hold until termination of service with the Company.

 

 

NEO Stock Ownership

Each year, the Committee reviews our NEOs’ stock ownership relative to their respective requirement, with new executives expected to meet their ownership requirement within five years from the date they became subject to the requirement. As of the end of fiscal 2017, allEach of our continuing NEOs, met theirexcluding Mr. Tom who was not subject to a stock ownership requirement except Ms. Allen, who was hired in October 2014 andfiscal 2019, is stillcurrently in compliance with (or within herthe transition period for compliance.meeting) the stock ownership guidelines, as of September 29, 2019.

 

Name  Shares
Directly
Held		   Restricted
Stock/
Unvested
Shares  (1)		   Total
Shares		   Value at 10/01/17
@ $101.92		   

Stock
Ownership

Requirement
(000s)

   Meets
Requirement		   Shares
Directly
Held		  Restricted
Stock/
Unvested
Shares (1)		  Total
Shares		  Value at 9/29/19
@ $90.45		  Stock
Ownership
Requirement
(000s)		  Meets
Requirement

Mr. Comma (CEO)

   46,914    127,473    174,387   $17,773,523   $4,500,000    Yes     48,901    134,651    183,552   $16,602,278   $4,625,000                Yes

Mr. Rebel (CFO)

   35,240    73,674    108,914   $11,100,515   $1,692,000    Yes 

Ms. Allen (JIB President)

   2,932    8,577    11,509   $1,172,997   $1,545,000    No 

Mr. Guilbault (Qdoba President)

   13,203    3,986    17,189   $1,751,903   $1,125,000    Yes 

Mr. Tucker (CFO)

    979    18,025    19,004   $  1,718,912   $1,725,000    No (2) 

Dr. Blankenship (CSS)

    14,799    7,298    22,097   $  1,998,674   $1,134,000    Yes

Mr. Rudolph (CLO)

   23,612    68,741    92,353   $9,412,618   $1,536,000    Yes     21,007    70,350    91,357   $  8,263,241   $1,575,000    Yes

Mr. Tom (COO)

    102    5,684    5,786   $     523,344    N/A    N/A 
(1) 

This column includes restricted shares and unvested RSUs; and for Mr. Comma, also includes deferred performance vested restricted stock. Unvested PSUs and unvested or unexercised options do not count toward meeting ownership guidelines.

(2)

Mr. Tucker is just under his ownership requirement and is still within his transition period for compliance.

b. Executive Benefits

 

Our NEOs and other executives receive the same benefits as those generally available to other employees in the Company. Both Company-subsidized and voluntary benefit programs are provided and include medical, dental, vision, life insurance,

and disability coverage. Additionally, the Company provides each NEO with an enhanced level of employer-paid term life insurance with a value for each NEO of $770,000.

 

 

4852    JACK IN THE BOX INC.  ï  20182020 PROXY STATEMENT

    

 

  CD&A — VII. ADDITIONAL COMPENSATION INFORMATION  

 

c. Retirement Plans

 

The Company’s retirement plans are designed to provide our employees, including our NEOs and other executives, with some retirement income security. These plans reward for service and provide an additional incentive for our employees to build long-term careers at Jack in the Box.

 

Defined Benefit Pension Plan (“Retirement Plan”). Four NEOs and all otherAll employees hired before 2011 (including three of our NEOs) are participants in atax-qualified defined benefit pension plan. This plan was closed to new employees hired on or after January 1, 2011, and “sunset” on December 31, 2015. This means that participants no longer accrue additional benefits based on additional pay and service as of that date. Participants may begin receiving their accrued benefit on or after retirement.

 

Supplemental Executive Retirement Plan (“SERP”). One of our NEOs and three other Company executives are participants in the SERP. Effective January 1, 2007, the SERP was closed to new participants. The SERP is unfunded and not qualified for tax purposes. The SERP was established in 1990 to address IRC limitations on pension benefits that could be accrued under ourtax-qualified pension plan. Effective January 1, 2007, the SERP was closed to new participants. One of our NEOs is a participant in the SERP.

 

Qualified 401(k) Plan (“401(k) Plan”).Effective January 1, 2016, our NEOs became eligible to defer base salary and annual incentive compensation through the Company’s The 401(k) Plan is a qualified defined contribution plan the 401(k) Plan. (Prior to that time, our NEOs and other highly compensated employees were excluded from participating.) The 401(k) Plan is available to all Company employees and provides to all employeesemployees. Employees who participate in the plan by deferringcan defer eligible compensation and receive a Company matching contribution equal to 100% of the first four percent of compensation deferred, with immediate vesting.

vesting. Our NEOs became eligible to defer base salary and annual incentive compensation through the 401(k) Plan beginning January 1, 2016 (prior to that time, our executive officers and other highly compensated employees were excluded from participating). All of our NEOs participated in the 401(k) Plan during fiscal 2019.

Non-Qualified Deferred Compensation Plan (“EDCP”). In light of IRC limits imposed on the 401(k) Plan, we sponsor the EDCP Plan into whichwhereby our NEOsexecutive officers and other highly compensated employees may also defer up to 50% of their base salary and up to 85% of their annual incentive compensation. In coordination with the 401(k) Plan changes that took effect January 1, 2016, the EDCP Company matching contribution (previously 100% of the first three percent of compensation deferred) was replaced with a “restoration matching contribution.” This means the Company will match up to the full four percent potential matching contribution forFor participants whose compensation or deferrals to the 401(k) Plan (and related Company matching contributions) are limited due to the IRC limits applicable to the 401(k) Plan.Plan, the Company provides a “restoration matching contribution” to the EDCP of up to the first four percent of compensation deferred (as described in the 401(k) Plan). A participant must be employed on the last day of the calendar year to receive the restoration matching contribution, which is then 100% vested. Company matching contributions made prior to January 1, 2016 vested at a rate of 25% per year (such that the match fully vests after completion of four full years of service with the Company). Participants choose from an array of investment options, and their accounts are credited based upon the performance of the investment options. These obligations under the EDCP represent an unsecured claim against the Company.

Enhanced EDCP. Due to the closure of the SERP in 2007, employees hired or promoted into a Corporate Vice President position between January 1, 2007 and May 7, 2015 receive a supplemental contribution to their EDCP account of four percent of base salary and annual incentive each year for up to ten years. During 2017, four All of our NEOs, receivedexcept Mr. Tom, participated in the enhanced EDCP.EDCP during 2019.

 

 

d. Prohibition of Pledging and Hedging Transactions

 

The Company prohibits directors and Section 16 officers from engaging in certain derivative transactions in Company stock that hedge or offset, or are designed to hedge or offset, any decrease in the market value of equity securities granted as compensation to, or held directly or indirectly by, the employee or director, including:

 

Trading in “puts”, “calls”, or other derivative vehicles involving the Company’s securities (often referred to as hedging transactions);

Engaging inzero-cost collars, forward sales contracts or other hedging transactions in Company securities;

 

Holding Company securities in margin accounts; or

 

Pledging Company securities.

 

 

JACK IN THE BOX INC.  ï  20182020 PROXY STATEMENT4953

 

  CD&A — VII. ADDITIONAL COMPENSATION INFORMATION  

    

 

e. Executive Compensation Recovery (“Clawback”) Policy

 

The Company’s compensation recovery policy provides that in the event Jack in the Box Inc. materially restates all or a portion of its financial statements due to fraud or intentional misconduct, either committed by a Corporate Officer or knowingly permitted by a Corporate Officer, the Committee may take action to recover incentive cash compensation and performance-based equity awards that were based on the achievement of financial results that were subsequently restated. For purposes of this policy, a Corporate Officer is defined as an employee with the title of Corporate Vice President or above, and includes the JIB President and Qdoba President, as well as former Corporate Officers who were employed by the Company at the time of any fraud or intentional misconduct.

Executive compensation subject to recovery and/or cancellation may include:

 

i)

Annual incentive or incentive cash compensation paid to the Corporate Officer, plus a reasonable rate of interest,

 

ii)

Economic gains realized from the sale of shares awarded under a performance-based equity plan, and

 

iii)

Restricted stock or units (PSUs, RSUs), deferred stock awards or units, and outstanding stock options to the extent vesting of such awards is performance-based.

The Committee has the sole discretion to determine what action to take in the event of a restatement, including soliciting recommendations from the Audit Committee and the full Board and retaining outside advisors to assist in making its determinations. Any actions taken by the Committee would be independent of consequences imposed by law enforcement agencies, regulators or other authorities.

Since November 2015, all PSU grant agreements contain specific terms providing that the award is subject to recoupment in accordance with any clawback policy that the Company adopts pursuant to the listing standards of any national securities exchange or association on which the Company’s securities are listed or as is otherwise required by the Dodd-Frank Act or other applicable law. The Committee will continue to review potential changes to its policies, as appropriate in light of the Dodd-Frank Act final regulations.

 

 

f. Termination of Service

 

None of the 20172019 NEOs have (or had during fiscal 2019) employment agreements that provide for benefits upon termination of service, except (a) in the event of a change in control (“CIC”) (including for Mr. Guilbault, a change in control of the Qdoba business) as described in the “Compensation and Benefits Assurance Agreements”Agreements” discussion in the next section;section. However, the Committee approved certain severance benefits payable to Dr. Blankenship and (b)Mr. Rudolph in connection with their actual or anticipated restructure-related separation from service with the Company in January and February 2020, respectively. These benefits are described in the case“Potential Payments on Termination of Ms. Allen, whose employment offer letter provides for her to receive one year base salaryEmployment or Change in the event she is terminated without cause.Control” section.

When an NEO terminates employment with the Company, the NEO will receive amounts according to the specific terms and provisions of each compensation plan or benefit plan in which he or she participates. Such amounts may include:

 

Amounts contributed to and distributed under the Company’s qualified andnon-qualified deferred compensation plans (subject to the specific terms and requirements of IRC Section 409A).

 

Under the Company’s equity incentive plan and standard equity agreements, upon a CIC: (a) vesting of PSUs based on actual levels achieved for completed performance periods and target level for incomplete periods, and (b) accelerated vesting of RSUs and options only upon both a qualified CIC and qualifying termination, as described in the “Compensation & Benefits Assurance Agreements” section below.

Amounts accrued and vested in the Company’s pension plans (Retirement Plan for fourthree NEOs; plus, the SERP for Mr. Rebel only)Dr. Blankenship).

If termination is after the end of the fiscal year but before payment, the annual cash incentive award, subject to the Company’s achievement of performance goals.

If eligible to retire under a Company-sponsored retirement plan, in addition to the above, and consistent with the terms of our standard equity agreement, a corporate officerCorporate Officers (including all NEOs) isare entitled to the following:

 

Accelerated vesting of options equal to 5% additional vesting for each full year of service with the Company.

 

Prorated vesting of PSUs and full vesting of time-vested RSUs inIn accordance with the vesting schedule of each award.award, prorated vesting of PSUs; and, full vesting of time-vested RSUs granted in fiscal 2019 and earlier.

 

A prorated annual cash incentive award based on the number of full reporting periods worked in the fiscal year before retirement, subject to the Company’s eligibility requirements and achievement of performance goals.

If an NEO dies while employed by the Company, under the terms of the respective stock award agreements, all outstanding options and stock awards will become 100% vested on the date of his or her death (in the case of PSUs, subject to the number of periods completed during the performance period and actual performance achieved).

The values of additional potential payments to the NEOs are provided in the section entitled “Potential Payments Onon Termination of Employment or Change in Control” of this Proxy Statement.

 

 

5054    JACK IN THE BOX INC.  ï  20182020 PROXY STATEMENT

    

 

  CD&A — VII. ADDITIONAL COMPENSATION INFORMATION  

 

g. Compensation & Benefits Assurance (Change in Control) Agreements

 

The Committee believes that Compensation & Benefits Assurance Agreements (otherwise known as a Change in Control or “CIC” Agreements) benefit stockholders by providing an important incentive to senior executivesexecutive officers to remain focused on running the business in the case of a pending or actual CIC event. Accordingly, each of the NEOs and sevenfive other current officers have a CIC Agreement providing for compensation in the form of a lump sum payment and other benefits in the event of a qualifying termination within 24 months offollowing the effective date of the CIC of the Company (a “double-trigger” agreement).

In 2009, in line with market practices, the Committee determined not to enter into any future compensatory agreements with executives that obligate the The Company to providehas no taxgross-up payments intended to offset the cost of excise taxes imposed on “excess parachute payments.” Accordingly, no CIC Agreements entered into since 2009 includegross-up provisions. One grandfathered CIC Agreement, entered intoprovisions in any agreement with our CFO prior to 2009, was still in effect at fiscalyear-end, and includes agross-up provision. The CFO has announced his plan to retire in fiscal 2018.any executive offers.

The Company’s current form CIC agreement includes a “bestafter-tax” provision where benefits would be reduced only if doing so would result in a betterafter-tax economic position for the affected executive. Under this provision, there are nogross-ups payable; theThe executive is solely responsible for payment of any excise taxes and all other applicable federal, state, and local income and employment taxes. The Committee plans to continue to monitor the costs and appropriate terms and conditions of CIC Agreements in the future.

In fiscal 2017, in connection with the Company’s evaluation of strategic alternatives with respect to Qdoba, the Company entered into a CIC agreement with the Qdoba Brand President that would be triggered upon his termination following a separation of the Qdoba business.

A detailed discussion of the provisions of the CIC Agreements and associated monetary values is provided in thesub-section following the compensation tables entitledCompensation & Benefits Assurance Agreements.

 

 

h. Tax and Accounting Information

 

Internal Revenue Code Section 162(m)

The Committee and its Consultant consider the IRC Section 162(m) implications of all compensation decisions for our NEOs and other executives. Section 162(m) places a $1 million limit on the amount of compensation that the Company can deduct in any one taxable year for certain NEOs.covered employees. Historically, certain performance-based pay has been excluded from this limit. However, the performance-based pay exemption has been repealed, effective for taxable years beginning after December 31, 2017, such that compensation paid to certain NEOscovered employees in excess of $1 million per taxable year will not be deductible unless it qualifies for transition relief applicable to certain arrangements in place as of November 2, 2017.2017 (the “Section 162(m) Transition Relief”).

For the reasons discussed earlier, ourOur compensation programs have generallyhistorically been designed to provide the largestfor a substantial portion of an executive’s compensation to be delivered through programs generally intended to qualify as performance-based compensation under Section 162(m), including our annual performance incentive plan and long-term incentive plan in the form of stock options and performance shares. However, any such compensation will not qualify as performance-based compensation under Section 162(m) unless it qualifies for the Section 162(m) Transition Relief. Furthermore, in many cases, corporate objectives may not have necessarily alignaligned with the requirements ofto qualify as performance-based compensation under Section 162(m). Accordingly, the Committee mayhad (and continues to have) the discretion to grant awards or enter into compensation arrangements under which payments are not deductible under Section 162(m). For example, time-based restricted stock awards aredo not consideredqualify as performance-based compensation under Section 162(m) and accordingly,our annual performance incentive plan for 2019 and performance shares granted in 2019 are subject to the $1 million deductibility limit. Despite the Committee’s efforts to structure certain compensation in a manner intended to be exempt from

qualify as performance-based compensation under Section 162(m) and therefore not subject to its deduction limit, because of ambiguities and uncertainties as to the application and interpretation of Section 162(m) and the regulations issued

thereunder, including the uncertain scope of the transition relief under the legislation repealing the performance-based exemption from the deduction limit, no assurance can be given that such compensation intended to satisfyin fact will qualify for the requirementsSection 162(m) Transition Relief, and therefore, be eligible for exemption from Section 162(m) in fact will.the $1 million deductibility limit. Further, the Committee may modify compensation that was initially intended to be exempt from the $1 million deductibility limit under Section 162(m) if it determines that such modifications are consistent with our business needs. The Committee will continue to monitor the applicability of Section 162(m) to the Company’s ongoing compensation arrangements.

