Five Meetings | | Directors when his or her term expires and when he or she has a change in status, including changes to employment and outside board of directors service, and make appropriate recommendations regarding such matters to the Board of Directors for approval. • Develop and review the Corporation’s Corporate Governance Guidelines and recommend any changes to the Corporate Governance Guidelines for approval by the Board of Directors. • Consider and recommend for approval by the Board of Directors matters pertaining to committees of the Board of Directors, including with respect to structure, member qualifications, composition, committee chairs and committee reporting to the Board of Directors. • Consider and recommend for approval by the Board of Directors the Chairman of the Board of Directors. • Review the Code of Conduct for Non-Employee Directors and the Corporation’s Global Code of Conduct and recommend any changes for approval by the Board of Directors. • Oversee and review with the Board of Directors risk and risk mitigation associated with the Committee’s purpose and areas of responsibility, including Board of Directors’ organization, membership and structure, succession planning, director independence, Board of Directors effectiveness and other corporate governance matters. • Work with the Chairman of the Board of Directors to reviewoversee the evaluation of the performance and effectiveness of the Board of Directors and each committee of the Board of Directors. • Coordinate an annual corporate governance training for the Board of Directors. • Review and oversee the Corporation’s actions on issues related to corporate social responsibility, sustainability, philanthropy, and other matters associated with the Corporation’s participation as a global corporate citizen. Added• Review and oversee the responsibility to reviewCorporation’s political activities and overseecontributions and other public policy issues to ensure alignment with the Corporation’s long-term strategy and values.
The Audit Committee Charter, the Compensation Committee Charter, and the Nominating and Corporate Governance Committee Charter can be found in the Corporate Governance section of the Corporation’s website, http://www.dinebrands.com. Printed copies are also available at no charge upon request to the Secretary at Dine Brands Global, Inc., 450 North Brand Boulevard, Glendale, California 91203,(866) 995-DINE.
| | | 10 | |  |
| 2020 PROXY STATEMENT
| CORPORATE GOVERNANCE
|
| | |  | | 15 |
| 2023 PROXY STATEMENT | CORPORATE GOVERNANCE |
Board of Directors Nominations The Nominating and Corporate Governance Committee considers various criteria in evaluating Board of Directors candidates, including: business experience, board of directors experience, skills, expertise, education, professions, backgrounds, diversity, personal and professional integrity, character, business judgment, business philosophy, time availability in light of other commitments, dedication, conflicts of interest, and such other relevant factors that the Nominating and Corporate Governance Committee considers appropriate in the context of the needs of the Board of Directors. In considering diversity, the Nominating and Corporate Governance Committee evaluates candidates with a broad range of expertise, experience, skills, professions, education, backgrounds and other board of directors experience. While the Nominating and Corporate Governance Committee does not have a formal policy with respect to diversity, it considers diversity of race, gender and ethnicity as important factors in identifying directors who will bring diverse viewpoints, opinions and areas of expertise that will benefit the Board of Directors as a whole. The Nominating and Corporate Governance Committee does not assign specific weights to particular criteria in evaluating prospective nominees. The Nominating and Corporate Governance Committee also considers whether a potential nominee would satisfy the NYSE’s criteria for director “independence,” the NYSE’s “accounting or related financial management expertise” standard and the SEC’s definition of “audit committee financial expert.” Whenever a vacancy or potential vacancy exists on the Board of Directors due to expansion of the size of the Board of Directors or the resignation or retirement of an existing director, the Nominating and Corporate Governance Committee begins its process of identifying and evaluating potential director nominees. The Nominating and Corporate Governance Committee considers recommendations of members of the Board of Directors, management, stockholders and others. The Nominating and Corporate Governance Committee has sole authority to retain and terminate any search firm to be used to identify director candidates, including approving its fees and other retention terms. The Nominating and Corporate Governance Committee conducted an evaluation and assessment of each director whose term expires in 2023 for purposes of determining whether to recommend them for nomination for re-election to the Board of Directors. Current director Larry A. Kay will be retiring from the Board of Directors effective as of the Annual Meeting. In light of the retirement of Mr. Kay, the Nominating and Corporate Governance Committee engaged an independent search firm to assist it in evaluating potential director candidates, which is how Arthur F. Starrs was first identified as a candidate. Following this search, the Nominating and Corporate Governance Committee conducted an evaluation and assessment of Mr. Starrs for the purposes of determining whether to recommend him for nomination for election to the Board of Directors. The Nominating and Corporate Governance Committee determined to make a recommendation to the Board of Directors that Howard M. Berk, Susan M. Collyns, Richard J. Dahl, Michael C. Hyter, Caroline W. Nahas, Douglas M. Pasquale, John W. Peyton, Martha C. Poulter, and Lilian C. Tomovich be nominated for re-election to the Board of Directors and Arthur F. Starrs be nominated for election to the Board of Directors. After reviewing the assessment results, the Board of Directors reviewed and accepted the Nominating and Corporate Governance Committee’s recommendation and has nominated Howard M. Berk, Susan M. Collyns, Richard J. Dahl, Michael C. Hyter, Caroline W. Nahas, Douglas M. Pasquale, John W. Peyton, Martha C. Poulter, Arthur F. Starrs, and Lilian C. Tomovich for election to the Board of Directors. Stockholder Nominations The Nominating and Corporate Governance Committee will consider director candidates recommended by stockholders and will apply the same standards in considering director candidates recommended by stockholders that it applies to other candidates. Stockholders wishing to recommend director candidates for consideration by the Nominating and Corporate Governance Committee may do so by writing to the Secretary, giving the recommended nominee’s name, biographical data and qualifications, accompanied by the written consent of the recommended nominee to serve if elected. Any stockholder who wishes to directly nominate a director candidate to stand for election at a meeting of stockholders must provide written notice that is timely and in proper form in accordance with the advance notice procedures provided in the Corporation’s Bylaws. For more information, please refer to the discussion under the heading “Proposals of Stockholders.” | | | | 16 | | |
| 2023 PROXY STATEMENT | DIRECTOR COMPENSATION |
DIRECTOR COMPENSATION Generally, the Corporation does not pay directors who are also employees of the Corporation additional compensation for their service on the Board of Directors. Compensation for non-employee directors is comprised of a cash component and an equity component. Cash compensation for non-employee directors includes retainers for serving as a member of the Board of Directors and for serving as a member and/or chair of a Board of Directors committee and as the Chair of the Board of Directors. During 2022, non-employee directors were entitled to receive $70,000 as an annual cash retainer for serving as a member of the Board of Directors. In addition, depending on their roles, non-employee directors were entitled to receive: $125,000 as an annual retainer for the Chairman of the Board of Directors; $15,000, $12,500, and $12,500, respectively, as an annual retainer for the chairs of the Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee; $12,500, $10,000, and $10,000, respectively, as an annual retainer for the members of the Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee; $1,500 per meeting beyond the eighth meeting of the Board of Directors attended for each director in a year; and $1,500 per meeting beyond the eighth meeting attended for each director who serves on a standing committee that meets more than eight times per year. The 2022 non-employee director compensation program did not change as compared to the 2021 non-employee director compensation program other than the Board of Directors’ approval of a fee of $1,500 per meeting beyond the eighth meeting of the Board of Directors attended by a director in a year. The Corporation also reimburses each of the directors for reasonable out-of-pocket expenses incurred for attendance at Board of Directors and committee meetings and other corporate events. Under the Corporation’s equity plan, non-employee directors may receive periodic grants of non-qualified stock options (“NQSOs”), restricted stock awards (“RSAs”), restricted stock units (“RSUs”), stock appreciation rights (“SARs”) or performance unit awards. In March 2022, equity awards valued at approximately $105,000 in the form of RSUs were granted to each non-employee director under the Corporation’s 2019 Stock Incentive Plan. Consistent with the non-employee director compensation program, annual equity awards granted to non-employee directors cliff vest on the one-year anniversary of the date of grant. In the event a director retires from the Board of Directors after completing five years of service, all of the director’s then-outstanding RSUs will vest. To the extent the Corporation declares dividends, non-employee directors receive dividend equivalent rights in the form of additional RSUs in lieu of receiving cash dividends based upon the number of RSUs held by the director at the time of the dividend record dates. Dividend equivalent rights are subject to the same vesting restrictions as the underlying RSUs. Directors are eligible to defer up to 100% of their annual Board of Directors retainer and committee fees and equity awards pursuant to the Dine Brands Global, Inc. Nonqualified Deferred Compensation Plan (the “Deferred Compensation Plan”). Effective January 1, 2023, the Board of Directors approved the following adjustments to director compensation: the annual cash retainer for non-employee directors was increased to $75,000 and the annual equity award was increased to a grant date fair value of $120,000. Stock Ownership Guidelines Non-employee directors are subject to stock ownership guidelines whereby each director is expected to hold the lesser of 7,000 shares of Common Stock or Common Stock with a value of at least five times the amount of the Board of Directors’ annual retainer (currently, $350,000). Directors are expected to meet the ownership guidelines within five years of joining the Board of Directors. Upon review by the Compensation Committee in 2022, all directors met, were on track to meet, or exceeded the ownership guidelines. | | | | | | 17 |
| 2023 PROXY STATEMENT | DIRECTOR COMPENSATION |
Director Compensation Table for 2022 The following table sets forth certain information regarding the compensation earned or paid in cash and stock awards granted to each non-employee director who served on the Board of Directors in 2022. Mr. Peyton did not receive any additional compensation for his service as a director in 2022. Please see the 2022 Summary Compensation Table for the compensation received by Mr. Peyton in his capacity as Chief Executive Officer. | | | | | | | | | | | | | | | Name | | Fees Earned or
Paid in Cash
($) | | Stock
Awards
($)(1)(2) | | | Total
($) | | | | | | Howard M. Berk | | 111,000 | | | 105,050 | | | | 216,050 | | | | | | Daniel J. Brestle(3) | | 29,205 | | | 105,050 | | | | 134,255 | | | | | | Susan M. Collyns | | 88,500 | | | 105,050 | | | | 193,550 | | | | | | Richard J. Dahl | | 225,000 | | | 105,050 | | | | 330,050 | | | | | | Michael C. Hyter | | 86,926 | | | 105,050 | | | | 191,976 | | | | | | Larry A. Kay | | 86,000 | | | 105,050 | | | | 191,050 | | | | | | Caroline W. Nahas | | 108,500 | | | 105,050 | | | | 213,550 | | | | | | Douglas M. Pasquale | | 103,500 | | | 105,050 | | | | 208,550 | | | | | | Martha Poulter | | 87,000 | | | 105,050 | | | | 192,050 | | | | | | Lilian C. Tomovich | | 93,000 | | | 105,050 | | | | 198,050 | |
| (1) | These amounts reflect the aggregate grant date fair value computed in accordance with Financial Accounting Standards Board’s Accounting Standards Codification Topic 718, Compensation—Stock Compensation (“FASB ASC Topic 718”). See Note 14 to the Consolidated Financial Statements in the Corporation’s annual report on Form 10-K for the fiscal year ended December 31, 2022 for information regarding assumptions underlying the valuation of equity awards. |
| (2) | The chart below identifies directors who are members and chairs of each committee as of the date of this proxy statement, the principal functions of each committee andfollowing table sets forth the number of meetingsRSUs held by each committeenon-employee director during 2019. The Board of Directors believes that committee rotation fosters the sharing of new perspectives2022 and enables directors with diverse skills and experiences to focus on different areas of oversight. The Nominating and Corporate Governance Committee regularly considers committee rotation and makes recommendations towhich were outstanding at December 31, 2022. |
| | | | | Name | | Stock Awards
Outstanding at
December 31, 2022
(#) | | | | Howard M. Berk | | | 1,532 | | | | Daniel J. Brestle(3) | | | 0 | | | | Susan M. Collyns | | | 1,532 | | | | Richard J. Dahl | | | 1,532 | | | | Michael C. Hyter | | | 1,532 | | | | Larry A. Kay | | | 1,532 | | | | Caroline W. Nahas | | | 4,437 | | | | Douglas M. Pasquale | | | 1,532 | | | | Martha Poulter | | | 1,532 | | | | Lilian C. Tomovich | | | 1,532 | |
| (3) | Mr. Brestle retired from the Board of Directors as appropriate.in May 2022. |
| | | | 18 | | |
| | | | | | Name of Committee and
Membership
| | Principal Functions and Responsibilities | Audit Committee
Douglas M. Pasquale, Chair
Howard M. Berk
Susan M. Collyns
Richard J. Dahl
Gilbert T. Ray
| | • Appoint and oversee the work of the independent auditor in preparing or issuing an audit report or performing other audit, review or attest services for the Corporation.
• Review and discuss annual audited financial statements and quarterly financial statements, as well as Form10-Ks and Form10-Qs. Review and discuss earnings press releases and financial information and earnings guidance provided to analysts and rating agencies.
• Discuss the Corporation’s policies with respect to risk assessment and risk management and review and evaluate the guidelines and policies developed and implemented by management with respect to risk assessment and risk management. Oversee and review with the Board of Directors risk and risk mitigation associated with the Committee’s purpose and areas of responsibility, including accounting, auditing, financial reporting and internal controls over financial reporting. Review and discuss with the Board of Directors, at least annually and at the Board of Directors’ request, issues relating to the assessment and mitigation of major financial risks affecting the Corporation.
| Meetings in 2019
| | • Review risk assessments from management with respect to cybersecurity and oversee the
| Seven Meetings
| | Corporation’s cybersecurity risk management processes. Review risk assessments from
management with respect to food safety and quality assurance.
• Review the scope, progress and results of the internal audit program, including significant findings and recommendations and management’s responses.
• Review the Corporation’s program to monitor compliance with the Corporation’s Global Code of Conduct. Review any requests for waivers.
• Review and discuss the Corporation’s information technology program and overall trends in technology.
• Prepare the report required by the rules of the Securities and Exchange Commission to be included in the Corporation’s annual proxy statement.
• Review and approve all related party transactions (as defined under Item 404 of RegulationS-K and under the standards of the Public Company Accounting Oversight Board).
|
| | | | | 11 |
| 2020 2023 PROXY STATEMENT
| CORPORATE GOVERNANCE |
| | | | | Name of Committee and
Membership
| | Principal Functions and Responsibilities | Compensation Committee
Daniel J. Brestle, Chair
Howard M. Berk
Caroline W. Nahas
| | • Review and approve the Corporation’s overall compensation philosophy and related compensation and benefits programs, policies and practices.
• Review and recommend for approval by the Board of Directors equity incentive compensation and other stock-based plans.
• Review and approve the performance goals and objectives for the Chief Executive Officer’s compensation and evaluate the Chief Executive Officer’s performance in light of these performance goals and objectives in order to determine and approve the Chief Executive Officer’s compensation package. Based on recommendations from the Chief Executive Officer, evaluate the performance of the other executive officers of the Corporation (which shall be the Corporation’s Section 16 officers under applicable Securities and Exchange Commission rules) and approve the compensation for such executive officers.
| Meetings in 2019
| | • Review and approve any changes to perquisites or other personal benefits provided to
| Seven Meetings
| | executive officers of the Corporation.
• Review and approve a peer group of companies against which to compare the Corporation’s executive compensation.
• Review compliance of each director and executive officer with the Corporation’s stock ownership guidelines and take any appropriate action in connection therewith.
• Review and approve any severance or termination arrangements to be made with any executive officer of the Corporation.
• Review the compensation package fornon-employee directors and recommend any changes for approval by the Board of Directors.
• Oversee and review with the Board of Directors risk and risk mitigation associated with the Committee’s purpose and areas of responsibility, including with respect to the Corporation’s compensation policies and practices. In doing so, consider and confirm that the Corporation’s compensation policies and practices do not encourage unnecessary risk taking.
• Assist the Board of Directors in developing and evaluating potential candidates for executive management positions, including the Chief Executive Officer, and oversee the development of executive succession plans.
• Maintain visibility into, assist with the development of, and monitor progress of programs regarding the Corporation’s organizational culture, including diversity and inclusion.
• Review and approve the Compensation Discussion and Analysis to be included in the Corporation’s annual proxy statement.
|
| | | 12 | | |
| 2020 PROXY STATEMENT
| CORPORATE GOVERNANCE
|
| | | | | Name of Committee and
Membership
| | Principal Functions and Responsibilities | Nominating and Corporate
Governance Committee
Caroline W. Nahas, Chair
Richard J. Dahl
Larry A. Kay
Lilian C. Tomovich
| | • Oversee succession planning for the Board of Directors and consider the size and composition of the Board of Directors as a whole. Make appropriate recommendations regarding such matters to the Board of Directors for approval.
• Identify and evaluate qualified director candidates, including any candidates validly nominated by the Corporation’s stockholders, and recommend director nominees for approval by the Board of Directors.
• Determine the skills and qualifications required for directors and develop criteria to be considered in identifying and evaluating director candidates. In developing such criteria, the Committee should consider diversity of experience, skills, background, gender, race and ethnicity as important factors.
• Consider the suitability of existing directors for continued service on the Board of Directors when his or her term expires and when he or she has a change in status, including changes to employment and outside board of directors service, and make appropriate recommendations regarding such matters to the Board of Directors for approval.
| Meetings in 2019
| | • Develop and review the Corporation’s Corporate Governance Guidelines and recommend
| Five Meetings
| | any changes to the Corporate Governance Guidelines for approval by the Board of Directors.
• Consider and recommend for approval by the Board of Directors matters pertaining to committees of the Board of Directors, including with respect to structure, member qualifications, composition, committee chairs and committee reporting to the Board of Directors.
• Consider and recommend for approval by the Board of Directors the Chairman of the Board of Directors.
• Review the Code of Conduct forNon-Employee Directors and the Corporation’s Global Code of Conduct and recommend any changes for approval by the Board of Directors.
• Oversee and review with the Board of Directors risk and risk mitigation associated with the Committee’s purpose and areas of responsibility, including Board of Directors’ organization, membership and structure, succession planning, director independence, Board of Directors effectiveness and other corporate governance matters.
• Work with the Chairman of the Board of Directors to oversee the evaluation of the performance and effectiveness of the Board of Directors and each committee of the Board of Directors.
• Coordinate an annual corporate governance training for the Board of Directors.
• Review and oversee the Corporation’s actions on issues related to corporate social responsibility, sustainability, philanthropy, and other matters associated with the Corporation’s participation as a global corporate citizen.
• Review and oversee the Corporation’s political activities and contributions and other public policy issues to ensure alignment with the Corporation’s long-term strategy and values.
|
| | | | | 13 |
| 2020 PROXY STATEMENT
| CORPORATE GOVERNANCE
|
Board of Directors Nominations
The Nominating and Corporate Governance Committee considers various criteria in evaluating Board of Directors candidates, including: business experience, board of directors experience, skills, expertise, education, professions, backgrounds, diversity, personal and professional integrity, character, business judgment, business philosophy, time availability in light of other commitments, dedication, conflicts of interest, and such other relevant factors that the Nominating and Corporate Governance Committee considers appropriate in the context of the needs of the Board of Directors. In considering diversity, the Nominating and Corporate Governance Committee evaluates candidates with a broad range of expertise, experience, skills, professions, education, backgrounds and other board of directors experience. While the Nominating and Corporate Governance Committee does not have a formal policy with respect to diversity, it considers diversity of race, gender and ethnicity as important factors in identifying directors who will bring diverse viewpoints, opinions and areas of expertise that will benefit the Board of Directors as a whole. To further demonstrate its commitment to seeking diversity of race, gender and ethnicity in its consideration of director candidates, the Nominating and Corporate Governance Committee added these important factors to its charter in August 2019 as criteria to be considered in identifying and evaluating director candidates. The Nominating and Corporate Governance Committee does not assign specific weights to particular criteria in evaluating prospective nominees.
The Nominating and Corporate Governance Committee also considers whether a potential nominee would satisfy the NYSE’s criteria for director “independence,” the NYSE’s “accounting or related financial management expertise” standard and the SEC’s definition of “audit committee financial expert.”
Whenever a vacancy or potential vacancy exists on the Board of Directors due to expansion of the size of the Board of Directors or the resignation or retirement of an existing director, the Nominating and Corporate Governance Committee begins its process of identifying and evaluating potential director nominees. The Nominating and Corporate Governance Committee considers recommendations of members of the Board of Directors, management, stockholders and others. The Nominating and Corporate Governance Committee has sole authority to retain and terminate any search firm to be used to identify director candidates, including approving its fees and other retention terms.
The Nominating and Corporate Governance Committee conducted an evaluation and assessment of each director whose term expires in 2020 for purposes of determining whether to recommend them for nomination forre-election to the Board of Directors. After reviewing the assessment results, the Nominating and Corporate Governance Committee determined to make a recommendation to the Board of Directors that Howard M. Berk, Daniel J. Brestle, Caroline W. Nahas, Gilbert T. Ray, Larry A. Kay, Douglas M. Pasquale and Susan M. Collyns be nominated forre-election to the Board of Directors. The Board of Directors reviewed and accepted the Nominating and Corporate Governance Committee’s recommendation and has nominated Howard M. Berk, Daniel J. Brestle, Caroline W. Nahas, Gilbert T. Ray, Larry A. Kay, Douglas M. Pasquale and Susan M. Collyns forre-election to the Board of Directors.
Stockholder Nominations
The Nominating and Corporate Governance Committee will consider director candidates recommended by stockholders and will apply the same standards in considering director candidates recommended by stockholders that it applies to other candidates. Stockholders wishing to recommend director candidates for consideration by the Nominating and Corporate Governance Committee may do so by writing to the Secretary, giving the recommended nominee’s name, biographical data and qualifications, accompanied by the written consent of the recommended nominee to serve if elected. Any stockholder who wishes to directly nominate a director candidate to stand for election at a meeting of stockholders must provide written notice that is timely and in proper form in accordance with the advance notice procedures provided in the Corporation’s Bylaws.
Environmental, Social and Governance Highlights
In executing on the Corporation’s strategic priorities, we recognize our responsibility to drive long-term stockholder value through ethical business practices that make sense for our business, our guests and our communities. Pursuant to its charter, our Nominating and Corporate Governance Committee has the responsibility to review and oversee the Corporation’s actions on issues related to corporate social responsibility, sustainability, philanthropy and other matters associated with the Corporation’s participation as a global corporate citizen. Our corporate social responsibility efforts are organized into the following categories: supporting our neighborhoods, caring for the environment and valuing our team members.
| | | 14 | | |
| 2020 PROXY STATEMENT
| CORPORATE GOVERNANCE
|
Supporting our neighborhoods.
We value the neighborhoods in which we do business. Together with our franchisees and team members, we make a difference by giving back to the communities where we operate. Every year, we support hundreds of fundraisers and events taking place across the country through our charitable foundation, volunteering, and team member donations. Some highlights include:
Alex’s Lemonade Stand: Since 2005, Applebee’s franchisees have raised nearly $10.2 million in support of research to help in the fight against childhood cancer.
National Pancake Day: An annual IHOP event which has raised over $30 millionto-date in support of Children’s Miracle Network Hospitals and other local charities. National Pancake Day is also celebrated at IHOPs in Mexico, Canada, Guam, and Puerto Rico.
Veteran’s Day: Since 2008, more than 9.8 million free meals have been donated by Applebee’s to veteran and active military personnel in recognition and gratitude for their service.
We also seek to engage our team members in community-investment and development initiatives that serve the communities where we live and operate. An annual Philanthropic Day provides paid time off for our team members, giving them an opportunity to volunteer a full day to support a philanthropic effort of their choice.
Caring for the environment.
Animal Welfare
Animal welfare is an issue of critical importance for us and we are continuing to work with our suppliers, animal welfare experts and others both in and outside the industry to align on solutions and best practices that are supported by science and rigorous research. We are committed to an animal welfare policy that is rooted in sustainable progress and accountability. For example, we ask our chicken and pork suppliers to prohibit the routine use of medically important antibiotics as defined by the World Health Organization, including prohibiting the use of these antibiotics for disease prevention. We also undertake an annual internal compliance review of our animal protein suppliers’ established animal handling procedures, including by requesting relevant third-party farm and plant animal audits, to facilitate informed sourcing decisions. We are working towards using shelled and liquid eggs in the U.S. that are derived 100% from hens housed in a cage-free environment.
Environmental
We are focused on identifying ways to reduce our impact on the environment through improvements in how we supply, design, build and maintain our restaurants. In addition, our IHOP® and Applebee’s® Restaurant Support Center is housed in a LEED Platinum Certified building.
We source a large amount of paper and plastic goods for our restaurants. We are working towards reducing the amount of polystyrene used in our “to go” orders and replacing these packaging products with recyclable packaging.
We continue working to reduce the energy consumption in our restaurants and our restaurant support center. For example, nearly all offices in our innon-restaurant facilities have motion-activated light switches that automatically lower or turn off the lights if no movement is detected after a period of time. We have also been aggressive about replacing traditional lighting with compact florescent lighting wherever practicable.
Valuing our team members.
We operate under a cultural framework based on shared values and strategic pillars which define who we are and how we work. We value, encourage and recognize the diversity and inclusion of our workforce and the benefits that an array of backgrounds, cultures and thinking styles bring to our organization. We are committed to creating an environment that accepts, includes and engages everyone in our workforce and encourages open dialogue. Substantially all of our restaurant support center team members undertake a comprehensive diversity and inclusion training seminar. Our Chief Executive Officer, Stephen P. Joyce, has taken the CEO Action for Diversity and Inclusion Pledge.
We are focused on identifying diverse director candidates as demonstrated by the addition of race, gender and ethnicity as important factors for the Nominating and Corporate Governance Committee to consider when identifying director candidates. In 2019, the Compensation Committee also added the responsibility to oversee the Corporation’s organizational culture, including diversity and inclusion, to its committee charter.
| | | | | 15 |
| 2020 PROXY STATEMENT
| DIRECTOR COMPENSATION
|
DIRECTOR COMPENSATION
Generally, the Corporation does not pay directors who are also employees of the Corporation additional compensation for their service on the Board of Directors. Compensation fornon-employee directors is comprised of a cash component and an equity component. Cash compensation fornon-employee directors includes retainers for serving as a member of the Board of Directors and for serving as a member and/or chair of a Board of Directors committee and as the Chairman of the Board of Directors.
During 2019,non-employee directors were entitled to receive $70,000 as an annual cash retainer for serving as a member of the Board of Directors. In addition, depending on their roles,non-employee directors were entitled to receive:
$125,000 as an annual retainer for the Chairman of the Board of Directors;
$15,000, $12,500 and $7,500, respectively, as an annual retainer for the chairs of the Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee;
$12,500, $10,000 and $7,500, respectively, as an annual retainer for the members of the Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee; and
$1,500 per meeting beyond the eighth meeting attended for each director who serves on a standing committee that meets more than eight times per year.
The Corporation also reimburses each of the directors for reasonableout-of-pocket expenses incurred for attendance at Board of Directors and committee meetings and other corporate events.
Under the Corporation’s equity plan,non-employee directors may receive periodic grants ofnon-qualified stock options (“NQSOs”), restricted stock awards (“RSAs”), restricted stock units (“RSUs”), stock appreciation rights (“SARs”) or performance unit awards. In February 2019, equity awards valued at approximately $105,000 in the form of RSUs were granted to eachnon-employee director under the 2016 Stock Incentive Plan. Annual equity awards granted tonon-employee directors from 2019 forward are subject to aone-year cliff vesting from the date of grant, while annual RSU grants tonon-employee directors prior to 2019 are subject to three-year cliff vesting from the date of grant. In the event a director retires from the Board of Directors after completing five years of service, all of the director’s then-outstanding RSUs will vest. To the extent the Corporation declares dividends,non-employee directors receive dividend equivalent rights in the form of additional RSUs in lieu of receiving cash dividends based upon the number of RSUs held by the director at the time of the dividend record dates. Dividend equivalent rights are subject to the same vesting restrictions as the underlying RSUs.
Directors are eligible to defer up to 100% of their annual Board of Directors retainer and committee fees and equity award compensation pursuant to the Dine Brands Global, Inc. Nonqualified Deferred Compensation Plan (the “Deferred Compensation Plan”).