Internal Revenue Code Section 409A

Under IRC Section 409A, amounts deferred by an employee under anon-qualified deferred compensation plan (such as the SERP and EDCP) may be included in gross income when deferred and be subject to a 20% additional federal tax, unless the plan complies with certain requirements related to the timing of deferral election and distribution decisions.

The Company administers the SERP and EDCP intending to comply with Section 409A. The Company intends that its stock options are exempt from Section 409A.

Expensing of Stock and Option Awards

The Company accounts for compensation expense associated with stock and option awards in accordance with the Financial Accounting Standards Board (“FASB”) authoritative guidance on stock compensation, and it uses a Black Scholes valuation model to determine the “fair value” of our stock options at grant. For further details regarding the accounting for the compensation expense associated with stock and option awards, refer to Note 12,13, ShareShare-Based-Based Employee Compensationin the Company’s 20172019 Annual Report on Form10-K.

 

 

JACK IN THE BOX INC.  ï  20182020 PROXY STATEMENT5155

 

  COMPENSATION COMMITTEE REPORTCD&A — VIII. CEO PAY RATIO DISCLOSURE  

    

VIII. CEO PAY RATIO DISCLOSURE

Under SEC rules, we are required to calculate and disclose the ratio of the annual total compensation of our CEO to the annual total compensation of our median compensated employee. This ratio is a reasonable estimate calculated in accordance with applicable SEC rules.

Below is (i) the fiscal 2019 annual total compensation of our CEO, (ii) the fiscal 2019 annual total compensation of our median employee, and (iii) the ratio of the annual total compensation of our CEO to that of our median employee.

CEO PAY RATIO (Fiscal 2019)

  CEO Annual Total Compensation(1)

$6,202,069  

  Median Employee Annual Total Compensation

$     14,935  
  Ratio of CEO Annual Total Compensation to Median   Employee Annual Total Compensation415:1  

(1)

As set forth in the fiscal 2019 Summary Compensation Table.

The majority of our employee population consists of hourly part-time restaurant employees, where we provide work schedule flexibility to accommodate each individual’s personal schedule. Due to the variability in work hours and tenure, for fiscal 2019, we identified a new median employee using gross base wages and target incentive potential (“total cash compensation”) of all full-time and part-time employees who were employed by the Company on September 29, 2019. We did not annualize pay for employees employed for less than the full fiscal year.

•

Our median employee was identified as a restaurant Team Member who worked an average of 26 hours per week. After identifying the median employee, we used the same methodology to determine annual compensation as we use for our NEOs as set forth in theSummary Compensation Tablefor fiscal 2019

56    JACK IN THE BOX INC.ï  2020 PROXY STATEMENT

  COMPENSATION COMMITTEE REPORT  

 

COMPENSATION COMMITTEE REPORT

The Jack in the Box Compensation Committee is comprised solely of independent members of the Company’s Board of Directors. The Committee assists the Board in fulfilling its responsibilities regarding compensation matters and is responsible under its charter for determining the compensation of the Executive Officers. This includes reviewing all components of pay for our CEO and the other NEOs. The Committee reviewed and discussed the Compensation Discussion and Analysis contained in this Proxy Statement with its Consultant, with Management and with the Board. Based on this review and discussion, the Committee, on behalf of the Board, has authorized that this Compensation Discussion and Analysis be included in this Proxy Statement for fiscal 2017,2019, which ended October 1, 2017.on September 29, 2019.

THE COMPENSATION COMMITTEE

John T. Wyatt,Chair

Jean M. Birch

John P. Gainor

David L. Goebel

Sharon P. John

Madeleine A. KleinerMichael W. Murphy

 

52JACK IN THE BOX INC.  ï  20182020 PROXY STATEMENT57

  COMPENSATION RISK ANALYSIS  

    

  COMPENSATION RISK ANALYSIS   

 

COMPENSATION RISK ANALYSIS

The Committee has engaged in a thorough risk analysis of our compensation plans, programs, policies, and practices for all employees. This includes advice from the Committee’s independent Consultant regarding executive programs, and a detailed report, prepared by a Company Internal Compensation Risk Committee, describing the risk mitigation characteristics of the Company’s annual and long-term incentive programs. For the following reasons, the Committee believes that the design of our compensation programs, the governance of our programs, and our risk oversight process guard against imprudent risk taking that could have a material adverse effect on the Company.

Compensation Program Design Protections

 

 

Our base pay programs consist of competitive salaries that provide a fixed level of income on a regular basis. This mitigates incentives on the part of our executives and employees to take unnecessary or imprudent risks.

 

The Board approves the Company’s strategic plan, capital budget, and long-term financial and operational plans that serve as the basis for setting short and long-term incentive goals. Goals are intended to drive stockholder value and are set relative to the approved budget, historical and future expected performance, and a reasonable amount of stretch so that they do not encourage imprudent risk taking.

 

Our annual incentive programs provide variable pay opportunities for certain position levels based on achievement of multiple annual performance goals including both financial, operational, and, for some years, strategic goals. Goals are set at reasonable levels and payouts are managed as a percentage of pay.

The maximum awards that may be paid to executive officers under the annual and long-term incentive programs are capped, and the Committee retains the discretion to reduce payouts under the plans.

 

The largest amount of executive incentive compensation opportunity is tied to long-term incentive compensation that emphasizes sustained Company performance over time. This reduces incentive for executives and other employees to take risks that might increase short-term compensation at the expense of longer term Company results.

 

Equity awards have multi-year vesting, and RSU and PSU awards for executives have holding requirements until termination of service. This aligns the long-term interests of our NEOs and executives with those of our stockholders and discourages taking short-term risks at the expense of longer-term performance.

 

 

Structural Governance Protections

 

 

The Committee has adopted a clawback/compensation recovery policy that allows the Committee to take action to recover both cash compensation and performance-based equity awards for all NEOs and executives in the event of a material restatement based on fraud or intentional misconduct.

 

The Company has strong internal controls over the measurement and calculation of performance goals designed to keep them from being susceptible to manipulation.

 

Company policy also:

 

Prohibits directors and executive officers from engaging in hedging transactions involving our stock, which prevents executives from insulating themselves from poor stock performance by betting against our success;

Prohibits directors and officers from pledging Company stock or holding Company stock in margin accounts. This reduces the risk that executives might create incentives to focus on short-term performance at the expense of long-term performance; and

 

Has a formal ethics code of conduct and an ethics helpline and provides ethics training and communications to employees. The ethics program is intended to reinforce a culture of integrity.

 

The Company also has a Compensation Risk Committee that includes functional experts tasked specifically with evaluating potential unintended or unforeseen consequences of our compensation programs and their component parts.

 

 

58JACK IN THE BOX INC.  ï  20182020 PROXY STATEMENT53

  EXECUTIVE COMPENSATION  

    

  EXECUTIVE COMPENSATION  

 

EXECUTIVE COMPENSATION

The Summary Compensation Table (“SCT”) summarizes the total compensation of our NEOs for the fiscal year ended October 1, 2017,September 29, 2019, and the prior two fiscal years to the extent required under the Securities and Exchange Commission rules.

Summary Compensation Table

 

 

Name &

Principal Position

 

Fiscal

Year

  Salary(1)  Bonus  

Stock

Awards(3)

  

Option

Awards(4)

  

Non-Equity

Incentive Plan

Compensation (5)

  

Change in

Pension

Value &

NQDC

Earnings (6)

  

All

Other

Comp (7)

  Total 

Mr. Comma

  2017  $900,000  $0  $2,796,728  $858,264  $78,660  $0  $114,281  $4,747,933 

Chairman and CEO

  2016  $909,615  $0  $5,963,780  $703,380  $1,506,240  $97,294  $260,745  $9,441,054 
   2015  $842,308  $0  $2,631,761  $1,013,216  $1,632,000  $36,357  $239,702  $6,395,344 

Mr. Rebel

  2017  $564,000  $0  $618,362  $182,381  $37,506  $687,915  $176,235  $2,266,399 

Executive Vice President,

  2016  $573,615  $0  $648,609  $170,813  $708,243  $1,620,465  $179,577  $3,901,322 

Chief Financial Officer

  2015  $553,539  $0  $925,277  $283,110  $801,335  $1,256,873  $155,541  $3,975,675 

Ms. Allen

  2017  $515,000  $0  $593,882  $182,381  $14,678  $0  $94,635  $1,400,576 

JIB President

  2016  $522,596  $0  $489,171  $180,869  $644,651  $0  $146,770  $1,984,057 
   2015  $461,538  $200,000 (2)  $614,752  $171,581  $683,654  $0  $291,636  $2,423,161 

Mr. Guilbault

Qdoba President

  2017  $375,000  $0  $352,383  $116,922  $10,688  $577  $97,831  $953,401 

Mr. Rudolph

  2017  $512,000  $0  $609,155  $182,381  $34,048  $2,578  $149,063  $1,489,225 

Executive Vice President,

  2016  $520,308  $0  $612,256  $170,813  $642,944  $64,290  $186,302  $2,196,913 
Chief Legal and Risk Officer
& Secretary		  2015  $499,385  $0  $731,084  $246,271  $723,508  $48,499  $171,248  $2,419,995 

Name &

Principal Position

 

Fiscal

Year

  Salary(1)  Bonus (2)  Stock
Awards(3)		  Option
Awards(4)		  Non-Equity
Incentive Plan
Compensation (5)		  Change in
Pension
Value &
NQDC
Earnings (6)		  

All

Other
Comp (7)

  Total 

Mr. Comma

 

 

2019

 

 

$

925,000

 

 

$

0

 

 

$

3,905,996

 

 

$

0

 

 

 

$1,114,625

 

 

 

$110,975

 

 

$

145,473

 

 

$

6,202,069

 

Chairman and CEO

  2018  $919,711  $0  $2,160,655  $1,197,937   $   639,175   $           0  $126,443  $5,043,921 
  

 

2017

 

 

$

900,000

 

 

$

0

 

 

$

2,796,728

 

 

$

858,264

 

 

 

$     78,660

 

 

 

$           0

 

 

$

114,281

 

 

$

4,747,933

 

Mr. Tucker*

 

 

2019

 

 

$

575,000

 

 

$

0

 

 

$

1,598,190

 

 

$

0

 

 

 

$   519,656

 

 

 

$           0

 

 

$

84,167

 

 

$

2,777,013

 

Executive Vice President

  2018  $298,558  $0  $370,364  $0   $   137,536   $           0  $173,957  $980,415 

Chief Financial Officer

                                    

Dr. Blankenship

 

 

2019

 

 

$

378,000

 

 

$

0

 

 

$

465,999

 

 

$

0

 

 

 

$   341,618

 

 

 

$946,196

 

 

$

80,838

 

 

$

2,212,651

 

Former Executive Vice President

  2018  $376,096  $0  $451,933  $142,170   $   195,899   $           0  $74,871  $1,240,969 

Chief of Staff & Strategy

 

 

2017

 

 

$

369,000

 

 

$

0

 

 

$

372,324

 

 

$

111,566

 

 

 

$     24,539

 

 

 

$273,429

 

 

$

67,903

 

 

$

1,218,761

 

Mr. Rudolph

 

 

2019

 

 

$

525,000

 

 

$

50,000

 

 

$

806,909

 

 

$

0

 

 

 

$   474,469

 

 

 

$  56,070

 

 

$

144,471

 

 

$

2,056,919

 

Executive Vice President

  2018  $522,250  $0  $637,831  $246,991   $   272,081   $           0  $139,225  $1,818,378 

Chief Legal and Risk Officer

and Corporate Secretary

 

 

2017

 

 

$

512,000

 

 

$

0

 

 

$

609,155

 

 

$

182,381

 

 

 

$     34,048

 

 

 

$    2,578

 

 

$

149,063

 

 

$

1,489,225

 

Mr. Tom*

 

 

2019

 

 

$

325,000

 

 

$

10,000

 

 

$

529,546

 

 

$

0

 

 

 

$   176,231

 

 

 

$           0

 

 

$

33,752

 

 

$

1,074,529

 

Vice President

Chief Operating Officer

                                    

*

Mr. Tucker was not employed by the Company in fiscal 2017, and Mr. Tom was not an NEO in fiscal 2018 or 2017; therefore, in accordance with SEC’s disclosure rules, information regarding their compensation in those fiscal years is not included.

(1) 

This column shows the base salary earned during the fiscal year, including any amounts deferred by the NEOs in the Executive Deferred Compensation Plan (EDCP). The amounts for 2016 reflect one additional week of compensation due to the Company’s53-week fiscal year.

(2) 

Ms. Allen joinedThe column reflects special bonus payments to Messrs. Rudolph and Tom to recognize their additional responsibilities relating to the Company during fiscal 2015completion of the business securitization transaction and this amount represents the new hire cash bonus she received.leadership in the development and execution of an improved communications process with the franchise organization, respectively.

(3) 

This column shows the aggregate grant date fair value of the PSUs and RSUs granted during the applicable fiscal year, in accordance with FASB ASC Topic 718 (“ASC 718”) based on the assumptions and methodologies set forth in the Company’s 20172019 Annual Report on Form10-K (Note 12,13, Share-Based Employee Compensation). The 2016 amount for Mr. Comma also includes his specialone-time retention RSU award which vests 50% four years after the date of grant, and the remaining 50% five years after grant. The 2015 amount for Ms. Allen also includes hernew-hire grant of 4,207 RSUs, which vest 33% per year over three years on each anniversary of the grant.

  

The PSU awards which cliff vest after three years vest based on ourCompany performance during a three-fiscal year period. The performance metrics are established at the beginning of the three-year period when the grant is made; themade. The specific performance goals for all or a portion of the award are reviewed and typically set by the Committee (a) for the full three-year performance period at the time of grant for some performance metrics, and (b) for aone-year period at the beginning of each fiscal year for other performance metrics. The amounts for each year include the sum of the grant date fair values under ASC 718 for current year PSU grants and past year PSU grants, for which performance metrics were set in that year, at target values. Assuming the maximum level of performance achievement (150% of target), the PSU total values for each NEO in 20172019 are, respectively: Mr. Comma, $2,096,161;$2,689,199; Mr. Rebel, $481,649; Ms. Allen, $444,929;Tucker, $435,894; Dr. Blankenship, $322,367; Mr. Guilbault, $242,679Rudolph, $556,521, and Mr. Rudolph, $467,838.Tom, $120,780.

(4) 

This column shows the grant date fair values of stock options granted during the applicable fiscal year in accordance with ASC 718. The grant date fair values have been determined based on the assumptions and methodologies set forth in the Company’s 20172019 Annual Report on Form10-K (Note 12,13, Share-Based Employee Compensation).

(5) 

This column shows the annual incentive awards earned under the annual incentive plan for executives. Performance achievement is approved by the Committee following the end of the fiscal year. Annual incentive payments are made following Committee approval and reported in the SCT in the fiscal year for which the incentive is earned.

(6) 

This column shows the change in the estimated present value of each NEO’s accumulated benefit under (a) the qualified pension plan (the “Retirement Plan”) for Messrs. Comma, Rebel, Rudolph and Guilbault, and (b) the Supplemental Executive Retirement Plan (“SERP”) for Mr. Rebel only.Dr. Blankenship. The estimates are determined using interest rate and mortality rate assumptions consistent with those used in the Company’s financial statements for fiscal years ending September 29, 2019, September 30, 2018 and October 1, 2017, October 2, 2016, and September 27, 2015.2017. TheRP-2014 Mortality Table is used for the Retirement Plan and SERP estimates (the SERP uses a white collarwhite-collar adjustment). Both Plans used theMP-2016MP-2018 generational scale projected from 2006, modified to use 15 year15-year convergence to an ultimate rate of 0.75%. The amounts reported in this column may fluctuate significantly in a given year based on a number of factors that affect the formula to determine pension benefits, including changes in: (i) salary and annual incentive; (ii) years of service; and, predominantly (iii) the discount rates used in estimating present values, which were 3.24% for the SERP and 3.36% for the Retirement Plan for 2019; 4.37% for the SERP and 4.40% for the Retirement Plan for 2018; and, 3.80% for the SERP and 3.99% for the Retirement Plan for 2017, 3.60% for the SERP and 3.85% for the Retirement Plan for 2016, and 4.45% for the SERP and 4.79% for the Retirement Plan for 2015.2017. Participating NEOs become vested in the Retirement Plan after five years, and in the SERP after attaining age 55 and completing ten years of service. Both plans have been closed to new participants, and the Retirement Plan was sunset on December 31, 2015. For a detailed discussion of the Company’s pension benefits, see the sections of this Proxy Statement titled “Retirement Plan,” “Supplemental Executive Retirement Plan” and “Pension Benefits Table” and accompanying footnotes. The Company does not provide above-market or preferential earnings onnon-qualified deferred compensation.

 

54JACK IN THE BOX INC.  ï  20182020 PROXY STATEMENT59

  EXECUTIVE COMPENSATION  

(7)

Amounts in this column for fiscal 2019 are detailed in the following table:

All Other Compensation Table 
  

 

  

Perquisite

Allowance (a)

   Deferred
Compensation
Matching
Contribution (b)		   Company-
Paid Life
Insurance
Premiums		   Other  

Total

All Other
Compensation

 

Mr. Comma (CEO)

   $66,500    $78,973    $    0   $0   $145,473 

Mr. Tucker (CFO)

   $52,000    $31,947    $220   $0   $  84,167 

Dr. Blankenship (CSS)

   $52,000    $28,396    $442   $0   $  80,838 

Mr. Rudolph (CLO)

   $52,000    $39,006    $276   $53,189(c)   $144,471 

Mr. Tom (COO)

   $24,600    $  8,650    $502   $0   $  33,752 

(a)  Represents the total cash perquisite allowance to each NEO for fiscal 2019. The cash perquisite allowance is described in CD&A Section VI.e. (“Cash Perquisite Allowance”).

(b)   Represents matching contributions under the 401(k) Plan and the restoration matching contribution in the EDCP related to fiscal 2019 compensation.

(c)  Represents cash dividends paid on December 18, 2018; March 19, 2019; June 14, 2019 and September 10, 2019 for Mr. Rudolph’s restricted stock shares being held in an escrow account until his termination or retirement.

   

    

   

60    JACK IN THE BOX INC.ï  2020 PROXY STATEMENT

    

 

  EXECUTIVE COMPENSATION  

 

(7)

Amounts in this column for fiscal 2017 are detailed in the following table:

All Other Compensation Table 
    

Perquisite

Allowance

   Deferred
Compensation
Matching
Contribution (a)		   Company-
Paid Life
Insurance
Premiums		   Other  

Total

All Other
Compensation

 

Mr. Comma (CEO)

  $66,500   $47,781   $0   $0  $114,281 

Mr. Rebel (CFO)

  $52,000   $23,813   $307   $100,115 (b)  $176,235 

Ms. Allen (JIB President)

  $52,000   $42,256   $379   $0  $94,635 

Mr. Guilbault (Qdoba President)

  $52,000   $31,384   $599   $13,848 (c)  $97,831 

Mr. Rudolph (CLO)

  $52,000   $43,490   $384   $53,189 (b)  $149,063 
(a)

Reflect matching contributions under the 401(k) plan and the restoration matching contribution in the EDCP related to fiscal 2017 compensation. For Messrs. Comma, Rudolph and Guilbault and Ms. Allen, these amounts include the enhanced EDCP Company contribution they receive in place of the SERP, as discussed in the“Non-qualified Deferred Compensation” section below. In January 2017, Mr. Comma reached the maximum ten years of Company contributions to the EDCP and ceased receiving the enhanced EDCP Company contribution.

(b)

Represents cash dividends paid on December 16, 2016; March 20, 2017; June 12, 2017 and September 5, 2017 for Mr. Rebel and Mr. Rudolph’s restricted stock shares being held in an escrow account until each executive’s termination or retirement.

(c)

Represents reimbursement for relocation-related expenses while Mr. Guilbault was based in Denver, Colorado, pending the Company’s decision to relocate the Qdoba corporate office to San Diego.

JACK IN THE BOX INC.ï  2018 PROXY STATEMENT55

  EXECUTIVE COMPENSATION  

Grants of Plan-Based Awards

 

The following table provides information on fiscal 20172019 cash and equity incentive awards granted to our NEOs. Cash incentive awards are based on fiscal year performance under our annual incentive plan (“AIP”). Long-term equity incentive compensation includes stock options, time-based restricted stock units (“RSUs”), and performance share awards (“PSUs”) that vest, if at all, upon achievement of performance goals over a three fiscalthree-fiscal year period. The 20172019 incentive award terms are further described in CD&A Sections IV (“Elements of Compensation”) and VI (“Fiscal 20172019 Compensation”).

 

 

Grant

Date(1)

  

Approval

Date

  

Award

Type(2)

  Estimated Future Payouts Under
Non-Equity Incentive Plan Awards (3)		 Estimated Future Payouts Under
  Equity Incentive Plan Awards (4)		 

All Other
Stock
Awards:
Number of
Shares of

Stock or

Units #(5)

  

All Other
Option
Awards:
Number of

Securities

Underlying

Options # (6)

  

Exercise

or Base
Price of
Option

Awards

($/Share)

  

Grant

Date Fair
Value of
Stock and

Option

Awards

($) (7)

  

Grant

Date(1)

 

Approval

Date

 

Award

Type(2)

  

 

Estimated Future Payouts Under
Non-Equity Incentive Plan Awards (3)

 

 

Estimated Future Payouts Under
Equity Incentive Plan Awards  (4)

  

All Other
Stock
Awards:
Number of
Shares of

Stock or

Units #(5)

 

All Other
Option
Awards:
Number of

Securities

Underlying

Options # (6)

 

Exercise

or Base
Price of
Option

Awards

($/Share)

 Grant
Date Fair
Value of
Stock and
Option
Awards
($) (7)		 
Name 

Threshold

($)

 

Target

($)

 

Maximum

($)

 Threshold
(#)		 Target
(#)		 Maximum
(#)		  

  Threshold  

($)

 

Target

($)

 

  Maximum  

($)

 Threshold
(#)		 Target
(#)		 Maximum
(#)		 

Mr. Comma

(CEO)

 11/29/2016  11/17/2016  PSU 15-17        1,264  2,528  3,792        $253,441   11/29/2018   11/15/2018   PSU 17-19         1,128   2,256   3,385        $196,233 
 11/29/2016  11/17/2016  PSU 16-18     1,193  2,385  3,578     $239,120   11/29/2018   11/15/2018   PSU 18-20      1,080   2,159   3,239     $187,768 
 11/29/2016  11/17/2016  PSU 17-19     4,513  9,025  13,538     $904,880   11/29/2018   11/15/2018   PSU 19-21      8,099   16,199   24,298     $1,408,798 
 11/29/2016  11/17/2016  RSU        13,538    $1,399,288   11/29/2018   11/15/2018   RSU         24,298    $2,113,197 
 11/29/2016  11/17/2016  Option         41,026  $104.95  $858,264     11/15/2018   AIP   $ —  $925,000   $1,850,000               
  11/17/2016  AIP   $ —  $900,000  $1,800,000        

Mr. Rebel

(CFO)

 11/29/2016  11/17/2016  PSU 15-17        353  706  1,059        $70,800 

Mr. Tucker
(CFO)

  11/29/2018   11/15/2018   PSU 19-20      1,671   3,341   5,012     $290,596 
 11/29/2016  11/17/2016  PSU 16-18     290  579  869     $58,067   11/29/2018   11/15/2018   RSU         5,012    $435,894 
 11/29/2016  11/17/2016  PSU 17-19     959  1,917  2,876     $192,232   11/29/2018   11/15/2018   RSU-Retention         10,023    $871,700 
 11/29/2016  11/17/2016  RSU        2,876    $297,263     11/15/2018   AIP   $ —  $431,250   $   862,500               
 11/29/2016  11/17/2016  Option         8,718  $104.95  $182,381 
  11/17/2016  AIP   $ —  $423,000  $846,000        

Ms. Allen (JIB President)

 11/29/2016  11/17/2016  PSU 15-17        214  428  642        $42,911 
 11/29/2016  11/17/2016  PSU 16-18     307  613  920     $61,476 
 11/29/2016  11/29/2016  PSU17-19     959  1,917  2,876     $192,232 
 11/29/2016  11/17/2016  RSU        2,876    $297,263 
 11/29/2016  11/17/2016  Option         8,718  $104.95  $182,381 
  11/17/2016  AIP   $ —  $386,250  $772,500        

Mr. Guilbault (Qdoba President)

 11/29/2016  11/17/2016  PSU 15-17        107  214  321        $21,456 
 11/29/2016  11/12/2016  PSU 16-18     85  170  256     $17,078 

Dr. Blankenship
(CSS)

  11/29/2018   11/15/2018   PSU 17-19      147   293   440     $25,511 
 11/29/2016  11/17/2016  PSU 17-19     615  1,229  1,844     $123,253   11/29/2018   11/15/2018   PSU 18-20      128   257   385     $22,308 
 11/29/2016  11/17/2016  RSU        1,844    $190,596   11/29/2018   11/15/2018   PSU 19-21      962   1,923   2,885     $167,272 
 11/29/2016  11/17/2016  Option         5,589  $104.95  $116,922   11/29/2018   11/15/2018   RSU         2,885    $250,908 
  11/17/2016  AIP   $ —  $281,250  $562,500              AIP   $ —  $283,500   $   567,000               

Mr. Rudolph

(CLO)

 11/29/2016  11/17/2016  PSU 15-17        307  614  922        $61,593   11/29/2018   11/15/2018   PSU 17-19      240   479   719     $41,688 
 11/29/2016  11/17/2016  PSU 16-18     290  579  869     $58,067   11/29/2018   11/15/2018   PSU 18-20      223   445   668     $38,731 
 11/29/2016  11/17/2016  PSU 17-19     959  1,917  2,876     $192,232   11/29/2018   11/15/2018   PSU 19-21      1,671   3,341   5,012     $290,596 
 11/29/2016  11/17/2016  RSU        2,876    $297,263   11/29/2018   11/15/2018   RSU         5,012    $435,894 
 11/29/2016  11/17/2016  Option         8,718  $104.95  $182,381     11/15/2018   AIP   $ —  $393,750   $   787,500               

Mr. Tom
(COO)

  11/29/2018   11/15/2018   PSU 18-20      58   116   174     $10,074 
   11/17/2016  AIP   $ —  $384,000  $768,000                 11/29/2018   11/15/2018   PSU 19-21      405   810   1,215     $70,446 
  11/29/2018   11/15/2018   RSU         1,215    $105,668 
  11/29/2018   11/15/2018   RSU-Retention         3,948    $343,358 
    11/15/2018   AIP   $ —  $146,520   $   292,500               

(1)

All grants were approved at the November 201615, 2018 Committee meeting, with a grant date of November 29, 2016, the second business day of the Company’s next open trading window, as is the Company’s standard practice.2018. In accordance with ASC 718, the “grant date” is shown for the portion of the PSUs awarded in fiscal 20172019 that relate to the fiscal 20172019 performance period, and the portion of the PSUs awarded in fiscal 20152017 and 20162018 related to the fiscal 20172019 performance period, as further described in Footnote 7 to this table.

(2) 

For PSU awards, this column shows the three fiscal years of the PSU performance period.

(3) 

This column shows the potential payouts under the fiscal 20172019 annual incentive plan (“AIP”), which could have been earned based on performance in fiscal 2017.2019. The threshold payout is zero, target payout represents the amount payable for achieving the target level of performance, and maximum payout is capped at two times target payout. Incentive payouts are prorated between performance levels, and the payout values are calculated using the executive’s annual salary rate as specified at the time performance goals are approved by the Committee. The SCT for fiscal 20172019 shows the actual incentive compensation earned by our NEOs for fiscal 20172019 performance.

(4) 

This column shows the threshold, target, and maximum potential share payout levels for the PSUs under the Company’s long-term incentive plan for the fiscal2017-192019-21 PSU award and for the fiscal 20172019 performance period of the2015-172017-19 and2016-182018-20 PSU awards. The amount for the2017-19 PSU award represents (a) the entire three-fiscal year period for one of the two performance metrics (ROIC from Operations), and (b) the fiscal 2017 performance period only for the second metric (consolidated systemwide sales growth) for the reasons explained in Footnote 7. Threshold payout for all of the PSUs reflected above is 50% of target and requires achieving an established minimum performance requirement (there is no payout if performance doesn’t meet the minimum requirement). Maximum payout is 150% of target.

(5) 

This column shows the number of RSUs granted on November 29, 2016 that vest 25% per year over four years on each anniversary of the grant date.date, including the special retention grants for Messrs. Tucker and Tom(RSU-Retention)

(6) 

This column shows the number ofNo stock options were granted on November 29, 2016 that vest 33% per year over three years on each anniversary of the grant date. The options expire seven years from grant date. The exercise price is the closing price of Common Stock on the grant date ($104.95).in fiscal 2019.