Stock Ownership Guidelines
Non-employee directors are subject to stock ownership guidelines whereby each director is expected to hold the lesser of 7,000 shares of Common Stock or Common Stock with a value of at least five times the amount of the Board of Directors’ annual retainer (currently, $350,000). Directors are expected to meet the ownership guidelines within five years of joining the Board of Directors. Upon review by the Compensation Committee in 2019, all directors met, were on track to meet, or exceeded the ownership guidelines.
| | | 16 | | |
| 2020 PROXY STATEMENT
| DIRECTOR COMPENSATION
|
Director Compensation Table for 2019
The following table sets forth certain information regarding the compensation earned or paid in cash and stock awards granted to eachnon-employee director who served on the Board of Directors in 2019. Mr. Joyce did not receive any additional compensation for his service as a director in 2019. Please see the 2019 Summary Compensation Table for the compensation received by Mr. Joyce in his capacity as Chief Executive Officer.
| | | | | | | | | | | | | | | | | | | | Name | | Fees Earned or
Paid in Cash
($) | | Stock
Awards
($)(1)(2) | | Total
($) | | | | | Howard M. Berk | | 92,500 | | | | 105,007 | | | | | 197,507 | | | | | | Daniel J. Brestle | | 92,500 | | | | 105,007 | | | | | 197,507 | | | | | | Susan M. Collyns(3) | | 34,413 | | | | 105,050 | | | | | 139,463 | | | | | | Richard J. Dahl | | 212,257 | | | | 105,007 | | | | | 317,264 | | | | | | Larry A. Kay | | 77,500 | | | | 105,007 | | | | | 182,507 | | | | | | Caroline W. Nahas(4) | | 95,000 | | | | 105,007 | | | | | 200,007 | | | | | | Douglas M. Pasquale | | 100,500 | | | | 105,007 | | | | | 205,507 | | | | | | Gilbert T. Ray | | 82,500 | | | | 105,007 | | | | | 187,507 | | | | | | Lilian C. Tomovich | | 77,500 | | | | 105,007 | | | | | 182,507 | |
(1) | These amounts reflect the aggregate grant date fair value computed in accordance with Financial Accounting Standards Board’s Accounting Standards Codification Topic 718,Compensation—Stock Compensation (“FASB ASC Topic 718”). See Note 14 to the Consolidated Financial Statements in the Corporation’s annual report on Form10-K for the fiscal year ended December 31, 2019 for information regarding assumptions underlying the valuation of equity awards.
|
(2) | The following table sets forth the number of RSUs held by eachnon-employee director during 2019 and which were outstanding at December 31, 2019.
|
| | | | | Name
| | Stock Awards
Outstanding at
December 31, 2019
(#) | | | | Howard M. Berk
| | | 4,958 | | | | Daniel J. Brestle
| | | 4,958 | | | | Susan M. Collyns(3)
| | | 1,262 | | | | Richard J. Dahl
| | | 4,958 | | | | Larry A. Kay
| | | 4,958 | | | | Caroline W. Nahas
| | | 4,958 | | | | Douglas M. Pasquale
| | | 4,958 | | | | Gilbert T. Ray
| | | 4,958 | | | | Lilian C. Tomovich
| | | 4,271 | |
(3) | Ms. Collyns was appointed as a director on August 1, 2019. Ms. Collyns’ retainer fees were prorated for the period of time Ms. Collyns served as a director.
|
(4) | Ms. Nahas elected to defer all of her 2019 director cash compensation and annualnon-employee director equity awards pursuant to the Deferred Compensation Plan.
|
| | | | | 17 |
| 2020 PROXY STATEMENT
| SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT Security Ownership of Certain Beneficial Owners
The following table sets forth information regarding beneficial ownership of more than 5% of the outstanding shares of any class of the Corporation’s voting securities, which information is derived solely from certain SEC filings available as of March 18, 2020, as noted below. The percentages of Common Stock ownership have been calculated based upon 16,593,808 shares of Common Stock outstanding as of March 18, 2020.
| | | | | | | | | | | | | | Shares of Common
Stock Beneficially
Owned | | | | | Name and Address of Beneficial Owner | | Number | | | Percent | | | | | BlackRock, Inc. 55 East 52nd Street New York, NY 10055 | | | 2,473,956 | (1) | | | 15.01 | % | | | | The Vanguard Group 100 Vanguard Blvd. Malvern, PA 19355 | | | 2,112,747 | (2) | | | 12.81 | % | | | | Capital Research Global Investors 333 South Hope Street Los Angeles, CA 90071 | | | 2,039,724 | (3) | | | 12.37 | % | | | | Wells Fargo & Company 420 Montgomery Street San Francisco, CA 94163 | | | 1,470,361 | (4) | | | 8.92 | % |
(1) | Based solely upon on a Schedule 13G/A filed with the SEC on February 4, 2020 by BlackRock, Inc. reporting beneficial ownership as of December 31, 2019. BlackRock, Inc. reported that it possessed sole power to vote or direct the vote with respect to 2,441,677 of these shares and sole power to dispose or direct the disposition of 2,473,956 of these shares.
|
(2) | Based solely upon on a Schedule 13G/A filed with the SEC on February 11, 2020 by The Vanguard Group reporting beneficial ownership as of December 31, 2019. The Vanguard Group reported that it possessed sole power to vote or direct the vote with respect to 26,131 shares, shared power to vote or direct the vote with respect to 2,901 shares, sole power to dispose or direct the disposition of 2,085,732 shares and shared power to dispose or to direct the disposition of 27,015 of these shares.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT Security Ownership of Certain Beneficial Owners The following table sets forth information regarding beneficial ownership of more than 5% of the outstanding shares of any class of the Corporation’s voting securities, which information is derived solely from certain SEC filings available as of March 17, 2023, as noted below. The percentages of Common Stock ownership have been calculated based upon 15,718,577 shares of Common Stock outstanding as of March 17, 2023. |
(3) | Based solely upon a Schedule 13G/A filed with the SEC on February 14, 2020 by Capital Research Global Investors reporting beneficial ownership as of December 31, 2019. Capital Research Global Investors reported that it possessed sole power to vote or direct the vote and sole power to dispose or direct the disposition of all of the shares indicated in the table above. | | | | | | | | | | | | | | Shares of Common
Stock Beneficially
Owned | | | | | Name and Address of Beneficial Owner | | Number | | | Percent | | | | | BlackRock, Inc. 55 East 52nd Street New York, NY 10055 | | | 2,423,273 | (1) | | | 15.4% | | | | | The Vanguard Group 100 Vanguard Blvd. Malvern, PA 19355 | | | 1,965,964 | (2) | | | 12.5% | | | | | AllianceBernstein L.P. 1345 Avenue of the Americas New York, NY 10105 | | | 1,743,245 | (3) | | | 11.1% | | | | | Allspring Global Investments Holdings, LLC 525 Market St., 10th Fl. San Francisco, CA 94105 | | | 1,264,768 | (4) | | | 8.0% | |
| (1) | Based solely upon on a Schedule 13G/A filed with the SEC on January 26, 2023 by BlackRock, Inc. reporting beneficial ownership as of December 31, 2022. BlackRock, Inc. reported that it possessed sole power to vote or direct the vote with respect to 2,402,022 of these shares and sole power to dispose or direct the disposition of 2,423,273 of these shares. |
| (2) | Based solely upon on a Schedule 13G/A filed with the SEC on February 9, 2023 by The Vanguard Group reporting beneficial ownership as of December 31, 2022. The Vanguard Group reported that it possessed shared power to vote or direct the vote with respect to 31,405 shares, sole power to dispose or direct the disposition of 1,920,019 shares and shared power to dispose or to direct the disposition of 45,945 of these shares. |
| (3) | Based solely upon a Schedule 13G/A filed with the SEC on February 14, 2023 by AllianceBernstein L.P. reporting beneficial ownership as of December 31, 2022. AllianceBernstein, L.P. reported that it possessed sole power to vote or direct the vote of 1,496,392 of these shares and sole power to dispose or direct the disposition of 1,743,245 of these shares. |
| (4) | Based solely upon a Schedule 13G/A filed with the SEC on January 13, 2023 by (i) Allspring Global Investments Holdings, LLC (“AGIH”), (ii) Allspring Global Investments, LLC (“AGI”), and (iii) Allspring Funds Management, LLC (“AFM”) reporting beneficial ownership as of December 31, 2022. AGIH reported that it possessed sole power to vote or direct the vote of 1,224,061 shares and sole power to dispose or direct the disposition of 1,264,768 shares. AGI reported that it possessed sole power to vote or direct the vote of 197,938 shares and sole power to dispose or direct the disposition of 1,262,766 shares. AFM reported that it possessed sole power to vote or direct the vote of 1,026,123 shares and sole power to dispose or direct the disposition of 2,002 shares. |
| | | | | | 19 |
| (4) | Based solely upon a Schedule 13G filed with the SEC on February 4, 2020 by Wells Fargo & Company reporting beneficial ownership as of December 31, 2019. Wells Fargo & Company reported that it possessed the sole power to vote or direct the vote with respect to 23,086 shares, shared power to vote or direct the vote with respect to 241,895 shares, sole power to dispose or direct the disposition of 23,086 shares and shared power to dispose or direct the disposition of 1,447,275 of these shares.
|
| | | 18 | | |
| 2020 2023 PROXY STATEMENT
| SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT |
Security Ownership of Management The following table sets forth, as of March 17, 2023, the beneficial ownership of the Corporation’s Common Stock, including shares as to which a right to acquire ownership exists within the meaning of Rule 13d-3(d)(1) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), within 60 days of March 17, 2023, of each director, each nominee for election as director, each named executive officer and all directors and executive officers of the Corporation, as a group. The percentages of ownership have been calculated based upon 15,718,577 shares of Common Stock outstanding as of March 17, 2023. | | | | | | | | | | | | | | | | | | | | | | | | Amount and Nature of
Beneficial Ownership | | | | | | | | | | | | | Name | | Shares
Beneficially
Owned(1) | | | Unvested
Restricted
Shares(2) | | | Total Shares
Beneficially
Owned | | | Percent of Class | | | | | | | Howard M. Berk | | | 35,016 | (3)(4) | | | — | | | | 35,016 | | | | * | | | | | | | Susan M. Collyns | | | 4,662 | | | | — | | | | 4,662 | | | | * | | | | | | | Richard J. Dahl | | | 74,771 | (3)(5) | | | — | | | | 74,771 | | | | * | | | | | | | Michael C. Hyter | | | 2,872 | | | | — | | | | 2,872 | | | | * | | | | | | | Larry A. Kay | | | 21,105 | (3)(6) | | | — | | | | 21,150 | | | | * | | | | | | | Caroline W. Nahas | | | 35,056 | (3) | | | — | | | | 35,056 | | | | * | | | | | | | Douglas M. Pasquale | | | 17,174 | (3)(7) | | | — | | | | 17,174 | | | | * | | | | | | | Martha C. Poulter | | | 1,970 | | | | — | | | | 1,970 | | | | * | | | | | | | Arthur F. Starrs | | | — | | | | — | | | | — | | | | * | | | | | | | Lilian C. Tomovich | | | 8,182 | (3) | | | — | | | | 8,182 | | | | * | | | | | | | John W. Peyton | | | 87,458 | | | | 36,670 | | | | 124,128 | | | | * | | | | | | | Vance Y. Chang | | | 5,255 | | | | 16,577 | | | | 21,832 | | | | * | | | | | | | Jay D. Johns | | | 46,138 | | | | 12,630 | | | | 58,768 | | | | * | | | | | | | Tony E. Moralejo | | | 15,806 | | | | 9,493 | | | | 25,299 | | | | * | | | | | | | Christine K. Son | | | 39,311 | | | | 11,063 | | | | 50,374 | | | | * | | | | | | | All directors and executive officers as a group (15 persons) | | | 394,822 | | | | 86,433 | | | | 481,255 | | | | 3.03% | |
| * | Represents less than 1% of the outstanding shares of Common Stock. |
| | | | 20 | | |
| 2023 PROXY STATEMENT | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT |
| (1) | Security Ownership of Management
The following table sets forth, as of March 18, 2020, the beneficial ownershipNone of the Corporation’s Common Stock, including shares have been pledged as to which a right to acquire ownership exists withinsecurity. Share amounts for each of the meaning ofRule 13d-3(d)(1) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), within 60 days of March 18, 2020, of each director,directors, each nominee for election as director, each named executive officer and for all directors and executive officers as a group include shares subject to stock options that are exercisable within 60 days of March 17, 2023, as follows:
|
| | | Name | | Shares Subject to Options | | | Howard M. Berk | | — | | | Susan M. Collyns | | — | | | Richard J. Dahl | | 27,000 | | | Michael C. Hyter | | — | | | Larry A. Kay | | — | | | Caroline W. Nahas | | — | | | Douglas M. Pasquale | | — | | | Martha C. Poulter | | — | | | Arthur F. Starrs | | — | | | Lilian C. Tomovich | | — | | | John W. Peyton | | 47,834 | | | Vance Y. Chang | | 2,888 | | | Jay D. Johns | | 35,117 | | | Tony E. Moralejo | | 8,113 | | | Christine K. Son | | 30,827 | | | All directors and executive officers as a group (15 persons) | | 151,779 |
| Directors and certain executive officers also hold RSUs that are not included in the beneficial ownership table because vesting will not occur within 60 days of March 17, 2023. The amounts of RSUs held by non-employee directors as of December 31, 2022 are provided in the section of this proxy statement entitled “Director Compensation” and the amounts of RSUs held by executive officers are provided in the Outstanding Equity Awards at Fiscal Year-End Table. |
| (2) | Unvested RSAs are deemed beneficially owned because grantees of unvested RSAs under the Corporation’s equity compensation plans hold the sole right to vote such shares. |
| (3) | Includes unvested RSUs for Mr. Berk 1,602; Mr. Dahl 1,602; Mr. Kay 1,602; Ms. Nahas 1,602; Mr. Pasquale 1,602; and Ms. Tomovich 1,602. Each RSU represents a contingent right to receive one share of common stock. There are no voting rights associated with RSUs. |
| (4) | The amount for Mr. Berk does not include 740,545 shares of the Corporation, asCorporation’s Common Stock beneficially owned by Coral Rock Investments, L.P. MSD Capital, L.P. is the general partner of Coral Rock Investments, L.P. and may be deemed to beneficially own securities owned by Coral Rock Investments, L.P. Mr. Berk is a group. Senior Advisor of BDT & MSD Partners and may be deemed to beneficially own securities owned by MSD Capital, L.P. Mr. Berk disclaims beneficial ownership of the shares that may be deemed to be beneficially owned by MSD Capital, L.P., except to the extent of his pecuniary interest therein. |
| (5) | The percentages of ownership have been calculated based upon 16,593,808amount for Mr. Dahl includes 46,169 shares of Common Stock outstandingheld by the Richard J. Dahl Revocable Living Trust dated 1/20/1995, of which Mr. Dahl serves as Trustee. |
| (6) | The amount for Mr. Kay includes 11,909 shares of March 18, 2020.Common Stock held by the IRA Trustee for the benefit of Mr. Kay. |
| (7) | The amount for Mr. Pasquale includes 14,029 shares of Common Stock held by the Pasquale Living Trust. |
| | | | | | 21 |
| 2023 PROXY STATEMENT | | | | | | | | | | | | | | | | | | | | | | | | Amount and Nature of
Beneficial Ownership | | | | | | | | | | | | | Name | | Shares
Beneficially
Owned(1) | | | Unvested
Restricted
Shares(2) | | | Total Shares
Beneficially
Owned | | | Percent of Class | | | | | | | Howard M. Berk | | | 30,487 | (3)(4) | | | — | | | | 27,651 | | | | * | | | | | | | Daniel J. Brestle | | | 24,487 | (3) | | | — | | | | 21,651 | | | | * | | | | | | | Susan M. Collyns | | | — | | | | — | | | | — | | | | * | | | | | | | Richard J. Dahl | | | 77,079 | (3)(5) | | | — | | | | 74,243 | | | | * | | | | | | | Larry A. Kay | | | 25,445 | (3)(6) | | | — | | | | 22,609 | | | | * | | | | | | | Caroline W. Nahas | | | 31,187 | (3) | | | — | | | | 29,982 | | | | * | | | | | | | Douglas M. Pasquale | | | 12,645 | (3)(7) | | | — | | | | 9,809 | | | | * | | | | | | | Gilbert T. Ray | | | 14,555 | (3) | | | — | | | | 11,719 | | | | * | | | | | | | Lilian C. Tomovich | | | 2,672 | | | | — | | | | 2,672 | | | | * | | | | | | | Stephen P. Joyce | | | 10,775 | | | | — | | | | 10,775 | | | | * | | | | | | | Thomas H. Song | | | 9,983 | | | | 18,489 | | | | 28,472 | | | | * | | | | | | | Jay D. Johns | | | 19,344 | (8) | | | 15,680 | | | | 35,024 | | | | * | | | | | | | John C. Cywinski | | | 98,865 | | | | 17,503 | | | | 116,368 | | | | * | | | | | | | Bryan R. Adel | | | 45,330 | | | | 7,290 | | | | 52,620 | | | | * | | | | | | | All directors and executive officers as a group (14 persons) | | | 402,854 | | | | 58,962 | | | | 461,816 | | | | 2.75% | |
| * | Represents less than 1% of the outstanding shares of Common Stock.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE |
| | | | | 19 |
| 2020 PROXY STATEMENT
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE Section 16(a) of the Exchange Act requires that the Corporation’s directors, executive officers and persons who own more than ten percent of the Corporation’s equity securities file reports of ownership and changes in ownership with the SEC. Based on its review of such reports and other information furnished by the directors and executive officers, the Corporation believes that all reports required to be filed pursuant to Section 16(a) of the Exchange Act were filed on a timely basis in 2022 except for one report which was filed on September 13, 2022 in connection with vesting on September 1, 2022 of RSUs granted to director Martha C. Poulter. | | | | 22 | | | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
|
| 2023 PROXY STATEMENT | EXECUTIVE COMPENSATION |
(1) | None of the shares have been pledged as security. Share amounts for each of the directors, each nominee for election as director, each named executive officer and for all directors and executive officers as a group include shares subject to stock options that are exercisable within 60 days of March 18, 2020, as follows:
EXECUTIVE COMPENSATION COMPENSATION COMMITTEE REPORT The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management. Based on its review and discussion, the Compensation Committee recommended that the Board of Directors include the Compensation Discussion and Analysis in this proxy statement and the Corporation’s annual report on Form 10-K. THIS REPORT IS SUBMITTED BY THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS Howard M. Berk (Chair) Caroline W. Nahas Lilian C. Tomovich COMPENSATION DISCUSSION AND ANALYSIS The following discussion provides an overview and analysis of the Corporation’s compensation programs and policies, the material compensation decisions made under those programs and policies with respect to the Corporation’s named executive officers (the “NEOs”) and the material factors that were considered in making those decisions. Following this Compensation Discussion and Analysis is a series of tables under the heading “Compensation Tables” containing specific data about the compensation earned by or granted to our NEOs in 2022. The following executive officers were NEOs in 2022: Chief Executive Officer, John W. Peyton; Chief Financial Officer, Vance Y. Chang; President of the Applebee’s Business Unit, John C. Cywinski; President of the IHOP Business Unit, Jay D. Johns; and Senior Vice President, Legal, General Counsel and Secretary, Christine K. Son. Effective January 6, 2023, Mr. Cywinski resigned as President, Applebee’s Business Unit and Tony E. Moralejo became our President, Applebee’s Business Unit. Executive Summary 2022 Fiscal Year Performance Highlightsand Link to Pay Decisions: Our compensation decisions for 2022 were driven by our overarching goals of creating long-term stockholder value and linking pay with performance. Our 2022 performance was impacted by the ongoing COVID-19 pandemic, the inflationary environment, and supply chain issues, each of which affected performance results. However, despite these headwinds, we delivered steady performance and continued to return capital to stockholders via dividends and buybacks. Highlights include the following: Total 2022 revenues were $909.4 million, compared to $896.2 million for 2021. Consolidated adjusted EBITDA for 2022 was $251.9 million, compared to $253.3 million for 2021. Adjusted EBITDA is a performance measure used in our annual cash incentive plan. GAAP earnings per diluted share of $4.96 for 2022, compared to $5.66 for 2021. Development activity by Applebee’s and IHOP franchisees for 2022 resulted in the opening of 67 new restaurants and the closure of 39 restaurants, a net gain of 28 restaurants. Adjusted EBITDA for the Applebee’s Business Unit and IHOP Business Unit represented 101% and 97% of our incentive targets, respectively. | | | | | | 23 |
| 2023 PROXY STATEMENT | EXECUTIVE COMPENSATION |
| | | Name
• Same-restaurant sales in our domestic Applebee’s and IHOP restaurants increased by 5.1% and 5.8%, respectively. We completed the acquisition of Fuzzy’s Taco Shop, adding a new and growing category to our portfolio of brands. We believe that the Corporation’s 2022 compensation results were commensurate with the Corporation’s performance in 2022, demonstrating our commitment to a pay-for-performance philosophy. The Corporation’s 2022 annual cash incentive plan paid out at approximately 94% of target for Dine Brands, 119% of target for the Applebee’s Business Unit and 66% of target for the IHOP Business Unit. The following chart shows the annual cash incentive plan payout for 2022 and 2021 for Dine Brands. | | Shares Subject to
Options
The cash LTIP plan for 2020-2022 did not pay out based on our relative TSR performance at the 29.6th percentile relative to an index of publicly traded restaurant companies. | |  |
| † | For complete information regarding the Corporation’s 2022 performance, stockholders should read “Management’s Discussion and Analysis of Results of Operation and Financial Condition” and the audited consolidated financial statements and accompanying notes thereto contained in the Corporation’s 2022 annual report on Form 10-K filed with the SEC on March 1, 2023, which is being made available to stockholders with this proxy statement. |
| | | | 24 | | |
| Howard M. Berk
| | — | | | Daniel J. Brestle
| | — | | | Susan M. Collyns
| | — | | | Richard J. Dahl
| | 47,000 | | | Larry A. Kay
| | — | | | Caroline W. Nahas
| | — | | | Douglas M. Pasquale
| | — | | | Gilbert T. Ray
| | — | | | Lilian C. Tomovich
| | — | | | Stephen P. Joyce
| | — | | | Thomas H. Song
| | 8,263 | | | Jay D. Johns
| | 12,392 | | | John C. Cywinski
| | 79,285 | | | Bryan R. Adel
| | 42,000 | | | All directors and executive officers as a group (15 persons)
| | 191,128 |
(2) | Unvested RSAs are deemed beneficially owned because grantees of unvested RSAs under the Corporation’s equity compensation plans hold the sole right to vote such shares.
2023 PROXY STATEMENT | EXECUTIVE COMPENSATION |
(3) | Includes unvested RSUs for Mr. Berk 2,836; Mr. Brestle 2,836; Mr. Dahl 2,836; Mr. Kay 2,836; Ms. Nahas 1,205; Mr. Pasquale 2,836; and Mr. Ray 2,836. Each RSU represents a contingent right to receive one share of common stock. There are no voting rights associated with RSUs. Directors and certain executive officers also hold RSUs that are not included in the beneficial ownership table because vesting will not occur within 60 days of March 18, 2020. The amounts of RSUs held bynon-employee directors as of December 31, 2019 are provided in the section of this proxy statement entitled “Director Compensation” and the amounts of RSUs held by executive officers are provided in the Outstanding Equity Awards at FiscalYear-End Table.
Compensation Policies, Practices and Risk Management The Compensation Committee, along with the Chief Executive Officer, continually assess the Corporation’s compensation policies and practices to evaluate whether they remain aligned with the Corporation’s pay-for-performance culture, the creation of long-term stockholder value, effective risk management and strong governance practices. The Compensation Committee believes that, through a combination of risk-mitigating features and incentives guided by relevant market practices and corporate-wide goals, our compensation policies and practices do not present risks that are reasonably likely to have a material adverse effect on the Corporation. The Compensation Committee believes that appropriate safeguards are in place with respect to compensation policies and practices that assist in mitigating excessive risk-taking that could harm the value of the Corporation or reward poor judgment by the Corporation’s executives and other employees. The Compensation Committee’s independent compensation consultant, Exequity LLP (“Exequity”), conducted a risk assessment in 2022 of the Corporation’s compensation policies and practices as they apply to all employees, including the NEOs. Exequity reviewed the design features and performance metrics of the Corporation’s cash and stock-based incentive programs along with the approval mechanisms associated with each and determined that the Corporation’s policies and practices were unlikely to create risks that are reasonably likely to have a material adverse effect on the Corporation. The following actions, practices and policies are intended to provide for continued alignment with the Corporation’s principles and/or reduce the likelihood of excessive risk-taking: |
(4) | The amount for Mr. Berk does not include 740,545 shares of the Corporation’s Common Stock beneficially owned by MSD SBI, L.P. MSD Capital, L.P. is the general partner of MSD SBI, L.P. and may be deemed to beneficially own securities owned by MSD SBI, L.P. Mr. Berk is a partner of MSD Capital, L.P. and may be deemed to beneficially own securities owned by MSD Capital, L.P. Mr. Berk disclaims beneficial ownership of the shares that may be deemed to be beneficially owned by MSD Capital, L.P., except to the extent of his pecuniary interest therein.
|
(5) | The amount for Mr. Dahl includes 24,687 shares of Common Stock held by the Richard J. Dahl Revocable Living Trust dated 1/20/1995, of which Mr. Dahl serves as Trustee.
|
(6) | The amount for Mr. Kay includes 12,645 shares of Common Stock held by the IRA Trustee for the benefit of Mr. Kay.
|
(7) | The amount for Mr. Pasquale includes 5,090 shares of Common Stock held by the Pasquale Living Trust.
|
(8) | The amount for Mr. Johns includes 6,952 shares of Common Stock held by the Jay D. Johns Revocable Trust created on 9/20/2013.
|
| | | 20 | | |
| 2020 PROXY STATEMENT
| EXECUTIVE COMPENSATION
|
EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE REPORT
The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) ofRegulation S-K with management. Based on its review and discussion, the Compensation Committee recommended that the Board of Directors include the Compensation Discussion and Analysis in this proxy statement and the Corporation’s annual report onForm 10-K.
THIS REPORT IS SUBMITTED BY THE
COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
Daniel J. Brestle (Chairman)
Howard M. Berk
Caroline W. Nahas
COMPENSATION DISCUSSION AND ANALYSIS
The following discussion provides an overview and analysis of the Corporation’s compensation programs and policies, the material compensation decisions made under those programs and policies with respect to the Corporation’s named executive officers (the “NEOs”) and the material factors that were considered in making those decisions. Following this Compensation Discussion and Analysis is a series of tables under the heading “Compensation Tables” containing specific data about the compensation earned by or granted to our NEOs in 2019.
The following executive officers were NEOs in 2019:
Chief Executive Officer, Stephen P. Joyce;
Chief Financial Officer, Thomas H. Song;
President of the Applebee’s Business Unit, John C. Cywinski;
President of the IHOP Business Unit, Jay D. Johns, who was promoted to President of the IHOP Business Unit as of June 13, 2019; and
Senior Vice President, Legal, General Counsel and Secretary, Bryan R. Adel
Directors and officers of the Corporation are subject to stock ownership guidelines. | | | | | 21 |
| 2020 PROXY STATEMENT
| EXECUTIVE COMPENSATION
|
Executive Summary
2019 Fiscal Year Performance Highlightsand Link to Pay Decisions
Our compensation decisions for 2019 were driven by our overarching goal of creating long-term stockholder value and linking pay with performance. 2019 performance was defined by several significant achievements but with mixed results in certain key metrics:
| | | | |  STOCK PRICE APPRECIATION | |  EARNINGS PER SHARE | |  SAME RESTAURANT SALES | | | | Year over year growth calculated based on the Corporation’s stock price on the last trading day of each period | | AEPS calculated as total adjusted net income available to common stockholders divided by weighted average diluted shares.
AEPS is anon-U.S. GAAP measure. Reconciliation of U.S. GAAP earnings per share to AEPS is provided in Appendix C
| | Percentage change in sales in 2019 compared to the same period of 2018 for domestic restaurants operated during both years and open for at least 18 months |
Adjusted Earnings Per Share (AEPS) for fiscal 2019 increased 29.4% year-over-year to $6.95. Similarly, net income available to common stockholders, as reported pursuant to U.S. GAAP (GAAP EPS) increased from $4.37 in 2018 to $5.85 in 2019, a 33.9% year-over-year increase.
The Corporation returned over $156 million to our stockholders, comprised of $109.7 million in the form of stock repurchases and $46.9 million in cash dividends, with cash dividends reflecting a 10% increase in our quarterly dividend to $0.69 per share, effective with the dividend declared in the first quarter 2019.
The Corporation refinanced $1.3 billion of fixed rate senior notes.
Cash flows from operating activities for fiscal 2019 increased 10.6% to $155.2 million.
IHOP signed the largest multi-unit development agreement in its history, calling for the development, with TravelCenters of America, of nearly 100 IHOP restaurants over the next five
The Corporation’s compensation mix is balanced among fixed components such as salary and benefits, and variable compensation such as annual cash incentive payments and long-term incentive awards, including NQSOs, RSAs, and participation in the cash LTIP, which generally vest or are earned over three years. IHOP operating profit performance exceeded target levels under our 2019 annual cash incentive plan while Dine Brands and Applebee’s operating profit performance fell below target.
IHOP and Applebee’s same-restaurant sales underperformed internal targets and industry benchmarks in 2019; IHOP same-restaurants-sales achieved positive growth for the eighth consecutive quarter.
For fiscal years 2017 through 2019, the Corporation’s Total Shareholder Return was 20.4%, achieving a percentile rank of 54.5% relative to an index of publicly-traded restaurant companies.
| | | 22 | | |
| 2020 PROXY STATEMENT
| EXECUTIVE COMPENSATION
|
We believe that the Corporation’s 2019 compensation results were commensurate with the Corporation’s performance in 2019, demonstrating a commitment to apay-for-performance philosophy.
With respect to our NEOs, the Corporation’s 2019 annual cash incentive plan paid out at approximately 78.0% of target for Dine Brands, 63.5% of target for the Applebee’s Business Unit and 80.6% of target for the IHOP Business Unit. The Dine Brands target is applicable to Mr. Joyce, Mr. Song, and Mr. Adel, while the Applebee’s Business Unit target and IHOP Business Unit Target are applicable to Mr. Cywinski and Mr. Johns, respectively.
 Annual Cash Incentive Payout
The long-term cash incentive plan for fiscal years 2017 through 2019 paid out at 111.3% of target for 2017 – 2019 due to a relative total stockholder return (“TSR”) percentile rank of 54.5% relative to an index of publicly traded restaurant companies (compared to a percentile rank of 44.3% for 2016 – 2018).
 Cash LTIP Payout (as a percentage of target)
† | For complete information regarding the Corporation’s 2019 performance, stockholders should read “Management’s Discussion and Analysis of Results of Operation and Financial Condition” and the audited consolidated financial statements and accompanying notes thereto contained in the Corporation’s 2019 annual report on Form10-K filed with the SEC on February 24, 2020, which is being made available to stockholders with this proxy statement.
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| 2020 PROXY STATEMENT
| EXECUTIVE COMPENSATION
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Compensation Policies, Practices and Risk Management
The Compensation Committee, along with the Chief Executive Officer and the Senior Vice President, Chief People Officer, continually assess the Corporation’s compensation policies and practices to evaluate whether they remain aligned with the Corporation’spay-for-performance culture, the creation of long-term stockholder value, effective risk management and strong governance practices.
The Compensation Committee believes that, through a combination of risk-mitigating features and incentives guided by relevant market practices and corporate-wide goals, our compensation policies and practices do not present risks that are reasonably likely to have a material adverse effect on the Corporation. The Compensation Committee believes that appropriate safeguards are in place with respect to compensation policies and practices that assist in mitigating excessive risk-taking that could harm the value of the Corporation or reward poor judgment by the Corporation’s executives and other employees.
The Compensation Committee’s independent compensation consultant, Exequity LLP (“Exequity”), conducted a risk assessment in 2019 of the Corporation’s compensation policies and practices as they apply to all employees, including the NEOs. Exequity reviewed the design features and performance metrics of the Corporation’s cash and stock-based incentive programs along with the approval mechanisms associated with each and determined that the Corporation’s policies and practices were unlikely to create risks that are reasonably likely to have a material adverse effect on the Corporation.
The following actions, practices and policies are intended to provide for continued alignment with the Corporation’s principles and/or reduce the likelihood of excessive risk-taking:
The Compensation Committee reviews Chief Executive Officerpay-for-performance alignment by evaluating the Chief Executive Officer’s compensation relative to the Corporation’s TSR performance over the last five years.
Directors and officers of the Corporation are subject to stock ownership guidelines.
The Corporation’s compensation mix is balanced among fixed components such as salary and benefits, and variable compensation such as annual cash incentive payments and long-term incentive awards including NQSOs, RSAs, RSUs, and participation in the cash long-term incentive plan (“cash LTIP”), which generally vest or are earned over three years.
The Corporation’s annual cash incentive plan and three-year cash LTIP both have capped payment opportunities and primarily reward achievement for different performance metrics. Further, the cash LTIP is measured against an index of publicly-traded restaurant companies and, beginning with the 2018-2020 cycle, a second financial performance metric – average adjusted earnings per share over the performance period.
The Corporation’s annual cash incentive plan and three-year cash LTIP both have capped payment opportunities and primarily reward achievement for different performance metrics. Further, performance under the cash LTIP is evaluated in a relative context against an index of restaurant companies traded on U.S.-based exchanges. The Compensation Committee has ultimate authority to determine, and increase or decrease, if appropriate, compensation provided to the Corporation’s executive officers, including each of the NEOs. The Compensation Committee annually undertakes a “tally sheet” analysis of total annual compensation and the total potential payout under various termination scenarios for the NEOs. | • | | The Compensation Committee reviews Chief Executive Officer pay-for-performance alignment by evaluating the Chief Executive Officer’s compensation relative to the Corporation’s TSR performance over the last three years. |
The Corporation maintains a Clawback Policy, which allows the Board of Directors to recoup incentive compensation in certain circumstances. See “Clawback Policy” for further details on the Corporation’s policy. | • | | All outstanding long-term incentive award agreements use a “double-trigger” definition for acceleration of vesting that requires both a change-in-control and a qualifying termination following such change-in-control. |
All employees, including our NEOs, and the Board of Directors are subject to the Corporation’s Insider Trading Policy, which contains a prohibition on engaging in hedging and pledging transactions involving the Corporation’s securities. | • | | The Compensation Committee has set the grant date for annual equity awards to be the close of business on the second full business day after our announcement of fiscalyear-end earnings. The Compensation Committee utilizes the services of an independent compensation consultant who does not provide any other services to the Corporation
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The Compensation Committee utilizes the services of an independent compensation consultant (who does not provide any other services to the Corporation) and has the authority to retain any advisor it deems necessary or advisable to fulfill its obligations. The Corporation’s equity compensation plans do not permit repricing of previously granted stock options without stockholder approval. | | | 24 | | |
| 2020 PROXY STATEMENT
| EXECUTIVE COMPENSATION
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The Corporation has not authorized any multi-year guaranteed bonuses. | • | | The Corporation does not provide tax“gross-ups” on severance payments or perquisites other than certain expenses related to relocation. Overview of Executive Compensation Philosophy and Objectives
The Compensation Committee has structured the Corporation’s executive compensation programs to align with a compensation philosophy that is based on several objectives, including:
Instilling an ownership culture and linking the interests of the NEOs with those of the Corporation’s stockholders;
Rewarding executives for achievement of both annual and longer-term financial and key operating goals of the Corporation; and
Facilitating the attraction, motivation and retention of highly talented, entrepreneurial and creative executive leaders.
The Role of the Compensation Committee
Under its charter, the Compensation Committee has the sole authority to determine and approve compensation for the Corporation’s NEOs and other executive officers. In addition, the Compensation Committee, which is comprised solely of independent directors and reports regularly to the Board of Directors:
reviews and approves compensation and benefits programs including grants made pursuant to the Corporation’s equity compensation plans;
oversees the Corporation’s executive compensation philosophy and strategy;
ensures that proper due diligence, deliberations, and reviews of executive compensation are conducted;
maintains visibility into, assists with the development of, and monitors progress of programs regarding the Corporation’s organizational culture, including diversity and inclusion; and
oversees risks related to the Corporation’s compensation practices.
The Compensation Committee is also responsible for reviewing the compensation for the members of the Board of Directors and submits any recommended changes for approval by the Board of Directors.
The Compensation Committee reviews the Corporation’s executive compensation plans throughout the fiscal year. Decisions concerning annual salary increases, the approval of annual cash incentives, the design and objectives of each year’s incentive plan and the granting of long-term incentive (“LTI”) awards are typically made in the first quarter of each fiscal year after a series of meetings among the Compensation Committee, its compensation consultant, the Chief Executive Officer and the Senior Vice President, Chief People Officer. The Compensation Committee also performs a “tally sheet” analysis which provides the Compensation Committee with information related to total annual compensation of each NEO and the potential payout each NEO would receive upon separation from the Corporation. The Compensation Committee performs this analysis on an annual basis as part of its oversight function with respect to executive compensation.