(7) 

For stock options, the value represents the grant date fair value computed in accordance with ASC 718, which is a theoretical value at grant using a valuation model that requires the input of assumptions, including the expected volatility of our stock price. As such, the values may not reflect the actual amounts that our NEOs will realize; rather the actual amount realized will depend on the Company’s stock price relative to the exercise price. The values of PSUs and RSUs also represent the grant date fair values, as computed in accordance with ASC 718, based on the closing price of the Company’s Common Stock on the grant date discounted by the present value of the expected dividend stream over the vesting period, as applicable, which for the annual PSU grants was $100.26$86.97; and, for PSUsthe annual RSU grants, $86.97, including for the special RSU retention grants for Messrs. Tucker and $103.36 for RSUs.Tom. The grant date fair values of all awards were determined based on the assumptions and methodologies set forth in the Company’s 20172019 Annual Report on Form10-K (Note 12,13, Share-Based Employee Compensation). PSU awards, which cliff vest after three years, are made annually and vest based on the Company’s performance during the succeeding three-fiscal year period. The performance metrics are established at the beginning of the three- fiscal year period when the grant is made; while the specific performance goals are either set by the Committee (a) at thatthe time alsoof grant (or at a later time) for the full three-fiscal year(or remaining) performance period or (b) at the beginning of each fiscal year for that portion of the performance period; in accordance with SEC rules and ASC 718, the values shown on each of the three rows for the PSUs reflect the grant date fair value of the fiscal 20172019 performance period (total or portion, as applicable) of the award based on probable outcome (target level performance) of each of the PSU awards.

 

56JACK IN THE BOX INC.  ï  20182020 PROXY STATEMENT61

  EXECUTIVE COMPENSATION  

    

  EXECUTIVE COMPENSATION  

 

Outstanding Equity Awards at FiscalYear-End 2017 2019

 

The following table provides information on all outstanding option awards and unvested stock awards held by each of the NEOs at the end of fiscal 2017.2019. Each option grant is shown separately, and the vesting schedule is shown as Footnote 1 to the table. The market value of the stock awards is based on the closing price of Jack in the Box Inc. Common Stock as of the last trading day of the fiscal year, September 29, 2017,2019, which was $101.92.$90.45.

 

  Option Awards(1)  Stock Awards 
Name 

Option

Grant Date

  

Number of

Securities

Underlying

Unexercised

Options

Exercisable

(#)

  

Number of

Securities

Underlying

Unexercised

Options

Unexercisable

(#)

  

Option

Exercise

Price

($)

  

Option

Expiration

Date

  

Number

Of Shares

or Units

of Stock

That

Have Not

Vested

(#)(2)

  

Market

Value of

Shares or

Units of

Stock That

Have Not

Vested

($)

  

Equity

Incentive

Plan Awards:

Number of

Unearned

Shares,

Units or

Other Rights

That Have

Not Vested

(#) (3) 

  

Equity

Incentive

Plan Awards:

Market or

Payout Value

of Unearned

Shares,

Units or

Other Rights

That Have

Not Vested

($)

 

Mr. Comma (CEO)

  11/25/2014   30,640   15,320  $73.53   11/25/2021   148,682  $15,153,669   18,656  $1,901,420 
  11/24/2015   14,455   28,910  $75.24   11/24/2022     
   11/29/2016   —   41,026  $104.95   11/29/2023                 

Mr. Rebel (CFO)

  11/26/2013   25,263   —  $47.29   11/26/2020   80,147  $8,168,582   4,216  $429,695 
  11/25/2014   8,561   4,281  $73.53   11/25/2021     
  11/24/2015   3,511   7,020  $75.24   11/24/2022     
   11/29/2016   —   8,718  $104.95   11/29/2023                 

Ms. Allen

  11/25/2014   5,188   2,595  $73.53   11/25/2021   13,130  $1,338,210   4,334  $441,721 

(JIB President)

  11/24/2015   3,717   7,434  $75.24   11/24/2022     
   11/24/2015   —   8,718  $104.95   11/29/2023                 

Mr. Guilbault

  11/26/2013   1,925   —  $47.29   11/26/2020   6,087  $620,387   2,003  $204,146 

(Qdoba President)

  11/25/2014   1,297   1,297  $73.53   11/25/2021     
  11/24/2015   1,033   2,064  $75.24   11/24/2022     
   11/29/2016   —   5,589  $104.95   11/29/2023                 

Mr. Rudolph (CLO)

  11/25/2014   7,447   3,724  $73.53   11/25/2021   74,560  $7,599,155   4,216  $429,695 
  11/24/2015   3,511   7,020  $75.24   11/24/2022     
   11/29/2016   —   8,718  $104.95   11/29/2023                 
  Option Awards(1)  Stock Awards 
Name 

Option

Grant Date

  

Number of

Securities

Underlying

Unexercised

Options

Exercisable

(#)

  

Number of

Securities

Underlying

Unexercised

Options

Unexercisable

(#)

  

Option

Exercise

Price

($)

  

Option

Expiration

Date

  

Number

Of Shares

or Units

of Stock

That

Have Not

Vested

(#)(2)

  

Market

Value of

Shares or

Units of

Stock That

Have Not

Vested

($)

  

Equity

Incentive

Plan Awards:

Number of

Unearned

Shares,

Units or

Other Rights

That Have

Not Vested

(#) (3) 

  Equity
Incentive
Plan Awards:
Market or
Payout Value
of Unearned
Shares,
Units or
Other Rights
That Have
Not Vested
($)		 

Mr. Comma (CEO)

 

 

11/24/2015

 

 

 

14,455

 

 

 

—

 

 

 

$  75.24

 

 

 

11/24/2022

 

 

 

155,255

 

 

$

14,042,815

 

 

 

21,486

 

 

 

$1,943,409

 

 

 

11/29/2016

 

 

 

27,350

 

 

 

13,676

 

 

 

$104.95

 

 

 

11/29/2023

 

    
  

 

2/26/2018

 

 

 

21,596

 

 

 

43,192

 

 

 

$  90.06

 

 

 

2/26/2025

 

                

Mr. Tucker (CFO)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

$       —

 

 

 

—

 

 

 

18,818

 

 

$

1,702,088

 

 

 

3,963

 

 

 

$   358,453

 

Dr. Blankenship

 

 

11/25/2014

 

 

 

2,335

 

 

 

—

 

 

 

$  73.53

 

 

 

11/25/2021

 

 

 

10,245

 

 

$

926,660

 

 

 

2,551

 

 

 

$   230,738

 

(CSS)

 

 

11/24/2015

 

 

 

6,195

 

 

 

—

 

 

 

$  75.24

 

 

 

11/24/2022

 

    
 

 

11/29/2016

 

 

 

3,555

 

 

 

1,778

 

 

 

$104.95

 

 

 

11/29/2023

 

    
  

 

2/26/2018

 

 

 

2,563

 

 

 

5,126

 

 

 

$  90.06

 

 

 

2/26/2025

 

                

Mr. Rudolph (CLO)

 

 

11/25/2014

 

 

 

11,171

 

 

 

—

 

 

 

$  73.53

 

 

 

11/25/2021

 

 

 

75,298

 

 

$

6,810,704

 

 

 

4,431

 

 

 

$   400,784

 

 

 

11/24/2015

 

 

 

10,531

 

 

 

—

 

 

 

$  75.24

 

 

 

11/24/2022

 

    
 

 

11/29/2016

 

 

 

5,812

 

 

 

2,906

 

 

 

$104.95

 

 

 

11/29/2023

 

    
  

 

2/26/2018

 

 

 

4,452

 

 

 

8,906

 

 

 

$  90.06

 

 

 

2/26/2025

 

                

Mr. Tom (COO)

 

 

2/26/2018

 

 

 

1,079

 

 

 

2,160

 

 

 

$  90.06

 

 

 

2/26/2025

 

 

 

6,040

 

 

$

546,318

 

 

 

1,289

 

 

 

$   116,590

 

(1) 

All option awards vest 33% each year for three years from date of grant.

(2)

The amounts in this column are:

  

(a) unvested restricted stock awards or RSUs granted under the stock ownership program with vesting subject to the executive’s continued employment with the Company, and full vesting ten years from the grant date and issued only upon termination (Mr. Comma, 34,700; Mr. Rebel, 62,572; and Mr. Rudolph, 58,815);

  

(b) unvested RSUs that vest (i) for each executive: (A) 20% each year for five years for grants prior to November 2015, and (B) 25% each year for four years for the regular November 2015, November 2016, November 2018 and 2016December 2017 grants (Mr. Comma, 40,213;47,391; Mr. Rebel, 11,102; Ms. Allen, 8,577;Tucker, 15,035; Dr. Blankenship, 5,892; Mr. Guilbault, 3,986;Rudolph, 10,059; and Mr. Rudolph, 9,926)Tom, 5,684); and (ii) for Mr. Comma’s FY 2016 special retention stock award: 49,560 RSUs that vest 50% four years after the date of grant and the remaining 50% five years after grant; and (iii) for Mr. Tucker’s new hire grant, 2,990 RSUs, and Dr. Blankenship and Mr. Rudolph’s specialone-time RSU awards, 1,406 and 1,476 RSUs respectively, that vest 33% each year for three years; and

  

(c) unvested PSUs for which the performance goals have been met for a completed performance period and that vest upon the third anniversary of the November 2014,2016, November 20152018 and November 2016December 2017 grant dates, subject to the executive’s continued employment with the Company (Mr. Comma, 24,209;23,604; Mr. Rebel, 6,473; Ms. Allen, 4,553;Tucker, 793; Dr. Blankenship, 2,947; Mr. Guilbault, 2,101;Rudolph, 4,948; and Mr. Rudolph, 5,819)Tom, 356).

(3)

This column shows unvested PSUs granted in November 2014,2016, November 20152018 and November 2016December 2017 for which the performance achievement was not yet known at fiscalyear-end (“FYE”), and that vest upon the third anniversary of each grant date. The share amount is reported at target payout level.

 

62JACK IN THE BOX INC.  ï  20182020 PROXY STATEMENT57

  EXECUTIVE COMPENSATION  

    

  EXECUTIVE COMPENSATION  

 

Option Exercises and Stock Vested in Fiscal 20172019

 

The following table provides information on stock option exercises and shares acquired on the vesting of stock awards by the NEOs during fiscal 2017. Option award value realized is calculated by subtracting the aggregate exercise price of the options exercised from the aggregate fair market value of the shares of Jack in the Box Inc. stock acquired on the date of exercise.2019. Stock award value realized is calculated by multiplying the number of shares shown in the table by the closing price of our stock on the date the stock awards vested. There were no stock option exercises by the NEOs in fiscal 2019.

 

   Option Awards   Stock Awards(1) 
    Number of Shares
Acquired on
Exercise (#)		   Value Realized on
Exercise ($)		   Number of Shares
Acquired on
Vesting (#)		   Value Realized on
Vesting ($)		 

Mr. Comma (CEO)

   25,529   $1,474,431    36,557   $3,930,757 

Mr. Rebel (CFO)

   0   $0    13,714   $1,471,296 

Ms. Allen (JIB President)

   0   $0    2,836   $286,210 

Mr. Guilbault (Qdoba President)

   1,297   $42,051    2,747   $295,673 

Mr. Rudolph (CLO)

   20,722   $1,200,371    10,763   $1,155,575 
   Option Awards   Stock Awards(1) 
    Number of Shares
Acquired on
Exercise (#)		   

Value Realized on

Exercise ($)

   Number of Shares
Acquired on
Vesting (#)		   

Value Realized on

Vesting ($)

 

Mr. Comma (CEO)

  

 

0

 

  

 

$              0

 

  

 

26,248

 

  

 

$2,287,689

 

Mr. Tucker (CFO)

  

 

0

 

  

 

$              0

 

  

 

1,496

 

  

 

$   121,056

 

Dr. Blankenship (CSS)

  

 

0

 

  

 

$              0

 

  

 

4,431

 

  

 

$   381,767

 

Mr. Rudolph (CLO)

  

 

0

 

  

 

$              0

 

  

 

6,965

 

  

 

$   600,805

 

Mr. Tom (COO)

  

 

0

 

  

 

$              0

 

  

 

174

 

  

 

$     13,831

 

(1) 

The reported number of shares and value realized on vesting includes time-vested RSUs granted in prior years, and the PSUs granted in November 20132015 for the performance period fiscal 2014-2016,2016-2018, which vested in November 20162018 and resulted in a payout of 122.4%95% of the target PSU award.

Retirement Plan Benefits

 

The following table provides information on the pension benefits for the NEOs under each of the following pension plans:

 

Retirement Plan

The Retirement Plan is a Company-funded andtax-qualified retirement plan that was offered to eligible employees hired prior to January 1, 2011 that had reached age 21 and completed one year of service (at least 1,000 hours/year). FourThree NEOs who were hired prior to 2011 participate in the plan. Participants are 100% vested after completing five years (1,000 hours per year) of service. As of December 31, 2015, the Retirement Plan was “sunset” and employees no longer accrue additional benefits based on additional pay and service. The plan provides that a participant retiring at the normal retirement age of 65 will receive benefits based primarily on the formula described below:

 

 (1)

1% of the average of the five highest consecutive calendar years of pay (“Final Average Pay”, includes base(base salary and annual incentive)incentive out of the last ten years of eligible service (referred to as “Final Average Pay”), multiplied by the number of full calendar years and months while an eligible employee.

PLUS

 

 (2)

0.4% of Final Average Pay in excess of Covered Compensation (average of the Social Security taxable wage bases) multiplied by the number of full calendar years and months while an eligible employee (up to a maximum of 35 years).

A participant in the Retirement Plan who has at least ten years of vesting service may elect to begin receiving reduced payments as early as age 55. Note: Prior to 1989, benefits are subject to grandfathered minimum benefit accruals under

the previous plan. Retirement plan benefits are (i) not

permitted to be paid to participants while actively employed with Jack in the Box Inc. and (ii) typically paid in the form of a monthly annuity unless the present value of the accrued benefit is equal to or less than $20,000 (previously $15,000) at termination and in such event, may be paid in the form of a lump sum payment.

Supplemental Executive Retirement Plan (SERP)

Effective January 1, 2007, the SERP was closed to new participants. Executives and certain “highly compensated employees” who were hired or promoted into such position prior to January 1, 2007 (including one NEO) areis eligible to participate in the SERP. The SERP, established in 1990, provides for retirement benefits above amounts available under the Company’s Retirement Plan due to IRC limits that restrict benefits available under the Company’stax-qualified plan. The SERP is unfunded and not qualified for tax purposes.

The SERP provides that a participant retiring at the normal retirement age of 62 will receive a benefit equal to a target replacement income, based on final average pay and service. When combined with other amounts payable under the Company’stax-qualified pension benefit, and other qualified andnon-qualified deferred compensation programs, the target replacement income is up to 60% of Final Average Pay and subject to the following conditions:

 

Under the SERP, Final Average Pay is defined as the average of the five highest calendar years of pay (base salary and annual incentive) out of the last ten years of employment with the Company.

 

 

58JACK IN THE BOX INC.  ï  20182020 PROXY STATEMENT63

  EXECUTIVE COMPENSATION  

    

  EXECUTIVE COMPENSATION  

 

Service is defined as the entire period of employment in calendar years and months while an eligible employee.

 

There is no reduction in the target replacement income (60%) if a participant has 20 or more years of service. For participants with less than 20 years of service, the target replacement income percentage is determined by multiplying the number of years of service times 3%, up to a maximum of 20 years.