The general practice of the Compensation Committee has been to evaluate annually the performance of the Chief Executive Officer and the other executive officers and approve compensation based on this evaluation. As it relates to the assessment of the Chief Executive Officer’s performance, the Chairman of the Board of Directors and the chairs of the Compensation Committee and the Nominating and Corporate Governance Committee discuss annual performance goals with the Chief Executive Officer and conduct an annual performance review and compensation discussion.
In addition, the Compensation Committee annually determines the compensation of the other executive officers based on evaluations of their respective performance.
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| Generally, the Chief Executive Officer and the Senior Vice President, Chief People Officer provide input to the Compensation Committee in connection with its compensation deliberations except with regard to decisions concerning themselves:
2023 PROXY STATEMENT The Chief Executive Officer provides assessments of each NEO’s performance against specific objectives and overall contributions, potential future contributions and retention risk;
Based on the assessment described above, as well as the market data provided by the Compensation Committee’s independent consultant, the Chief Executive Officer and the Senior Vice President, Chief People Officer make recommendations to the Compensation Committee regarding executive compensation for each of the other NEOs; and
In instances where new executives are hired, the Chief Executive Officer and the Senior Vice President, Chief People Officer discuss available information regarding compensation provided at the executive’s current or former employer, internal and external compensation benchmarking data, skill set and qualifications, and make recommendations for new executive pay packages to the Compensation Committee.
The Role of the Compensation Consultant
The Compensation Committee has the sole authority to retain or terminate a compensation consultant to assist in carrying out its responsibilities. Accordingly, during 2019, the Compensation Committee directly engaged Exequity as its independent compensation consultant to provide objective and expert analyses, advice, and information with respect to executive compensation. In performing its services, Exequity interacted collaboratively with the Compensation Committee and with senior management at the direction of the Compensation Committee. In 2019, Exequity performed the following services:
Provided executive compensation benchmarking data (as described below);
Provided analysis and advice regarding annual incentive plan design;
Provided analysis and advice regarding LTI plan design;
Assisted with stock plan modeling and design in connection with the proposal to approve the Dine Brands Global, Inc. 2019 Stock Incentive Plan (“2019 Stock Incentive Plan”) included in the Corporation’s 2019 proxy statement;
| | EXECUTIVE COMPENSATION |
Overview of Executive Compensation Philosophy and Objectives The Compensation Committee has structured the Corporation’s executive compensation programs to align with a compensation philosophy that is based on several objectives, including: Instilling an ownership culture and linking the interests of the NEOs with those of the Corporation’s stockholders; Rewarding executives for achievement of both annual and longer-term financial and key operating goals of the Corporation; and Facilitating the attraction, motivation, and retention of highly talented, entrepreneurial, and creative executive leaders. The Role of the Compensation Committee Under its charter, the Compensation Committee has the sole authority to determine and approve compensation for the Corporation’s NEOs and other executive officers. In addition, the Compensation Committee, which is comprised solely of independent directors and reports regularly to the Board of Directors: Reviews and approves compensation and benefits programs, including grants made pursuant to the Corporation’s equity compensation plans; Oversees the Corporation’s executive compensation philosophy and strategy; Oversees due diligence, deliberations, and reviews of executive compensation; Maintains visibility into, assists with the development of, and monitors progress of programs regarding the Corporation’s organizational culture, including diversity and inclusion; and Oversees risks related to the Corporation’s compensation practices. The Compensation Committee is also responsible for reviewing the compensation for the members of the Board of Directors and submits any recommended changes for approval by the Board of Directors. The Compensation Committee reviews the Corporation’s executive compensation plans throughout the fiscal year. Decisions concerning annual salary increases, the approval of annual cash incentives, the design and objectives of each year’s incentive plan and the granting of long-term incentive (“LTI”) awards are typically made in the first quarter of each fiscal year after a series of meetings among the Compensation Committee, its compensation consultant, and the Chief Executive Officer. The general practice of the Compensation Committee has been to evaluate annually the performance of the Chief Executive Officer and the other executive officers and to approve compensation based on this evaluation. As it relates to the assessment of the Chief Executive Officer’s performance, the Chair of the Board of Directors and/or the chairs of the Compensation Committee and the Nominating and Corporate Governance Committee discuss annual performance goals with the Chief Executive Officer and conduct an annual performance review and compensation discussion. In addition, the Compensation Committee annually determines the compensation of the other executive officers based on evaluations of their respective performance. Generally, the Chief Executive Officer provides input to the Compensation Committee in connection with its compensation deliberations except with regard to decisions concerning the Chief Executive Officer: The Chief Executive Officer provides assessments of each NEO’s performance against specific objectives and overall contributions, potential future contributions, and retention risk; Based on the assessment described above, as well as the market data provided by the Compensation Committee’s independent consultant, the Chief Executive Officer makes recommendations to the Compensation Committee regarding executive compensation for each of the other NEOs; and In instances where new executives are hired, the Chief Executive Officer reviews available information regarding compensation provided at the executive’s current or former employer, internal benchmarking data, market data provided by the Compensation Committee’s independent consultant, skill set and qualifications, and makes recommendations for new executive pay packages to the Compensation Committee. | | | | 26 | | |
| 2023 PROXY STATEMENT | EXECUTIVE COMPENSATION |
The Role of the Compensation Consultant The Compensation Committee has the sole authority to retain or terminate a compensation consultant to assist in carrying out its responsibilities. Accordingly, during 2022, the Compensation Committee directly engaged Exequity as its independent compensation consultant to provide objective and expert analyses, advice, and information with respect to executive compensation. In performing its services, Exequity interacted collaboratively with the Compensation Committee and with senior management at the direction of the Compensation Committee. In 2022, Exequity performed the following services: Provided executive compensation benchmarking data (as described below); Provided analysis and advice regarding annual incentive plan design; Provided analysis and advice regarding LTI plan design; Provided analysis and advice regarding executive severance arrangements; | • | | Responded to other requests including conducting a Chief Executive Officerpay-for-performance analysis, a compensation risk assessment, peer group analysis, a stock ownership guidelines analysis, and advising on various governance and regulatory developments; and Advised on compensation for executive officers.
Exequity did not provide any additional services to the Corporation during 2019
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Advised on compensation for executive officers. Exequity did not provide any additional services to the Corporation during 2022 beyond those provided in the capacity of independent compensation consultant to the Compensation Committee. The Compensation Committee has assessed the independence of Exequity pursuant to the rules of the SEC and concluded that Exequity’s work for the Compensation Committee does not raise any conflicts of interest. Compensation Benchmarking and Peer Group The Corporation uses a peer group of restaurant and hospitality companies and compensation surveys for different benchmarking comparisons, including base salary, target annual cash incentive, LTI awards and total direct compensation opportunity (“TDCO”). The Compensation Committee, with input from its independent compensation consultant and management, periodically reviews its peer group (the “NEO Peer Group”) for the purpose of evaluating executive compensation. The Corporation’s highly franchised business model is uncommon amongst its peer group. The majority of the peer companies have a significant number of company-owned restaurants, with only 7 of our 17 current peers having more than 85% of their locations franchised. We believe our significantly franchised business model (more than 99% franchised as of fiscal year end 2022) requires less capital investment and general and administrative overhead, generates higher gross profit margins and reduces the volatility of adjusted free cash flow performance as compared to owning more company-operated restaurants. In acknowledging the structural differences, the Compensation Committee considers a variety of metrics in evaluating the NEO Peer Group, which includes but is not limited to revenues, system-wide sales, EBITDA, market capitalization and enterprise value. As compared to the NEO Peer Group, as of December 31, 2022, the Corporation ranked in the first quartile in revenues (due to our franchise structure), and the second quartile in EBITDA, market capitalization and enterprise value. The NEO Peer Group consists of companies in the Corporation’s industry and companies with similar business models in related industries that the Compensation Committee believes to approximate the Corporation’s general labor market for top executive talent. The NEO Peer Group used for evaluating 2022 compensation decisions consisted of the companies set forth below. The NEO Peer Group listed below is the same peer group that was used to evaluate 2021 compensation decisions except for the removal of Dunkin’ Brands Group, Inc. due to its acquisition by Inspire Brands in December 2020. | | | | | • Bloomin’ Brands Inc. | | • Dave & Buster’s Entertainment, Inc. | | • Ruth’s Hospitality Group, Inc. | • BJ’s Restaurants, Inc. | | • Denny’s Corporation | | • Shake Shack Inc. | • Brinker International, Inc. | | • Jack in the capacity of independent compensation consultant to the Compensation Committee.Box Inc. | | • Texas Roadhouse, Inc. | • The Compensation Committee has assessed the independence of Exequity pursuant to the rules of the SECCheesecake Factory Incorporated | | • Papa John’s International, Inc. | | • The Wendy’s Company | • Choice Hotels International, Inc. | | • Red Robin Gourmet Burgers, Inc. | | • Wingstop Inc. | • Cracker Barrel Old Country Store, Inc. | | | | • Wyndham Hotels and concluded that Exequity’s work for the Compensation Committee does not raise any conflicts of interest. Compensation Benchmarking and Peer Group
The Corporation uses a restaurant peer group and compensation surveys for different benchmarking comparisons, including base salary, target annual cash incentive, LTI awards and total direct compensation opportunity (“TDCO”). The Compensation Committee, with input from its independent compensation consultant and management, periodically reviews its peer group (the “NEO Peer Group”) for the purpose of evaluating executive compensation.
The Corporation’s significantly franchised business model is uncommon amongst its peer group. The majority of the peer companies have a significant number of company-owned restaurants, with only 8 of 15 peers having more than 85% of their restaurants franchised. We believe our significantly franchised business model (approximately 98% franchised as of fiscal year end 2019) requires less capital investment and general and administrative overhead, generates higher gross profit margins and reduces volatility of adjusted free cash flow performance as compared to owning more company-operated restaurants. In acknowledging the structural differences, the Compensation Committee considers a variety of metrics in evaluating the NEO Peer Group which includes but is not limited to revenues, system-wide sales, market capitalization and enterprise value and the ratio of these metrics per employee. As compared to the NEO Peer Group, the Corporation ranked
| | | 26 | | |
| 2020 PROXY STATEMENT
| EXECUTIVE COMPENSATION Resorts, Inc.
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in the first quartile in revenues and market capitalization, second quartile in enterprise value, and the top quartile in system-wide sales. The NEO Peer Group consists of companies in the Corporation’s industry and companies with similar business models in related industries that the Compensation Committee believes to approximate the Corporation’s general labor market for top executive talent.
The NEO Peer Group used for evaluating 2019 compensation decisions consisted of the companies set forth below. The NEO Peer Group for 2019 remained unchanged from 2018 except that Sonic Corp. was removed during 2019 because it was acquired in December 2018.
| | | | | | • Bloomin’ Brands Inc.
| | • Cracker Barrel Old Country Store, Inc.
| | • Papa John’s International, Inc.
| • BJ’s Restaurants, Inc.
| | • Denny’s Corporation
| | • Red Robin Gourmet Burgers, Inc.
| • Brinker International, Inc.
| | • Domino’s Pizza, Inc.
| | • Texas Roadhouse, Inc.
| • The Cheesecake Factory Incorporated
| | • Dunkin’ Brands Group, Inc.
| | • The Wendy’s Company
| • Choice Hotels International, Inc.
| | • Jack in the Box Inc.
| | • Wyndham Hotels and Resorts, Inc.
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The NEO Peer Group was the primary data source considered by the Compensation Committee when reviewing total pay levels of the NEOs. The Compensation Committee also considered broader compensation data from the 2019 AON Hewitt US Total Compensation by Industry Survey, which provided general industry pay data on executive positions for companies with comparable sales.
The Role of Say on Pay Votes and Stockholder Outreach Efforts
The Corporation provides its stockholders with the opportunity to cast an annual advisory vote on executive compensation (say on pay). In addition to receiving overall feedback on the Corporation’s compensation programs as part of the annual say on pay proposal, the Board of Directors and management are committed to regular engagement with our stockholders to solicit views and input on important topics including executive compensation. During 2019, the Corporation reached out to stockholders representing a majority of outstanding shares to discuss key executive compensation and other governance topics. The Corporation incorporates stockholder feedback into its compensation and governance policies. At the Corporation’s annual meeting of stockholders held in May 2019, approximately 72% of the votes present and entitled to vote at the meeting on the say on pay proposal were voted in favor of the proposal approving the compensation of the NEOs as disclosed in the 2019 proxy statement. The Compensation Committee believes that the Corporation’s approach to executive compensation, including theone-time grants of RSUs and NQSOs made to Mr. Joyce in 2017 in connection with his appointment as Chief Executive Officer with no subsequent equity grants made or contemplated to be made throughout the term of his current employment agreement, is reasonable considering market conditions and is consistent with the Corporation’spay-for-performance philosophy and overarching goal of creating long-term stockholder value.
In addition to direct feedback from the Corporation’s stockholders, the Compensation Committee will continue to consider the outcome of the Corporation’s say on pay votes when making future compensation decisions for its NEOs.
Compensation Discussion Related to the Chief Executive Officer
Mr. Joyce joined the Corporation as Chief Executive Officer in September 2017 amidst a challenging environment for casual and family dining and during a transitional time for the Corporation. Given Mr. Joyce’s previous experience and proven track record for returning companies to growth, the Board of Directors identified Mr. Joyce as the best candidate to lead the Corporation in executing its long-term strategy to return the Corporation to a growth company focused on delivering strong results. As such, Mr. Joyce’s overall compensation opportunity was strategically designed to include a significant proportion of front-loaded, performance-contingent equity awards that would be directly linked to the performance of the Corporation.
Mr. Joyce’s compensation package primarily consists of the following:
an annual base salary of $1,000,000;
participation in the Corporation’s annual incentive plan with a target payout of 100% of base salary;
| • | | aone-time grant of 75,000 time-based RSUs, which will cliff vest on February 1, 2021 assuming Mr. Joyce remains continuously employed by the Corporation through such date with no subsequent equity grants made or contemplated to be made throughout the term of his current employment agreement;
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| • | | aone-time grant of 350,000 performance- and time-based NQSOs and 175,000 performance- and time-based RSUs, both of which will cliff vest on February 1, 2021 based on Mr. Joyce’s achievement of certain price targets for the Corporation’s common stock and if Mr. Joyce remains continuously employed by the Corporation through such vesting date with no subsequent equity grants made or contemplated to be made throughout the term of his current employment agreement;
The NEO Peer Group was the primary data source considered by the Compensation Committee when reviewing total pay levels of the NEOs. The Compensation Committee also considered broader compensation data from published salary surveys, which provided general industry pay data on executive positions from thousands of representative companies with sales, geographic locations, and jobs similar to ours. The Role of Say on Pay Votes and Stockholder Outreach Efforts The Corporation provides its stockholders with the opportunity to cast an annual advisory vote on executive compensation (say on pay). In addition to receiving overall feedback on the Corporation’s compensation programs as part of the annual say on pay proposal, the Board of Directors and management are committed to regular engagement with our stockholders to solicit views and input on important topics including executive compensation. The Corporation incorporates stockholder feedback into its compensation and governance policies as it deems appropriate. At the Corporation’s annual meeting of stockholders held in May 2022, approximately 94.5% of the votes cast on the say on pay proposal were voted in favor of the proposal approving the compensation of the NEOs as disclosed in the 2022 proxy statement. The Compensation Committee believes that the Corporation’s approach to executive compensation is reasonable considering market conditions and is consistent with the Corporation’s pay-for-performance philosophy and overarching goal of creating long-term stockholder value and the Compensation Committee did not make any changes to the Company’s 2022 executive compensation program in response to the 2022 say on pay results. In addition to direct feedback from the Corporation’s stockholders, the Compensation Committee will continue to consider the outcome of the Corporation’s say on pay votes when making future compensation decisions for its NEOs. Elements of the Compensation Program for NEOs The Corporation’s executive compensation program for NEOs generally consists of the following components: | • | | Base Salary. Base salaries are designed to attract and retain talented executives and to provide a competitive and stable component of income. |
| • | | Annual Cash Incentives under the Annual Incentive Plan. Annual cash incentives provide a commuting allowance of $125,000 per year subject tocompetitive incentive opportunity for achieving financial performance and operational objectives over an annual 5% increaseperformance period. Generally, no payouts are made under the annual incentive plan unless these objectives are achieved. |
| • | | LTI Awards. LTI awards are composed of NQSOs, RSAs, and a temporary housing allowance of $125,000 per year subject to an annual 3% increase. In determining the overall compensation package for Mr. Joyce, the Compensation Committee considered the statecash LTIP, excluding one-time equity awards made in connection with hiring, retention, or other non-standard circumstances. Each of the business at the time of Mr. Joyce’s hire, the critical role Mr. Joyce would have in returning the Corporationannual LTI components is vested or earned over a three-year period to growth, and Mr. Joyce’s previous experience and proven track record for returning companies to growth. The Compensation Committee also considered competitive market data and the input of Exequity.
Front-loaded Equity Awards
88% of the equity awards granted to Mr. Joyce at his time of hire are tied to stock price performance hurdles that represent a rigorous performance standard and directly align his compensationprovide ongoing alignment with thestockholders’ interests of our stockholders.
The performance contingent NQSOs and RSUs were granted at a price of $40.58 and earned in increments based on nine different stock price performance hurdles, with the first stock price hurdle set at $50.00, or approximately 123% of the stock price on the date of grant, and the last stock price hurdle set at $90.00, or approximately 221% of the stock price on the date of grant. In order for each and any of the stock price performance hurdles to be considered satisfied, the closing stock price of the Corporation’s common stock must be at or above the stock price target for a period of 20 consecutive New York Stock Exchange trading days.
In line with the sustained improvement in stock price performance since Mr. Joyce joined as Chief Executive Officer, 100% of the performance conditions tied to Mr. Joyce’s performance-contingent equity awards have been satisfied. As of December 31, 2019, the final stock price hurdle of $90 was achieved, representing 221% of the stock price on the date of grant. Mr. Joyce must remain continuously employed through February 1, 2021 for any of these performance-contingent equity awards to vest. This post-performance vesting requirement facilitates the continued retention of the Chief Executive Officer through the term of his employment agreement and was a primary element considered by the Compensation Committee when designing Mr. Joyce’s performance-contingent equity awards. Further, given the stock-denominated awards, the value of the performance-contingent awards Mr. Joyce receives at the end of the vesting period is directly dependent on the Corporation’s future stock price on the vesting date and the continued success of the Corporation under Mr. Joyce’s leadership. Please see the Outstanding Equity Awards at 2019 FiscalYear-End Table in this proxy statement for additional information.
2019 Compensation Decisions
The Compensation Committee did not approve any increase to Mr. Joyce’s base salary for 2019 or 2020. Further, the Compensation Committee did not approve an increase to Mr. Joyce’s target opportunity under the annual cash incentive plan, which remains at 100% of base salary. Mr. Joyce’s base salary and target opportunity under the annual cash incentive plan remain at the levels established when he joined the Corporation. The equity award grants described above which were made in conjunction with Mr. Joyce’s hire are intended to cover the entire term of his employment agreement. To that end, Mr. Joyce did not receive any additional equity awards in 2019 and did not participate in, or receive any payouts under, the Corporation’s cash LTIP for performance periods covering 2019. The Compensation Committee does not intend to grant Mr. Joyce any additional long-term incentive awards prior to the end of the term of his current employment agreement in February 2021.
Please see Elements of the Compensation Program For NEOs section below for additional information regarding Mr. Joyce’s 2019 compensation.
Elements of the Compensation Program For NEOs
The Corporation’s executive compensation program for NEOs generally consists of the following components:
| • | | Base Salary. Base salaries are designed to attract and retain talented executives and to provide a competitive and stable component of income.
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| • | | Annual Cash Incentives under the Annual Incentive Plan. Annual cash incentives provide a competitive incentive opportunity for achieving financial performance and operational objectives over an annual performance period. Generally, no payouts are made under the annual incentive plan unless these objectives are achieved.
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| 2020 PROXY STATEMENT
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| • | | LTI Awards. LTI awards are composed ofperformance. NQSOs RSAs and the cash LTIP with each component representing approximatelyone-third of the total value awarded, excludingone-time equity awards made in connection with hiring, retention or othernon-standard circumstances. Each of the annual LTI components is vested or earned over a three-year period to provide ongoing alignment with stockholders’ interests based on the Corporation’s future stock price performance. Stock options provide value to the executive only if the Corporation’s stock price increases above the grant date price. The value of RSAs increases or decreases with changes in the Corporation’s stock price. The 2017 – 2019 cash LTIP cycle provides payment only if the Corporation’s TSR performance is in the 33rd percentile or greater compared to a group of publicly traded restaurant companies over a three-year performance period. Beginning with the 2018 – 2020 cash LTIP cycle, 50% of the cash LTIP will be earned based on the TSR metric and 50% will be earned based on the average AEPS performance metric when performance meets or exceedspre-established performance goals over the three-year performance period.
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| • | | Benefits and Other Compensation. Benefits and other compensation programs are provided to protect executive health and safety and provide flexibility and efficiencies that facilitate executive productivity.
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The Compensation Committee’s compensation strategy is comprised of a TDCO for each NEO which is defined as base salary, target annual cash incentive and the grant date fair market value of LTI awards.
| | | | | | | | | | | | | Base Salary | | + | | Annual Cash
Incentive | | + | | Long-Term Incentive | | = | | Total Direct
Compensation
Opportunity
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The TDCO for each NEO is generally set by using a holistic approach that considers various individual factors as well as relevant benchmark data. Such individual factors include performance, experience level, criticality, scarcity of skill set, internal equity and external competitiveness. Rather than striving for a single market reference point, the Compensation Committee believes that this broader holistic approach provides appropriate flexibility in tailoring award opportunities.
The TDCO for 2019, as reviewed and approved by the Compensation Committee for the NEOs on February 12, 2019, is listed in the following table. TDCO differs from the total compensation amounts reported in the 2019 Summary Compensation Table in that it includes the base salary and target annual cash incentive opportunity in effect following such approval, while the 2019 Summary Compensation Table includes the amounts actually earned for base salary and under the 2019 Annual Incentive Plan. Further, TDCO does not include amounts set forth in the “All Other Compensation” column of the 2019 Summary Compensation Table nor does it includeone-time equity awards made in connection with hiring, retention or othernon-standard circumstances. In addition, TDCO includes the value of the target opportunity under the cash LTIP grant at the time it is awarded whereas the 2019 Summary Compensation Table includes the actual value earned, if any, based upon performance under the cash LTIP after the completion of the performance period.
2019 Total Direct Compensation Opportunity
| | | | | | | | | | | | | | | | | | | | | | | | | | Name | | 2019
Base
Salary
($) | | 2019 Annual Cash
Target Incentive
($) | | 2019 Long-
Term
Incentive
($) | | 2019 Total
Direct Compensation
Opportunity
($) | | | | | | Stephen P. Joyce | | | $ | 1,000,000 | | | | $ | 1,000,000 | | | | $ | 0 | | | | $ | 2,000,000 | | | | | | | Thomas H. Song | | | $ | 510,000 | | | | $ | 382,500 | | | | $ | 700,080 | | | | $ | 1,592,580 | | | | | | | John C. Cywinski | | | $ | 615,940 | | | | $ | 492,752 | | | | $ | 875,019 | | | | $ | 1,983,711 | | | | | | | Jay D. Johns(1) | | | $ | 428,400 | | | | $ | 214,240 | | | | $ | 325,028 | | | | $ | 967,749 | | | | | | | Bryan R. Adel | | | $ | 500,000 | | | | $ | 350,000 | | | | $ | 600,035 | | | | $ | 1,450,035 | |
(1) | The TDCO for Mr. Johns represents his target total direct compensation as of March 2019 relating to his role as Senior Vice President, Operations of the IHOP Business Unit and excludes a specialone-time long-term incentive award granted in connection with his promotion to President of the IHOP Business Unit on June 13, 2019. Upon his promotion, Mr. Johns’ Base Salary was increased to $525,000 and Mr. Johns’ Annual Cash Target Incentive was increased from 50% of Base Salary to 75% of Base Salary. Mr. Johns’ 2019 Annual Cash Target Incentive waspro-rated at 50% through June 2019 and 75% for the remainder of 2019, resulting in a target of $328,125.
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| EXECUTIVE COMPENSATION
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A significant portion of executive pay has been structured to be contingent on satisfyingpre-established performance goals and increasing stockholder value. Accordingly, executives will not realize the incentive portion of their TDCO unless these objectives are satisfied. For the NEOs, excluding Mr. Joyce, who did not receive any equity awards in 2019, and Mr. Johns, who was promoted to President of the IHOP Business Unit as of June 13, 2019, an average of 68% of 2019 TDCO was linked to performance and/or increasing stockholder value.
See the section entitled “Compensation Decisions Made in 2019” in this proxy statement for additional information regarding the elements of compensation for NEOs.
The chart below illustrates the 2019 pay mix for the NEOs, excluding Mr. Joyce and Mr. Johns:
 NEO Average Pay Mix
Compensation Decisions Made in 2019
Annual Base Salaries
In setting annual base salaries, the Compensation Committee generally considers benchmarking data derived from a review of the proxy statement disclosures of the NEO Peer Group, the AON Hewitt survey and, in the case of the NEOs other than the Chief Executive Officer, recommendations and assessments of the performance of the individual NEOs by the Chief Executive Officer. The Compensation Committee uses the market data to establish points of reference to determine whether and to what extent it is establishing competitive levels of compensation for the NEOs. In February 2019, the Compensation Committee set annual base salaries for 2019 as follows:
| | | | | | | | | | | | | | | | | | | | Name | | Former
Base Salary ($) | | New
Base Salary($) | | Percentage Increase | | | | | Stephen P. Joyce | | | | 1,000,000 | | | | | 1,000,000 | | | | | 0.0 | % | | | | | Thomas H. Song | | | | 500,000 | | | | | 510,000 | | | | | 2.0 | % | | | | | John C. Cywinski | | | | 592,250 | | | | | 615,940 | | | | | 4.0 | % | | | | | Jay D. Johns | | | | 412,000 | | | | | 428,480 | (1) | | | | 4.0 | % | | | | | Bryan R. Adel | | | | 475,000 | | | | | 500,000 | | | | | 5.3 | % |
Base salary increases for the NEOs were based on individual performance and external market competitiveness.
(1) | Mr. Johns’ base salary increase in February 2019 related to his former role as our Senior Vice President, Operations of the IHOP Business Unit. He received an additional salary increase in June 2019 upon his promotion to President of the IHOP Business Unit. At that time, the Compensation Committee set Mr. Johns’ base salary at $525,000, an increase of 22.5%, after considering internal and external benchmarking data, the compensation paid to the previous President of the IHOP Business Unit, and Mr. Johns’ skill set and qualifications relative to those desired by the Corporation.
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| 2020 PROXY STATEMENT
| EXECUTIVE COMPENSATION
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Performance- and Stock-Based Compensation
Annual Cash Incentives
In early 2019, the Compensation Committee approved the 2019 Annual Incentive Plan to reward executive officers whose performance meets or exceeds the Corporation’s expectations, to provide incentives for excellent future performance that contributes to the Corporation’s success and profitability and to serve as a means by which eligible participants may share in the Corporation’s financial success.
Pursuant to the 2019 Annual Incentive Plan, the target annual cash incentive amount for each of the NEOs is established as a percentage of base salary based on the participant’s level in the management structure. The 2019 threshold, target, and maximum payout amounts for each NEO are provided in the Grants of Plan-Based Awards in 2019 table. The 2019 threshold, target and maximum percentages of base salary for each of the NEOs under the Corporation’s 2019 Annual Incentive Plan were as follows:
| | | | | | | | | | | | | | | | | | | | Name | | Threshold as Percentage
of Base Salary | | Target as Percentage
of Base Salary | | Maximum as Percentage of Base Salary | | | | | Stephen P. Joyce | | | | 50 | % | | | | 100 | % | | | | 200 | % | | | | | Thomas H. Song | | | | 37.5 | % | | | | 75 | % | | | | 150 | % | | | | | John C. Cywinski | | | | 40 | % | | | | 80 | % | | | | 160 | % | | | | | Jay D. Johns | | | | 31.25 | % | | | | 62.5 | % | | | | 125 | % | | | | | Bryan R. Adel | | | | 35 | % | | | | 70 | % | | | | 140 | % |
Decisions regarding the threshold, target and maximum incentive percentages were made in consultation with Exequity and after consideration of the NEO Peer Group and survey data mentioned above and the desired TDCO pay mix. The Compensation Committee believes the incentive targets to be generally consistent with incentive opportunities at the NEO Peer Group companies for similarly situated executives. Mr. Johns’ 2019 target was 50% of base salary through June 2019 while serving and Senior Vice President, Operations of the IHOP Business Unit and was raised to 75% of base salary for the remainder of the year, following his promotion to President of the IHOP Business Unit, after considering internal and external benchmarking data, the compensation paid to the previous President of the IHOP Business Unit, and Mr. Johns’ skill set and qualifications relative to those desired by the Corporation
The annual cash incentive for the NEOs is based on a combination of the Corporation’s AEPS, Dine Brands Global, Inc., IHOP, and Applebee’s Operating Profit, Same Restaurant Sales, and Traffic. The Compensation Committee focused the 2019 annual incentive metrics entirely on financial and operating performance metrics to drive an emphasis on delivering results and improving performance. The Compensation Committee incorporated Same Restaurant Sales with a Traffic modifier in order to encourage the brands to drive improved Same Restaurant Sales performance based on guests visiting the restaurants rather than solely by increases to average check. Overall, the Compensation Committee believes the 2019 annual cash incentive metrics reflect the appropriate balance between profitability(70-80%) and growth(20-30%). The annual cash incentive for each of the NEOs may then be decreased or increased based on the individual performance of each executive.
The Compensation Committee uses AEPS as a primary incentive metric as it represents a broad and commonly used measure of financial performance for the Corporation. The Compensation Committee includes Operating Profit as a performance measure because it believes operating profit appropriately incentivizes the business units on items specifically within their control. “Operating Profit” is defined as Segment Profit plus gains on asset dispositions, less Direct G&A and losses on asset dispositions, excluding the impact of extraordinary, unusual, infrequently occurring,non-recurring and unanticipated events. “Segment Profit” is defined as segment revenues less segment expenses. Direct G&A is defined as general and administrative expenses directly incurred at operating units excluding any allocation of shared service and general corporate overhead. “Same Restaurant Sales” is a growth performance indicator used by the Corporation and the restaurant industry and provides a measure of the change in restaurant sales by comparing the sales performance of the same restaurants from period to period. “Traffic” is a growth performance indicator used by the Corporation and the restaurant industry and provides a measure of the change in the number of guests visiting restaurants by comparing the number of guests visiting the same restaurants from period to period. Based on Traffic performance, the Same Restaurant Sales metric is increased or decreased by up to 20% for a given measurement period.
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| 2020 PROXY STATEMENT
| EXECUTIVE COMPENSATION
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The table below outlines the annual cash incentive metrics and weighting for each of the NEOs for 2019:
| | | | | | | | | | | | | | | | | | | | Name | | Dine Brands
AEPS | | Dine Brands/
IHOP /
Applebee’s
Business Unit
Operating Profit(1) | | Same Restaurant Sales with Traffic Modifier(2) | | | | | Stephen P. Joyce | | | | 50 | % | | | | 30 | % | | | | 20 | % | | | | | Thomas H. Song | | | | 50 | % | | | | 30 | % | | | | 20 | % | | | | | John C. Cywinski | | | | 40 | % | | | | 40 | % | | | | 20 | % | | | | | Jay D. Johns | | | | 40 | % | | | | 30 | % | | | | 30 | % | | | | | Bryan R. Adel | | | | 50 | % | | | | 30 | % | | | | 20 | % |
(1) | Operating profit for Mr. Joyce, Mr. Song, and Mr. Adel was based on Dine Brands’ operating profit, while Business Unit operating profit for Mr. Cywinski and Mr. Johns was based entirely on their respective Business Units.
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(2) | Same Restaurant Sales and Traffic performance for Mr. Joyce, Mr. Song, and Mr. Adel was based 50% on Applebee’s Business Unit performance and 50% on IHOP Business Unit performance, while Same Restaurant Sales and Traffic performance for Mr. Cywinski and Mr. Johns was based entirely on their respective Business Units.