 

To receive a retirement benefit under the SERP, a participant must attain the earlier of (i) age 62 or (ii) age 55 with ten years of service while employed at Jack in the Box or while disabled. A participant may begin receiving payments as early as age 55 subject to a reduction in benefits (equal to 5/12 of 1% for each month by which commencement of benefit payments precedes the participant’s attainment of age 62).

 

Benefits under the SERP are only available to retirees as monthly payments and cannot be received in a lump sum.

 

Death benefits are payable if a participant dies while employed.

 

The SERP provides for spousal joint and survivor annuities.

The following table provides information on the actuarial present value of the NEOs’ accumulated pension and SERP benefits as of the end of fiscal 2017 (October 1, 2017)2019 (September 29, 2019), using fiscal 20172019 earnings (base salary and annual incentive). The maximum amounts used for the Retirement Plan do not exceed theIRS-prescribed limit applicable totax-qualified plans ($270,000265,000 for 2017)2015, the year the Retirement Plan was sunset). Present values were calculated using the interest rate and mortality assumptions used in the Company’s financial statements for fiscal year 2017.2019.

 

 

Pension Benefits TablePension Benefits Table Pension Benefits Table 
  Plan Name (1)  Number of Years
Credited Service
(#)		   Present Value of
Accumulated
Benefit at Normal
Retirement Age ($) (2)		   Payments During
Last Year ($)		   Plan Name (1)  Number of Years
Credited Service
(#)		   

Present Value of
Accumulated
Benefit at Normal

Retirement Age ($) (2)

   

Payments During

Last Year ($)

 

Mr. Comma (CEO)

  Retirement Plan   14   $381,504   $0   

Retirement Plan

  

 

14

 

  

 

$   470,556

 

  

 

$           0

 

Mr. Rebel (CFO)

  Retirement Plan   12   $525,998   $0 

Mr. Tucker (CFO)

  

None

  

 

N/A

 

  

 

N/A

 

  

 

$           0

 

Dr. Blankenship (CSS)

  

Retirement Plan

  

 

18

 

  

 

$   798,600

 

  

 

$           0

 

  SERP   14   $6,676,481   $0   

SERP

  

 

20

 

  

 

$5,106,040

 

  

 

$           0

 

Ms. Allen (JIB President)

  None   N/A    N/A    N/A 

Mr. Guilbault (Qdoba President)

  Retirement Plan   11   $387,445   $0 

Mr. Rudolph (CLO)

  Retirement Plan   8   $335,935   $0   

Retirement Plan

  

 

8

 

  

 

$   386,929

 

  

 

$           0

 

Mr. Tom (COO)

  

None

  

 

N/A

 

  

 

N/A

 

  

 

$           0

 

(1) 

Messrs. Comma, Rebel, Rudolph, and GuilbaultDr. Blankenship participate in the Retirement Plan; Mr. Rebeladditionally, Dr. Blankenship is the only NEO who participatesis a participant in the SERP.

(2) 

As of the end of fiscal 2017,2019, all fourthree Retirement Plan participants are vested in the Retirement Plan, and Mr. RebelDr. Blankenship has met the service and minimum age requirements for vesting in the SERP. The actuarial present value of accumulated benefits under the Retirement Plan and the SERP is based on discount rates of 3.99%3.36% and 3.80%3.24% respectively, as of October 1, 2017.September 29, 2019. TheRP-2014 Mortality Table is used for both the Retirement Plan and the SERP calculations (the SERP uses a white collar adjustment). Both Plans use theMP-2016MP-2018 generational scale projected from 2006, modified to use 15 year15-year convergence to an ultimate rate of 0.75%. Participants are assumed to retire at the latest of current age and the plan’s earliest retirement date with unreduced benefits. Nopre-retirement mortality, retirement, or termination has been assumed for the present value factors.

Non-Qualified Deferred Compensation

 

Executive Deferred Compensation Plan (EDCP)

In addition to eligibility to participate in the 401(k) Plan, the NEOs and other highly compensated employees are eligible to defer up to 50% of base salary and up to 85% of annual incentive pay to the EDCP, an unfunded,non-qualified deferred compensation plan, with benefits paid by the Company out of its general assets. The plan is subject to IRC Section 409A for all deferred compensation earned on or after January 1, 2005; deferred compensation earned prior to 2005 is not subject to Section 409A requirements and continues to be governed under the terms of the plan and tax laws in effect on or before December 31, 2004, as applicable. In conjunctionTo provide participants with the 401(k) Plan changes that took effect January 1, 2016, the EDCP Company matching contribution (previously 100% of the first three percent of compensation deferred) was replaced with a “restoration matching contribution.” This means the Company will matchopportunity to receive up to the full four percent potential matching contribution offered in the 401(k), the Company provides a “restoration matching contribution” to the EDCP for

participants whose deferrals to the 401(k) Plan (and related Company matching contributions) wereare limited due to the IRC limits

applicable to the 401(k) Plan. A participant must be employed on the last day of the calendar year to receive the restoration matching contribution, which is then 100% vested. Company matching contributions made prior to January 1, 2016 vest at a rate of 25% per year (such that the match fully vests after completion of four full years of service with the Company).

Participants choose from an array of investment options.

Enhanced EDCP — Beginning January 1, 2007, new Corporate Vice Presidents and aboveexecutive officers who otherwise would have been eligible for the SERP receivereceived an additional annual Company contribution of 4% of base salary and annual incentive to their EDCP account for up to ten years. In January 2017,The two NEOs who received the enhanced EDCP, Mr. Comma and Mr. Rudolph, ended theirten-year period during which Mr. Comma received the additional 4% Company EDCP contribution came to an

JACK IN THE BOX INC.ï  2018 PROXY STATEMENT59

  EXECUTIVE COMPENSATION  

end, and he ceasedof receiving these contributions. Participants become vestedcontributions in theJanuary 2017 and November 2017, respectively. The supplemental contribution vested at thea rate of 25% per year (such that they areparticipants were fully vested after completing four full years of service with the Company). The Enhanced EDCP was closed to new participants as of May 7, 2015.

64    JACK IN THE BOX INC.ï  2020 PROXY STATEMENT

  EXECUTIVE COMPENSATION  

The following table provides information on the contributions, earnings, withdrawals and distributions in the Executive Deferred Compensation Plan during fiscal 20172019 and the

account balances as of the end of fiscal 2017.2019. As of October 1, 2017,September 29, 2019, all NEOs except Ms. Allenwho participated in the Enhanced EDCP, are 100% vested in Company contributions.

 

 

Non-Qualified Deferred Compensation Plan TableNon-Qualified Deferred Compensation Plan Table Non-Qualified Deferred Compensation Plan Table 
  Executive
Contributions in
Fiscal 2017(1)		   Registrant
Contributions In
Fiscal 2017(2)		   Aggregate
Earnings in
Fiscal 2017		   Aggregate
Withdrawals/
Distributions		   Aggregate
Balance at
FYE17 (3)		   Executive
Contributions in
Fiscal 2019(1)		   Registrant
Contributions In
Fiscal 2019(2)		   Aggregate
Earnings in
Fiscal 2019		   Aggregate
Withdrawals/
Distributions		   Aggregate
Balance at
FYE19(3)		 

Mr. Comma (CEO)

  $232,866   $47,781   $297,892   $—   $3,798,771   

 

$342,713

 

  

 

$70,435

 

  

 

$226,811

 

  

 

$          —

 

  

$

4,690,780

 

Mr. Rebel (CFO)

  $24,435   $23,813   $91,907   $—   $1,325,431 

Ms. Allen (JIB President)

  $37,518   $42,256   $53,470   $—   $527,627 

Mr. Guilbault (Qdoba President)

  $58,922   $31,384   $172,368   $—   $2,365,906 

Mr. Tucker (CFO)

  

 

$103,931

 

  

 

$26,939

 

  

 

$           0

 

  

 

$          —

 

  

$

0

 

Dr. Blankenship (CSS)

  

 

$  29,149

 

  

 

$17,635

 

  

 

$196,477

 

  

 

$          —

 

  

$

2,818,481

 

Mr. Rudolph (CLO)

  $54,605   $43,490   $141,393   $—   $1,510,627   

 

$  99,947

 

  

 

$28,829

 

  

 

$  91,196

 

  

 

$          —

 

  

$

1,875,132

 

Mr. Tom (COO)

  

 

$           0

 

  

 

$         0

 

  

 

$           0

 

  

 

$          —

 

  

$

0

 

(1) 

These amounts are also included in the salary andnon-equity incentive plan compensation columns in the 20172019 row of the SCT.

(2) 

These amounts represent only the restoration matching contributions in thenon-qualified EDCP and are reported as “All Other Compensation” in the SCT.SCT and represent a portion of the total amount reported as deferred compensation matching contribution in footnote 7 to the SCT, which also includes contributions to the 401(k).

(3) 

Amounts reported in this column are included in the “Salary” column in the SCT in prior years if the NEO was a named executive officer in previous years. The balance at FYE 20172019 reflects the cumulative value of each NEO’s deferrals, match, and investment gains or losses. These FYE amounts do not include contributions or earnings related to the fiscal 20172019 annual incentive payment which was paid after the end of fiscal 20172019 (but which amounts are included in the executive and registrant contributions columns of this table).

Potential Payments on Termination of Employment or Change in Control

 

 

Compensation & Benefits Assurance Agreements (CIC Agreements).The Company provides CIC Agreements because it considers it in the best interest of its stockholders to encourage continued employment of key management in the event of a CIC transaction. These agreements help facilitate successful performance by key executives during an impending CIC, by protecting them against the loss of their positions following a change in the ownership or control of the Company and ensuring that his or her expectations forlong-term incentive compensation arrangements will be fulfilled. Generally, under the agreements, a Company CIC is defined to include:

 

(i)

the acquisition by any person or group of 50% or more of the outstanding stock or combined voting power of the Company (excluding acquisitions by the fiduciary of the Company benefit plans or certain affiliates);

 

(ii)

circumstances in which individuals constituting our board of directors generally cease to constitute a majority of the board; and

 

(iii)

certain stockholder-approved mergers, consolidations, sales of assets or liquidation of the Company.

In connection with the Company’s evaluation of Qdoba strategic alternatives, in 2017, the Company entered into a second agreement with Mr. Guilbault, providing him similar benefits to the CIC Agreement in the event of his qualifying termination from Qdoba within 24 months following a separation of the Qdoba business (a “Qdoba CIC”), defined as either (a) a complete liquidation of Qdoba Restaurant

Corporation, or (b) the consummation of a sale or disposition of all or substantially all of the business or assets of the Qdoba business to an unrelated third party. The benefits are the same as those provided in the CIC agreement, except where specified below, and for Mr. Guilbault, references to a CIC below also include a Qdoba CIC.

These CIC Agreements provide certain specified benefits to the executive if, within twenty-four (24) full calendar months following the effective date of a CIC, his or her employment is terminated (“Qualifying Termination”):

 

(i)

involuntarily other than for cause (which is defined in the agreements and includes acting deliberately and in bad faith or committing fraud), death, or disability, or

(ii)

voluntarily for good reason. Voluntary termination for good reason is generally defined as the executive’s resignation due to: (a) the assignment of the executive to duties or responsibilities inconsistent with his or her status, or a reduction or alteration in the nature or status of his or her duties or responsibilities in effect as of 90 days prior to the CIC event; (b) the acquiring company’s requirement that the executive be based at a location in excess of 50 miles from his or her location immediately prior to a CIC; (c) a material reduction in base salary; (d) a material reduction in the Company’s compensation, health and welfare, retirement benefit plans, or any perquisites, unless an alternative plan is provided of a comparable value; or (e) the Company’s failure to require any successor to assume the CIC Agreement benefits.

CIC benefits under the CIC Agreements are not provided in the event of terminations by reason of death, disability,

60    JACK IN THE BOX INC.ï   2018 PROXY STATEMENT

  EXECUTIVE COMPENSATION  

voluntary termination without good reason, or the Company’s involuntary termination of the executive’s employment for cause. CIC benefits under the CIC Agreements are also not provided in the event of a CIC when there is not a corresponding Qualifying Termination (except for a benefit for Mr. Guilbault in the event of a Qdoba CIC).Termination. In the event of a CIC of the Company and Qualifying Termination of an executive covered under a CIC Agreement as described above, the executive is entitled to the following severance benefits:

 

1.

A lump sum cash payment equal to his or her accrued but unpaid annual salary and unreimbursed business expenses.

 

JACK IN THE BOX INC.ï  2020 PROXY STATEMENT65

  EXECUTIVE COMPENSATION  

2.

A lump sum cash amount equal to a multiple of the executive’s then-current annual salary, based on his or her position, as follows:

 

    Multiple of Salary 

Mr. Comma

  

3.0x

Messrs. Rebel, Guilbault and Rudolph and Ms. AllenTucker, and Dr. Blankenship

  

2.5x

Mr. Tom

  

1.5x

 

3.

A lump sum cash incentive award equal to the multiple above times the greater of: (a) the average annual incentive percentage for the last three fiscal years prior to the CIC times annual salary; or (b) the average dollar amount of the annual incentive paid for the last three fiscal years prior to the CIC. If an executive does not have three full years of incentive awards, the Company will apply the target incentive award percentage for each missed year.

 

4.

Continuation of health insurance coverage at Company expense at the same cost and same coverage level as in effect as of the executive’s Qualifying Termination date (subject to changes in coverage levels applicable to all employees generally) for a specified coverage period as provided below, to run concurrently with any coverage provided under COBRA. If an executive receives health insurance coverage with a subsequent employer prior to the end of 18 months, the continuation of health insurance coverage under the agreement is discontinued.

 

    Coverage Period 

Mr. Comma

  

36 months

Messrs. Rebel, Guilbault and Rudolph and Ms. AllenTucker, and Dr. Blankenship

30 months

Mr. Tom

   3018 months 

 

5.

Standard outplacement services at Company expense, from a nationally recognized outplacement firm selected by the executive, for a period of up to one year from the date of Qualifying Termination.

 

6.

Vesting of unvested restricted stock and RSUs, PSUs, andin-the-money stock options, in accordance with the terms of the applicable award agreement and stock incentive plan. SinceFrom 2014 through the end of fiscal 2019, all options and RSU awards provide that unvested units that continue after a CIC are “double-

trigger”“double-trigger”, requiring both a CIC and Qualifying Termination for vesting to accelerate. (For grants prior to 2014, and for PSU grants, no Qualifying Termination is required.) Since 2014, theThe terms of PSU awards provide for accelerated vesting upon a CIC that pays out at actual levels achieved for completed performance periods and at target level for incomplete periods. See Footnote 4 to the following table. With regard to Mr. Guilbault’s additional Qdoba CIC agreement, in the event of a Qdoba separation, the acquiring corporation shall assume the outstanding equity awards or substitute substantially equivalent awards in the acquirer’s stock. Should the acquirer elect not to assume or substitute, the agreement provides that Mr. Guilbault’s outstanding awards will be cancelled and he will receive alump-sum cash payment equal in value to the fair market value of the cancelled awards on the effective date of the Qdoba CIC.

7.