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For each of the performance metrics, amounts were not paid unless the threshold performance level for that metric was achieved. The threshold, target and maximum payout levels for certain of the performance metrics are illustrated in the table below. Payouts increase incrementally for performance up to a maximum of 200% of an executive’s target annual cash incentive opportunity.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Metric | | Threshold | | Target | | Maximum | | Actual
Result | | Percentage of
Target
Achieved | | Payout Percentage of Target for Metric | | | | | | | | AEPS | | | $ | 6.05 | | | | $ | 7.12 | | | | $ | 7.83 | | | | $ | 6.95 | | | | | 97.6 | % | | | | 90 | % | | | | | | | | Dine Brands Operating Profit | | | $ | 199.8 | | | | $ | 229.7 | | | | $ | 248.1 | | | | $ | 228.9 | | | | | 99.7 | % | | | | 94 | % | | | | | | | | IHOP Business Unit Operating Profit | | | $ | 152.1 | | | | $ | 174.8 | | | | $ | 188.8 | | | | $ | 175.7 | | | | | 100.5 | % | | | | 100 | % | | | | | | | | Applebee’s Business Unit Operating Profit | | | $ | 120.1 | | | | $ | 138.0 | | | | $ | 149.0 | | | | $ | 128.1 | | | | | 92.8 | % | | | | 69 | % | | | | | | | | IHOP Same Restaurant Sales | | | | 0.0 | % | | | | 3.0 | % | | | | 4.5 | % | | | | 1.1 | % | | | | 37.3 | % | | | | 69 | % | | | | | | | | Applebee’s Same Restaurant Sales | | | | 0.5 | % | | | | 3.5 | % | | | | 5.0 | % | | | | -0.7 | % | | | | 0 | % | | | | 0 | % | | | | | | | | Payout as a Percentage of an Executive’s Target | | | | 50 | % | | | | 100 | % | | | | 200 | % | | | | — | | | | | — | | | | | — | |
Traffic growth for the domestic IHOP Business Unit fell short of its target, which reduced the IHOP Same Restaurant Sales payout from 69% to 49%. Traffic growth for the domestic Applebee’s Business Unit fell short of its target which would have reduced the Applebee’s Same Restaurant Sales payout if performance had been above the threshold.
All metrics were set after consideration of the business environment at the time the metrics were approved and the Corporation’s forward-looking strategic plan. The Compensation Committee established challenging levels such that attainment of the targeted amounts was not assured at the time they were set and would require a high level of effort and execution in order to obtain them.
The final annual cash incentive amounts under the 2019 Annual Incentive Plan were determined by multiplying the results of the performance metrics that each NEO was measured against by an individual performance modifier for the NEOs. The final annual cash incentive payout amount may be modified upward or downward based on individual performance and other factors deemed relevant by the Compensation Committee. The final annual cash incentive amount approved by the Compensation Committee and payable to Mr. Joyce under the 2019 Annual Incentive Plan was reduced by $324,000 to reflect leadership and individual performance considerations. At the end of 2019, Mr. Joyce assessed the performance of each of the NEOs, other than himself, and their overall contribution to the Corporation’s strategy and results and assigned no individual performance modifiers for Mr. Song, Mr. Cywinski, Mr. Johns, or Mr. Adel.
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| 2020 PROXY STATEMENT
| EXECUTIVE COMPENSATION
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The amounts in the table below represent the annual cash incentive paid to each of the NEOs pursuant to the 2019 Annual Incentive Plan and are calculated by multiplying the NEO’s base salary by the target percentage, the percentage of incentive target achieved, and adjusting for performance as set forth above.
| | | | | | | | | | | | | | | | | | | | | | | | | | Name | | Base Salary | | Target as
Percentage of
Base Salary | | Percentage of Incentive
Target Achieved | | Annual Cash Incentive Paid | | | | | | Stephen P. Joyce | | | $ | 1,000,000 | | | | | 100 | % | | | | 45.6 | % | | | $ | 455,948 | | | | | | | Thomas H. Song | | | $ | 510,000 | | | | | 75 | % | | | | 78.0 | % | | | $ | 298,330 | | | | | | | John C. Cywinski | | | $ | 615,940 | | | | | 80 | % | | | | 63.5 | % | | | $ | 312,898 | | | | | | | Jay D. Johns | | | $ | 525,000 | | | | | 62.5 | % | | | | 80.6 | % | | | $ | 264,500 | | | | | | | Bryan R. Adel | | | $ | 500,000 | | | | | 70 | % | | | | 78.0 | % | | | $ | 272,982 | |
Mr. Johns’ 2019 target while serving and Senior Vice President, Operations of the IHOP Business Unit through June 2019 was 50% of base salary, which increased to 75% of base salary for the remainder of the year following his promotion to President of the IHOP Business Unit. In August 2019, Mr. Song received a special recognition bonus of $250,000 for his leadership in successfully completing a securitization refinancing transaction.
Long-Term Incentive or LTI Awards
The Compensation Committee grants each of the NEOs, other than the Chief Executive Officer, a blend of NQSOs, RSAs and cash LTIP awards. The NQSOs vest in equal installments over a three-year period and are exercisable for up to a maximum of ten years. The RSAs typically cliff vest after three years and the cash LTIP payout is based on cumulative TSR against an index of publicly-traded restaurant companies over a three-year performance period, and, beginning in 2018, three-year average AEPS over the performance period. NQSOs have value to the executive only if the Corporation’s stock price increases over the price on the date of grant and the value of RSAs increases or decreases with changes in the Corporation’s stock price. The 2017 – 2019 cash LTIP cycle provides payment between zero and 200% of the target award based on the Corporation’s relative TSR performance. The 2018 – 2020 and 2019 – 2021 cash LTIP cycles provide payment between zero and 200% of the target award based on the Corporation’s relative TSR performance and three-year average AEPS performance againstpre-established performance goals, with each performance metric weighted equally. The performance goals were designed to be challenging but achievable with strong management performance.
For the 2017 – 2019 cash LTIP, the award vested based ononly if the Corporation’s TSR performance withinis at or above the rankings depicted in the table below:
| | | | | | | | | | | | | | | | Relative TSR Ranking at
End of Performance Period | | Payout as a Percentage
of Target Cash LTIP
| | | | No Payout
| | | | < 33rd Percentile of the Index | | | | | 0% | | | | | Threshold
| | | | 33rd Percentile of the Index | | | | | 50% | | | | | Target
| | | | 50th Percentile of the Index | | | | | 100% | | | | | Maximum
| | | | 80th Percentile of the Index | | | | | 200% | |
For the 2019 – 2021 cash LTIP, the award will vest 50% based on the Corporation’s TSR33rd percentile of that of a group of publicly-traded restaurant companies over a three-year performance within the rankings depicted above as well as 50% based on the Corporation’s AEPS performance as depicted below. AEPS performance is based on the Corporation’s adjusted earnings per share as determined by the Board of Directors and reported in the Corporation’s audited financial statements.
| | | | | | | | Average Annual AEPS Growth
2019 – 2021 | | Percentage of Target AEPS Growth Units Earned | | | <7.5% | | | | 0 | % | | | 7.5% | | | | 50 | % | | | 15% | | | | 100 | % | | | ³30% | | | | 200 | % |
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| 2020 PROXY STATEMENT
| EXECUTIVE COMPENSATIONperiod.
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| • | | The Compensation Committee believes that this mix of long-term incentives appropriately balances an emphasis on absoluteBenefits and relative stock price performanceOther Compensation. Benefits and aligns theother compensation of our NEOs with the long-term interests of stockholders. The LTI awardsprograms are comprised of 34% of the grant date value in NQSOs, 33% of the grant date value in RSAs and 33% of the grant date value in the cash LTIP (at target). The Compensation Committee believes this weighting provides a balanced strategy between stockholder alignment, executive retention, risk and performance.
The Compensation Committee considered a range of factors in setting the value to be awarded to the NEOs, including assessments of individual performance, the potential contributions that each NEO could be expected to make in the future, each NEO’s TDCO, LTI awards previously granted to certain NEOs, the size of awards provided to other individuals holding similar positions in the market data considered by the Compensation Committee, the number of shares which remained available for issuance under the 2016 Stock Incentive Plan (prior to the adoption of the 2019 Stock Incentive Plan)protect executive health and overall accounting expense associated withsafety and provide flexibility and efficiencies that facilitate executive productivity.
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The Compensation Committee’s compensation strategy is comprised of a TDCO for each NEO which is defined as base salary, target annual cash incentive and the grant date fair market value of annual LTI awards. The table below summarizes the grant date value of the annual long-term incentive awards made in 2019 (additional detail regarding long-term incentive awards granted in 2019 can be found in the Grants of Plan-Based Awards in 2019 table in this proxy statement):
| | | | | | | | | | | | | | | | | | | | | | | | | | Name | | Stock Options | | Restricted Stock | | Cash LTIP at Target | | Total Long-Term Incentive Opportunity | | | | | | Thomas H. Song | | | $ | 237,985 | | | | $ | 231,095 | | | | $ | 231,000 | | | | $ | 700,080 | | | | | | | John C. Cywinski | | | $ | 297,475 | | | | $ | 288,794 | | | | $ | 288,750 | | | | $ | 875,019 | | | | | | | Jay D. Johns | | | $ | 110,495 | | | | $ | 107,283 | | | | $ | 107,250 | | | | $ | 325,028 | | | | | | | Bryan R. Adel | | | $ | 203,996 | | | | $ | 198,039 | | | | $ | 198,000 | | | | $ | 600,035 | |
| | | | | | | | | | | | | | Base Salary | | + | | Annual Cash
Incentive | | + | | Long-Term Incentive | | = | | The LTI award for Mr. John’s was granted in February 2019 while serving in the role of Senior Vice President, Operations of the IHOP Business Unit. In June 2019, the Total Direct
Compensation Committee granted aone-time special recognition award of 10,556 RSAs, with a grant date fair value of $1,000,075, to Mr. Johns in connection with his promotion to President of the IHOP Business Unit. These RSAs will vest on the third anniversary of grant, subject to continued service.
In December 2018, the Compensation Committee granted a special retention award to Mr. Cywinski of 28,575 performance- and time-based RSUs which will vest on March 1, 2022 in amounts based on the Corporation’s achievement of certain stock price targets that are successively more difficult to achieve. The Compensation Committee structured these special retention awards consistent with the performance-contingent design of Mr. Joyce’s awards and to align Mr. Cywinski with the Corporation’s strategic goal of driving long-term stockholder value. The stock price hurdles with respect to Mr. Cywinski’s performance-contingent awards range from $85 to $105. As of December 31, 2019, 40% of the performance conditions tied to Mr. Cywinski’s performance-contingent equity awards were satisfied based on achievement of stock price hurdles of $85 and $90.
2017—2019 Cash LTIP Payout
Opportunity
Demonstrating the Corporation’spay-for-performance philosophy and the direct link between pay and the Corporation’s stock price performance, the Cash LTIP payout as a percentage of the target has varied significantly over the past three performance periods based on relative TSR performance relative to the companies included in the index of publicly-traded restaurant companies. Performance and payouts under the 2017-2019 performance period and prior performance periods were as follows:
| | | | | | | | | | | | | | | | | | | | Performance Period | | Dine
Brands
TSR | | Restaurant Index
Percentile Rank | | Payout as a percentage of target award | | | | | 2015 - 2017 | | | | -40.3 | % | | | | 2.7 | % | | | | 0 | % | | | | | 2016 - 2018 | | | | -8.5 | % | | | | 44.3 | % | | | | 83.2 | % | | | | | 2017—2019 | | | | 20.4 | % | | | | 54.5 | % | | | | 111.3 | % |
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The TDCO for each NEO is generally set by using a holistic approach that considers various individual factors as well as relevant benchmark data. Such individual factors include performance, experience level, criticality, scarcity of skill set, internal equity, and external competitiveness. Rather than striving for a single market reference point, the Compensation Committee believes that this broader holistic approach provides appropriate flexibility in tailoring award opportunities. | | | | 28 | | |
| 2023 PROXY STATEMENT | EXECUTIVE COMPENSATION |
The TDCO for 2022, as reviewed and approved by the Compensation Committee for the NEOs on February 15, 2022, is listed in the following table. TDCO differs from the total compensation amounts reported in the 2022 Summary Compensation Table in that it includes the base salary and target annual cash incentive opportunity in effect following such approval, while the 2022 Summary Compensation Table includes the amounts actually earned. Further, TDCO does not include amounts set forth in the “All Other Compensation” column of the 2022 Summary Compensation Table nor does it include one-time equity awards made in connection with hiring, retention, or other non-standard circumstances. In addition, TDCO includes the value of the target opportunity under the cash LTIP grant at the time it is awarded whereas the 2022 Summary Compensation Table includes the actual value earned, if any, based upon performance under the cash LTIP after the completion of the three-year performance period. 2022 Total Direct Compensation Opportunity | | | | | | | | | | | | | | | | | | | | | | | | | | Name | | 2022
Base
Salary
($) | | 2022 Annual Cash
Target Incentive
($) | | 2022 Long-
Term
Incentive
($) | | 2022 Total
Direct Compensation
Opportunity
($) | | | | | | John W. Peyton | | | $ | 1,000,000 | | | | $ | 1,000,000 | | | | $ | 3,499,960 | | | | $ | 5,499,960 | | | | | | | Vance Y. Chang | | | $ | 510,000 | | | | $ | 382,500 | | | | $ | 900,025 | | | | $ | 1,792,525 | | | | | | | John C. Cywinski | | | $ | 750,000 | | | | $ | 675,000 | | | | $ | 2,500,072 | | | | $ | 3,925,072 | | | | | | | Jay D. Johns | | | $ | 750,000 | | | | $ | 675,000 | | | | $ | 1,500,031 | | | | $ | 2,925,031 | | | | | | | Christine K. Son | | | $ | 468,000 | | | | $ | 280,800 | | | | $ | 825,134 | | | | $ | 1,573,934 | |
Excludes special incentive RSUs granted during 2022, which are described below. A significant portion of executive pay has been structured to be contingent on satisfying pre-established performance goals and increasing stockholder value. For the CEO, 82% of 2022 TDCO, and for non-CEO NEOs, an average of 76% of 2022 TDCO was linked to performance and/or increasing stockholder value. See the section entitled “Compensation Decisions Made in 2022” in this proxy statement for additional information regarding the elements of compensation for NEOs. The chart below illustrates the 2022 pay mix for the CEO and the 2022 average pay mix for the NEOs other than the CEO: 
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| 2023 PROXY STATEMENT | EXECUTIVE COMPENSATION |
Compensation Decisions Made in 2022 Annual Base Salaries In setting annual base salaries, the Compensation Committee generally considers benchmarking data derived from a review of the proxy statement disclosures of the NEO Peer Group, published compensation surveys and, in the case of the NEOs other than the Chief Executive Officer, recommendations and assessments of the performance of the individual NEOs by the Chief Executive Officer. The Compensation Committee uses the market data to establish points of reference to determine whether and to what extent it is establishing competitive levels of compensation for the NEOs. In February 2022, the Compensation Committee set annual base salaries for 2022 as follows: | | | | | | | | | | | | | | | | | Name | | 2021
Base Salary($) | | | 2022
Base Salary($) | | | Percentage Increase | | | | | | John W. Peyton | | | 1,000,000 | | | | 1,000,000 | | | | n/a | | | | | | Vance Y. Chang | | | 500,000 | | | | 510,000 | | | | 2.0 | % | | | | | John C. Cywinski | | | 692,000 | | | | 750,000 | | | | 8.4 | % | | | | | Jay D. Johns | | | 600,000 | | | | 750,000 | | | | 25.0 | % | | | | | Christine K. Son | | | 450,000 | | | | 468,000 | | | | 4.0 | % |
The base salary increase for Mr. Johns and Mr. Cywinski were based on individual performance, the Compensation Committee’s assessment of both internal and external market competitiveness, and alignment of compensation across business units. Performance- and Stock-Based Compensation Annual Cash Incentives In early 2022, the Compensation Committee approved the 2022 Annual Incentive Plan to reward executive officers whose performance meets or exceeds the Corporation’s expectations, to provide incentives for excellent future performance that contributes to the Corporation’s success and profitability and to serve as a means by which eligible participants may share in the Corporation’s financial success. Pursuant to the 2022 Annual Incentive Plan, the target annual cash incentive amount for each of the NEOs is established as a percentage of base salary based on the participant’s level in the management structure and on market competitiveness. The 2022 threshold, target, and maximum payout amounts for each NEO are provided in the Grants of Plan-Based Awards in 2022 table. The 2022 threshold, target, and maximum percentages of base salary for each of the NEOs under the Corporation’s 2022 Annual Incentive Plan were as follows: | | | | | | | | | | | | | | | | | Name | | Threshold as Percentage
of Base Salary | | | Target as Percentage
of Base Salary | | | Maximum as Percentage
of Base Salary | | | | | | John W. Peyton | | | 50 | % | | | 100 | % | | | 200 | % | | | | | Vance Y. Chang | | | 37.5 | % | | | 75 | % | | | 150 | % | | | | | John C. Cywinski | | | 45 | % | | | 90 | % | | | 180 | % | | | | | Jay D. Johns | | | 45 | % | | | 90 | % | | | 180 | % | | | | | Christine K. Son | | | 30 | % | | | 60 | % | | | 120 | % |
Decisions regarding the threshold, target and maximum incentive percentages were made in consultation with Exequity and after consideration of the NEO Peer Group and survey data mentioned above and the desired TDCO pay mix. In 2022, the Compensation Committee increased the target annual cash incentive as a percentage of base salary for Mr. Cywinski from 85% to 90%, and Mr. Johns from 80% to 90% based on the Compensation Committee’s assessment of internal and external market competitiveness. Following such adjustments, the Compensation Committee believes the incentive targets to be generally consistent with incentive opportunities at the NEO Peer Group companies for similarly-situated executives. | | | | 30 | | |
| 2023 PROXY STATEMENT | | EXECUTIVE COMPENSATION |
The 2022 annual cash incentive for the NEOs is based on a combination of Dine Brands, IHOP Business Unit, and Applebee’s Business Unit adjusted EBITDAs, same-restaurant sales, and net development. This performance goal mix was a change from the 2021 annual cash incentive program, which focused exclusively on adjusted EBITDA performance in order to continue to drive an emphasis on delivering profitable results through the adjusted EBITDA metric and also incentivize the growth of our business through the use of same-restaurant sales and net development metrics. The Compensation Committee included adjusted EBITDA as a performance measure because it believes adjusted EBITDA appropriately incentivizes the business units on items specifically within their control. The Corporation defines adjusted EBITDA as net income or loss, adjusted for the effect of closure and impairment charges, interest charges, income tax provision or benefit, depreciation and amortization, non-cash stock-based compensation, gain or loss on disposition of assets, other non-income-based taxes and other items deemed not reflective of current operations. The Compensation Committee utilized same restaurant sales and net development in order to encourage the brands to drive improved sales figures and increase the restaurant counts in their systems. “Same-restaurant sales” is a growth performance indicator used by the Corporation and the restaurant industry and provides a measure of the change in restaurant sales by comparing the sales performance of the same restaurants from period to period. “Net development” is a growth performance indicator measuring the number of new restaurant starts during the fiscal year, less any restaurant closings. Net development for each business unit includes only restaurants for the applicable business unit, and net development for Dine Brands reflects global development for all brands. All metrics were set after consideration of the business environment at the time the metrics were approved and the Corporation’s forward-looking strategic plan. Such business environment was influenced by supply chain and inflationary pressures, as well as lingering effects and uncertainty related to the COVID-19 pandemic. The Compensation Committee believed at the time that the performance targets were rigorous, yet achievable, and established levels designed to be challenging such that attainment of the targeted amounts was not assured at the time they were set and would require a high level of effort and execution to attain them. These targets were set in the first quarter of 2022. Results for Dine Brands and each of Applebee’s and IHOP, and resulting bonus payout percentages, were as presented in the below table. The table below outlines the annual cash incentive metrics and weighting for each of the NEOs for 2022: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name | | Dine Brands Adjusted EBITDA | | IHOP
Business Unit
Adjusted EBITDA | | Applebee’s Business Unit Adjusted EBITDA | | Dine
Brands Same-
Restaurant
Sales | | IHOP
Business Unit
Same-
Restaurant
Sales | | Applebee’s Business Unit Same- Restaurant Sales | | Dine Brands Net Development | | IHOP
Business Unit
Net
Development | | Applebee’s Business Unit Net
Development | | | | | | | | | | | John W. Peyton | | | | 60 | % | | | | — | | | | | — | | | | | 20 | % | | | | — | | | | | — | | | | | 20 | % | | | | — | | | | | — | | | | | | | | | | | | Vance Y. Chang | | | | 60 | % | | | | — | | | | | — | | | | | 20 | % | | | | — | | | | | — | | | | | 20 | % | | | | — | | | | | — | | | | | | | | | | | | John C. Cywinski | | | | 30 | % | | | | — | | | | | 30 | % | | | | — | | | | | — | | | | | 20 | % | | | | — | | | | | — | | | | | 20 | % | | | | | | | | | | | Jay D. Johns | | | | 30 | % | | | | 30 | % | | | | — | | | | | — | | | | | 20 | % | | | | — | | | | | — | | | | | 20 | % | | | | — | | | | | | | | | | | | Christine K. Son | | | | 60 | % | | | | — | | | | | — | | | | | 20 | % | | | | — | | | | | — | | | | | 20 | % | | | | — | | | | | — | |
| | | | | | 31 |
| 2023 PROXY STATEMENT | EXECUTIVE COMPENSATION |
The threshold, target and maximum payout levels for the performance metrics are illustrated in the table below. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Metric | | Threshold | | | Target | | | Maximum | | | Actual
Result | | | Percentage of
Target
Achieved | | | Payout
Percentage
of Target
for Metric | | | | | | | | | Dine Brands Adjusted EBITDA | | $ | 219.8 | | | $ | 249.8 | | | $ | 274.8 | | | $ | 251.6 | | | | 101 | % | | | 100 | % | | | | | | | | IHOP Business Unit Adjusted EBITDA | | $ | 143.8 | | | $ | 163.4 | | | $ | 179.7 | | | $ | 159.3 | | | | 97 | % | | | 88 | % | | | | | | | | Applebee’s Business Unit Adjusted EBITDA | | $ | 111.9 | | | $ | 127.2 | | | $ | 139.9 | | | $ | 128.0 | | | | 101 | % | | | 100 | % | | | | | | | | IHOP Same Restaurant Sales | | | 8 | % | | | 12.5 | % | | | 16 | % | | | 5.7 | % | | | 46 | % | | | 0 | % | | | | | | | | Applebee’s Same Restaurant Sales | | | (1 | %) | | | 2.5 | % | | | 5 | % | | | 5.1 | % | | | 206 | % | | | 200 | % | | | | | | | | IHOP Net Development | | | 41 | | | | 65 | | | | 81 | | | | 41 | | | | 63 | % | | | 50 | % | | | | | | | | Applebee’s Net Development | | | (18 | ) | | | (2 | ) | | | 14 | | | | (4 | ) | | | 200 | % | | | 94 | % | | | | | | | | Dine Brands Net Development | | | 61 | | | | 125 | | | | 173 | | | | 90 | | | | 85 | % | | | 69 | % | | | | | | | | Payout as a Percentage of an Executive’s Target | | | 50 | % | | | 100 | % | | | 200 | % | | | — | | | | — | | | | — | |
The amounts in the table below represent the annual cash incentives paid to each of the NEOs pursuant to the 2022 Annual Incentive Plan and are calculated by multiplying the NEO’s year-end base salary by the target percentage of base salary and by the percentage of incentive target achieved. | | | | | | | | | | | | | | | | | | | | | | Name | | Base Salary | | | Target as
Percentage of
Base Salary | | | Percentage of
Incentive Target
Achieved | | | Annual
Cash
Incentive
Paid | | | | | | | John Peyton | | $ | 1,000,000 | | | | 100 | % | | | 93.75 | % | | $ | 937,500 | | | | | | | Vance Chang | | $ | 510,000 | | | | 75 | % | | | 93.75 | % | | $ | 358,594 | | | | | | | John C. Cywinski | | $ | 750,000 | | | | 90 | % | | | 118.75 | % | | $ | 801,563 | | | | | | | Jay D. Johns | | $ | 750,000 | | | | 90 | % | | | 66.25 | % | | $ | 447,187 | | | | | | | Christine K. Son | | $ | 468,000 | | | | 60 | % | | | 93.75 | % | | $ | 263,250 | |
Long-Term Incentive or LTI Awards The Compensation Committee grants each of the NEOs a blend of NQSOs, RSAs, and cash LTIP awards. The NQSOs vest in equal installments over a three-year period and are exercisable for up to a maximum of ten years. The RSAs vest in equal installments over a three-year period, and the cash LTIP payout is based on relative TSR against an index of primarily publicly-traded restaurant companies over a three-year performance period. NQSOs have value to the executive only if the Corporation’s stock price increases over the price on the date of grant and the value of RSAs fluctuates with changes in the Corporation’s stock price. The Compensation Committee believes that this mix of long-term incentives appropriately balances an emphasis on absolute and relative stock price performance and aligns the compensation of our NEOs with the long-term interests of stockholders. The LTI awards are comprised of the mix of award vehicles noted in the below table. The Compensation Committee believes this weighting provides a balanced strategy between stockholder alignment, executive retention, risk, and performance. | | | | | | | | | | | | | | | | | | | | RSAs | | | NQSOs | | | Cash LTIP | | | | | | CEO | | | 40 | % | | | 30 | % | | | 30 | % | | | | | Other NEOs | | | 50 | % | | | 25 | % | | | 25 | % |
| | | | 32 | | |
| 2023 PROXY STATEMENT | EXECUTIVE COMPENSATION |
The cash LTIP cycles provide for payment between zero and 200% of the target award based on the Corporation’s relative TSR performance over a three-year performance period. The relative TSR performance targets are depicted below: | | | | | | | | | | | | | | Relative TSR Ranking at
End of Performance Period | | | Percentage of Target
Relative TSR Units Earned | | | | | No Payout | | | < 33rd Percentile of the Index | | | | 0% | | | | | Threshold | | | 33rd Percentile of the Index | | | | 50% | | | | | Target | | | 50th Percentile of the Index | | | | 100% | | | | | Maximum | | | 80th Percentile of the Index | | | | 200% | |
The Committee also may grant, and from time to time has granted, performance-vesting restricted stock to the NEOs, which typically have vested at the end of a three-year period in an amount determined by pre-established company performance metrics. The Compensation Committee considered a range of factors in setting the value to be awarded to the NEOs, including assessments of individual performance, the potential contributions that each NEO could be expected to make in the future, each NEO’s TDCO, LTI awards previously granted to certain NEOs, the size of awards provided to other individuals holding similar positions in the NEO Peer Group and survey data considered by the Compensation Committee, the number of shares which remained available for issuance under the 2019 Stock Incentive Plan and overall accounting expense associated with the awards. The table below summarizes the grant date value of the annual long-term incentive awards made in 2022 (additional detail regarding long-term incentive awards granted in 2022 can be found in the Grants of Plan-Based Awards in 2022 table in this proxy statement): | | | | | | | | | | | | | | | | | | | | | | Name | | Stock Options | | | Restricted Stock | | | Cash LTIP at Target | | | Total Long-Term
Incentive Opportunity | | | | | | | John W. Peyton | | $ | 1,050,001 | | | $ | 1,400,058 | | | $ | 1,050,000 | | | $ | 3,500,059 | | | | | | | Vance Y. Chang | | $ | 150,014 | | | $ | 300,012 | | | $ | 150,000 | | | $ | 600,026 | | | | | | | John C. Cywinski(1) | | $ | 250,013 | | | $ | 500,021 | | | $ | 250,000 | | | $ | 1,000,034 | | | | | | | Jay D. Johns | | $ | 250,013 | | | $ | 500,021 | | | $ | 250,000 | | | $ | 1,000,034 | | | | | | | Christine K. Son | | $ | 137,519 | | | $ | 275,064 | | | $ | 137,500 | | | $ | 550,083 | |
| (1) | Mr. Cywinski is not entitled to the unvested portions of these awards due to his resignation in January 2023. |
The Total Long-Term Incentive Opportunity in the table above represents the on-going annual award values granted to each NEO and excludes the value of any special one-time long-term incentive awards. In March 2022, Mr. Chang, Mr. Cywinski, Mr. Johns, and Ms. Son also received a special incentive award of performance-based RSUs as set forth below: | | | | | | | | | | | | | | | | | Name | | Performance-
Based RSUs | | | Grant date Stock
Price | | | Target Long-Term
Incentive Opportunity | | | | | | Vance Y. Chang | | | 4,281 | | | $ | 70.08 | | | $ | 300,012 | | | | | | John C. Cywinski | | | 7,135 | | | $ | 70.08 | | | $ | 500,021 | | | | | | Jay D. Johns | | | 7,135 | | | $ | 70.08 | | | $ | 500,021 | | | | | | Christine K. Son | | | 3,925 | | | $ | 70.08 | | | $ | 275,064 | |
| | | | | | 33 |
| 2023 PROXY STATEMENT | EXECUTIVE COMPENSATION |
This special grant of performance-based RSUs, which vest based on attainment of certain stock price targets that are successively more difficult to achieve, was made to drive NEO alignment with the stock price appreciation aspect of shareholder return. It was also intended to drive additional retentive capacity at a time of a tightening market for executive talent. These equity awards were granted to each NEO other than the CEO and were granted in an amount equal to the annual RSA grant for such NEO and will vest on the third anniversary of the grant date, subject to the achievement of the performance criteria and the recipient’s continued service with the Corporation through such date. The stock price hurdles with respect to these performance-contingent awards range from $115 to $150. The stock price on the date of grant was $70.08. As of December 31, 2022, none of the stock price hurdles tied to these equity awards was satisfied. Also in March 2022, Mr. Cywinski received a one-time special grant of 14,270 RSAs with a grant-date value of approximately $1,000,000. This special grant was intended to drive additional retentive capacity and was scheduled to vest on March 4, 2025. Mr. Cywinski is not entitled to vest in these RSAs due to his resignation in January 2023. 2020—2022 Cash LTIP Payout Demonstrating the Corporation’s pay-for-performance philosophy and the direct link between pay and the Corporation’s stock price performance, the cash LTIP payout as a percentage of target, which is determined based on the Corporation’s TSR performance relative to all other restaurant companies traded on U.S.-based exchanges, has varied significantly over the past three performance periods. Performance and payouts under the 2020-2022 performance period and prior performance periods were as follows: | | | | | | | | | | | | | | | | | | | | Performance Period | | Dine
Brands
TSR | | Restaurant Index
Percentile Rank | | Payout as a
percentage of
target award | | | | | 2018 — 2020 | | | | 26.2 | % | | | | 63.6 | th | | | | 134.0 | % | | | | | 2019 — 2021 | | | | 18.4 | % | | | | 42.7 | th | | | | 78.5 | %* | | | | | 2020 — 2022 | | | | (18.9 | )% | | | | 29.6 | th | | | | 0 | %* |
| * | For the 2017-20192020-2022 cash LTIP cycle, the Corporation’s TSR performance achieved a percentile rank of 54.5%29.6th percentile relative to the companies included in the index of publicly-traded restaurant companies during the three-year performance period. The amounts in the table below represent the target cash LTIP incentive and actual amounts paid to the participating NEOs pursuant to the 2017-20192020-2022 cash LTIP. Mr. Joyce is not eligible to participate in |
| | | | | | | | | | | | Name | | 2020 -2022
Target Award | | | 2020 - 2022
Payout
(0% of Target) | | | | | John C. Cywinski | | $ | 330,000 | | | $ | 0 | | | | | Jay D. Johns | | $ | 247,500 | | | $ | 0 | |
| * | Messrs. Peyton and Chang joined the Company and Ms. Son was promoted after the 2020 cash LTIP grants and, accordingly, did not participate in the 2017-20192020-2022 cash LTIP cycle. |
| | | | | | | | | | | | | | Name | | 2017 - 2019
Target Award | | 2017 - 2019 Payout (111.3% of Target) | | | | Thomas H. Song | | | $ | 200,000 | | | | $ | 222,600 | | | | | John C. Cywinski | | | $ | 264,000 | | | | $ | 293,832 | | | | | Jay D. Johns | | | $ | 107,250 | | | | $ | 119,369 | | | | | Bryan R. Adel | | | $ | 148,500 | | | | $ | 165,281 | |
| | | | 34 | | |
| Stock Ownership Guidelines
The Corporation maintains robust stock ownership guidelines that are intended to further the Compensation Committee’s objectives of aligning the financial interests of its executives with those of the Corporation’s stockholders. The stock ownership guidelines call for each NEO to accumulate a minimum number of shares equal in value to a multiple of their base salary. For purposes of the guidelines, stock ownership includes Common Stock owned directly,in-the-money value of exercisable NQSOs, RSAs, and stock-settled RSUs that are not subject to performance goals that have not been achieved. The types and amounts of stock-based awards are intended, in part, to facilitate the accumulation of sufficient shares by the Corporation’s executives to allow them to meet the stock ownership guidelines. 2023 PROXY STATEMENT
The Compensation Committee annually reviews each NEO’s progress towards meeting the stock ownership guidelines. The Compensation Committee has informed management that it may reduce or choose not to grant future stock-based compensation to any executive who fails to make reasonable progress towards meeting the stock ownership goals within five years from becoming subject to the guidelines. Based upon its October 2019
| EXECUTIVE COMPENSATION |
Stock Ownership Guidelines The Corporation maintains robust stock ownership guidelines that are intended to further the Compensation Committee’s objectives of aligning the financial interests of its executives with those of the Corporation’s stockholders. The stock ownership guidelines call for each NEO to accumulate a minimum number of shares equal in value to a specific multiple of their base salary. For purposes of the guidelines, stock ownership includes Common Stock owned directly, in-the-money value of exercisable NQSOs, RSAs, and stock-settled RSUs that are not subject to performance goals that have not been achieved. The types and amounts of stock-based awards are intended, in part, to facilitate the accumulation of sufficient shares by the Corporation’s executives to allow them to meet the stock ownership guidelines. The Compensation Committee annually reviews each NEO’s progress towards meeting the stock ownership guidelines. The Compensation Committee has informed management that it may reduce or choose not to grant future stock-based compensation to any executive who fails to make reasonable progress towards meeting the stock ownership goals within five years after becoming subject to the guidelines. Based upon its November 2022 review of each NEO’s equity holdings in the Corporation, the Compensation Committee determined that each NEO met, exceeded, or was on schedule to meet the applicable guideline. The following table sets forth the stock ownership and goals of each of the continuing NEOs: | | | | | | | | | | | | | | | | | Name | | Guideline as a
Multiple of Base Salary | | | Holdings as a
Multiple of Base Salary(1) | | | Guideline Status | | | | | | John W. Peyton(2) | | | 6 | | | | 5.9 | | | | On Schedule | | | | | | Vance Y. Chang(3) | | | 4 | | | | 2.2 | | | | On Schedule | | | | | | Jay D. Johns(4) | | | 4 | | | | 1.9 | | | | On Schedule | | | | | | Christine K. Son | | | 2 | | | | 3.1 | | | | Meets Guideline | |
| (1) | Based upon holdings in the Corporation,shares of Common Stock and the Compensation Committee determined that each NEO met, exceeded or was on scheduleone-year average daily price per share of Common Stock from November 24, 2021 to November 23, 2022. |
| (2) | Mr. Peyton has until January 4, 2026 to meet his guideline as outlined in the following table:stock ownership guideline. |
| (3) | Mr. Chang has until June 14, 2026 to meet his stock ownership guideline. |
| (4) | Mr. Johns has until June 13, 2024 to meet his stock ownership guideline. |
Clawback Policy To the extent permitted by governing law, in the event that (i) the Corporation is required to make a material restatement of its financial statements as a result of fraudulent behavior or material intentional misconduct on the part of the Corporation’s current or former (a) Chief Executive Officer, (b) executive officers subject to Section 16 of the Exchange Act or (c) other executive officers who report directly to the Chief Executive Officer and (ii) any incentive compensation was paid to any of these individuals based upon achievement of certain financial results and in reliance upon the financial statements to be restated, then the Board of Directors may, in its sole discretion and upon making a determination that it would be in the best interest of the Corporation to do so, direct the Corporation to make reasonable efforts to seek reimbursement of any such incentive compensation paid within the past three years from the date of the restatement to the extent it exceeds the amounts that would have been earned under the restated financial statements. This policy shall apply in addition to any right of recoupment against the Chief Executive Officer and Chief Financial Officer pursuant to Section 304 of the Sarbanes-Oxley Act of 2002 or other applicable law or regulation. The Company is in the process of reviewing its clawback policy and will modify the policy as necessary to reflect the final NYSE listing rules adopted to implement the compensation recovery requirements under the Dodd-Frank Wall Street Reform and Consumer Protection Act. | | | | | | | | | | | | | | | | | | | | Name | | Guideline as a
Multiple of Base Salary | | Holdings as a
Multiple of Base Salary(1) | | Guideline Status | | | | | Stephen P. Joyce | | | | 6 | | | | | 24.1 | | | | | Meets Guideline | | | | | | Thomas H. Song(2) | | | | 4 | | | | | 2.9 | | | | | On Schedule | | | | | | John C. Cywinski | | | | 4 | | | | | 8.2 | | | | | Meets Guideline | | | | | | Jay D. Johns(3) | | | | 4 | | | | | 3.3 | | | | | On Schedule | | | | | | Bryan R. Adel | | | | 2 | | | | | 2.9 | | | | | Meets Guideline | |
| | | | | | 35 |
| (1) | Based upon holdings in the shares of common stock of the Corporation andone-year average daily price per share of the Corporation’s common stock from October 2, 2018 to October 1, 2019.
2023 PROXY STATEMENT | EXECUTIVE COMPENSATION |
(2) | Mr. Song has until June 1, 2023 to meet his stock ownership guideline.
Hedging and Pledging Restrictions Under the Corporation’s Insider Trading Policy, all officers, employees, and directors of the Corporation are prohibited from engaging in short sales of the Corporation’s common stock or in taking positions on the Corporation’s publicly traded call and put options or otherwise using financial instruments to engage in hedging transactions to lock in the value of the Corporation’s securities by preventing a decrease and/or increase in value. Employment Agreements and Change-in-Control Provisions Employment Agreements The Corporation enters into employment agreements with certain executives when it determines that an employment agreement is desirable for the Corporation to obtain a measure of assurance as to the executive’s continued employment in light of prevailing market competition for the particular position held by the executive officer, or where the Compensation Committee determines that an employment agreement is necessary and appropriate to attract an executive in light of market conditions, the prior experience of the executive or practices at the Corporation with respect to other similarly situated employees. As of March 9, 2022, Mr. Cywinski’s employment agreement was amended and restated and Mr. Johns entered into an employment agreement with the Corporation. The Compensation Committee approved the terms of the agreements for Messrs. Cywinski and Johns after considering individual performance, the Compensation Committee’s assessment of both internal and external market competitiveness, and alignment of employment terms across business units. As of December 31, 2022, each of Mr. Peyton, Mr. Chang, Mr. Cywinski, and Mr. Johns was a party to an employment agreement with the Corporation. Each employment agreement provides for an initial employment term of three years. Mr. Peyton’s employment agreement further provides for automatic successive one-year extensions at the end of such term unless the Corporation or the executive gives notice to the contrary more than 90 days prior to the expiration of the then-current term of the agreement. The Corporation may terminate any employment agreement at any time, with or without cause upon written notice to the executive. The employment agreements provide for base salaries, target annual cash incentive opportunities as a percentage of base salary and certain other perquisites and benefit programs. The employment agreements do not contain multi-year incentive guarantees or tax gross-ups. The employment agreements contain confidentiality, trade secrets, discoveries, and non-solicitation provisions. Mr. Cywinski’s employment agreement terminated with his resignation, effective as of January 6, 2023. In connection with his resignation, Mr. Cywinski did not receive any severance benefits under his employment agreement or otherwise from the Corporation. Ms. Son is party to an employment offer letter with the Corporation, effective as of March 16, 2021. Under certain termination scenarios, the employment agreements may provide for severance payments, benefits continuation and vesting of outstanding equity-based awards. See “Potential Payments Upon Termination or Change in Control” in this proxy statement for additional information about severance arrangements, including projected severance payment amounts, pursuant to the employment agreements. Amended and Restated Executive Severance and Change in Control Policy As of December 31, 2022, Ms. Son participated in the Corporation’s Amended and Restated Executive Severance and Change in Control Policy. This policy was amended, effective January 1, 2022, to modify the policy to increase the level of severance benefits with the incorporation of the NEO’s target bonus in the cash severance amount and to provide for equity vesting in connection with certain terminations of employment. The Compensation Committee approved the amended and restated policy after considering market data and the input of Exequity. This amended and restated policy is intended to increase the retention of the senior leadership team and to provide severance benefits under specified circumstances to certain individuals who are in a position to contribute materially to the success of the Corporation. These arrangements also are intended to facilitate changes in the leadership team by setting terms for the termination of an executive officer in advance, thereby allowing a smooth transition of responsibilities when it is in the best interests of the Corporation. Under certain termination scenarios, the policy may provide for severance payments, benefits continuation and vesting of certain outstanding equity-based awards. The policy does not provide for tax gross-ups. See “Potential Payments Upon Termination or Change in Control” in this proxy statement for additional information about severance arrangements, including projected severance payment amounts, pursuant to the Amended and Restated Executive Severance and Change in Control Policy. | | | | 36 | | |
| 2023 PROXY STATEMENT | EXECUTIVE COMPENSATION |
Nonqualified Deferred Compensation Plan Pursuant to the Deferred Compensation Plan, all NEOs are eligible to defer their base salaries, annual cash incentives, and long-term incentive plan cash distributions. Deferrals are always 100% vested. This plan provides the NEOs with a long-term capital accumulation opportunity. The Deferred Compensation Plan provides a range of investment opportunities and is designed to comply with Section 409A of the Internal Revenue Code (the “Code”). See “2022 Nonqualified Deferred Compensation” in this proxy statement for additional information. Perquisites The Corporation provided all 2022 NEOs with limited perquisites as part of a competitive total compensation package. The Compensation Committee annually reviews the perquisites provided to the NEOs and approves those personal benefits or perquisites that it deems to be in the Corporation’s best interest in order to induce executives to maintain or accept employment with us. Annual Physicals. Each NEO is entitled and expected to have an annual physical provided at the Corporation’s cost. Automobile Allowances. The Corporation pays each of the NEOs an automobile allowance. Supplemental Life Insurance. The Corporation provides supplemental life insurance for each of the NEOs in addition to paying for life insurance for all eligible employees. NEOs are provided $900,000 in life insurance under the Corporation’s group policy. Supplemental Disability Insurance. The Corporation provides supplemental disability insurance for each of the NEOs in addition to paying for disability insurance for all eligible employees. The coverage for each NEO generally provides for a benefit equal to 60% of pre-disability earnings subject to a maximum of $25,000 per month. Tax Preparation Reimbursement. The Corporation may provide tax preparation reimbursement for certain NEOs who are required to file tax returns in multiple states as a result of their employment with the Corporation. The benefit is taxable to the NEO and is intended to encourage the NEO to engage knowledgeable experts to assist with tax preparation. Restaurant Dining Expenses. The Corporation reimburses each of the NEOs for amounts spent dining at Applebee’s and IHOP restaurants. Other. On a case-by-case basis, the Corporation may provide other perquisites to certain executives from time to time. See the 2022 Summary Compensation Table for additional details on these perquisites. | | | | | | 37 |
| (3) | Mr. Johns has until June 13, 2024 to meet his stock ownership guideline.
|
Clawback Policy
To the extent permitted by governing law, in the event that (i) the Corporation is required to make a material restatement of its financial statements as a result of fraudulent behavior or material intentional misconduct on the part of the Corporation’s current or former (a) Chief Executive Officer, (b) executive officers subject to Section 16 of the Exchange Act or (c) other executive officers who report directly to the Chief Executive Officer and (ii) any incentive compensation was paid to any of
| | | | | 35 |
| 2020 2023 PROXY STATEMENT
| EXECUTIVE COMPENSATION |
these individuals based upon achievement of certain financial results and in reliance upon the financial statements to be restated, then the Board of Directors of the Corporation may, in its sole discretion and upon making a determination that it would be in the best interest of the Corporation to do so, direct the Corporation to make reasonable efforts to seek reimbursement of any such incentive compensation paid within the past three years from the date of the restatement to the extent it exceeds the amounts that would have been earned under the restated financial statements. This policy shall apply in addition to any right of recoupment against the Chief Executive Officer and Chief Financial Officer pursuant to Section 304 of the Sarbanes-Oxley Act of 2002 or other applicable law or regulation.
Hedging and Pledging Restrictions
Under the Corporation’s Insider Trading Policy, all officers, employees and directors of the Corporation are prohibited from engaging in short sales of the Corporation’s common stock or in taking positions on the Corporation’s publicly traded call and put options or otherwise using financial instruments to engage in hedging transactions to lock in the value of the Corporation’s securities by preventing a decrease and/or increase in value.
Employment Agreements and Change in Control Provisions
Employment Agreements
The Corporation enters into employment agreements with certain executives when it determines that an employment agreement is desirable for the Corporation to obtain a measure of assurance as to the executive’s continued employment in light of prevailing market competition for the particular position held by the executive officer, or where the Compensation Committee determines that an employment agreement is necessary and appropriate to attract an executive in light of market conditions, the prior experience of the executive or practices at the Corporation with respect to other similarly situated employees.
Mr. Joyce is a party to an employment agreement with the Corporation. The employment agreement calls for a term beginning on September 12, 2017 and ending on February 1, 2021 with no automatic extensions. The Corporation may terminate the agreement at any time, with or without cause upon written notice to the executive. The employment
agreement provides for a base salary, a target annual cash incentive opportunity of 100% of base salary for eligible participation years (2018, 2019 and 2020) and certain other perquisites and benefit programs. The employment agreement does not contain multi-year incentive guarantees or taxgross-ups. The employment agreement contains confidentiality, trade secrets, discoveries andnon-solicitation provisions.
Mr. Song and Mr. Cywinski are also parties to employment agreements with the Corporation. The employment agreements call for an initial employment term of three years and provide for automatic successiveone-year extensions unless the Corporation or the executive gives notice to the contrary more than 90 days prior to the expiration of the then-current term of the agreement. The Corporation may terminate the agreements at any time, with or without cause upon written notice to the executive. The employment agreements provide for a base salary, a target annual cash incentive opportunity of 75% of base salary and certain other perquisites and benefit programs. The employment agreements do not contain multi-year incentive guarantees or taxgross-ups. The employment agreements contain confidentiality, trade secrets, discoveries andnon-solicitation provisions.
Mr. Adel and Mr. Johns are parties to employment offer letters with the Corporation, effective as of August 2, 2010 and June 13, 2019, respectively.
Under certain termination scenarios, the employment agreements may provide for severance payments, benefits continuation and vesting of outstanding equity-based awards. See “Potential Payments Upon Termination or Change in Control” in this proxy statement for additional information about severance arrangements, including projected severance payment amounts, pursuant to the employment agreements.
| | | 36 | | |
| 2020 PROXY STATEMENT
| EXECUTIVE COMPENSATION
|
Amended and Restated Executive Severance and Change in Control Policy
Mr. Adel and Mr. Johns participate in the Corporation’s Amended and Restated Executive Severance and Change in Control Policy. This policy is intended to increase the retention of the senior leadership team and to provide severance benefits under specified circumstances to certain individuals who are in a position to contribute materially to the success of the Corporation. These arrangements also are intended to facilitate changes in the leadership team by setting terms for the termination of an executive officer in advance, thereby allowing a smooth transition of responsibilities when it is in the best interests of the Corporation. Under certain termination scenarios, the policy may provide for severance payments, benefits continuation and vesting of certain outstanding equity-based awards. The policy does not provide fortax gross-ups. See “Potential Payments Upon Termination or Change in Control” in this proxy statement for additional information about severance arrangements, including projected severance payment amounts, pursuant to the Amended and Restated Executive Severance and Change in Control Policy.
Nonqualified Deferred Compensation Plan
Pursuant to the Deferred Compensation Plan, all NEOs are eligible to defer their base salaries, annual cash incentives, and long-term incentive plan cash distributions. Deferrals are always 100% vested. This plan provides the NEOs with a long-term capital accumulation opportunity. The Deferred Compensation Plan provides a range of investment opportunities and is designed to comply with Section 409A of the Internal Revenue Code (the “Code”). See “2019 Nonqualified Deferred Compensation” in this proxy statement for additional information.
Perquisites
The Corporation provides all NEOs with limited perquisites as part of a competitive total compensation package. The Compensation Committee annually reviews the perquisites provided to the NEOs and approves those personal benefits or perquisites that it deems to be in the Corporation’s best interest in order to induce executives to maintain or accept employment with us.
Annual Physicals.Each NEO is entitled and expected to have an annual physical provided at the Corporation’s cost.
Automobile Allowances.The Corporation pays each of the NEOs an automobile allowance.
Supplemental Life Insurance.The Corporation provides supplemental life insurance for each of the NEOs in addition to paying for life insurance for all eligible employees. NEOs are provided $900,000 in life insurance under the Corporation’s group policy.
Supplemental Disability Insurance.The Corporation provides supplemental disability insurance for each of the NEOs in addition to paying for disability insurance for all eligible employees. The coverage for each NEO generally provides for a benefit equal to 60% ofpre-disability earnings subject to a maximum of $25,000 per month.
Tax Preparation Reimbursement.The Corporation may provide tax preparation reimbursement for certain NEOs who are required to file tax returns in multiple states as a result of their employment with the Corporation. The benefit is taxable to the NEO and is intended to encourage the NEO to engage knowledgeable experts to assist with tax preparation.
Restaurant Dining Expenses.The Corporation reimburses each of the NEOs for amounts spent dining at Applebee’s and IHOP restaurants.
Other. On acase-by-case basis, the Corporation may provide other perquisites to certain executives from time to time.
See the 2019 Summary Compensation Table for additional details on these perquisites.
| | | | | 37 |
| 2020 PROXY STATEMENT
| COMPENSATION TABLES
|
COMPENSATION TABLES
Compensation tables and accompanying notes and disclosures for all NEOs are set forth below.
2019 Summary Compensation Table
The following 2019 Summary Compensation Table and accompanying notes set forth information concerning compensation earned by each of the Corporation’s NEOs for the fiscal year ended December 31, 2019, and, to the extent required under applicable SEC disclosure rules, the fiscal years ended December 31, 2018 and 2017.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name & Principal Position | | Year | | | Salary
($)(1) | | | Bonus
($) | | | Stock
Awards
($)(2) | | | Option
Awards
($)(3) | | | Non-Equity
Incentive
Plan
Compensation
($)(4) | | | All Other
Compensation
($)(5) | | | Total ($) | | | | | | | | | | | Stephen P. Joyce | | | 2019 | | | | 1,000,000 | | | | — | | | | — | | | | — | | | | 455,948 | | | | 297,810 | | | | 1,753,758 | | Chief Executive Officer | | | 2018 | | | | 1,000,000 | | | | — | | | | — | | | | — | | | | 1,295,200 | | | | 275,503 | | | | 2,570,703 | | | | | 2017 | | | | 284,615 | | | | 750,000 | (6) | | | 4,826,500 | (7) | | | 1,076,000 | | | | — | (8) | | | 76,328 | | | | 7,013,443 | | | | | | | | | | | Thomas H. Song | | | 2019 | | | | 508,461 | | | | 250,000 | (9) | | | 231,095 | | | | 237,985 | | | | 520,930 | | | | 38,197 | | | | 1,786,668 | | Chief Financial Officer | | | 2018 | | | | 286,538 | | | | 200,000 | (10) | | | 1,198,010 | (11) | | | 204,042 | | | | 568,900 | | | | 225,893 | | | | 2,683,383 | | | | | | | | | | | John C. Cywinski | | | 2019 | | | | 612,295 | | | | — | | | | 288,794 | | | | 297,475 | | | | 606,730 | | | | 34,871 | | | | 1,840,165 | | President, Applebee’s Business Unit | | | 2018 | | | | 589,596 | | | | — | | | | 2,319,309 | (12) | | | 280,555 | | | | 1,016,400 | | | | 174,434 | | | | 4,380,294 | | | | | 2017 | | | | 457,788 | | | | 150,000 | (13) | | | 1,764,053 | (14) | | | 272,003 | | | | 271,688 | | | | 631,758 | | | | 3,547,290 | | | | | | | | | | | Jay D. Johns President, IHOP Business Unit | | | 2019 | | | | 476,803 | | | | — | | | | 1,107,358 | (15) | | | 110,495 | | | | 383,869 | | | | 38,984 | | | | 2,117,509 | | | | | | | | | | | Bryan R. Adel | | | 2019 | | | | 496,154 | | | | — | | | | 198,039 | | | | 203,996 | | | | 438,263 | | | | 38,201 | | | | 1,374,652 | | Senior Vice President, Legal, General | | | 2018 | | | | 475,000 | | | | 250,000 | (16) | | | 181,563 | | | | 187,037 | | | | 598,552 | | | | 65,835 | | | | 1,757,987 | | | | | 2017 | | | | 445,461 | | | | — | | | | 148,542 | | | | 153,001 | | | | 256,757 | | | | 36,463 | | | | 1,040,224 | |
(1) | Represents 26bi-weekly pay periods during the fiscal years ended December 31, 2017, 2018 and 2019, respectively.
|
(2) | The amounts reported in this column for 2019 represent the aggregate grant date fair value related to the RSAs that were granted as part of the 2019 LTI award and the new hire, promotion, and special retention grants awarded to certain of the NEOs, each computed in accordance with FASB ASC Topic 718. The amounts in the “Stock Awards” column for prior years include the aggregate grant date fair value related to stock awards granted in each of the years shown, computed in accordance with FASB ASC Topic 718. See Note 14 to Consolidated Financial Statements in the Corporation’s annual reports on Form10-K for the years ended December 31, 2019 and 2018, and Note 13 to the Consolidated Financial Statements in the Corporation’s annual report on Form10-K for the year ended December 31, 2017 for information regarding assumptions underlying the valuation of equity awards granted in 2019, 2018 and 2017.
|
(3) | The amounts in the “Option Awards” column include the aggregate grant date fair value related to option awards granted in each of the years shown, computed in accordance with FASB ASC Topic 718. See Note 14 to Consolidated Financial Statements in the Corporation’s annual reports on Form10-K for the years ended December 31, 2019 and 2018, and Note 13 to the Consolidated Financial Statements in the Corporation’s annual report on Form10-K for the year ended December 31, 2017 for information regarding assumptions underlying the valuation of equity awards granted in 2019, 2018 and 2017.
|
(4) | The amounts in the“Non-Equity Incentive Plan Compensation” column for 2019 include payouts under the 2019 Annual Incentive Plan and the cash LTIP for the 2017 – 2019 performance period. These payout amounts were based on the Corporation’s attainment of certainpre-determined performance targets.
|
| | | | | | | | | | | | | | | | Name | | Annual Incentive Plan Award ($) | | Cash LTIP Award ($) | | Non-Equity Incentive Plan Compensation ($) | | | | | Stephen P. Joyce | | | | 455,948 | | | | | N/A | | | | | 455,948 | | | | | | Thomas H. Song | | | | 298,330 | | | | | 222,600 | | | | | 520,930 | | | | | | John C. Cywinski | | | | 312,898 | | | | | 293,832 | | | | | 606,730 | | | | | | Jay D. Johns | | | | 264,500 | | | | | 119,369 | | | | | 383,869 | | | | | | Bryan R. Adel | | | | 272,982 | | | | | 165,281 | | | | | 438,263 | |
| | | 38 | | |
| 2020 PROXY STATEMENT
| COMPENSATION TABLES |
| For additional information on the amounts earned for 2019, see the section entitled “Performance- and Stock-Based Compensation” in the Compensation Discussion and Analysis section of this proxy statement.
COMPENSATION TABLES Compensation tables and accompanying notes and disclosures for all NEOs are set forth below. 2022 Summary Compensation Table The following 2022 Summary Compensation Table and accompanying notes set forth information concerning compensation earned by each of the Corporation’s NEOs for the fiscal year ended December 31, 2022, and, to the extent required under applicable SEC disclosure rules, the fiscal years ended December 31, 2021 and 2020. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name & Principal Position | | Year | | Salary
($) | | Bonus
($) | | Stock
Awards
($)(1) | | Option
Awards
($)(2) | | Non-Equity
Incentive
Plan
Compensation
($) | | All Other
Compensation
($)(3) | | Total
($) | | | | | | | | | | John Peyton | | | | 2022 | | | | | 1,000,010 | | | | | 0 | | | | | 1,400,058 | | | | | 1,050,001 | | | | | 937,500 | | | | | 37,763 | | | | | 4,425,333 | | Chief Executive Officer | | | | 2021 | | | | | 961,539 | | | | | 1,200,000 | (4) | | | | 4,251,545 | (5) | | | | 2,074,736 | (6) | | | | 2,000,000 | | | | | 350,193 | | | | | 10,838,013 | | | | | | | | | | | Vance Chang | | | | 2022 | | | | | 508,077 | | | | | 0 | | | | | 600,024 | | | | | 150,014 | | | | | 358,594 | | | | | 40,699 | | | | | 1,657,408 | | Chief Financial Officer | | | | 2021 | | | | | 259,615 | | | | | — | | | | | 998,157 | (7) | | | | 204,029 | | | | | 750,000 | | | | | 26,203 | | | | | 2,238,004 | | | | | | | | | | | John C. Cywinski | | | | 2022 | | | | | 738,846 | | | | | 0 | | | | | 2,000,084 | | | | | 250,013 | | | | | 801,563 | | | | | 44,156 | | | | | 3,834,660 | | President, Applebee’s Business Unit | | | | 2021 | | | | | 686,115 | | | | | — | | | | | 902,391 | (8) | | | | 340,009 | | | | | 1,403,069 | | | | | 36,664 | | | | | 3,368,248 | | | | | | 2020 | | | | | 668,185 | | | | | 286,875 | | | | | 330,026 | | | | | 340,014 | | | | | 364,815 | | | | | 37,173 | | | | | 2,027,088 | | | | | | | | | | | Jay D. Johns | | | | 2022 | | | | | 721,154 | | | | | 0 | | | | | 1,000,042 | | | | | 250,013 | | | | | 447,187 | | | | | 44,366 | | | | | 2,462,762 | | President, IHOP Business Unit | | | | 2021 | | | | | 582,692 | | | | | — | | | | | 297,031 | | | | | 306,035 | | | | | 1,044,191 | | | | | 41,963 | | | | | 2,271,912 | | | | | | 2020 | | | | | 546,154 | | | | | 206,250 | | | | | 247,563 | | | | | 255,006 | | | | | 110,550 | | | | | 35,433 | | | | | 1,400,956 | | | | | | | | | | | Christine K. Son | | | | 2022 | | | | | 464,538 | | | | | 0 | | | | | 550,128 | | | | | 137,519 | | | | | 263,250 | | | | | 41,215 | | | | | 1,456,650 | | Senior Vice President, | | | | 2021 | | | | | 398,249 | | | | | — | | | | | 499,996 | (9) | | | | — | | | | | 540,000 | | | | | 37,021 | | | | | 1,475,266 | |
| (1) | The amounts reported in this column for 2022 represent the aggregate grant date fair value related to the RSAs that were granted as part of the 2022 LTI award, the special incentive performance-based RSUs granted to certain NEOs and the retentive award granted to Mr. Cywinski, in each case, computed in accordance with FASB ASC Topic 718 and, in the case of the performance-based RSUs, based on the probable level of achievement of the underlying performance goals. Under FASB ASC Topic 718, the vesting conditions related to the performance-based RSUs granted to each of the NEOs other than Mr. Peyton are considered a market condition and not a performance condition. Accordingly, there is no grant date fair value below or in excess of the amount reflected in the table above for the performance-based RSUs granted to each NEO other than Mr. Peyton that could be calculated and disclosed based on achievement of the underlying market condition. The amounts in the “Stock Awards” column for prior years include the aggregate grant date fair value related to stock awards granted in each of the years shown, computed in accordance with FASB ASC Topic 718. See Note 14 to Consolidated Financial Statements in the Corporation’s annual reports on Form 10-K for the years ended 2022, 2021 and 2020, and for information regarding assumptions underlying the valuation of equity awards granted in 2022, 2021 and 2020, respectively. |
| (2) | The amounts in the “Option Awards” column for 2022, 2021, and 2020 represent the aggregate grant date fair value related to option awards granted in each of such years, computed in accordance with FASB ASC Topic 718. See Note 14 to Consolidated Financial Statements in the Corporation’s annual report on Form 10-K for the years ended 2022, 2021, and 2020 for information regarding assumptions underlying the valuation of equity awards granted in 2022, 2021, and 2020. |
| (3) | The amounts in “All Other Compensation” for 2022 include amounts paid or reimbursed for the following: |
(5) | The amounts in “All Other Compensation” for 2019 include amounts paid or reimbursed for the following:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name | | Taxable
Fringe ($) | | Auto
Allowance
and
Expenses
($) | | 401(k) Plan
Contributions
($) | | Dine Brands
Restaurant
Dining
Expenses
($) | | Life and
Disability
Insurance
Premiums ($) | | Annual
Physical
Exam
($) | | Total ($) | | | | | | | | | John W. Peyton | | | | 152 | | | | | 15,000 | | | | | 15,250 | | | | | 1,430 | | | | | 5,931 | | | | | 0 | | | | | 37,763 | | | | | | | | | | Vance Y. Chang | | | | 152 | | | | | 15,000 | | | | | 15,250 | | | | | 2,722 | | | | | 3,075 | | | | | 4,500 | | | | | 40,698 | | | | | | | | | | John C. Cywinski | | | | 540 | | | | | 15,000 | | | | | 15,250 | | | | | 589 | | | | | 8,277 | | | | | 4,500 | | | | | 44,155 | | | | | | | | | | Jay D. Johns | | | | 152 | | | | | 15,000 | | | | | 15,250 | | | | | 1,187 | | | | | 8,277 | | | | | 4,500 | | | | | 44,366 | | | | | | | | | | Christine K. Son | | | | 202 | | | | | 15,000 | | | | | 15,250 | | | | | 3,300 | | | | | 2,963 | | | | | 4,500 | | | | | 41,215 | |
| | | | 38 | | |
| 2023 PROXY STATEMENT | COMPENSATION TABLES |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name | | Auto
Allowance
and
Expenses
($) | | 401(k) Plan
Contributions
($) | | Dine Brands
Restaurant
Dining
Expenses ($) | | Housing
and
Commuting Expenses
($) | | Life and
Disability
Insurance
Premiums
($) | | Annual
Physical
Exam
($) | | Airline
Club
($) | | Total ($) | | | | | | | | | | Stephen P. Joyce | | | | 15,000 | | | | | 14,000 | | | | | 157 | | | | | 262,887 | | | | | 5,766 | | | | | — | | | | | — | | | | | 297,810 | | | | | | | | | | | Thomas H. Song | | | | 15,000 | | | | | 14,000 | | | | | 2,337 | | | | | — | | | | | 2,910 | | | | | 3,400 | | | | | 550 | | | | | 38,197 | | | | | | | | | | | John C. Cywinski | | | | 15,000 | | | | | 14,000 | | | | | 105 | | | | | — | | | | | 5,766 | | | | | — | | | | | — | | | | | 34,871 | | | | | | | | | | | Jay D. Johns | | | | 15,000 | | | | | 14,000 | | | | | 818 | | | | | — | | | | | 5,766 | | | | | 3,400 | | | | | — | | | | | 38,984 | | | | | | | | | | | Bryan R. Adel | | | | 15,000 | | | | | 14,000 | | | | | 535 | | | | | — | | | | | 5,766 | | | | | 2,900 | | | | | — | | | | | 38,201 | |
| (4) | | Amounts for Mr. Joyce’s housing and commuting expenses are based on amounts actually paid or reimbursed to Mr. Joyce or service provider, as applicable.
|
(6) | Represents Mr. Joyce’ssign-on bonus.
|
(7) | Includessign-on performance- and time-based RSUs and time-based RSUs awarded to Mr. Joyce valued at $1,783,000 and $3,043,500, respectively.
|
(8) | Mr. Joyce was not a participant in the 2017 Annual Incentive Plan.
|
(9) | Represents a special recognition bonus paid to Mr. Song in August 2019.
|
(10) | Represents Mr. Song’ssign-on bonus.
|
(11) | Includessign-on RSAs awarded to Mr. Song valued at $1,000,002.
|
(12) | Includes a special retention grant of performance- and time-based RSUs valued at $2,046,999.
|
(13) | Represents Mr. Cywinski’ssign-on bonus.
|
(14) | Includes thesign-on RSAs awarded to Mr. Cywinski valued at $1,500,040 in 2017.
|
(15) | Includes special recognition RSAs awarded to Mr. Johns valued at $1,000,075 in connection with his promotion to President of the IHOP Business Unit.
|
(16) | Represents a special recognition bonus of $50,000 paid to Mr. Adel in November 2018 and a special recognition bonus of $200,000 paid to Mr. Adel in March 2019.
|
| | | | | 39 |
| 2020 PROXY STATEMENT
| COMPENSATION TABLESRepresents Mr. Peyton’s sign-on bonus which was repayable upon voluntary termination of employment within two years from date of hire.
|
| (5) | GrantsIncludes the grant date fair value associated with special sign-on RSUs awarded to Mr. Peyton valued at $3,096,478.