There is one NEO (our CFO)No outstanding CIC agreements (or any other agreements with apre-2009 agreement in effect as of fiscal 2017 year-end (who has announced his intent to retire during fiscal 2018); in the event thatour NEOs) provide for any portion of the payments and benefits providedexcise tax gross up for under his agreement are considered excess parachute payments under IRC Section 280G and are thus subject to the 20% excise tax imposed by IRC Section 4999, the agreement provides for a conditionalgross-up payment to reimburse the CFO for the excise tax and additional taxes resulting from the imposition of the excise tax.280G. Thegross-up payment will be made only if the amounts treated as “parachute payments” under Section 280G exceed the Section 280G threshold by more than 10%. If the parachute payments exceed the Section 280G threshold by 10% or less, then the payments to the executive will be reduced to an amount that is one dollar less the Section 280G threshold. At the time this agreement was entered into, the potential tax “gross up” payment, in the Committee’s view, was an appropriate method for the Company to insulate the executives from excise tax imposed under Section 4999 and was a more common practice in the market.

8.

For agreements in 2009 and later, there is no excise tax gross up. The four remaining NEOs are parties to this form ofa CIC agreement, which provides for payment of the greater of: (i) the aggregate parachute payments reduced to the maximum amount that would not subject the executive to relevant excise taxes; or (ii) the aggregate parachute payments, with the executive paying the relevant excise taxes and such other applicable federal, state and local income and employment taxes. Under this “best after tax” provision, the executive is solely responsible for payment of excise taxes and other applicable federal, state, and local income and employment taxes.

Supplemental Executive Retirement Plan. For the one NEO who is a SERP participant, in the event of an involuntary termination (or material diminution in duties or responsibilities

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or material downward change of title) within 24 months following a CIC, the SERP provides for payment to the participant of the actuarial equivalent of his accrued early retirement benefit unreduced for early commencement, in the form of three annual installments commencing on termination.

Non-Qualified Deferred Compensation.In the event of a CIC, in accordance with the EDCP, a participant shall become 100% vested in any Company contributions without regard to service requirements. Accounts shall be distributed in accordance with the participant’s existing distribution election (on termination of employment or under a scheduledin-service withdrawal).

Termination of Employment Without Change in Control.In the event of a termination not related to a CIC, NEOs will receive amounts under the terms and provisions of the specific plans in which they are a participant, including the Retirement Plan, the SERP and the EDCP, and with respect to Ms. Allen, her offer letter.EDCP.

Mr. Rebel isDr. Blankenship was the only fiscal-2019 NEO who is a SERP participant and eligible to retire under that plan. Messrs. Rebelwill receive SERP benefits. He and Mr. Rudolph are both eligible to retire under the Retirement plan.Plan.

In addition, Dr. Blankenship and Mr. Rudolph are eligible to receive certain severance benefits that were approved by the Compensation Committee in connection with their actual or anticipated restructure-related separation from service in January and February 2020 respectively, as further described in the paragraph following the table and footnotes, below.

 

 

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  EXECUTIVE COMPENSATION  

 

Potential Payments on Termination of Employment or Change in Control

 

 

The following table helps illustrate the potential payments and benefits our current NEOs would be entitled to as of fiscal 20172019 year-end: (1) in the event of a termination of employment not related to a CIC, including termination due to death or disability; (2) in the event of a CIC and a Qualifying Termination, and (3) in the event of a CIC without a corresponding termination of employment. All references to “CIC” refer to a “Company CIC” as defined in theCompensation & Benefits Assurance Agreementssection —except in the final two rows for Mr. Guilbault explained in Notes 8 and 8a below.section.

The potential payments assume that the termination and/or termination resulting from a CIC occurred on the last day of fiscal 2017, October 1, 2017,2019, September 29, 2019, and, where applicable, use the closing price of our Common Stock of $101.92$90.45 on September 29, 20172019 (the last market trading day in the fiscal year). The actual amounts to which an NEO may be eligible to receive can only be determined at the time of such termination or CIC, and therefore, the actual amounts will vary from the estimated amounts in the table below.

 

 

  Lump Sum
Cash
Payment (1)		 Annual
Incentive (2)		 Continuation
of Benefits (3)		  Equity
Incentive
and Stock
Awards (4)		  Pension
and SERP
Benefits (5)		  Total
  Lump Sum
Cash
Payment (1)		 Annual
Incentive (2)		 Continuation
of Benefits (3)		   Equity
Incentive
and Stock
Awards(4)		   Pension
and SERP
Benefits(5)		   Gross-Up for
Excise Tax (6)		   Total 

Mr. Comma (CEO)

               

 

 

 

 

 

   

 

   

 

   

 

Termination Reason

            

Triggering Event

   

 

 

 

 

 

   

 

   

 

   

 

Voluntary/Involuntary Termination   —   —   —    —   $381,504    —   $381,504      —  —    —   $470,556   $470,556

Death

   —   —   —   $13,922,864   $381,504    —   $14,304,368      —  —   $11,756,374   $470,556   $12,226,930

Disability

   —   —   —   $12,716,610   $381,504    —   $13,098,114      —  —   $11,739,529   $470,556   $12,210,085

CIC/Qualifying Termination

  $0 (7)  $2,694,010 (7)  $50,596   $15,190,247   $381,504    —   $18,316,357    $2,775,000 $1,834,275 $57,108   $13,427,526   $470,556   $18,564,465

CIC/No Termination

   —   —   —   $5,531,869    —    —   $5,531,869      —  —   $4,641,463    —   $4,641,463

Mr. Rebel (CFO)

            

Termination Reason

            

Mr. Tucker (CFO)

              

Triggering Event

              
Voluntary/Involuntary Termination   —   —   —   $1,735,462   $7,202,479    —   $8,937,941      —  —    —    —    —

Death

   —   —   —   $1,735,462   $7,202,479    —   $8,937,941      —  —   $1,501,887    —   $1,501,887

Disability

   —   —   —   $1,426,631   $7,202,479    —   $8,629,110      —  —   $1,501,887    —   $1,501,887

CIC/Qualifying Termination

  $1,410,000  $1,298,845  $35,393   $2,017,563   $5,937,738    —   $10,699,539    $1,437,500 $1,151,797 $49,257   $1,790,131    —   $4,428,685

CIC/No Termination

   —   —   —   $891,028    —    —   $891,028      —  —   $430,215    —   $430,215

Ms. Allen (JIB President)

            

Termination Reason

            

Dr. Blankenship (CSS)

              

Triggering Event

              
Voluntary/Involuntary Termination  $515,000   —   —    —    —    —   $515,000      —  —   $603,272   $5,904,640   $6,507,912

Death

   —   —   —   $1,453,353    —    —   $1,453,353      —  —   $603,272   $5,904,640   $6,507,912

Disability

   —   —   —   $1,181,342    —    —   $1,181,342      —  —   $601,273   $5,904,640   $6,505,913

CIC/Qualifying Termination

  $929,152 (7)  $1,185,144  $122,448   $1,741,483    —    —   $3,978,227    $945,000 $468,957 $49,257   $801,714   $5,037,212   $7,302,140

CIC/No Termination

   —   —   —   $738,196    —    —   $738,196      —  —   $346,195    —   $346,195

Mr. Guilbault (Qdoba President)

            

Termination Reason

            

Mr. Rudolph (CLO)

              

Triggering Event

              
Voluntary/Involuntary Termination   —   —   —    —   $387,445    —   $387,445      —  —   $2,216,628   $386,929   $2,603,557

Death

   —   —   —   $616,066   $387,445    —   $1,003,511      —  —   $2,216,628   $386,929   $2,603,557

Disability

   —   —   —   $524,177   $387,445    —   $911,622      —  —   $2,213,155   $386,929   $2,600,084

CIC/Qualifying Termination

  $864,690 (7)  $740,860  $21,283   $761,293   $387,445    —   $2,775,571    $1,312,500 $651,328 $38,598   $2,561,338   $386,929   $4,950,693

CIC/No Termination

   —   —   —   $324,915    —     $324,915      —  —   $1,873,415    —   $1,873,415

Qdoba CIC/Qualifying Termination (8)

  $651,161  $740,860  $21,283   $761,293   $387,445     $2,562,042 

Qdoba CIC/No Termination (8a)

  $187,500   —   —   $761,293    —    —   $948,793 

Mr. Rudolph (CLO)

            

Termination Reason

            

Mr. Tom (COO)

              

Triggering Event

              
Voluntary/Involuntary Termination   —   —   —    —   $335,935    —   $335,935      —  —    —    —    —

Death

   —   —   —   $5,157,105   $335,935    —   $5,493,040      —  —   $514,118    —   $514,118

Disability

   —   —   —   $4,864,087   $335,935    —   $5,200,022      —  —   $514,118    —   $514,118

CIC/Qualifying Termination

  $1,280,000  $1,178,987  $35,393   $5,439,206   $335,935    —   $8,269,521    $487,500 (6)  $234,366 (6)  $33,554   $663,759    —   $1,419,179

CIC/No Termination

   —   —   —   $4,362,117    —    —   $4,362,117       —  —   $148,799    —   $148,799

 

(1) 

Lump Sum Cash Payment (“Cash Payment”):: For all NEOs, amounts shown in the table for a CIC/Qualifying Termination reflect a multiple of annual base salary under the CIC Agreement, as described in the Compensation and Benefits Assurance Agreements section (“CIC Section”) above. In the case of Ms. Allen, the amount shown in the table for a termination not related to a CIC represents the one year base salary she is entitled to for termination without cause pursuant to her employment offer letter.

(2) 

Annual IncentiveIncentive:: Reflects multiple of annual incentive as described in the CIC Section.

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(3) 

Continuation of BenefitsBenefits:: Reflects benefits continuation as described in the CIC section, including an outplacement fee estimate of $10,000; and 100% vesting of company matching and supplemental contributions to the EDCP.

(4) 

Equity Incentive and Stock AwardsAwards:: The amounts shown in the table reflect only the value of unvested awards and options that would be accelerated upon termination and/or CIC as applicable; they do not include the vested portion of awards and options as of the end of fiscal 2017.2019. For Mr. Rebel,Rudolph and Dr. Blankenship, the only NEONEOs who waswere retirement eligible at FYE 2017,2019, the value of histheir unvested equity that would be accelerated on termination (retirement), is shown in the “Voluntary/Involuntary Termination” row. For a CIC, the amounts shown reflect only the amount of acceleration of unvested restricted stock awards and stock units, unvested performance shares, andin-the-money unvested stock options. All references to termination exclude terminations for cause.

 

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  EXECUTIVE COMPENSATION  

 a)

Pre-2011 Stock Awards (RSA/RSU under the stock ownership program in place prior to fiscal 2011, for Messrs. Comma Rebel and Rudolph only):

 

 (i)

Upon termination not related to a CIC, if eligible to retire under a Company sponsored retirement plan, determination of shares vested is based on a schedule of the greater of: a) 30% of the award vesting three years from the date of grant, and 10% vesting for each year of service thereafter as of the date of retirement; b) such vesting as would have occurred had 10% of the award vested for each year of service with the Company, or c) in such greater amount as may be determined by the Board in its sole discretion.

 

 (ii)

Upon termination not related to a CIC, and not eligible to retire under a Company sponsored retirement plan, determination of shares vested is based on a schedule of 15% vesting on or after three years from the grant date, and 5% vesting for each year of service thereafter as of the termination date.

 

 (iii)

Upon death, disability, or a CIC, these stock awards would vest 100%.

 

 b)

Performance Shares (PSUs):

 

 (i)

Upon termination not related to a CIC, if eligible to retire under a Company sponsored retirement plan or due to death or disability, and the awardee had been continuously employed by the Company as of the last dateday of the first fiscal year of the performance period, the performance shares would vest on a prorated basis, based on the number of full accounting periods the awardee was continuously employed by the Company during the performance period and to the extent to which performance goals are achieved.

 

 (ii)

Upon termination not related to a CIC (other than as described above), the award would be cancelled.

 

 (iii)

Upon a CIC, PSUs awarded prior to 2014 would vest and pay out at the greater of the performance level attained as of the date of the CIC or 100% of target, and PSUs granted in 2014 and thereafter would vest and pay out based on (A) actual achievement for completed fiscal years for which targets have been set and performance results measured and (B) at 100% of target for any incomplete fiscal years for which performance results are not known.

For the accelerated portion of PSUs for which performance was unknown as of the last day of fiscal 2017,2019, the amounts in the table assume that the PSUs will be accelerated based on target performance levels.

 

 c)

Time-vested RSUs:

 

 (i)

Upon termination not related to a CIC, disability, or retirement, the award would be cancelled.

 

 (ii)

Upon death, disability or retirement, the RSUs would vest 100%.

 

 (iii)

Upon a CIC, RSUs awarded prior to 2014 would vest 100%, and RSUs awarded insince 2014 and thereafter would vest only upon a Qualifying Termination.Termination, unless not assumed by an acquirer.

 

 d)

Option Awards:

 

 (i)

Upon termination not related to a CIC, and eligible to retire under a Company sponsored retirement plan, determination of shares vested is based on a formula of 5% additional vesting for each year of service with the Company.

 

 (ii)

Upon termination not related to a CIC, and not eligible to retire under a Company sponsored retirement plan, there is no acceleration of option awards.

 

 (iii)

Upon death, options would vest 100%.

 

 (iv)

Upon a CIC, where options are not assumed by the acquiring company, options awarded prior to 2014 would vest 100%, while those awarded in 2014 and thereafter would vest 100% only upon a Qualifying Termination related to the CIC.

 

 (v)

Vesting upon disability is based on the number of shares which would have been vested as of twelve months following the optionee’s first day of absence from work with the Company, and therefore, for purposes of this table, no additional vesting is applied in the event of a disability.

 

(5) 

Pension and SERPSERP:: Annual benefit amounts listed for each NEO are subject to the eligibility and vesting provisions of the Retirement Plan (Messrs. Comma, Rebel, Rudolph, and Guilbault)Dr. Blankenship) and the SERP (Mr. Rebel)(Dr. Blankenshipn), which are described above in the sections of this Proxy Statement titled Retirement Plan, Supplemental Executive Retirement Plan and Pension Benefits Table, and accompanying footnotes. All values shown represent present values and are based on the following:

 

 a)

In the event of a voluntary/involuntary termination (for any reason) or death, benefit values are based on accrued benefits as of fiscalyear-end payable at normal retirement. Benefit values were calculated as of October 1, 2017,September 29, 2019, based on a discount rate of 3.988%3.36% for the qualified pension plan and 3.799%3.24% for the SERP. TheRP-2014 Mortality Table is used for both the Retirement Plan and the SERP calculations (the SERP uses a white collar adjustment). Both Plans use theMP-2016MP-2018 generational scale projected from 2006, modified to use 15 year15-year convergence to an ultimate rate of .75%. Under the SERP, which applies only to Mr. Rebel,Dr. Blankenship, in the event of death, the amount of the survivor benefit would be the greater of one times the participant’s compensation or the actuarial equivalent lump sum present value of the participant’s supplemental retirement benefit. In the event of death while actively employed, the amount of the benefit under the Retirement Plan would be the accrued actuarial equivalent pension benefit as determined on the date of death. Such benefit is not subject to any reduction of benefits.