|
| (6) | Includes the grant date fair value associated with special sign-on stock options awarded to Mr. Peyton valued at $884,704. |
| (7) | Includes the grant date fair value associated with sign-on RSAs awarded to Mr. Chang valued at $800,090. |
| (8) | Includes the incremental value of Plan-Based Awards in 2019 The following table provides information with respect$572,384 attributable to the plan-based awardsmodification of Mr. Cywinski’s special retention award originally granted byin December 2018 to extend the Compensation Committeeperformance and service-based vesting periods.
|
| (9) | Includes the grant date fair value associated with special recognition RSAs awarded to the NEOs. Plan-based awards include annual incentive plan awards under the Corporation’s 2019 Annual Incentive Plan (“AIP”), RSAs, NQSOsMs. Son valued at $249,955 in connection with her promotion to SVP, Legal, General Counsel and cash LTIP awards under the 2016 Stock Incentive Plan and 2019 Stock Incentive Plan.Secretary. |
Grants of Plan-Based Awards in 2022 The following table provides information with respect to the plan-based awards granted by the Compensation Committee to the NEOs. Plan-based awards include annual incentive plan awards under the Corporation’s 2022 Annual Incentive Plan (“AIP”), RSAs, NQSOs and cash LTIP awards under the 2019 Stock Incentive Plan as well as the performance-based RSUs granted to each of the NEOs other than the CEO during 2022 and Mr. Cywinski’s special retention award. For additional information on the performance objectives and determination of threshold, target, and maximum payouts for these awards, see the section entitled “Performance- and Stock-Based Compensation” in the Compensation Discussion and Analysis section of this proxy statement. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Estimated Future Payouts
Under Non-Equity Incentive
Plan Awards(1) | | Equity
Incentive
Plan
Awards (#) | | All Other
Stock
Awards:
Number of
Shares or
Stock
Units
(#)(2) | | All Other
Option
Awards:
Number of
Securities
Underlying Options
(#)(3) | | Exercise
or Base
Price of
Option Awards
($/Share) | | Grant Date Fair Value of Stock and Option Awards ($)(4) | Name /
Type of Award | | Grant
Date | | Approval
Date | | Threshold
($) | | Target
($) | | Maximum
($) | John Peyton | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | AIP | | | | — | | | | | | | | | | 500,000 | | | | | 1,000,000 | | | | | 2,000,000 | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | LTIP | | | | — | | | | | | | | | | 525,000 | | | | | 1,050,000 | | | | | 2,100,000 | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | NQSO | | | | 3/4/2022 | | | | | 2/16/2022 | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | 31,595 | | | | | 70.08 | | | | | 1,050,001 | | RSA | | | | 3/4/2022 | | | | | 2/16/2022 | | | | | — | | | | | — | | | | | — | | | | | — | | | | | 19,978 | | | | | — | | | | | — | | | | | 1,400,058 | | Vance Chang | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | AIP | | | | — | | | | | | | | | | 191,250 | | | | | 382,500 | | | | | 765,000 | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | LTIP | | | | — | | | | | | | | | | 75,000 | | | | | 150,000 | | | | | 300,000 | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | RSA | | | | 3/4/2022 | | | | | 2/16/2022 | | | | | — | | | | | — | | | | | — | | | | | — | | | | | 4,281 | | | | | — | | | | | — | | | | | 300,012 | | RSU | | | | 3/4/2022 | | | | | 2/16/2022 | | | | | — | | | | | — | | | | | — | | | | | 4,281 | | | | | — | | | | | — | | | | | — | | | | | 300,012 | | NQSO | | | | 3/4/2022 | | | | | 2/16/2022 | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | 4,514 | | | | | 70.08 | | | | | 150,014 | | John C. Cywinski(5) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | AIP | | | | — | | | | | 2/16/2022 | | | | | 191,250 | | | | | 382,500 | | | | | 765,000 | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | LTIP | | | | — | | | | | 2/16/2022 | | | | | 125,000 | | | | | 250,000 | | | | | 500,000 | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | RSA | | | | 3/4/2022 | | | | | 2/16/2022 | | | | | — | | | | | — | | | | | — | | | | | — | | | | | 14,270 | (6) | | | | — | | | | | — | | | | | 1,000,042 | | RSA | | | | 3/4/2022 | | | | | 2/16/2022 | | | | | — | | | | | — | | | | | — | | | | | — | | | | | 7,135 | | | | | — | | | | | — | | | | | 500,021 | | NQSO | | | | 3/4/2022 | | | | | 2/16/2022 | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | 7,523 | | | | | 70.08 | | | | | 250,013 | | RSU | | | | 3/4/2022 | | | | | 2/16/2022 | | | | | — | | | | | — | | | | | — | | | | | 7,135 | | | | | — | | | | | — | | | | | — | | | | | 500,021 | | Jay D. Johns | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | AIP | | | | — | | | | | — | | | | | 191,250 | | | | | 382,500 | | | | | 765,000 | | | | | — | | | | | — | | | | | — | | | | | — | | | | | | | LTIP | | | | — | | | | | | | | | | 125,000 | | | | | 250,000 | | | | | 500,000 | | | | | — | | | | | — | | | | | — | | | | | — | | | | | | | RSA | | | | 3/4/2022 | | | | | 2/16/2022 | | | | | — | | | | | — | | | | | — | | | | | — | | | | | 7,135 | | | | | — | | | | | — | | | | | 500,021 | | RSU | | | | 3/4/2022 | | | | | 2/16/2022 | | | | | — | | | | | — | | | | | — | | | | | 7,135 | | | | | — | | | | | — | | | | | — | | | | | 500,021 | | NQSO | | | | 3/4/2022 | | | | | 2/16/2022 | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | 7,523 | | | | | 70.08 | | | | | 250,013 | | Christine Son | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | AIP | | | | — | | | | | — | | | | | 140,400 | | | | | 280,800 | | | | | 561,600 | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | LTIP | | | | — | | | | | — | | | | | 68,750 | | | | | 137,500 | | | | | 275,000 | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | RSA | | | | 3/4/2022 | | | | | 2/16/2022 | | | | | — | | | | | — | | | | | — | | | | | — | | | | | 3,925 | | | | | — | | | | | — | | | | | 275,064 | | RSU | | | | 3/4/2022 | | | | | 2/16/2022 | | | | | | | | | | | | | | | | | | | | 3,925 | | | | | — | | | | | — | | | | | — | | | | | 275,064 | | NQSO | | | | 3/4/2022 | | | | | 2/16/2022 | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | 4,138 | | | | | 70.08 | | | | | 137,519 | |
| | | | | | 39 |
| 2023 PROXY STATEMENT | COMPENSATION TABLES |
| (1) | Please see the section entitled “Performance- and Stock-Based Compensation” in the Compensation Discussion and Analysis section of this proxy statement. For the actual amounts earned understatement for additional information regarding the AIP awards, see the 2019 Summary Compensation Tableand cash LTIP. |
| (2) | Unless otherwise noted, RSAs reflected in this proxy statement.table vest as to one-third of the total shares on each of the first, second, and third anniversaries of the date of grant. |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Estimated Future Payouts
UnderNon-Equity Incentive
Plan Awards(1) | | All Other
Stock
Awards:
Number of
Shares or
Stock Units
(#)(2) | | All Other
Option
Awards:
Number of
Securities
Underlying Options
(#)(3) | | Exercise
or Base
Price of
Option Awards
($/Share) | | Grant Date Fair Value of Stock and Option Awards ($)(4) | Name / Type of Award | | Grant
Date | | Approval
Date | | Threshold
($) | | Target
($) | | Maximum
($) | Stephen P. Joyce | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | AIP | | | | — | | | | | 2/12/2019 | | | | | 500,000 | | | | | 1,000,000 | | | | | 2,000,000 | | | | | — | | | | | — | | | | | — | | | | | — | | Thomas H. Song | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | AIP | | | | — | | | | | 2/12/2019 | | | | | 191,250 | | | | | 382,500 | | | | | 765,000 | | | | | — | | | | | — | | | | | — | | | | | — | | LTIP | | | | — | | | | | 2/12/2019 | | | | | 115,500 | | | | | 231,000 | | | | | 462,000 | | | | | — | | | | | — | | | | | — | | | | | — | | RSA | | | | 2/25/2019 | | | | | 2/12/2019 | | | | | — | | | | | — | | | | | — | | | | | 2,335 | | | | | — | | | | | — | | | | | 231,095 | | NQSO | | | | 2/25/2019 | | | | | 2/12/2019 | | | | | — | | | | | — | | | | | — | | | | | — | | | | | 10,853 | | | | | 98.97 | | | | | 237,985 | | John C. Cywinski | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | AIP | | | | — | | | | | 2/12/2019 | | | | | 246,376 | | | | | 492,752 | | | | | 985,504 | | | | | — | | | | | — | | | | | — | | | | | — | | LTIP | | | | — | | | | | 2/12/2019 | | | | | 144,375 | | | | | 288,750 | | | | | 577,500 | | | | | — | | | | | — | | | | | — | | | | | — | | RSA | | | | 2/25/2019 | | | | | 2/12/2019 | | | | | — | | | | | — | | | | | — | | | | | 2,918 | | | | | — | | | | | — | | | | | 288,794 | | NQSO | | | | 2/25/2019 | | | | | 2/12/2019 | | | | | — | | | | | — | | | | | — | | | | | — | | | | | 13,566 | | | | | 98.97 | | | | | 297,475 | | Jay D. Johns | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | AIP(5) | | | | — | | | | | 2/12/2019 | | | | | 164,063 | | | | | 328,125 | | | | | 656,250 | | | | | — | | | | | — | | | | | — | | | | | — | | LTIP | | | | — | | | | | 2/12/2019 | | | | | 53,625 | | | | | 107,250 | | | | | 214,500 | | | | | — | | | | | — | | | | | — | | | | | — | | RSA | | | | 2/25/2019 | | | | | 2/12/2019 | | | | | — | | | | | — | | | | | — | | | | | 1,084 | | | | | — | | | | | — | | | | | 107,283 | | RSA(6) | | | | 6/13/2019 | | | | | 6/3/2019 | | | | | — | | | | | — | | | | | — | | | | | 10,556 | | | | | | | | | | | | | | | 1,000,075 | | NQSO | | | | 2/25/2019 | | | | | 2/12/2019 | | | | | — | | | | | — | | | | | — | | | | | — | | | | | 5,039 | | | | | 98.97 | | | | | 110,495 | | Bryan R. Adel | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | AIP | | | | — | | | | | 2/12/2019 | | | | | 175,000 | | | | | 350,000 | | | | | 700,000 | | | | | — | | | | | — | | | | | — | | | | | — | | LTIP | | | | — | | | | | 2/12/2019 | | | | | 99,000 | | | | | 198,000 | | | | | 396,000 | | | | | — | | | | | — | | | | | — | | | | | — | | RSA | | | | 2/25/2019 | | | | | 2/12/2019 | | | | | — | | | | | — | | | | | — | | | | | 2,001 | | | | | — | | | | | — | | | | | 198,039 | | NQSO | | | | 2/25/2019 | | | | | 2/12/2019 | | | | | — | | | | | — | | | | | — | | | | | — | | | | | 9,303 | | | | | 98.97 | | | | | 203,996 | |
| (3) | NQSOs reflected in this table vest and become exercisable as to one-third of the shares subject to the NQSO on each of the first, second and third anniversaries of the date of grant. |
| (4) | The amounts in this column represent the aggregate grant date fair value related to RSAs and NQSO awards granted in 2022 computed in accordance with FASB ASC Topic 718. See Note 14 to Consolidated Financial Statements in the Corporation’s annual report on Form 10-K for the year ended December 31, 2022 for information regarding assumptions underlying the valuation of equity awards. |
| (5) | In connection with Mr. Cywinski’s resignation, he will not vest in these cash LTIP or equity awards. |
| (6) | Mr. Cywinski’s grant with respect to 14,270 shares was scheduled to vest in full on the third anniversary of the grant date, assuming he remained continuously employed by the Corporation through such vesting date. As a result of his resignation, he will not vest in this award. |
Outstanding Equity Awards at 2022 Fiscal Year-End The following table provides summary information regarding the outstanding equity awards for the Corporation’s NEOs at December 31, 2022. (1) | Please see the section entitled “Performance- and Stock-Based Compensation” in the Compensation Discussion and Analysis section of this proxy statement for additional information regarding the AIP and cash LTIP. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Stock Awards | | | | | | | | | | | | | | | Number of Securities Underlying
Unexercised Options | | Option
Exercise
Price
($) | | Option
Expiration
Date | | Number of
Shares or
Units of Stock
That Have
Not Vested
(#) | | Market Value
of Shares or
Units of Stock
That Have
Not Vested
($)(1) | | Equity
Incentive
Plan
Awards:
Number
of
Unearned
Shares,
Units or
Other
Rights
That
Have Not
Vested
(#) | | Equity
Incentive
Plan
Awards:
Market
or Payout
Value of
Unearned
Shares,
Units or
Other
Rights
That
Have Not
Vested
($)(1) | | | Name | | Exercisable (#) | | Unexercisable (#) | John Peyton | | | | 9,672 | | | | | 19,344 | (2) | | | | 57.55 | | | | | 01/04/31 | | | | | 26,903 | (3) | | | | 1,737,934 | | | | | — | | | | | — | | | | | | | | 8,979 | | | | | 17,957 | (4) | | | | 82.44 | | | | | 03/04/31 | | | | | 9,340 | (5) | | | | 603,364 | | | | | — | | | | | — | | | | | | | | — | | | | | 31,595 | (6) | | | | 70.08 | | | | | 03/04/32 | | | | | 19,978 | (7) | | | | 1,290,579 | | | | | — | | | | | — | | | | Vance Chang | | | | 1,383 | | | | | 2,765 | (8) | | | | 90.94 | | | | | 06/15/31 | | | | | 1,452 | (9) | | | | 93,799 | | | | | — | | | | | — | | | | | | | | — | | | | | — | | | | | — | | | | | — | | | | | 6,599 | (10) | | | | 426,295 | | | | | — | | | | | — | | | | | | | | — | | | | | 4,514 | (6) | | | | 70.08 | | | | | 03/04/32 | | | | | 4,281 | (7) | | | | 276,553 | | | | | 4,281 | (11) | | | | 282,582 | | | | John Cywinski | | | | 58,875 | | | | | — | | | | | 54.82 | | | | | 03/15/27 | | | | | — | | | | | — | | | | | — | | | | | — | | | | | | | | 23,832 | | | | | — | | | | | 68.80 | | | | | 02/22/28 | | | | | — | | | | | — | | | | | — | | | | | — | | | | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | 31,712 | (12) | | | | 2,048,616 | | | | | | | | 13,566 | | | | | — | | | | | 98.97 | | | | | 02/25/29 | | | | | — | | | | | — | | | | | — | | | | | — | | | | | | | | 12,933 | | | | | 6,466 | (13) | | | | 87.17 | | | | | 02/26/30 | | | | | 3,786 | (14) | | | | 244,576 | | | | | — | | | | | — | | | | | | | | 2,566 | | | | | 5,130 | (15) | | | | 82.44 | | | | | 3/4/31 | | | | | 2,668 | (16) | | | | 172,353 | | | | | — | | | | | — | | | | | | | | — | | | | | 7,523 | (17) | | | | 70.08 | | | | | 3/4/32 | | | | | 7,135 | (18) | | | | 460,921 | | | | | 7,135 | (19) | | | | 470,970 | | | | | | | | | | | | | | | | | | — | | | | | — | | | | | — | | | | | — | | | | | 14,270 | (20) | | | | 921,842 | | | | | — | | | | | — | | | | Jay Johns | | | | 3,184 | | | | | — | | | | | 113.72 | | | | | 02/24/25 | | | | | — | | | | | — | | | | | — | | | | | — | | | | | | | | 7,528 | | | | | — | | | | | 90.90 | | | | | 02/26/26 | | | | | — | | | | | — | | | | | — | | | | | — | | | | | | | | 5,039 | | | | | — | | | | | 98.97 | | | | | 02/25/29 | | | | | — | | | | | — | | | | | — | | | | | — | | | | | | | | 9,700 | | | | | 4,849 | (21) | | | | 87.17 | | | | | 02/26/30 | | | | | 2,840 | (22) | | | | 183,464 | | | | | — | | | | | — | | | | | | | | 2,309 | | | | | 4,618 | (4) | | | | 82.44 | | | | | 03/04/31 | | | | | 2,402 | (31) | | | | 155,169 | | | | | — | | | | | — | | | | | | | | — | | | | | 7,523 | (6) | | | | 70.08 | | | | | 03/04/32 | | | | | 7,135 | (7) | | | | 460.921 | | | | | 7,135 | (11) | | | | 470,970 | | | |
| | | | 40 | | |
| (2) | RSAs reflected in this table cliff vest in full on the third anniversary of the date of grant.
|
(3) | NQSOs reflected in this table vest and become exercisable as toone-third of the shares subject to the NQSO on each of the first, second and third anniversaries of the date of grant.
|
(4) | The amounts in this column represent the aggregate grant date fair value related to RSAs and NQSO awards granted in 2019 computed in accordance with FASB ASC Topic 718. See Note 14 to Consolidated Financial Statements in the Corporation’s annual report on Form10-K for the year ended December 31, 2019 for information regarding assumptions underlying the valuation of equity awards.
|
(5) | Amounts under the AIP arepro-rated based on a target of 50% of base salary through June 2019 prior to Mr. Johns’ promotion to President of the IHOP Business Unit and a target of 75% of base salary for the remainder of the year following such promotion.
|
(6) | Represents special recognition RSAs granted to Mr. Johns on June 13, 2019 in connection with his promotion to President of the IHOP Business Unit. These RSAs vest in full on the third anniversary of the grant date subject to Mr. Johns’ continued employment through such date, or earlier upon an involuntary termination without cause.
|
| | | 40 | | |
| 2020 2023 PROXY STATEMENT
| COMPENSATION TABLES |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Stock Awards | | | | | | | | | | | | | | | Number of Securities Underlying
Unexercised Options | | Option
Exercise
Price
($) | | Option
Expiration
Date | | Number of
Shares or
Units of Stock
That Have
Not Vested
(#) | | Market Value
of Shares or
Units of Stock
That Have
Not Vested
($)(1) | | Equity
Incentive
Plan
Awards:
Number
of
Unearned
Shares,
Units or
Other
Rights
That
Have Not
Vested
(#) | | Equity
Incentive
Plan
Awards:
Market
or Payout
Value of
Unearned
Shares,
Units or
Other
Rights
That
Have Not
Vested
($)(1) | | | Name | | Exercisable (#) | | Unexercisable (#) | Christine Son | | | | 1,621 | | | | | — | | | | | 113.72 | | | | | 02/24/25 | | | | | — | | | | | — | | | | | — | | | | | — | | | | | | | | 3,764 | | | | | — | | | | | 90.90 | | | | | 02/26/26 | | | | | — | | | | | — | | | | | — | | | | | — | | | | | | | | 12,593 | | | | | — | | | | | 53.49 | | | | | 03/03/27 | | | | | — | | | | | — | | | | | — | | | | | — | | | | | | | | 4,767 | | | | | — | | | | | 68.80 | | | | | 02/22/28 | | | | | — | | | | | — | | | | | — | | | | | — | | | | | | | | 2,559 | | | | | — | | | | | 98.97 | | | | | 02/25/29 | | | | | — | | | | | — | | | | | — | | | | | — | | | | | | | | 2,762 | | | | | 1,381 | (21) | | | | 87.17 | | | | | 02/26/30 | | | | | 1,691 | (22) | | | | 109,239 | | | | | — | | | | | — | | | | | | | | — | | | | | — | | | | | — | | | | | — | | | | | 750 | (23) | | | | 48,450 | | | | | — | | | | | — | | | | | | | | — | | | | | — | | | | | — | | | | | — | | | | | 2,022 | (24) | | | | 130,621 | | | | | — | | | | | — | | | | | | | | — | | | | | — | | | | | — | | | | | — | | | | | 1,681 | (25) | | | | 108,593 | | | | | — | | | | | — | | | | | | | | — | | | | | 4,138 | (45) | | | | 70.08 | | | | | 03/04/32 | | | | | 3,925 | (7) | | | | 253,555 | | | | | 3,925 | (11) | | | | 259,083 | | | |
| (1) | Per share value of stock awards is $64.60 based on the closing price of the Common Stock on the NYSE on December 30, 2022. |
| (2) | These NQSOs became exercisable as to one-third on each of January 4, 2022 and January 4, 2023 and will become exercisable as to one-third on January 4, 2024. |
| (3) | These RSAs vested as to one-half on each of January 4, 2022 and January 4, 2023. |
| (4) | These NQSOs became exercisable as to one-third on each of March 4, 2022 and March 4, 2023 and will become exercisable as to one-third on March 4, 2024. |
| (5) | These RSAs vested as to one-third on March 4, 2023 and will vest as to one-third on each of March 4, 2024 and March 4, 2025. |
| (6) | These NQSOs became exercisable as to one-third on March 4, 2023 and will become exercisable as to one-third on each of March 4, 2024, and March 4, 2025. |
| (7) | These RSAs vested as to one-third on March 4, 2023 and will vest as to one-third on each of March 4, 2024 and March 4, 2025. |
| (8) | These NQSOs became exercisable as to one-third on June 15, 2022 and will vest as to one-third on each of June 15, 2023 and June 15, 2024. |
| (9) | These RSAs vested as to one-third on June 15, 2022 and will vest as to one-third on each of June 15, 2023 and June 15, 2024. |
| (10) | These RSAs vested as to one-fourth on June 15, 2022 and will vest as to one-fourth on each of June 15, 2023, June 15, 2024, and June 15, 2025. |
| (11) | These RSUs will vest on March 4, 2025 in an amount to be determined based upon the achievement of certain stock price performance targets. |
| (12) | These RSUs were scheduled to vest on March 1 2023 in an amount to be determined based upon the achievement of certain stock price performance targets. Due to Mr. Cywinski’s termination in January 2023, he is not entitled to vest in these RSUs. |
| (13) | These NQSOs became exercisable as to one-third on each of February 26, 2021 and February 26, 2022. Due to Mr. Cywinski’s termination in January 2023, the remaining one-third will not become exercisable. |
| (14) | Due to Mr. Cywinski’s termination in January 2023, he is not entitled to vest in these RSAs, which were scheduled to vest on March 4, 2025. |
| (15) | These NQSOs became exercisable as to one-third on March 4, 2022. Due to Mr. Cywinski’s termination in January 2023, the remaining two thirds will not become exercisable. |
| (16) | These RSAs vested as to one-third on March 4, 2022. Due to Mr. Cywinski’s termination in January 2023, he is not entitled to vest in the remaining two thirds. |
| (17) | These NQSOs were scheduled to become exercisable as to one-third on March 4, 2023, March 4, 2024, and March 4, 2025. Due to Mr. Cywinski’s termination in January 2023, these NQSOs did not become exercisable. |
| | | | | | 41 |
| 2023 PROXY STATEMENT | COMPENSATION TABLES |
| (18) | Outstanding Equity Awards at 2019 FiscalYear-End
The following table provides summary information regarding the outstanding equity awards for the Corporation’s NEOs at December 31, 2019.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Option Awards | | Stock Awards | | | | | | | | | | | | | | | Number of Securities Underlying
Unexercised Options | | Option
Exercise
Price ($) | | Option
Expiration Date | | Number of
Shares or
Units of Stock
That Have
Not Vested (#) | | Market Value
of Shares or
Units of Stock
That Have
Not Vested ($)(1) | | Equity
Incentive
Plan
Awards:
Number
of
Unearned
Shares,
Units or
Other
Rights
That
Have Not
Vested (#) | | Equity
Incentive
Plan
Awards:
Market
or Payout
Value of
Unearned
Shares,
Units or
Other
Rights
That
Have Not
Vested ($)(1) | | | Name | | Exercisable (#) | | Unexercisable (#) | Stephen P. Joyce | | | | — | | | | | 350,000(2) | | | | | 40.58 | | | | | 9/12/2027 | | | | | 82,676 | (3) | | | | 6,905,125 | | | | | — | | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | | | 192,911 | (4) | | | | 16,111,958 | | | | | — | | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2,252 | (5) | | | | 188,127 | | | | | — | | | | | — | | | | Thomas H. Song | | | | 4,645 | | | | | 9,290(6) | | | | | 76.04 | | | | | 6/15/2028 | | | | | 2,604 | (7) | | | | 217,486 | | | | | — | | | | | — | | | | | | | | | | | | | 10,853(8) | | | | | 98.97 | | | | | 2/25/2029 | | | | | 10,521 | (9) | | | | 878,714 | | | | | — | | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2,335 | (10) | | | | 195,019 | | | | | — | | | | | — | | | | John C. Cywinski | | | | 39,250 | | | | | 19,625(11) | | | | | 54.82 | | | | | 3/15/2027 | | | | | 4,816 | (12) | | | | 402,232 | | | | | — | | | | | — | | | | | | | | 7,944 | | | | | 15,888(13) | | | | | 68.80 | | | | | 2/22/2028 | | | | | 13,682 | (14) | | | | 1,142,721 | | | | | — | | | | | — | | | | | | | | — | | | | | 13,566(15) | | | | | 98.97 | | | | | 2/25/2029 | | | | | 3,958 | (16) | | | | 330,572 | | | | | — | | | | | — | | | | | | | | — | | | | | — | | | | | — | | | | | — | | | | | 2,918 | (17) | | | | 243,711 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 11,811 | (18) | | | | 986,434 | | | | | 17,716 | (19) | | | | 1,479,651 | | | | Jay D. Johns | | | | 3,184 | | | | | — | | | | | 113.72 | | | | | 2/24/2025 | | | | | 2,006 | (20) | | | | 167,541 | | | | | — | | | | | — | | | | | | | | 7,528 | | | | | — | | | | | 90.90 | | | | | 2/26/2026 | | | | | 1,200 | (21) | | | | 100,224 | | | | | — | | | | | — | | | | | | | | — | | | | | 8,526(22) | | | | | 53.49 | | | | | 3/3/2027 | | | | | 1,084 | (23) | | | | 90,536 | | | | | — | | | | | — | | | | | | | | — | | | | | 4,814(24) | | | | | 68.80 | | | | | 2/22/2028 | | | | | 10,556 | (25) | | | | 881,637 | | | | | — | | | | | — | | | | | | | | — | | | | | 5,039(26) | | | | | 98.97 | | | | | 2/25/2029 | | | | | — | | | | | — | | | | | — | | | | | — | | | | Bryan R. Adel | | | | 4,723 | | | | | — | | | | | 72.28 | | | | | 2/26/2023 | | | | | 2,777 | (27) | | | | 231,935 | | | | | — | | | | | — | | | | | | | | 6,607 | | | | | — | | | | | 81.57 | | | | | 2/25/2024 | | | | | 2,639 | (28) | | | | 220,409 | | | | | — | | | | | — | | | | | | | | 5,210 | | | | | — | | | | | 113.72 | | | | | 2/24/2025 | | | | | 2,001 | (29) | | | | 167,124 | | | | | — | | | | | — | | | | | | | | 11,292 | | | | | — | | | | | 90.90 | | | | | 2/26/2026 | | | | | — | | | | | — | | | | | — | | | | | — | | | | | | | | — | | | | | 11,805(30) | | | | | 53.49 | | | | | 3/3/2027 | | | | | — | | | | | — | | | | | — | | | | | — | | | | | | | | 5,296 | | | | | 10,592(31) | | | | | 68.80 | | | | | 2/22/2028 | | | | | — | | | | | — | | | | | — | | | | | — | | | | | | | | | | | | | 9,303(32) | | | | | 98.87 | | | | | 2/25/2029 | | | | | — | | | | | — | | | | | — | | | | | — | | | |
(1) | Per share value of stock awards is $83.52 based on the closing price of the Common Stock on the NYSE on December 31, 2019.
|
(2) | These NQSOs were granted subject to both performance-based and service-based vesting conditions. As noted in the CD&A, the performance-based vesting conditions associated with these NQSOs were satisfied as of December 31, 2019, although these NQSOs remain subject to service-based vesting conditions and will become exercisable on February 1, 2021 subject to Mr. Joyce’s continued employment with the Corporation through such date. See “Compensation Discussion Related to the Chief Executive Officer” in this proxy statement for additional information regarding these performance-contingent NQSOs.
|
(3) | These RSUs will vest on February 1, 2021 subject to Mr. Joyce’s continued employment with the Corporation through such date.
|
(4) | These RSUs will vest in full on February 1, 2021 subject to Mr. Joyce’s continued employment with the Corporation through such date. See Compensation Discussion Related to the Chief Executive Officer in this proxy statement for additional information regarding Mr. Joyce’s performance-contingent RSUs.
|
(5) | Represents RSUs granted to Mr. Joyce on March 3, 2017 in connection with Mr. Joyce’s service as a member of the Board of Directors. These RSUs vested in full on March 3, 2020.
|
(6) | These NQSOs became exercisable as toone-third on June 15, 2019 and will become exercisable as toone-third on each of June 15, 2020 and 2021.
|
| | | | | 41 |
| 2020 PROXY STATEMENT
| COMPENSATION TABLES
|
(7) | These RSAs will vest in full on June 15, 2021.
|
(8) | These NQSOs became exercisable as toone-third on February 25, 2020 and will become exercisable as toone-third on each of February 25, 2021 and 2022.
|
(9) | These RSAs vested as to 20% on June 15, 2019 and will vest as to 40% on June 15, 2020 and 20% on each of June 15, 2021 and 2022.
|
(10) | These RSAs will vest in full on February 25, 2022.
|
(11) | These NQSOs became exercisable on March 15, 2020.
|
(12) | These RSAs vested in full on March 15, 2020.
|
(13) | These NQSOs became exercisable as toone-half on February 22, 2020 and will become exercisable as toone-half on February 22, 2021.
|
(14) | These RSAs vested as toone-half on March 15, 2020 and will vest as toone-half on March 15, 2021.
|
(15) | These NQSOs became exercisable as toone-third on February 25, 2020 and will become exercisable as toone-third on each February 25, 2021 and 2022.
|
(16) | These RSAs will vest in full on February 22, 2021.
|
(17) | These RSAs will vest in full on February 25, 2022.
|
(18) | These RSUs will vest on March 1, 2022 subject to Mr. Cywinski’s continued employment with the Corporation through such date.
|
(19) | These RSUs will vest on March 1, 2022 subject to Mr. Cywinski’s continued employment with the Corporation through such date and in an amount to be determined based upon the achievement of certain stock price performance targets.
|
(20) | These RSAs vested in full on March 3, 2020.
|
(21) | These RSAs will vest in full on February 22, 2021.
|
(22) | These NQSOs became exercisable on March 3, 2020.
|
(23) | These RSAs will vest in full on February 25, 2022.
|
(24) | These NQSOs became exercisable as toone-third on each of February 22, 2019 and 2020 and will become exercisable as toone-third on February 22, 2021.
|
(25) | These RSAs will vest in full on June 15, 2022.
|
(26) | These NQSOs became exercisable as toone-third on February 25, 2020 and will become exercisable as toone-third on each February 25, 2021 and 2022.
|
(27) | These RSAs vested in full on March 3, 2020.
|
(28) | These RSAs will vest in full on February 22, 2021.
|
(29) | These RSAs will vest in full on February 25, 2022.
|
(30) | These NQSOs became exercisable on March 3, 2020.
|
(31) | These NQSOs became exercisable as toone-third on each of February 22, 2019 and 2020 and will become exercisable as toone-third on February 22, 2021.
|
(32) | These NQSOs became exercisable as toone-third on February 25, 2020 and will become exercisable as toone-third on each February 25, 2021 and 2022.
|
| | | 42 | | |
| 2020 PROXY STATEMENT
| COMPENSATION TABLES These RSAs were scheduled to as to one-third on March 4, 2023, March 4, 2024 and March 4, 2025. Due to Mr. Cywinski’s termination in January 2023, he is not entitled to vest in these RSAs.
|
| (19) | 2019 Option ExercisesThese performance-based RSUs were scheduled to vest on March 4, 2025 in an amount to be determined based upon the achievement of certain stock price performance targets. Due to Mr. Cywinski’s termination in January 2023, he is not entitled to vest in these RSUs.
|
| (20) | These RSAs were scheduled to vest on March 4, 2025. Due to Mr. Cywinski’s termination in January 2023, he is not entitled to vest in these RSAs. |
| (21) | These NQSOs became exercisable as to one-third on each of February 26, 2021, February 26, 2022, and Stock VestedFebruary 26, 2023 |
| (22) | The following table provides informationThese RSAs vested on stock option exercisesFebruary 26, 2023.
|
| (23) | These RSAs vested as to one-third on each of December 15, 2021 and vestingDecember 15, 2022 and will vest as to one-third on December 15, 2023. |
| (24) | These RSAs vested as to one-third on each of stock awards by the NEOs during the fiscal year ended December 31, 2019.March 4, 2022 and March 4, 2023 and will vest as to one-third on March 4, 2024. |
| | | | | | | | | | | | | | | | | | | | | | | | Option Awards | | Stock Awards | | | | | | Name | | Number of
Shares Acquired
on Exercise
(#) | | Value
Realized on
Exercise
($)(1) | | Number of
Shares Acquired
on Vesting
(#)(2) | | Value
Realized on
Vesting
($)(3) | | | | | | Stephen P. Joyce. | | | | — | | | | | — | | | | | 1,355 | | | | | 131,692(4) | | | | | | | Thomas H. Song | | | | — | | | | | — | | | | | 2,630 | | | | | 254,558(5) | | | | | | | John C. Cywinski | | | | — | | | | | — | | | | | 6,841 | | | | | 595,030(6) | | | | | | | Jay D. Johns | | | | 15,182 | | | | | 522,774 | (7) | | | | 1,090 | | | | | 105,937(8) | | | | | | | Bryan R. Adel | | | | 30,602 | | | | | 1,328,518 | (9) | | | | 1,634 | | | | | 158,808(10) | |
| (25) | These RSAs vested as to one-third on May 17, 2022 and will vest as to on-third on each of May 17, 2023 and May 17, 2024. |
2022 Option Exercises and Stock Vested The following table provides information on stock option exercises and vesting of stock awards by the NEOs during the fiscal year ended December 31, 2022. | | | | | | | | | | | | | | | | | | | | | | | | Option Awards | | Stock Awards | | | | | | Name | | Number of
Shares Acquired
on Exercise
(#) | | Value
Realized on
Exercise
($)(1) | | Number of
Shares Acquired
on Vesting
(#)(2) | | Value
Realized on
Vesting
($)(3) | | | | | | John W. Peyton | | | | — | | | | | — | | | | | 31,713 | | | | | 2,462,007 | | | | | | | Vance Y. Chang | | | | — | | | | | — | | | | | 2,925 | | | | | 201,942 | | | | | | | John C. Cywinski | | | | — | | | | | — | | | | | 4,253 | | | | | 338,931 | | | | | | | Jay D. Johns | | | | — | | | | | — | | | | | 12,841 | | | | | 898,406 | | | | | | | Christine Son | | | | — | | | | | — | | | | | 3,753 | | | | | 282,376 | |
| (1) | Represents the difference between the market value of the stock on the exercise date and the exercise price times the number of NQSOs exercised. |
| (2) | Represents the lapsing of restrictions on and the release or issuance, as applicable, of RSAs and RSUs granted to the NEO. |
| (3) | Represents the product of the number of shares vested and the closing price of the Corporation’s Common Stock on the NYSE on the vesting date. |
(4) | Value realized is based on a closing price of $97.19 per share on the February 26, 2019 vesting date.
|
(5) | Value realized is based on a closing price of $96.79 per share on the June 15, 2019 vesting date.
|
(6) | Value realized is based on a closing price of $86.98 per share on the March 15, 2019 vesting date.
|
(7) | NQSO value realized on is based on the following transactions: 472 options exercised on February 27, 2019 at $72.28 and sold at a price of $96.59; 3,776 options exercised on February 27, 2019 at $81.57 and sold at a price of $96.65; 8,526 options exercised on February 27, 2019 at $81.57 and sold at a price of $96.74; and 2,408 options exercised on March 4, 2019 at $53.49 and sold at a price of $98.89.
|
(8) | Value realized is based on a closing price of $97.19 per share on the February 26, 2019 vesting date.
|
(9) | NQSO value realized on is based on the following transactions: 6,990 options exercised on February 21, 2019 at $52.37 and sold at a price of $99.50; 11,806 options exercised on February 28, 2019 at $53.49 and sold at a price of $97.20; 6,000 options exercised on July 5, 2019 at $53.49 and sold at a price of $103.50; and 5,806 options exercised on December 12, 2019 at $53.49 and sold at a price of $85.00.
|
(10) | Value realized is based on a closing price of $97.19 per share on the February 26, 2019 vesting date.
|
2019 Nonqualified Deferred Compensation
Pursuant to the Deferred Compensation Plan, certain highly compensated employees can elect to defer up to 80% of their base salary, 100% of annual cash incentive and 100% of long-term incentive plan distributions instead of receiving these amounts as payments taxable in the year of receipt.
Under the Deferred Compensation Plan, participants may designate select investment options approved by the Compensation Committee administering the Deferred Compensation Plan in which the deferred compensation payments are deemed to be invested. These investment options are not publicly traded and are only available through variable insurance products. Participants have no ownership interest in the investment options they select, as the investment options are used principally to measure gains or losses. Amounts are credited or debited to participant’s account balance in accordance with deferral elections made by the participant. There is no guaranteed investment return on any deferred payment amounts.
The unfunded, nonqualified plan structure of the Deferred Compensation Plan is required in order to preserve the beneficial tax deferral treatment for the participants. Amounts in a participant’s deferral account represent unsecured claims against the Corporation’s assets. Deferred amounts together with any credited investment returns are paid out to participants in accordance with their advance written election either in a lump sum or annual installment payments commencing on the
| | | | | 43 |
| 2020 PROXY STATEMENT
| COMPENSATION TABLES
|
applicable benefit distribution date selected by the participant. No NEOs participated in the Deferred Compensation Plan during 2019 or had account balances as of December 31, 2019.
Employment Agreements and Equity Awards
The employment agreements for Mr. Joyce, Mr. Song, and Mr. Cywinski and the employment offer letters and Amended and Restated Executive Severance and Change in Control Policy for Mr. Adel and Mr. Johns provide for severance benefits in the event of termination by the Corporation without “cause,” termination by the executive for “good reason” either prior to or following a “change in control,” termination upon a change in control only, termination due to death and termination due to disability.
The award agreements under our 2019 Stock Incentive Plan and 2016 Stock Incentive Plan provide for certain treatment of unvested equity awards upon a recipient’s termination of employment. Our RSA and RSU agreements generally provide for the forfeiture of the entire RSA or RSU award if the recipient does not remain continuously employed through the vesting period, except in the case of (i) disability or death, in which case the recipient shall fully vest in the RSAs or RSUs, or (ii) upon a change in control, in which case the recipient shall fully vest in the RSAs or RSUs subject to certain conditions including a qualifying termination. Our NQSO agreement generally provides that NQSOs may not be exercised after a recipient ceases to be employed or engaged by the Corporation except in the case of (i) death or disability, in which case, the recipient shall fully vest in the NQSOs and shall have 12 months from the date of termination to exercise such NQSOs; (ii) retirement, in which case, the recipient shall fully vest in the NQSOs and shall have five years from the date of retirement to exercise such NQSOs; and (iii) a qualifying termination upon a change in control, in which case, the recipient is eligible to receive, subject to certain conditions, the payment of a lump sum amount in cash equal to the product of the excessnumber of shares vested and the closing price of the fair market value ofCorporation’s Common Stock on the option overNYSE on the option exercise price and the number of unexercised option shares.vesting date.
Employment Agreement with Stephen P. Joyce
The employment agreement between the Corporation and Mr. Joyce provides that, in the event of termination by the Corporation without “cause” or by Mr. Joyce for “good reason” prior to a “change in control,” upon executing a release of claims in favor of the Corporation, Mr. Joyce will be entitled to the following benefits:
|
2022 Nonqualified Deferred Compensation Pursuant to the Deferred Compensation Plan, certain highly compensated employees can elect to defer up to 80% of their base salary, 100% of annual cash incentive payments and 100% of long-term incentive plan distributions instead of receiving these amounts as payments taxable in the year of receipt. Under the Deferred Compensation Plan, participants may designate select investment options, approved by the Compensation Committee, in which the deferred compensation payments are deemed to be invested. These investment options are not publicly traded and are only available through variable insurance products. Participants have no ownership interest in the investment option(s) they select, as the investment options are used principally to measure gains or losses. Amounts are credited or debited to a participant’s account balance in accordance with deferral elections made by the participant. There is no guaranteed investment return on any deferred payment amounts. | | | | 42 | | |
any accrued base salary through the date of termination;
| a lump sum payment equal to two times the sum of his annual base salary, plus the greater of (i) the average of his actual bonus attributable to the prior three years or such shorter time as he has been employed and (ii) Mr. Joyce’s target bonus for the then current fiscal year; 2023 PROXY STATEMENT
| the annual bonus payout for Mr. Joyce
COMPENSATION TABLES |
The unfunded, nonqualified plan structure of the Deferred Compensation Plan is required in order to preserve the beneficial tax deferral treatment for the participants. Amounts in a participant’s deferral account represent unsecured claims against the Corporation’s assets. Deferred amounts together with any credited investment returns are paid out to participants in accordance with their advance written election, either in a lump sum or in annual installment payments commencing on the applicable benefit distribution date selected by the participant. No NEOs participated in the Deferred Compensation Plan during 2022 or had account balances as of December 31, 2022. Employment Agreements and Equity Awards The employment agreements for Messrs. Peyton, Chang, and Johns and the employment offer letter and Amended and Restated Executive Severance and Change in Control Policy for Ms. Son provide for severance benefits in the event of termination by the Corporation without “cause,” termination by the executive for “good reason” either prior to or following a “change in control,” termination upon a change in control only, termination due to death, and termination due to disability. While employed with the Corporation, Mr. Cywinski was also subject to an employment agreement that provided for severance benefits upon certain qualifying terminations of employment. The award agreements under our 2019 Stock Incentive Plan provide for certain treatment of unvested equity awards upon a recipient’s termination of employment. Our RSA and RSU agreements generally provide that an executive shall no longer be entitled to the entire RSA or RSU award if the recipient does not remain continuously employed through the vesting period, except in the case of (i) disability or death, in which case the recipient shall fully vest in the RSAs or RSUs, or (ii) upon a change in control, in which case the recipient shall fully vest in the RSAs or RSUs subject to certain conditions including a qualifying termination. Our NQSO agreement generally provides that NQSOs may not be exercised after a recipient ceases to be employed or engaged by the Corporation except in the case of (i) death or disability, in which case, the recipient shall fully vest in the NQSOs and shall have 12 months from the date of termination to exercise such NQSOs; (ii) retirement, in which case, the recipient shall fully vest in the NQSOs and shall have five years from the date of retirement to exercise such NQSOs; and (iii) a qualifying termination upon a change in control, in which case, the recipient is eligible to receive, subject to certain conditions, the payment of a lump sum amount in cash equal to the product of the excess of the fair market value of the option over the option exercise price and the number of unexercised option shares. Employment Agreement with John W. Peyton The employment agreement between the Corporation and Mr. Peyton provides that, in the event of termination by the Corporation without “cause” or by Mr. Peyton for “good reason” prior to a “change in control,” upon executing a release of claims in favor of the Corporation, Mr. Peyton would be entitled to the following benefits: any accrued base salary through the date of termination and any bonus for the prior fiscal year not yet paid; a lump sum payment equal to two times the sum of his annual base salary, plus the greater of (i) the average of his actual bonus attributable to the prior three years or such shorter time as he has been employed and (ii) Mr. Peyton’s target bonus for the then-current fiscal year; the annual bonus payout for Mr. Peyton for the year of termination based on actual performance, prorated for the length of service during such year; continued insurance coverage for a maximum of 18 months; full vesting of all make-good RSU and make-good options granted to Mr. Peyton under his employment agreement in connection with the commencement of his employment with the Corporation; the right to exercise any vested stock options or SARs for up to 24 months; | • | | up to $10,000 in outplacement assistance;accelerated vesting of time-based equity awards (other than the make-good equity awards) that would have vested during the 24-month period following such termination; and
|
vesting of performance-based equity awards based on the portion of the period elapsed prior to the date of termination plus up to 24 months, with each such award to be paid at the time such award would have been paid to Mr. Peyton had he remained employed with the Corporation, based on actual performance during such period. | | | | | | 43 |
full vesting of all time-based RSUs granted to Mr. Joyce under his employment agreement; and
| vesting of performance-based RSUs and performance-based options granted under his employment agreement as to the portion of such equity awards for which performance criteria have been satisfied as if Mr. Joyce remained employed through the end of the term of his employment agreement.
The employment agreement with Mr. Joyce also provides that, in the event of termination by the Corporation without “cause” or by Mr. Joyce for “good reason” within 24 months following a “change in control,” upon executing a release of claims in favor of the Corporation, Mr. Joyce will be entitled to the following benefits: 2023 PROXY STATEMENT
| a lump sum payment equal to three times the sum of his base salary, plus the greater of (i) the average of his actual bonus attributable to the prior three years or such shorter time as he has been employed and (ii) Mr. Joyce’s target bonus for the then current
COMPENSATION TABLES |
The employment agreement with Mr. Peyton also provides that, in the event of termination by the Corporation without “cause” or by Mr. Peyton for “good reason” within 24 months following a “change in control,” upon executing a release of claims in favor of the Corporation, Mr. Peyton will be entitled to the following benefits: a lump sum payment equal to three times the sum of his base salary, plus the greater of (i) the average of his actual bonus attributable to the prior three years or such shorter time as he has been employed and (ii) Mr. Peyton’s target bonus for the then-current fiscal year; continued insurance coverage for a maximum of 18 months; full vesting of all time-based equity awards, including Mr. Peyton’s make-good RSUs and make-good options; and | | | 44 | | |
| 2020 PROXY STATEMENT
| COMPENSATION TABLES
|
full vesting of all time-based RSUs, performance- and time-based RSUs and performance- and time-based options granted to Mr. Joyce under his employment agreement.
Employment Agreement with Thomas H. Song
The employment agreement between the Corporation and Mr. Song provides that, in the event of termination by the Corporation without “cause” or by Mr. Song for “good reason” prior to a “change in control,” upon executing a release of claims in favor of the Corporation, Mr. Song
vesting of all performance-based equity awards and long-term cash-based compensation subject to performance-vesting criteria based on the Corporation’s actual performance through the date of such change in control. Employment Agreement with Vance Y. Chang The employment agreement between the Corporation and Mr. Chang provides that, in the event of termination by the Corporation without “cause” or by Mr. Chang for “good reason” prior to a “change in control,” upon executing a release of claims in favor of the Corporation, Mr. Chang will be entitled to the following benefits: any accrued base salary through the date of termination; a lump sum payment equal to the sum of his annual base salary, plus the average of his actual bonus attributable to the prior three years or such shorter time as he has been employed; continued insurance coverage for a maximum of 12 months; with respect to equity awards granted to Mr. Song in connection with the commencement of Mr. Song’s employment, full vesting of any unvested time- or service-based stock options, SARs, and other equity-based awards;
with respect to all other annual equity awards granted to Mr. Song, full vesting of any unvested time- or service-based stock options, SARs, and other equity-based awards that would have vested during the12-month period following the date of his termination;
pro rata vesting of any unvested equity-based or long-term cash-based awards subject to performance-based vesting conditions, other than as set forth above, that would have vested at the end of the performance period, based on actual performance during such performance period;
the right to exercise any vested stock options or SARs for up to 24 months; and
up to $10,000 in outplacement assistance.
The employment agreement with Mr. Song also provides that, in the event of termination by the Corporation without “cause” or by Mr. Song for “good reason” within 3 months prior to or 24 months following a “change in control,” upon executing a release of claims in favor of the Corporation, Mr. Song will be entitled to the following benefits:
a lump sum payment equal to two times the sum of his base salary, plus the average of his actual bonus attributable to the prior three years or such shorter time as he has been employed;
a lump sum payment equal to his prorated bonus for the year of termination based on actual performance through the date of termination;
continued insurance coverage for a maximum of 24 months;
full vesting of any unvested stock options, SARs, and other equity-based awards;
full vesting of any unvested equity-based or long-term cash-based awards subject to performance-based vesting conditions, based on actual performance; and
the right to exercise any vested stock options or SARs for up to 24 months.
Employment Agreement with John C. Cywinski
The employment agreement between the Corporation and Mr. Cywinski provides that, in the event of termination by the Corporation without “cause” or by Mr. Cywinski for “good reason” prior to a “change in control,” upon executing a release of claims in favor of the Corporation, Mr. Cywinski will be entitled to the following benefits:
any accrued base salary through the date of termination;
a lump sum payment equal to the sum of his annual base salary, plus the average of his actual bonus attributable to the prior three years or such shorter time as he has been employed;
| | |
| 2020 PROXY STATEMENT
| COMPENSATION TABLES
|
continued insurance coverage for a maximum of 12 months;
full vesting of any unvested time- or service-based stock options, SARs, and other equity-based awards that would have vested during the12-month period following the date of his termination; |
| • | | pro rata vesting of any unvested equity-based or long-term cash-based awards subject to performance-based vesting conditions that would have vested at the end of the performance period, based on actual performance during such performance period; the right to exercise any vested stock options or SARs for up to 24 months; and
up to $10,000 in outplacement assistance.
The employment agreement with Mr. Cywinski also provides that, in the event of termination by the Corporation without “cause” or by Mr. Cywinski for “good reason” within 24 months following a “change in control,” upon executing a release of claims in favor of the Corporation, Mr. Cywinski
|
the right to exercise any vested stock options or SARs for up to 12 months. The employment agreement with Mr. Chang also provides that, in the event of termination by the Corporation without “cause” or by Mr. Chang for “good reason” within three months prior to or 24 months following a “change in control,” upon executing a release of claims in favor of the Corporation, Mr. Chang will be entitled to the following benefits: a lump sum payment equal to two times the sum of his base salary, plus the average of his actual bonus attributable to the prior three years or such shorter time as he has been employed; a lump sum payment equal to his prorated bonus for the year of termination based on actual performance through the date of termination; continued insurance coverage for a maximum of 24 months; full vesting of any unvested stock options, SARs, and other equity-based awards; full vesting of any unvested equity-based or long-term cash-based awards subject to performance-based vesting conditions, based on actual performance through the date of the change in control; and the right to exercise any vested stock options or SARs for up to 24 months. | | | | 44 | | |
| 2023 PROXY STATEMENT | COMPENSATION TABLES |
Employment Agreement with Jay D. Johns The employment agreement between the Corporation and Mr. Johns entered into on March 9, 2022 provides that, in the event of termination by the Corporation without “cause” or by Mr. Johns for “good reason” prior to a “change in control,” upon executing a release of claims in favor of the Corporation, Mr. Johns will be entitled to the following benefits: any accrued base salary through the date of termination; a lump sum payment equal to the sum of his annual base salary, plus 100% of his target bonus for the period during which the termination of employment occurs; | • | | full vesting of any unvested time- or service-based stock options, SARs, and other equity-based awards that would have vested during the 12-month period following the date of his termination; |
| • | | pro rata vesting of any unvested equity-based or long-term cash-based awards subject to performance-based vesting conditions that would have vested at the end of the performance period, based on actual performance;performance during such performance period; and the right to exercise any vested stock options or SARs for up to 24 months.
Amended and Restated Executive Severance and Change in Control Policy
Pursuant to the terms of the employment offer letters for Mr. Adel and Mr. Johns and the Amended and Restated Executive Severance and Change in Control Policy, if the executive’s employment is involuntarily terminated by the Corporation without “cause” prior to a “change in control,” upon executing a release of claims in favor of the Corporation, the executive will be entitled to the following benefits:
an amount equal to 12 months’ base salary, plus pro rata bonus; and
up to $5,000 in outplacement assistance.
The Amended and Restated Executive Severance and Change in Control Policy also provides that in the event the executive’s employment is involuntarily terminated by the Corporation without “cause” within 24 months following a “change in control” or the executive’s employment is voluntarily terminated for “good reason” within 24 months following a “change in control,” upon executing a release of claims in favor of the Corporation, the executive will be entitled to the following benefits:
an amount equal to 24 months’ base salary, plus the greater of (i) the target bonus for the year in which the termination occurs and (ii) the average of the executive’s actual bonus attributable to the prior three years;
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the right to exercise any vested stock options or SARs for up to 24 months. The employment agreement with Mr. Johns also provides that, in the event of termination by the Corporation without “cause” or by Mr. Johns for “good reason” within 24 months following a “change in control,” upon executing a release of claims in favor of the Corporation, Mr. Johns will be entitled to the following benefits: a lump sum payment equal to two times the sum of his base salary, plus 200% of his target bonus for the period during which the termination of employment occurs; a lump sum payment equal to his prorated target bonus for the year of termination; continued insurance coverage for a maximum of 18 months; full vesting of any unvested stock options, SARs, and other equity-based awards; full vesting of any unvested equity-based or long-term cash-based awards subject to performance-based vesting conditions, based on actual performance through the date of the change in control; and the right to exercise any vested stock options or SARs for up to 24 months. Employment Agreement with John C. Cywinski The employment agreement between the Corporation and Mr. Cywinski was terminated in connection with his resignation on January 6, 2023. Prior to such termination, the employment agreement provided for severance benefits consistent with the benefits described above for Mr. Johns. Mr. Cywinski did not receive any severance in connection with his resignation from the Company and, accordingly, is excluded from the tables below. Amended and Restated Executive Severance and Change in Control Policy As of December 31, 2022, pursuant to the terms of the employment offer letter for Ms. Son and the Amended and Restated Executive Severance and Change in Control Policy, if Ms. Son’s employment is involuntarily terminated by the Corporation without “cause” prior to a “change in control,” upon executing a release of claims in favor of the Corporation, Ms. Son will be entitled to the following benefits: an amount equal to 12 months’ base salary, plus 100% of the target bonus for the performance period in which the termination occurs; | • | | full vesting of any unvested time- or service-based stock options, restricted stock,SARs, and other equity-based awards that would have vested during the 12-month period following the date of termination; |
| • | | pro rata vesting of any unvested equity awardsequity-based or grants, and unvested long-term cash-based awards subject to performance-based vesting conditions that would have vested at the end of the performance period, based on actual performance;performance during such performance period; and |
the right to exercise any vested stock options or SARs for up to 24 months. | | | | | | 45 |
up to $5,000 in outplacement assistance; and
| continued insurance coverage for a maximum of 24 months. 2023 PROXY STATEMENT
| COMPENSATION TABLES |
The Amended and Restated Executive Severance and Change in Control Policy also provides that in the event an executive’s employment is involuntarily terminated by the Corporation without “cause” within 24 months following a “change in control” or an executive’s employment is voluntarily terminated for “good reason” within 24 months following a “change in control,” upon executing a release of claims in favor of the Corporation, the executive will be entitled to the following benefits: an amount equal to 24 months’ base salary, plus 200% of the annual target bonus for the performance period in which the termination occurs; | | | 46 | | |
| 2020 PROXY STATEMENT
continued insurance coverage for a maximum of 18 months; full vesting of any unvested stock options, SARs, and other equity-based awards; full vesting of any unvested equity-based or long-term cash-based awards subject to performance-based vesting conditions, based on actual performance through the date of the change in control; and the right to exercise any vested stock options or SARs for up to 24 months. Section 280G of the Code The employment agreements for Messrs. Peyton, Chang, and Johns as well as the Amended and Restated Executive Severance and Change in Control Policy applicable to Ms. Son provide that if any payment or benefit received by the executive would not be deductible by reason of Section 280G of the Code, then the payment or benefits will be reduced until no portion of such payment or benefits is not deductible by reason of Section 280G of the Code, provided that no such reduction will be made unless the net after-tax benefit received by the executive after such reduction would exceed the net after-tax benefit received by the executive if no such reduction was made. Potential Payments Upon Termination or Change in Control The information below describes and estimates certain compensation that would become payable under existing plans and arrangements assuming the NEO’s employment had terminated or a “change in control” had occurred on December 31, 2022, based on the Corporation’s closing stock price on December 31, 2022. These benefits are in addition to benefits available generally to salaried employees. Mr. Cywinski did not receive any amounts in connection with his separation from the Corporation and is excluded from the tables below. Due to the number of factors that affect the nature and amount of any benefits provided upon the events discussed below, any actual amounts paid or distributed may be different. Factors that could affect these amounts include the timing during the year of any such event and the Corporation’s stock price. In addition, as of December 31, 2022, the employment agreements for Messrs. Peyton, Chang, and Johns as well as the Amended and Restated Executive Severance and Change in Control Policy applicable to Ms. Son provide that if the payments and benefits to an NEO under his or her respective employment agreement or policy or another plan, arrangement or agreement would subject the NEO to the excise tax imposed by Section 4999 of the Internal Revenue Code, then such payments will be reduced by the minimum amount necessary to avoid such excise tax, if such reduction would result in the NEO receiving a higher net after-tax amount. The amounts reflected in this table do not reflect the application of any reduction in compensation or benefits pursuant to the terms of the applicable employment agreement or policy. There can be no assurance that a termination or “change in control” would produce the same or similar results as those described if occurring on another date or at another price, or if any assumption used to prepare this information is not correct in fact. Please see “Employment Agreements and Change in Control Provisions” in the Compensation Discussion and Analysis section of this proxy statement for additional information. | | | | 46 | | |
Section 280G of the Code
The employment agreements for Mr. Joyce, Mr. Song, and Mr. Cywinski as well as the Amended and Restated Executive Severance and Change in Control Policy applicable to Mr. Adel and Mr. Johns provide that if any payment or benefit received by the executive would not be deductible by reason of Section 280G of the Code, then the payment or benefits will be reduced until no portion of such payment or benefits is not deductible by reason of Section 280G of the Code, provided, that no such reduction will be made unless the netafter-tax benefit received by the executive after such reduction would exceed the netafter-tax benefit received by the executive if no such reduction was made.
Potential Payments Upon Termination or Change in Control
The information below describes and estimates certain compensation that would become payable under existing plans and arrangements assuming the NEO’s employment had terminated or a “change in control” had occurred on December 31, 2019, based on the Corporation’s closing stock price on December 31, 2019. These benefits are in addition to benefits available generally to salaried employees.
Due to the number of factors that affect the nature and amount of any benefits provided upon the events discussed below, any actual amounts paid or distributed may be different. Factors that could affect these amounts include the timing during the year of any such event and the Corporation’s stock price. In addition, the employment agreements for Mr. Joyce, Mr. Song, and Mr. Cywinski as well as the Amended and Restated Executive Severance and Change in Control Policy applicable to Mr. Adel and Mr. Johns provide that if the payments and benefits to a Named Executive Officer under his or her respective employment agreement or policy or another plan, arrangement or agreement would subject the Named Executive Officer to the excise tax imposed by Section 4999 of the Internal Revenue Code, then such payments will be reduced by the minimum amount necessary to avoid such excise tax, if such reduction would result in the Named Executive Officer receiving a higher netafter-tax amount. The amounts reflected in this table do not reflect the application of any reduction in compensation or benefits pursuant to the terms of the applicable employment agreement or policy.
There can be no assurance that a termination or “change in control” would produce the same or similar results as those described if occurring on another date or at another price, or if any assumption used to prepare this information is not correct in fact. Please see “Employment Agreements and Change in Control Provisions” in the Compensation Discussion and Analysis section of this proxy statement for additional information.
The following table presents payments for involuntary termination by the Corporation for reasons other than “cause” or, in the case of Mr. Joyce, Mr. Song and Mr. Cywinski, voluntary termination by the participant for “good reason” prior to a “change in control.” 2023 PROXY STATEMENT
| | | | | | | | | | | | | | | | | | | | | | | | | | | Payments | | Joyce | | | Song | | | Johns | | | Cywinski | | | Adel | | | | | | | | Cash Severance | | $ | 4,600,000 | | | $ | 753,750 | | | $ | 525,000 | | | $ | 1,113,797 | | | $ | 500,000 | | | | | | | | Pro-Rata Bonus Payment | | $ | 455,948 | | | $ | 0 | | | $ | 264,500 | | | $ | 0 | | | $ | 272,982 | | | | | | | | Time-Vested NQSO Spread Value | | | 0 | | | $ | 34,745 | | | $ | 0 | | | $ | 680,173 | | | $ | 0 | | | | | | | | Time-Vested RSA and RSU Value | | $ | 6,682,520 | | | $ | 878,714 | | | $ | 881,637 | | | $ | 973,593 | | | $ | 0 | | | | | | | | Cash LTIP Value | | | 0 | | | $ | 504,227 | | | $ | 0 | | | $ | 667,783 | | | $ | 0 | | | | | | | | Performance- and Time-Vested NQSO Spread Value | | $ | 15,029,000 | | | $ | 0 | | | $ | 0 | | | $ | 0 | | | $ | 0 | | | | | | | | Performance- and Time-Vested RSU Value | | $ | 15,592,548 | | | $ | 0 | | | $ | 0 | | | $ | 970,210 | | | $ | 0 | | | | | | | | Welfare Benefit Value | | $ | 24,175 | | | $ | 15,842 | | | $ | 0 | | | $ | 15,482 | | | $ | 0 | | | | | | | | Outplacement | | $ | 10,000 | �� | | $ | 10,000 | | | $ | 5,000 | | | $ | 10,000 | | | $ | 5,000 | | | | | | | | Aggregate Payments | | $ | 42,394,191 | | | $ | 2,197,278 | | | $ | 1,676,137 | | | $ | 4,431,037 | | | $ | 777,982 | |
| | | | | 47 |
| 2020 PROXY STATEMENT
| COMPENSATION TABLES
|
COMPENSATION TABLES |
The following table presents payments for involuntary termination by the Corporation for reasons other than “cause” or, in the case of Mr. Joyce, Mr. Song and Mr. Cywinski, voluntary termination by the participant for “good reason” following table presents payments for involuntary termination by the Corporation for reasons other than “cause” or, in the case of Mr. Peyton, Mr. Chang and Mr. Cywinski, voluntary termination by the participant for “good reason” not in connection with a “change in control”(“CIC”). | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Peyton | | | Cywinski | | | Johns | | | Son | | | Chang | | | | | | | | Cash Severance | | $ | 9,000,000 | | | $ | 2,850,000 | | | $ | 2,850,000 | | | $ | 1,497,600 | | | $ | 2,520,000 | | | | | | | | Pro-Rata Bonus Payment | | $ | 937,500 | | | $ | 801,563 | | | $ | 447,188 | | | $ | 263,250 | | | $ | 358,594 | | | | | | | | Time-Vested NQSO Spread Value | | $ | 136,375 | | | $ | 0 | | | $ | 0 | | | $ | 0 | | | $ | 0 | | | | | | | | Time-Vested RSA and RSU | | $ | 3,679,016 | | | $ | 1,799,691 | | | $ | 799,554 | | | $ | 650,457 | | | $ | 796,647 | | | | | | | | Cash LTIP Value | | $ | 2,436,977 | | | $ | 637,614 | | | $ | 603,185 | | | $ | 161,329 | | | $ | 382,568 | | | | | | | | Performance- and Time-Vested RSU Value | | $ | 1,785,074 | | | $ | 2,519,585 | | | $ | 470,970 | | | $ | 259,083 | | | $ | 282,582 | | | | | | | | Welfare Benefit Value | | $ | 29,337 | | | $ | 27,869 | | | $ | 21,154 | | | $ | 26,634 | | | $ | 38,313 | | | | | | | | Outplacement | | $ | 10,000 | | | $ | 10,000 | | | $ | 5,000 | | | $ | 5,000 | | | $ | 10,000 | | | | | | | | Severance Reduction (if applicable) | | $ | 0 | | | $ | 0 | | | $ | 887,056 | | | $ | 300,113 | | | $ | 0 | | | | | | | | Total | | $ | 18,014,278 | | | $ | 8,646,322 | | | $ | 4,309,995 | | | $ | 2,563,240 | | | $ | 4,388,704 | |
The following table presents payments for involuntary termination by the Corporation for reasons other than “cause” or, in the case of Mr. Peyton, Mr. Chang and Mr. Cywinski, voluntary termination by the participant for “good reason” in connection with a CIC. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Peyton | | | Cywinski | | | Johns | | | Son | | | Chang | | | | | | | | Cash Severance | | $ | 6,000,000 | | | $ | 1,342,058 | | | $ | 1,226,917 | | | $ | 716,097 | | | $ | 1,260,000 | | | | | | | | Pro-Rata Bonus Payment | | $ | 937,500 | | | $ | 0 | | | $ | 0 | | | $ | 0 | | | $ | 0 | | | | | | | | Time-Vested NQSO Spread Value | | $ | 136,375 | | | $ | 0 | | | $ | 0 | | | $ | 0 | | | $ | 0 | | | | | | | | Time-Vested RSA and RSU | | $ | 3,248,780 | | | $ | 484,435 | | | $ | 414,732 | | | $ | 361,889 | | | $ | 281,204 | | | | | | | | Cash LTIP Value | | $ | 2,436,977 | | | $ | 327,301 | | | $ | 304,348 | | | $ | 53,776 | | | $ | 196,381 | | | | | | | | Performance- and Time-Vested RSU Value | | $ | 0 | | | $ | 819,446 | | | $ | 0 | | | $ | 0 | | | $ | 0 | | | | | | | | Welfare Benefit Value | | $ | 29,337 | | | $ | 18,579 | | | $ | 14,103 | | | $ | 17,756 | | | $ | 19,156 | | | | | | | | Outplacement | | $ | 10,000 | | | $ | 10,000 | | | $ | 5,000 | | | $ | 5,000 | | | $ | 10,000 | | | | | | | | Total | | $ | 12,798,969 | | | $ | 3,001,819 | | | $ | 1,965,100 | | | $ | 1,154,518 | | | $ | 1,766,741 | |
The following table presents payments for retirement. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Peyton | | | Cywinski | | | Johns | | | Son | | | Chang | | | | | | | | Time Vested NQSO Spread Value | | $ | 0 | | | $ | 0 | | | $ | 0 | | | $ | 0 | | | $ | 0 | | | | | | | | Time Vested RSA and RSU Value | | $ | 0 | | | $ | 0 | | | $ | 0 | | | $ | 0 | | | $ | 0 | | | | | | | | Cash LTIP Value | | $ | 0 | | | $ | 0 | | | $ | 304,348 | | | $ | 0 | | | $ | 0 | | | | | | | | Performance and Time-Vested RSU Value | | $ | 0 | | | $ | 0 | | | $ | 0 | | | $ | 0 | | | $ | 0 | | | | | | | | Total | | $ | 0 | | | $ | 0 | | | $ | 304,348 | | | $ | 0 | | | $ | 0 | |
| | | | | | 47 |
| 2023 PROXY STATEMENT | | | | | | | | | | | | | | | | | | | | | | | | | | | Payments | | Joyce | | | Song | | | Johns | | | Cywinski | | | Adel | | | | | | | | Cash Severance | | $ | 6,900,000 | | | $ | 1,785,000 | | | $ | 1,443,750 | | | $ | 2,227,593 | | | $ | 1,350,000 | | | | | | | | Pro-Rata Bonus Payment | | $ | 455,948 | | | $ | 298,330 | | | $ | 264,500 | | | $ | 312,988 | | | $ | 272,982 | | | | | | | | Time-Vested NQSO Spread Value due to CIC | | $ | 0 | | | $ | 69,489 | | | $ | 326,898 | | | $ | 797,109 | | | $ | 510,418 | | | | | | | | Time-Vested RSA and RSU Value due to CIC | | $ | 6,864,582 | | | $ | 1,291,219 | | | $ | 1,239,938 | | | $ | 2,119,236 | | | $ | 619,468 | | | | | | | | Cash LTIP Value due to CIC | | $ | 0 | | | $ | 800,710 | | | $ | 373,271 | | | $ | 1,015,545 | | | $ | 679,223 | | | | | | | | Performance- and Time-Vested NQSO Spread value due to CIC | | $ | 15,029,000 | | | $ | 0 | | | $ | 0 | | | $ | 0 | | | $ | 0 | | | | | | | | Performance-and Time-Vested RSU Value due to CIC | | $ | 15,592,548 | | | $ | 0 | | | $ | 0 | | | $ | 2,425,525 | | | $ | 0 | | | | | | | | Welfare Benefit Value | | $ | 24,175 | | | $ | 31,683 | | | $ | 22,334 | | | $ | 30,963 | | | $ | 32,684 | | | | | | | | Outplacement | | $ | 10,000 | | | $ | 10,000 | | | $ | 5,000 | | | $ | 10,000 | | | $ | 5,000 | | | | | | | | Aggregate Payments | | $ | 44,876,253 | | | $ | 4,286,431 | | | $ | 3,675,691 | | | $ | 8,974,959 | | | $ | 3,469,775 | |
The following table presents payments upon a “change in control” only and no termination of employment.