 

 b)

Disability benefits shown assume an NEO terminates employment with the Company due to disability and remains continuously disabled until reaching normal retirement age. Benefit values are based on accrued benefits as of the NEOs normal retirement age and were calculated as of October 1, 2017September 29, 2019 based on a discount rate of 3.988%3.36% for the qualified pension plan and 3.799%3.24% for the SERP and theRP-2014 Mortality Table as described above.

 

 c)

In the event of an involuntary termination (or material diminution in duties or responsibilities or material downward change of title) within 24 months following a CIC, a participant would become 100% vested in the SERP. Benefit values are based on accrued benefits as of fiscalyear-end and were calculated as of October 1, 2017.September 29, 2019. The SERP values are based on an interest rate of 6.0% and theRP-2000 Mortality Table, projected ten years.

 

 d)

As described in the“Non-Qualified Deferred Compensation Section” above, allfour of the NEOs received a three percent Company match on their contributions made to thenon-qualified deferred compensation (EDCP) prior to January 1, 2016, and an annual restoration match of up to 4% for contributions made after January 1, 2016. In addition, Messrs. Comma Rudolph, and Guilbault and Ms. Allen,Rudolph, who are not eligible to participate in the SERP, receivereceived an additional 4% Company contribution to their EDCP accounts for up toa maximum of ten years. Inyears, which ceased in January 2017 for, Mr. Comma reached the maximum ten years to receive the additional 4% Company contribution to the EDCP and therefore ceased receiving these contributions at that time.in November 2017 for Mr. Rudolph. As of the end of fiscal 2017, all2019, four of the NEOs, except Ms. Allen,Mr. Tom who did not participate in the EDCP, are 100% vested in the Company matching contributions. Accordingly, these amounts are not included here, but are described in the“Non-Qualified Deferred Compensation Section” above.

 

(6)

The CIC Agreement “best after tax” provision applied to Mr. Tom at FYE19 would result in reducing his Cash Payment and a portion of his annual incentive payment so as to remain below the maximum amount he may receive without triggering an excise tax; the estimated reduction is $487,500 in his Cash Payment and a reduction of $41,107 in his annual incentive.

Dr. Blankenship ceased to be an officer and employee of our company in January 2020, and it is anticipated that Mr. Rudolph will cease to be an officer and employee of our company at the end of February, 2020. In connection with their departure, Dr. Blankenship was and Mr. Rudolph will be eligible to receive, in exchange for entering into a separation and release agreement that includes a general release of claims against the Company, benefits providing for: (i) a lump sum cash payment of $567,000 for Dr. Blankenship and $686,538 for Mr. Rudolph, which represents compensation equal to 12 months base pay plus additional compensation based on years of service; (ii) if such officer is enrolled in the Company’s medical plan, COBRA medical coverage premiums for 12 months plus additional months based on years of service (up to a maximum of 18 months); and (iii) 12 months of outplacement services (such benefits in (a) through (c), the “Severance Benefits”). The aggregate amount of the Severance Benefits is expected to be $593,598 for Dr. Blankenship and $709,240 for Mr. Rudolph. Upon separation, Dr. Blankenship and Mr. Rudolph will each cease to be eligible for any benefits under the CIC Agreements.

6468    JACK IN THE BOX INC.  ï  20182020 PROXY STATEMENT

    

 

  EXECUTIVE COMPENSATION  

 

Payment of the Severance Benefits to the individual is contingent upon such individual being satisfactorily employed by the Company through January 3, 2020, in the case of Dr. Blankenship, and February 28, 2020, in the case of Mr. Rudolph, or in each case, such earlier date as the Company may determine it no longer needs such officer’s services and terminates their employment without cause, such definition as determined by the Compensation Committee of the Board (the “Compensation Committee”).

(6)

Gross-Up for Excise Tax: Nogross-up would be payable to any NEOs for termination at FYE 2017. While Mr. Rebel does have an agreement (entered into prior to 2009) that could provide for agross-up in the event of “excess parachute payments” under IRC Section 280G(b)(1) subject to excise tax, no suchgross-up would be triggered as of FYE 2017, applying calculations based on the value of all benefits that could have been received and characterized as contingent upon a CIC under IRC Section 280G and related regulations as of FY 2017, except for equity award acceleration which is calculated based on the assumption that the CIC occurred on December 31, 2017. For purposes of this calculation, the value of the acceleration of vesting of all outstanding equity awards is calculated according to Section 280G and the related regulations. Other than Mr. Rebel, all other NEOs have 2009 and later agreements under which nogross-up is provided in any circumstance.

(7)

The CIC Agreement “best after tax” provision applied to Mr. Comma at FYE 2017 would result in reducing his Cash Payment and a portion of his annual incentive payment so as to remain below the maximum amount he may receive without triggering an excise tax; the estimated reduction is $2,700,000 in his Cash Payment and a reduction of $619,250 in his annual incentive. The “best after tax” provision also applied to Ms. Allen and Mr. Guilbault and would result in reducing each of their Cash Payments. The estimated reduction is $358,348 for Ms. Allen and $72,810 for Mr. Guilbault. The net amounts are reflected in the Cash Payment and Annual Incentive columns for Mr. Comma, and the Cash Payment column for Ms. Allen and Mr. Guilbault.

(8)

Under the terms of Mr. Guilbault’s Qdoba CIC Agreement (described in the section above the table): in the event of a Qdoba CIC and his qualifying termination, Mr. Guilbault would receive a Cash Payment based on a multiple of annual base salary under the Qdoba CIC Agreement and additional payments for annual incentive, an equivalent value of the unvested portion of his equity, and other benefits as shown in those columns. The Cash Payment column also includes a $187,500 conditional bonus to which Mr. Guilbault is entitled contingent on continuous employment with the Company and satisfactory performance through the earlier of (a) January 2, 2018 or (b) the consummation of a sale orspin-off of Qdoba. The “best after tax” provision applied to Mr. Guilbault would result in reducing his Cash Payment amount so as to remain below the maximum amount he may receive without triggering an excise tax; the estimated reduction is $473,839 and net amount is shown in the column.

(8a)

This row represents the benefits Mr. Guilbault would receive upon a Qdoba CIC absent a qualifying termination: the conditional bonus described in Note 8 above and the equivalent value of the unvested portion of his equity.

 

JACK IN THE BOX INC.  ï  20182020 PROXY STATEMENT6569

 

  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT  

    

 

SECURITY OWNERSHIP OF CERTAIN

BENEFICIAL OWNERS AND MANAGEMENT

The following tables set forth, as of December 29, 2017 (“the Record30, 2019 (the “Record Date”), information with respect to beneficial ownership of our Common Stock by (i) each person who we know to beneficially own more than 5% of our Common Stock, (ii) each director and nominee for director of the Company, (iii) each NEO listed in the Summary Compensation Table herein and (iv) all of our directors and executive officers (employed as of the Record Date) of the Company as a group. The address of each director and executive officer shown in the table below is c/o Jack in the Box Inc., 9330 Balboa Avenue,9357 Spectrum Center Blvd., San Diego, CA 92123.

We determined the number of shares of Common Stock beneficially owned by each person under rules promulgated by the SEC, based on information obtained from questionnaires, Company records and filings with the SEC. The information is not necessarily indicative of beneficial ownership for any other purpose. Under these rules, beneficial ownership includes any shares as to which the individual or entity has sole or shared voting power or investment power and also any shares which the individual or entity had the right to acquire within sixty days of December 29, 2017.30, 2019. All percentages are based on the shares of Common Stock outstanding as of December 29, 2017.30, 2019. Except as noted below, each holder has sole voting and investment power with respect to all shares of Common Stock listed as beneficially owned by that holder.

Security Ownership of Certain Beneficial Owners

 

 

Name  Number of Shares of
Common Stock
Beneficially Owned as of
December 29, 2017		   Percent
of Class		 

BlackRock, Inc. (1)

   3,064,242    10.4% 

The Vanguard Group, Inc. (2)

   2,431,268    8.2% 
Name  Number of Shares of
Common Stock
Beneficially Owned as of
December 30, 2019		   Percent
of Class		 

BlackRock Inc. (1)

   2,997,470    13.0% 

The Vanguard Group Inc. (2)

   2,532,574    11.0% 

Millennium Management LLC(3)

   1,242,681    5.4% 
(1) 

According to its Form 13F filings as of September 30, 2017,2019, BlackRock Inc. had investment discretion with respect to accounts holding 3,064,2422,997,470 shares, of which it had sole voting power with respect to 3,000,7362,932,915 shares and no voting power with respect to 63,50664,555 shares. The address of BlackRock Inc. is 55 East 52nd Street, New York NY 10055.

(2) 

According to its Form 13F filings as of September 30, 2017,2019, The Vanguard Group Inc., on behalf of itself and its direct subsidiaries, Vanguard Fiduciary Trust Co, and Vanguard Investments Australia, Ltd., had investment discretion with respect to accounts holding 2,431,2682,532,574 shares. The Vanguard Group Inc. was the beneficial owner of 2,376,9092,499,482 shares, of which it had sole voting power with respect to 2,3093,072 shares and no voting power with respect to 2,374,6002,298,711 shares. Vanguard Fiduciary Trust Co was the beneficial owner of 50,40926,545 shares, of which it had sole voting power. Vanguard Investments Australia, Ltd. was the beneficial owner of 3,9503,475 shares, of which it had shared voting power. The address of The Vanguard Group, Inc. is:is P.O. Box 2600 Valley Forge, Pennsylvania 19482-2600.

(3)

According to its Form 13F filings as of September 30, 2019, Millennium Management LLC. had investment discretion with respect to accounts holding 1,242,681 shares, of which it had sole voting power with respect to 1,242,681 shares. The address of Millennium Management LLC is 666 5th Avenue New York NY 10103.

 

6670    JACK IN THE BOX INC.  ï  20182020 PROXY STATEMENT

    

 

  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT  

 

Security Ownership Of Directors and Management

 

 

Name  Number of Shares of
Common Stock
Beneficially Owned as of
December 29, 2017(1)		   Number Attributable to
Options Exercisable
Within 60 Days of
December 29, 2017		   Percent
of Class		   Shares (1)
Direct
Holdings		   Options
Exercisable
Within 60
Days (2)		   Restricted
Shares(3)		   Deferred
Stock
Equivalents /
Units (4)		   Unvested
RSUs (5)		   Total Shares
Beneficially
Owned		   Percent of
Class (6)		 

Mr. Comma

   169,070    88,545    *     

 

69,928

 

  

 

98,673

 

  

 

—

 

  

 

3,000

 

  

 

34,700

 

  

 

206,301

 

  

 

*   

 

Mr. Rebel

   167,610    57,354    *   

Ms. Allen

   25,159    18,123    *   

Mr. Guilbault

   25,492    8,447    *   

Mr. Tucker

  

 

3,425

 

  

 

—

 

  

 

—

 

  

 

—

 

  

 

—

 

  

 

3,425

 

  

 

*   

 

Dr. Blankenship

  

 

17,523

 

  

 

21,552

 

  

 

—

 

  

 

—

 

  

 

3,396

 

  

 

42,471

 

  

 

*   

 

Mr. Rudolph

   124,881    28,967    *     

 

20,290

 

  

 

43,778

 

  

 

33,243

 

  

 

—

 

  

 

30,669

 

  

 

127,980

 

  

 

*   

 

Mr. Tom

  

 

942

 

  

 

2,159

 

  

 

—

 

  

 

—

 

  

 

—

 

  

 

3,101

 

  

 

*   

 

Ms. Birch

  

 

—

 

  

 

—

 

  

 

—

 

  

 

—

 

  

 

824

 

  

 

824

 

  

 

*   

 

Mr. Gainor

  

 

600

 

  

 

—

 

  

 

—

 

  

 

—

 

  

 

824

 

  

 

1,424

 

  

 

*   

 

Mr. Goebel

   21,085    0    *     

 

8,524

 

  

 

—

 

  

 

—

 

  

 

9,276

 

  

 

1,138

 

  

 

18,938

 

  

 

*   

 

Ms. John

   3,390    0    *     

 

2,433

 

  

 

—

 

  

 

—

 

  

 

2,016

 

  

 

1,138

 

  

 

5,587

 

  

 

*   

 

Ms. Kleiner

   13,188    0    *     

 

6,556

 

  

 

—

 

  

 

—

 

  

 

7,729

 

  

 

1,138

 

  

 

15,423

 

  

 

*   

 

Mr. Murphy

   61,317    0    *     

 

—

 

  

 

—

 

  

 

—

 

  

 

64,796

 

  

 

1,138

 

  

 

65,934

 

  

 

*   

 

Mr. Myers

   16,072    0    *     

 

5,843

 

  

 

—

 

  

 

—

 

  

 

13,646

 

  

 

1,138

 

  

 

20,627

 

  

 

*   

 

Mr. Tehle

   49,984    0    *     

 

4,477

 

  

 

—

 

  

 

—

 

  

 

47,841

 

  

 

1,138

 

  

 

53,456

 

  

 

*   

 

Mr. Wyatt

   15,648    0    *     

 

6,044

 

  

 

—

 

  

 

—

 

  

 

10,757

 

  

 

1,138

 

  

 

17,939

 

  

 

*   

 

Ms. Yeung

   0    0    *      

 

—

 

  

 

—

 

  

 

—

 

  

 

2,979

 

  

 

1,138

 

  

 

4,117

 

  

 

*   

 

All directors and executive officers as a group (20 persons)

   792,515    243,510    2.6% 

All Directors and Executive Officers as a Group (23 persons)

  

 

162,265

 

  

 

196,142

 

  

 

33,243

 

  

 

162,040

 

  

 

85,984

 

  

 

636,674

 

  

 

2.7%

 

 *

Asterisk in the percent of class column indicates beneficial ownership of less than 1%

(1)

Represents the number of shares of common stock beneficially owned on December 30, 2019.

(2)

Represents options that were exercisable on December 30, 2019 and options that become exercisable within 60 days of December 30, 2019.

(3)

Represents restricted stock awards held by Mr. Rudolph, which shares may be voted, but are not available for sale or other disposition until the expiration of vesting restrictions upon his termination of service.

(4)

Represents (a) for Mr. Comma, deferred performance vested restricted stock units, and (b) for directors, (i) Common Stock equivalents attributed to cash compensation deferred under the Director Deferred Compensation Plan and (ii) deferred RSUs and related dividends. (As described in the Director Compensation section of this Proxy Statement, these deferrals are convertible on aone-for-one basis into shares of Common Stock upon a director’s termination of service.)

(5)

Represents (a) for executive officers, RSUs that fully vest upon termination of service and are convertible on aone-for-one basis into shares of Common Stock upon vesting, and (b) for directors, RSUs that fully vest upon the earlier of 12 months from the date of grant or upon termination of service.

(6) 

For purposes of computing the percentage of outstanding shares held by each person or group of persons named in the Beneficial Ownership table on a given date, any security which such person or persons has the right to acquire within 60 days after such date is deemed to be outstanding, but is not deemed to be outstanding for the purpose of computing the percentage ownership of any other person. The securities totaled in this column include stock options, direct holdings, stock equivalents under the Director Deferred Compensation Plan, restricted stock and restricted stock units as described below.

•

Direct Holdings and Restricted Stock — As a group, within 60 days of December 29, 2017, our directors, NEOs and other executive officers’ shares include (a) 243,086 shares directly held by directors and officers and (b) 95,815 restricted stock awards held by NEOs, which shares may be voted, but are not available for sale or other disposition until the expiration of vesting restrictions, which occurs upon each individual’s termination of service.

NameDirect HoldingsRestricted Stock

Mr. Comma

63,645—

Mr. Rebel

41,22562,572

Ms. Allen

7,036—

Mr. Guilbault

15,005—

Mr. Rudolph

28,34533,243

Mr. Goebel

15,380—

Ms. John

2,433—

Ms. Kleiner

6,556—

Mr. Murphy

669—

Mr. Myers

5,843—

Mr. Tehle

2,520—

Mr. Wyatt

6,044—

Ms. Yeung

0—

All other executive officers

48,385—
•

Stock Options — As a group, within 60 days of December 29, 2017, our directors, NEOs and other executive officers have the right to acquire through the exercise of stock options, 243,510 of the shares of Common Stock reflected in the Beneficial Ownership table

•

Common Stock Equivalents — The shares of our directors reflected as beneficially owned include an aggregate of 88,896 Common Stock equivalents attributed to cash compensation deferred under the Director Deferred Compensation Plan and deferred RSUs, and related dividends, as described in the Director Compensation section of this Proxy Statement. These Common Stock equivalents are convertible on aone-for-one basis into shares of Common Stock upon the director’s termination of service.

Name

Stock Equivalents

for Directors

Mr. Goebel

2,415

Ms. John

0

Ms. Kleiner

28

Mr. Murphy

48,220

Mr. Myers

6,315

Mr. Tehle

31,867

Mr. Wyatt

51

Ms. Yeung

0

 

JACK IN THE BOX INC.  ï  20182020 PROXY STATEMENT6771

 

  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENTOTHER INFORMATION  

    

 

•

Restricted Stock Units — As a group, within 60 days of December 29, 2017, our directors, NEOs and other executive officers may convert an aggregate of 121,208 RSUs on aone-for-one basis into shares of Common Stock upon vesting. RSUs may not be voted. The breakdown between directors and NEOs is provided below.

•

RSUs of Directors — These RSUs fully vest upon the earlier of 12 months from the date of grant or upon termination of service with the Board.

NameUnvested
RSUs		Deferred
RSUs

Mr. Goebel

9572,333

Ms. John

9570

Ms. Kleiner

9575,647

Mr. Murphy

95711,471

Mr. Myers

9572,957

Mr. Tehle

95714,640

Mr. Wyatt

9578,596

Ms. Yeung

00
•

RSUs of NEOs and other executive officers — These RSUs fully vest upon termination of service and are convertible on aone-for-one basis into shares of Common Stock upon vesting. Also included are deferred performance vested restricted stock units in the amount of 3,000 for Mr. Comma and 2,040 for Mr. Guilbault.

NameRSUs

Mr. Comma

16,880

Mr. Rebel

6,459

Ms. Allen

0

Mr. Guilbault

2,040

Mr. Rudolph

34,326

All other executive officers

9,160

68    JACK IN THE BOX INC.ï   2018 PROXY STATEMENT

  OTHER INFORMATION   

OTHER INFORMATION

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Pursuant to Section 16(a) of the Securities Exchange Act of 1934, each executive officer, each director, and each beneficial owner of more than 10% of the Company’s Common Stock is required to file certain forms with the SEC. A report of beneficial ownership of the Company’s Common Stock on Form 3 is due at the time such person becomes

subject to the reporting requirements and a report on Form 4 or Form 5 must be filed to reflect changes thereafter. Based on written statements and copies of forms provided to us by persons subject to the reporting requirements, we believe that all such reports required to be filed by such persons during fiscal 2017 were filed on a timely basis.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

 

 

It is the Company’s policy that the Audit Committee approve or ratify transactions involving the Company and its directors, executive officers or principal stockholders or members of their immediate families or entities controlled by any of them or in which they have a substantial ownership interest in which the amount involved exceeds $120,000 and that are otherwise reportable under SEC disclosure rules.

During fiscal year 2017,2019, the Company was not a party to a transaction or series of transactions in which the amount involved did or may exceed $120,000 in which any of its directors, named executive officers or other executive officers, any holder of more than 5% of its Common Stock or any member of the immediate family of any of these persons had or will have a direct or indirect material interest, other than the compensation arrangements (including with respect to equity compensation) described in “Executive Compensation” above.

 

 

72    JACK IN THE BOX INC.ï  2020 PROXY STATEMENT

  APPENDIX A—RECONCILIATION OF NON-GAAP MEASUREMENTS TO GAAP RESULTS  

APPENDIX A—RECONCILIATION OFNON-GAAP MEASUREMENTS TO GAAP RESULTS

This Proxy Statement contains information regarding Operating Earnings Per Share, Adjusted EBITDA, Restaurant-Level Margin, and Operating EBIT, which arenon-GAAP financial measures. Management believes that these measurements, when viewed with the Company’s results of operations in accordance with GAAP and the accompanying reconciliations in the tables below, provide useful information about operating performance and period-over-period changes, and provide additional information that is useful for evaluating the operating performance of the company’s core business without regard to potential distortions. Additionally, Restaurant-Level Margin and Operating EBIT were used by the Compensation Committee in determining annual incentive targets further discussed in the Proxy Statement.

Operating Earnings Per Share

Operating Earnings Per Share represents diluted earnings per share from continuing operations on a GAAP basis excluding gains or losses on the sale of company-operated restaurants, restructuring charges, loss on early termination of interest rate swaps and debt extinguishment, thenon-cash impact of the Tax Act, and the excess tax benefits from share-based compensation arrangements. Operating Earnings Per Share should be considered as a supplement to, not as a substitute for, analysis of results as reported under U.S. GAAP or other similarly titled measures of other companies. Management believes Operating Earnings Per Share provides investors with a meaningful supplement of the company’s operating performance and period-over-period changes without regard to potential distortions.

Below is a reconciliation ofnon-GAAP Operating Earnings Per Share to the most directly comparable GAAP measure, diluted earnings per share from continuing operations. Figures may not add due to rounding.

   52 Weeks Ended
    

September 29, 

2019 

 September 30, 
2018 

Diluted earnings per share from continuing operations — GAAP

                   $3.52                  $3.62

Loss on early termination of interest rate swaps and debt extinguishment

    0.64   —

Gains on the sale of company-operated restaurants

    (0.04)   (1.16)

Restructuring charges

    0.24   0.27

Non-cash impact of the Tax Cuts and Jobs Act

    —   1.13

Excess tax benefits from share based compensation arrangements

    —   (0.07)

Operating earnings per share —Non-GAAP

                   $4.35                  $3.79

Adjusted EBITDA

Adjusted EBITDA represents net earnings on a GAAP basis excluding earnings or losses from discontinued operations, income taxes, interest expense, net, gains or losses on the sale of company-operated restaurants, impairment and other charges, net, depreciation and amortization, and the amortization of franchise tenant improvement allowances and other. Adjusted EBITDA should be considered as a supplement to, not as a substitute for, analysis of results as reported under U.S. GAAP or other similarly titled measures of other companies. Management believes Adjusted EBITDA is useful to investors to gain an understanding of the factors and trends affecting the company’s ongoing cash earnings, from which capital investments are made and debt is serviced.

JACK IN THE BOX INC.  ï  20182020 PROXY STATEMENT69A-1

  APPENDIX A—RECONCILIATION OF NON-GAAP MEASUREMENTS TO GAAP RESULTS  

Below is a reconciliation ofnon-GAAP Adjusted EBITDA to the most directly comparable GAAP measure, net earnings (in thousands).

   52 Weeks Ended
    September 29, 
2019 		 September 30, 
2018 

Net earnings — GAAP

               $94,437              $121,371

Earnings from discontinued operations, net of income taxes

    (2,690)   (17,032)

Income taxes

    24,025   81,728

Interest expense, net

    84,967   45,547

Gains on the sale of company-operated restaurants

    (1,366)   (46,164)

Impairment and other charges, net

    12,455   18,418

Depreciation and amortization

    55,181   59,422

Amortization of franchise tenant improvement allowances and other

    1,983   862

Adjusted EBITDA —Non-GAAP

               $268,992              $264,152

Restaurant Level Margin

Restaurant-Level Margin is defined as company restaurant sales less restaurant operating costs (food and packaging, payroll and employee benefits, and occupancy and other costs) and is neither required by, nor presented in accordance with GAAP. Restaurant-Level Margin excludes revenues and expenses of our franchise operations and certain costs, such as selling, general, and administrative expenses, depreciation and amortization, impairment and other charges, net, gains or losses on the sale of company-operated restaurants, and other costs that are considered normal operating costs. As such, Restaurant-Level Margin is not indicative of the overall results of the company and does not accrue directly to the benefit of shareholders because of the exclusion of corporate-level expenses. Restaurant-Level Margin should be considered as a supplement to, not as a substitute for, analysis of results as reported under GAAP or other similarly titled measures of other companies. The company is presenting Restaurant-Level Margin because it believes that it provides a meaningful supplement to net earnings of the company’s core business operating results, as well as a comparison to those of other similar companies. Management utilizes Restaurant-Level Margin as a key performance indicator to evaluate the profitability of company-owned restaurants. Additionally, Restaurant-Level Margin is one of the metrics used in determining payouts under the 2019 Annual Incentives.

Below is a reconciliation ofnon-GAAP Restaurant-Level Margin to the most directly comparable GAAP measure, earnings from operations (in thousands):

   52 Weeks Ended
    September 29,    
2019    		 September 30,    
2018    

Earnings from operations — GAAP

               $202,223              $233,447

Franchise rental revenues

    (272,815)   (259,047)

Franchise royalties and other

    (169,811)   (162,585)

Franchise contributions for advertising and other services

    (170,674)   —

Franchise occupancy expenses

    166,584   158,319

Franchise support and other costs

    12,110   11,593

Franchise advertising and other services expenses

    178,093   —

Selling, general and administrative expenses

    76,357   104,816

Impairment and other charges, net

    12,455   18,418

Gains on the sale of company-operated restaurants

    (1,366)   (46,164)

Depreciation and amortization

    55,181   59,422

Restaurant-Level Margin —Non-GAAP

               $88,337              $118,219

Company restaurant sales

               $336,807              $448,058

Restaurant-Level Margin % —Non-GAAP

    26.2%   26.4%

A-2    JACK IN THE BOX INC.ï  2020 PROXY STATEMENT

  APPENDIX A—RECONCILIATION OF NON-GAAP MEASUREMENTS TO GAAP RESULTS  

Operating EBIT

Operating EBIT represents net earnings on a GAAP basis excluding earnings or losses from discontinued operations, income taxes, interest expense, net, gains or losses on the sale of company-operated restaurants and restructuring charges. Management believes Operating EBIT is useful to investors to gain an understanding of the factors and trends affecting the company’s ongoing cash earnings, from which capital investments are made and debt is serviced. Additionally, Operating EBIT is one of the metrics used in determining payouts under the 2019 Annual Incentives. Operating EBIT should be considered as a supplement to, not as a substitute for, analysis of results as reported under U.S. GAAP or other similarly titled measures of other companies.

Below is a reconciliation ofnon-GAAP Operating EBIT to the most directly comparable GAAP measure, net earnings (in thousands).

52 Weeks Ended 
September 29, 2019 

Net earnings — GAAP

                $94,437

Earnings from discontinued operations, net of income taxes

(2,690)

Income taxes

24,025

Interest expense, net

84,967

Gains on the sale of company-operated restaurants

(1,366)

Restructuring charges

8,455

Operating EBIT —Non-GAAP

                $207,828

JACK IN THE BOX INC.ï  2020 PROXY STATEMENTA-3

LOGOLOGO

 

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E16496-P84132E88362-P31752                KEEP THIS PORTION FOR YOUR RECORDS

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JACK IN THE BOX INC.

 

                      
  

The Board of Directors recommends you vote FOR all 910 nominees listed and FOR proposals 2 and 3.

 

    
      1. 

Election of Directors

 

  For  Against  Abstain            
    

Nominees:

 

         For  Against  

For

Against

Abstain

  
    

1a.   Jean M. Birch

1b.  Leonard A. Comma

 

1b.  David L. Goebel

1c.  SharonJohn P. JohnGainor

  

☐

 

☐

 

☐

  

☐

 

☐

 

☐

  

☐

 

☐

 

☐

  

 

 

 

2.

 

 

3.

  

1j.  Vivien M. Yeung

 

 

Ratification of the appointment of KPMG LLP as independent registered public accountants.

 

Advisory approval of executive compensation.

 

☐

 

 

☐

 

 

☐

 

☐

 

 

☐

 

 

☐

 

☐

 

 

☐

 

 

☐

  
    

1d.  Madeleine A. KleinerDavid L. Goebel

 

1e.  Michael W. MurphySharon P. John

  

☐

 

☐

  

☐

 

☐

  

☐

 

☐

         
    

 

1f.  James M. MyersMadeleine A. Kleiner

  

 

☐

  

 

☐

  

 

☐

          
    

 

1g.  David M. TehleMichael W. Murphy

  

 

☐

  

 

☐

  

 

☐

          
    

 

1h.  John T. WyattJames M. Myers

  

 

☐

  

 

☐

  

 

☐

  

 

NOTE:In their discretion, the proxies are authorized to vote upon such other business as may properly come before the meeting or any adjournment thereof.

     
    

 

1i.  VivienDavid M. YeungTehle

  

 

☐

  

 

☐

  

 

☐

 
  
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E16497-P84132E88363-P31752      

 

          
    

JACK IN THE BOX INC.

Annual Meeting of Stockholders

February 27, 2018,28, 2020, 8:30 a.m., Pacific Time

This proxy is solicited by the Board of Directors

   
       
  

The undersigned hereby appoints Leonard A. Comma and Phillip H. Rudolph, and each of them, with power to act without the other and with power of substitution, as proxies andattorneys-in-fact and hereby authorizes them to represent and vote, as provided on the other side, all the shares of Jack in the Box Inc. Common Stock which the undersigned is entitled to vote, and, in their discretion, to vote upon such other business as may properly come before the 20182020 Annual Meeting of Stockholders of the company to be held February 27, 2018,28, 2020, or at any adjournment or postponement thereof, with all powers which the undersigned would possess if present at the Annual Meeting.

 

THIS PROXY WILL BE VOTED AS DIRECTED, OR IF NO DIRECTION IS INDICATED, WILL BE VOTED “FOR” THE ELECTION OF ALL DIRECTORS AND “FOR” PROPOSALS 2 AND 3.

 

In their discretion, the proxies are authorized to vote upon such other business as may properly come before the Annual Meeting or any adjournment thereof.

 

 

  
   

   

Address Changes/Comments:                                                                                                                                                       

        
   
    

                                                                                                                                                                                                           

   
   
  

      
     

 

(If you noted any Address Changes/Comments above, please mark corresponding box on the reverse side.)

 

Continued and to be signed on reverse side

 

 

    

V.1.1