| | | | | | | | | | | | | | | | | | | | | | | | | | | Payments | | Joyce | | | Song | | | Johns | | | Cywinski | | | Adel | | | | | | | | Time-Vested NQSO Spread Value due to CIC | | $ | 0 | | | $ | 69,489 | | | $ | 326,898 | | | $ | 797,109 | | | $ | 510,418 | | | | | | | | Time-Vested RSA and RSU Value due to CIC | | $ | 6,864,582 | | | $ | 1,291,219 | | | $ | 1,239,938 | | | $ | 2,119,236 | | | $ | 619,468 | | | | | | | | Cash LTIP Value due to CIC | | $ | 0 | | | $ | 800,710 | | | $ | 373,271 | | | $ | 1,051,545 | | | $ | 679,223 | | | | | | | | Performance-and Time-Vested NQSO Spread value due to CIC | | $ | 0 | | | $ | 0 | | | $ | 0 | | | $ | 0 | | | $ | 0 | | | | | | | | Performance- and Time-Vested RSU Value due to CIC | | $ | 0 | | | $ | 0 | | | $ | 0 | | | $ | 0 | | | $ | 0 | | | | | | | | Aggregate Payments | | $ | 6,864,582 | | | $ | 2,161,418 | | | | 1,940,107 | | | $ | 3,967,890 | | | $ | 1,809,109 | |
The following table presents payments upon termination of employment due to disability or death.
| | | | | | | | | | | | | | | | | | | | | | | | | | | Payments | | Joyce | | | Song | | | Johns | | | Cywinski | | | Adel | | | | | | | | Pro-Rata Bonus Payment | | $ | 455,948 | | | $ | 298,330 | | | $ | 264,500 | | | $ | 312,988 | | | $ | 272,982 | | | | | | | | Time-Vested NQSO Spread Value due to Death or Disability | | $ | 0 | | | $ | 69,489 | | | $ | 326,898 | | | $ | 797,109 | | | $ | 510,418 | | | | | | | | Time-Vested RSA and RSU Value due to Death or Disability | | $ | 6,864,582 | | | $ | 1,291,219 | | | $ | 1,239,938 | | | $ | 2,119,236 | | | $ | 619,468 | | | | | | | | Cash LTIP Value due to Death or Disability | | $ | 0 | | | $ | 503,270 | | | $ | 239,731 | | | $ | 667,783 | | | $ | 418,578 | | | | | | | | Performance- and Time-Vested NQSO Spread value due to Death or Disability | | $ | 15,029,000 | | | $ | 0 | | | $ | 0 | | | $ | 0 | | | $ | 0 | | | | | | | | Performance- and Time-Vested RSU Value due to Death or Disability | | $ | 15,592,548 | | | $ | 0 | | | $ | 0 | | | $ | 970,210 | | | $ | 0 | | | | | | | | Aggregate Payments | | $ | 37,942,078 | | | $ | 2,162,308 | | | $ | 2,071,067 | | | $ | 4,867,326 | | | $ | 1,821,446 | |
| | | 48 | | |
| 2020 PROXY STATEMENT
| COMPENSATION TABLES
|
CEO Pay Ratio COMPENSATION TABLES
As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, we are providing the following disclosure about the relationship of the annual total compensation of our employees to the annual total compensation of Stephen P. Joyce, our CEO. Consistent with the Compensation Committee’s approach to our executive compensation program, we set compensation using a market-based approach. Accordingly, we strive to create a competitive global compensation program in terms of both the position and the geographic location in which the employee is located. As a result, our compensation program varies amongst each local market in order to allow us to provide a competitive compensation package.
Ratio
For 2019,
The median of the annual total compensation of all of our employees, other than Mr. Joyce, was $16,466.
Mr. Joyce’s annual total compensation was $1,783,248. The total used for purposes of the CEO pay ratio differs from the amount reported in the Total column of the 2019
|
The following table presents payments upon a CIC only and no termination of employment. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Peyton | | | Cywinski | | | Johns | | | Son | | | Chang | | | | | | | | Time-Vested NQSO Spread Value | | $ | 0 | | | $ | 0 | | | $ | 0 | | | $ | 0 | | | $ | 0 | | | | | | | | Time-Vested RSA and RSU | | $ | 0 | | | $ | 0 | | | $ | 0 | | | $ | 0 | | | $ | 0 | | | | | | | | Cash LTIP Value | | $ | 0 | | | $ | 0 | | | $ | 0 | | | $ | 0 | | | $ | 0 | | | | | | | | Performance- and Time-Vested RSU Value | | $ | 0 | | | $ | 0 | | | $ | 0 | | | $ | 0 | | | $ | 0 | | | | | | | | Total | | $ | 0 | | | $ | 0 | | | $ | 0 | | | $ | 0 | | | $ | 0 | |
The NEOs have contractual entitlements to double trigger treatment with respect to cash severance and the vesting of outstanding equity and cash LTIP awards. In the event of a change-in-control where the acquiring entity does not assume outstanding awards, the Compensation Committee may exercise discretion to provide for the accelerated vesting of outstanding equity and cash LTIP awards. The following table presents payments upon termination of employment due to disability or death. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Peyton | | | Cywinski | | | Johns | | | Son | | | Chang | | | | | | | | Pro-Rata Bonus Payment | | $ | 937,500 | | | $ | 801,563 | | | $ | 447,188 | | | $ | 263,250 | | | $ | 358,594 | | | | | | | | Time Vested NQSO Spread Value | | $ | 136,375 | | | $ | 0 | | | $ | 0 | | | $ | 0 | | | $ | 0 | | | | | | | | Time Vested RSA and RSU Value | | $ | 3,679,016 | | | $ | 1,799,691 | | | $ | 799,554 | | | $ | 650,457 | | | $ | 796,647 | | | | | | | | Cash LTIP Value | | $ | 1,213,996 | | | $ | 327,301 | | | $ | 304,348 | | | $ | 53,776 | | | $ | 196,381 | | | | | | | | Performance and Time-Vested RSU Value | | $ | 0 | | | $ | 819,446 | | | $ | 0 | | | $ | 0 | | | $ | 0 | | | | | | | | Total | | $ | 5,966,888 | | | $ | 3,748,001 | | | $ | 1,551,090 | | | $ | 967,484 | | | $ | 1,351,622 | |
CEO Pay Ratio As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, we are providing the following disclosure about the relationship of the annual total compensation of our employees to the annual total compensation of John W. Peyton, our CEO. Consistent with the Compensation Committee’s approach to our executive compensation program, we set compensation using a market-based approach. Accordingly, we strive to create a competitive global compensation program in terms of both the position and the geographic location in which the employee is located. As a result, our compensation program varies amongst each local market in order to allow us to provide a competitive compensation package. Ratio For 2022, The median of the annual total compensation of all of our employees other than Mr. Peyton, was $158,934. Mr. Peyton’s annual total compensation was $4,520,578. The total used for purposes of the CEO pay ratio differs from the amount reported in the Total column of the 2022 Summary Compensation Table due to the inclusion of the company-paid portion of health insurance premiums, which are excluded for Summary Compensation Table purposes. | • | | Based on this information, the ratio of the annual total compensation of Mr. JoycePeyton to the median of the annual total compensation of all employees is estimated to be10828 to 1. |
| | | | 48 | | |
| The 2019 pay ratio calculation includes 2,987 restaurant employees that became our employees as a result of the December 2018 acquisition of 69 Applebee’s restaurants. For comparison to our 2018 pay ratio, if these employees had been excluded from the 2019 pay ratio calculation, the median
2023 PROXY STATEMENT | COMPENSATION TABLES |
Identification of Median Employee We used a median employee identification date of November 28, 2022 to calculate our CEO Pay Ratio. In prior years we used December 31 as our employee identification date. We made this change because of our acquisition of Fuzzy’s Taco Shop in December 2022, the timing of which made use of the December 31 date administratively unfeasible. In addition, using the November 28 date ensured maximum year-to-year consistency in the employee population considered. As of the November 28, 2022 median employee identification date, we had 524 employees, with 506 employees based in the United States, ten in Mexico, five in the United Arab Emirates, and three in Canada. The pay ratio disclosure rules provide an exemption for companies to exclude non-U.S. employees from the median employee calculation if non-U.S. employees in a particular jurisdiction account for five percent or less of the Corporation’s total number of employees. The Corporation applied this de minimis exemption when identifying the median employee by excluding the 18 employees located outside of the United States. In determining the median employee, 506 employees in the United States and no employees located outside of the United States were used for the pay ratio calculation. For purposes of identifying the 2022 median employee from our employee population base, we considered the annual total sum of base salary, wages, overtime, and target bonus, as applicable, compiled from our human resources records. We selected these compensation measures as they represent the principal forms of compensation delivered to all of our employees and this information is readily available. In addition, we measured compensation for purposes of determining the median employee using the 12-month period ending December 31, 2022 and annualized the compensation of any employee who was employed by us for less than the entire year. Using this methodology, we determined that our median employee was a full-time, salaried employee located in Florida. In determining the annual total compensation of the median employee, such employee’s compensation was calculated in accordance with Item 402(c)(2)(x) of Regulation S-K, as required pursuant to the SEC executive compensation disclosure rules except that we elected to include the company-paid portion of health insurance premiums, which are normally excluded from the calculation of total compensation for purposes of the Summary Compensation Table. | | | | | | 49 |
| | Pay vs. Performance Comparison |
Pay vs. Performance Comparison Our executive compensation programs are intended to link a substantial portion of our NEOs’ realized compensation to the achievement of our financial, operational, and strategic objectives, and to align our NEOs’ pay with changes in the value of our shareholders’ investments. For further information concerning theCompany’s variable pay-for-performance philosophy and how the Company aligns executive compensation with Company performance, refer to the “Compensation Discussion and Analysis” section of this proxy statement. As required by Item 402(v) of Regulation S-K, we are providing the following information about the relationship between compensation actually paid (“CAP”) (as defined in Item 402(v)) and performance for fiscal years 2022, 2021 and 2020.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Ending Value of Initial
Fixed $100 Investment
Based on: | | | | | | | | | | | | | | | | Summary
Compensation
Table Total for
CEO(1) | | Compensation
Actually Paid
to CEO(1)(2) | | Summary
Compensation
Table Total
for former
CEO(3) | | Compensation
Actually Paid
to former
CEO (2) (3) | | Average
Summary
Compensation
Table Total for
Non-CEO
NEOs(4) | | Average
Compensation
Actually Paid
to Non-CEO
NEOs (2)(4) | | | | Comparator
Group Total
Shareholder
Return (5) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2022 | | | | 4,425,333 | | | | | 3,393,551 | | | | | — | | | | | — | | | | | 2,352,870 | | | | | 2,010,378 | | | | $ | 81.12 | | | | $ | 107.12 | | | | | 81.1 | | | | | 251.9 | | | | | | | | | | | | | | | 2021 | | | | 10,838,013 | | | | | 11,859,651 | | | | | 57,039 | | | | | 10,484,875 | | | | | 1,758,544 | | | | | 2,852,913 | | | | $ | 92.16 | | | | $ | 130.52 | | | | | 97.9 | | | | | 253.3 | | | | | | | | | | | | | | | 2020 | | | | — | | | | | — | | | | | 1,753,758 | | | | | (29,514,726 | ) | | | | 1,641,151 | | | | | (3,942,916 | ) | | | $ | 70.35 | | | | $ | 109.24 | | | | | 104.3 | | | | | 273.5 | |
| (1) | The dollar amounts shown reflect the total compensation reported for our CEO, Mr. Peyton, in the Summary Compensation Table for fiscal years 2022 and 2021. |
| (2) | The dollar amounts reported represent the amount of all of our employees, other than Mr. Joyce, would have been $109,829 and the ratio of annual total compensation of Mr. Joyce to the median would have been estimated to be16 to 1. This supplemental pay ratio should not be viewed“compensation actually paid”, as a substitute for the pay ratio calculatedcomputed in accordance with Item 402SEC rules. The dollar amounts do not reflect the actual amounts of RegulationS-K as set forth above.compensation paid to our CEO or other NEOs during the applicable year, but also include (i) theyear-end Identificationfair value of Median Employee
Asequity awards granted during the reported year and (ii) the change in the fair value of equity awards that were unvested at the end of the December 31, 2019 median employee identificationprior year, measured through the date we had 3,547 employees, with 3,531 employees based in the United States and 16 employees located outsideawards vested, expired, or were cancelled, or through the end of the United States. reported fiscal year.
|
| (3) | The pay ratio disclosure rules provide an exemption for companies to excludenon-U.S. employees fromdollar amounts shown reflect the median employee calculation ifnon-U.S. employees in a particular jurisdiction account for five percent or less of the Corporation’s total number of employees. The Corporation applied thisde minimis exemption when identifying the median employee by excluding 16 employees in the UAE (4 employees), Mexico (9 employees), and Canada (3 employees). In determining the median employee, 3,531 employees in the United States and no employees located outside of the United States were used for the pay ratio calculation. This employee total includes 2,987 restaurant employees that became our employees as a result of our acquisition of 69 Applebee’s restaurants in December 2018.For purposes of identifying the 2019 median employee from our employee population base, we considered the annual total sum of base salary, wages, overtime, tips, and target bonus, as applicable, compiled from our human resources records. We selected these compensation measures as they represent the principal forms of compensation delivered to all of our employees and this information is readily available. In addition, we measured compensation for purposes of determining the median employee using the12-month period ending December 31, 2019 and annualized the compensation of any employee who was employed by us for less than the entire year.
Using this methodology, we determined that our median employee was a full-time, hourly employee located in Leland, North Carolina. In determining the annual total compensation of the median employee, such employee’s compensation was calculatedreported for our former CEO, Mr. Stephen Joyce, in accordance with Item 402(c)(2)(x) of RegulationS-K, as required pursuant to the SEC executive compensation disclosure rules except that we elected to include the company-paid portion of health insurance premiums, which are normally excluded from the calculation of total compensation for purposes of the Summary Compensation Table.
| | Table for fiscal years 2021 and 2020. | | | 49 |
( | 2020 PROXY STATEMENT
| COMPENSATION TABLES
|
Securities Authorized4
| For 2022, reflects the total compensation reported in the Summary Compensation Table for Issuance Under Equity Compensation PlansDuring 2019,our NEOs other than our CEO, as described in the Corporation issued equity securities pursuant to the 2016 Dine Brands Global, Inc. Stock Incentive Plan and the 2019 Stock Incentive Plan. The 2019 Stock Incentive Plan was approved by stockholders at the Corporation’s 2019 Annual MeetingCD&A of Stockholders and replaced the Dine Brands Global, Inc. 2016 Stock Incentive Plan.
Equity Compensation Plan Information
The following table provides information as of December 31, 2019 about Common Stock that may be issued under the 2019 Stock Incentive Plan.
| | | | | | | | | | | | | | | | | | | | | | | (a) | | (b) | | (c) | | | | | Plan Category | | Number of Securities to
be Issued Upon Exercise
of Options,
Warrants
and Rights (#) | | Weighted- Average
Exercise Price of
Outstanding Options,
Warrants and
Rights ($) /Share | | Number of Securities Remaining Available for Future Issuance under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) (#) | | | | | Equity Compensation Plans approved by security holders | | | | 1,217,438 | | | | | 66.43 | | | | | 2,427,518 | | | | | | Equity Compensation Plans not approved by security holders | | | | — | | | | | — | | | | | — | | | | | | Total | | | | 1,217,438 | | | | | 66.43 | | | | | 2,427,518 | |
| | | 50 | | |
| 2020 PROXY STATEMENT
| COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
|
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The following members of the Board of Directors served on the Compensation Committee during 2019: Daniel J. Brestle (Chairman), Howard M. Berk, and Caroline W. Nahas. None of the Corporation’s executive officers or directors served on the board of directors of any entities whose directors or officers served on the Compensation Committee of the Board of Directors. No current or past executive officers or employees of the Corporation serve on the Compensation Committee and no Compensation Committee member had a relationship during 2019 that would require disclosure pursuant to Item 404 of RegulationS-K.
| | | | | 51 |
| 2020 PROXY STATEMENT
| EXECUTIVE OFFICERS OF THE CORPORATION
|
EXECUTIVE OFFICERS OF THE CORPORATION
General.The following table sets forth certain information with respect to each person who is currently an executive officer of the Corporation:
| | | | | | | | Name
| | Age | | Position and Offices with the Corporation | | | | Stephen P. Joyce
| | 60 | | Chief Executive Officer | | | | Thomas H. Song
| | 48 | | Chief Financial Officer | | | | John C. Cywinski
| | 57 | | President, Applebee’s | | | | Jay D. Johns
| | 59 | | President, IHOP | | | | Bryan R. Adel
| | 57 | | Senior Vice President, Legal, General Counsel and Secretary |
Executive officers of the Corporation are appointed by, and serve at the discretion of, the Board of Directors.
Biographicalthis proxy statement. For 2021, reflects compensation information for Mr. Joyce is provided in the section entitled “Proposal One: Election of Four Class I DirectorsChang, Ms. Hall, Mr. Cywinski, Mr. Johns, and three Class II Directors – Continuing Directors.” Certain biographicalMs. Son, and for Mr. Thomas H. Song, our former Chief Financial Officer. For 2020, reflects compensation information for the other executive officers is set forth below.
Mr.Messrs. Cywinski, Johns, Song,was appointed to the position of Chief Financial Officer in May 2018. and Mr. Song served as Senior Vice President, Corporate Development and Innovation at Choice Hotels International, Inc. from September 2013 to May 2018. Previously, Mr. Song was Vice President, Corporate Development and Strategy for Hanover Insurance Group, Inc. from 2010 to August 2013.
Mr. Cywinski was appointed to the position of President, Applebee’s Business Unit in March 2017. Mr. Cywinksi served as Executive Vice President of Strategic Innovation and Marketing at Brinker International, Inc. from March 2016 to March 2017. Mr. Cywinski was previously with Yum! Brands, Inc. in several roles from August 2010 to April 2014, including as President, KFC Corporation U.S. from November 2011 to April 2014.
Mr. Johns was appointed to the position of President, IHOP in June 2019. Mr. Johns served as the Senior Vice President, Operations for IHOP from April 2017 to June 2019. Mr. Johns has been with the Corporation in various operations leadership roles since February 2009, including serving as the Senior Vice President, Strategic Operations Implementation from November 2013 to April 2017.
Mr.Bryan R. Adel, was appointed to the position of our former Senior Vice President, Legal, General Counsel, and SecretarySecretary.
|
| ( 5 ) | Reflects cumulative total shareholder return of our peer group companies (BJ’s Restaurants, Inc.; Bloomin’ Brands Inc.; Brinker International, Inc.; Choice Hotels International, Inc.; Cracker Barrel Old Country Store, Inc.; Dave & Buster’s Entertainment, Inc.; Denny’s Corporation; Jack in the Box Inc.; Papa John’s International, Inc.; Red Robin Gourmet Burgers, Inc.; Ruth’s Hospitality Group, Inc.; Shake Shack Inc.; Texas Roadhouse, Inc.; The Cheesecake Factory Incorporated; The Wendy’s Company; Wingstop Inc.; and Wyndham Hotels and Resorts, Inc.) as of the Corporation in August 2010. Mr. Adel served as senior vice president, general counselend of each year indicated, weighted according to the constituent companies’ market capitalization at the beginning of each period for which a return is indicated. |
| ( 6 ) | Adjusted EBITDA includes income before interest, taxes, depreciation and corporate secretary for Viant Holdings, Inc., a provider of healthcare payment solutions, from 2007 to 2010. Mr. Adel also spent over ten years at McDonald’s Corporation in various legal and business roles. Mr. Adel served onamortization. |
| | Pay vs. Performance Comparison |
To calculate the amounts in the “Compensation Actually Paid to CEO” column in the table a bove, the followingamo unts were deducted from and added to (as applicable) our CEO’s “Total” compensation as reported in the Summary Compensation Table (): | | | | | | | | | | | | | | | | | | | | | | | | | | | | Summary
Compensation
Table Total
for CEO | | Reported
Value of
Equity
Awards
for
CEO(1) | | Equity Award
Adjustments
for CEO(2) | | Compensation Actually Paid to CEO | | | | | | | | | | | | | 2022(3) | | | | 4,425,333 | | | | | (2,450,060 | ) | | | | 1,418,278 | | | | | 3,393,551 | | | | | | | | | 2021(3) | | | | 10,838,013 | | | | | (6,326,281 | ) | | | | 7,347,919 | | | | | 11,859,651 | | | | | | | | | (4) | | | | 57,039 | | | | | 0 | | | | | 10,427,836 | | | | | 10,484,875 | | | | | | | | | 2020(4) | | | | 1,753,758 | | | | | 0 | | | | | (31,268,484 | ) | | | | (29,514,726 | ) |
| (1) | Represents the board of directors of Chipotle Mexican Grill, Inc. from 2001 to 2003. | | | 52 | | |
| 2020 PROXY STATEMENT
| AUDIT-RELATED MATTERS
|
AUDIT-RELATED MATTERS
REPORT OF THE AUDIT COMMITTEE
The Board of Directors has determined that:
each Audit Committee member is “independent” under the corporate governance listing standardsgrant date fair value of the NYSE and is or will become “financially literate,”equity awards to our CEO, as defined by the NYSE, within a reasonable period of time after appointment to the Audit Committee;
each member of the Audit Committee satisfies the “financial management expertise” standard, as required by the NYSE; and
Douglas M. Pasquale, Chairman of the Audit Committee, is an “audit committee financial expert,” as defined by the SEC.
Management is responsible for the preparation of financial statements and the financial reporting process, including the system of internal controls over financial reporting. Ernst & Young LLP (“Ernst & Young”), the Corporation’s independent auditor, is responsible for performing an independent audit of the Corporation’s consolidated financial statements in accordance with auditing standards generally acceptedreported in the United States“Stock Awards” and “Option Awards” columns in the SCT for each applicable year.
|
| (2) | Represents the year-over-year change in the fair value of America and for issuing a report thereon. The Audit Committee is responsible for assistingequity awards to our CEO, as itemized in the Board of Directorstable below. No awards vested in monitoring:the integrity of the Corporation’s financial statements; year they were granted. |
| (3) | the Corporation’s compliance with legal and regulatory requirements;
the Corporation’s independent auditor’s qualifications and independence; and
the performance of the Corporation’s independent auditor and the Corporation’s internal audit function.
It is the Audit Committee’s policyValues on this row relate to review and approve in advance all proposed audit andnon-audit services to be provided by the Corporation’s independent auditor.
During 2019, the Audit Committee met seven times and held separate discussions with management, the Corporation’s internal auditors and Ernst & Young. The Audit Committee reviewed and discussed the Corporation’s interim financial information contained in each quarterly earnings announcement with the Corporation’sour Chief Executive Officer, Mr. Peyton.
|
| (4) | Values on this row relate to our former Chief Executive Officer, Mr. Joyce. |
| | | | | | | | | | | | | | | | | | | | | | Fair Value of Equity Awards for CEO | | | | | | | | | | | | | | | | | | | | | | | As of year-end for awards granted during the year | | | 2,225,159 | | | | 7,347,919 | | | | 0 | | | | 0 | | | | | | | | | Year-over-year increase (decrease) of unvested awards granted in prior years | | | (820,436 | ) | | | 0 | | | | 0 | | | | (15,586,021 | ) | | | | | | | Increase (decrease) from prior fiscal year-end for awards that vested during the year | | | 13,555 | | | | 0 | | | | 10,427,836 | | | | (15,682,464 | ) | | | | | | | Total Equity Award Adjustments | | | | | | | | | | | | | | | | |
| (1) | Values in this column relate to our CEO, Mr. Peyton. |
| (2) | Values in this column relate to our former CEO, Mr. Joyce. |
To calculate the amounts in the “Average Compensation Actually Paid toNon-CEO NEOs” column in the table above, the following amounts were deducted from and added to (as applicable) the average of the “Total” compensation of ournon-CEO named executive officers for each applicable year, as reported in the SCT for that year: | | | | | | | | | | | | | | | | | | | | | | | | Average
Summary
Compensation
Table Total for
Non-CEO
NEOs | | | Average
Reported Value of
Equity Awards for
Non-CEO NEOs(1) | | | Average Equity Award Adjustments for Non-CEO NEOs(2) | | | Average
Compensation
Actually Paid | | | | | | | | | | | | | 2022 | | | 2,352,870 | | | | (1,234,459 | ) | | | 891,967 | | | | 2,010,378 | | | | | | | | | 2021 | | | 1,758,544 | | | | (433,086 | ) | | | 1,838,076 | | | | 2,852,913 | | | | | | | | | 2020 | | | 1,641,151 | | | | (272,208 | ) | | | (5,019,625 | ) | | | (3,942,916 | ) |
| (1) | Represents the average of the grant date fair value of the equity awards to our named executive officers (other than our CEO), as reported in the “Stock Awards” column in the SCT for each applicable year. |
| (2) | Represents the average of the year-over-year change in the fair value of equity awards to our named executive officers (other than our CEO), as itemized in the table below. No awards vested in the year they were granted. |
| | Pay vs. Performance Comparison |
| | | | | | | | | | | | | | | | | | | | Fair Value of Equity Awards for Non-CEO NEOs | | | | | | | | | | | As of year-end for awards granted during the year | | | | 1,132,473 | | | | | 564,471 | | | | | 245,882 | | | | | | | | Year-over-year increase (decrease) of unvested awards granted in prior years | | | | (218,368 | ) | | | | 1,131,852 | | | | | (5,078,860 | ) | | | | | | Increase (decrease) from prior fiscal year-end for awards that vested during the year | | | | (22,138 | ) | | | | 141,753 | | | | | (186,647 | ) | | | | | | Total Equity Award Adjustments | | | | | | | | | | | | | | | |
Financial Performance Measures The following table identifies the five most important financial performance measures used by our Compensation Committee to link the “compensation actually paid” (CAP ) to our CEO and other NEOs in 2022, calculated in accordance with SEC regulations, to our performance. The role of each of these performance measures on ourNEO s’ compensation is discussed in the CD&A above. | Financial Performance Measures | | | Adjusted EBITDA | | | Same-Restaurant Sales | | | Net Development | | | Total Shareholder Return |
Relationship to Compensation Actually Pai The following chart shows the relationship between the numbers calculated as compensation actually paid for the CEO and for the non-CEO NEOs (averaged), the Corporation’s total shareholder return, and the total shareholder return of the designated peer group. Note that CEO CAP shown is the aggregate CAP paid to both our current CEO, Mr. Peyton, and our previous CEO, Mr. Joyce, for 2021. The following chart shows the relationship between the numbers calculated as compensation actually paid for the CEO and for the non-CEO NEOs (averaged), the Corporation’s net income. Note that CEO CAP shown is the aggregate CAP paid to both our current CEO, Mr. Peyton, and our previous CEO, Mr. Joyce, for 2021.
| | Pay vs. Performance Comparison |
The following chart shows the relationship between the numbers calculated as compensation actually paid, for the CEO and for the non-CEO NEOs (averaged), and the Corporation’s Adjusted EBITDA. Note that CEO CAP shown is the aggregate CAP paid to both our current CEO, Mr. Peyton, and our previous CEO, Mr. Joyce, for2021 .
| 2023 PROXY STATEMENT | Equity Compensation Plan Information |
Equity Compensation Plan Information The following table provides information as of December 31, 2022 about Common Stock that may be issued under the 2019 Stock Incentive Plan. | | | | | | | | | | | | | | | | | | | | | | | (a) | | (b) | | (c) | | | | | Plan Category | | Number of Securities to be Issued Upon Exercise of Options, Warrants and Rights (#) | | Weighted- Average Exercise Price of Outstanding Options, Warrants and Rights ($) /Share | | Number of Securities Remaining Available for Future Issuance under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) (#) | | | | | Equity Compensation Plans approved by security holders | | | | 539,575 | | | | | 75.65 | | | | | 2,097,967 | | | | | | Equity Compensation Plans not approved by security holders | | | | — | | | | | — | | | | | — | | | | | | Total | | | | 539,575 | | | | | 75.65 | | | | | 2,097,967 | |
| | | | 54 | | |
| 2023 PROXY STATEMENT | COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION |
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION The following members of the Board of Directors served on the Compensation Committee during 2022: Howard M. Berk (Chair), Caroline W. Nahas and Lilian C. Tomovich. None of the Corporation’s executive officers or directors served on the board of directors of any entities whose directors or officers served on the Compensation Committee of the Board of Directors. No current or past executive officers or employees of the Corporation serve on the Compensation Committee and no Compensation Committee member had a relationship during 2022 that would require disclosure pursuant to Item 404 of Regulation S-K. | | | | | | 55 |
| 2023 PROXY STATEMENT | INFORMATION ABOUT OUR EXECUTIVE OFFICERS |
INFORMATION ABOUT OUR EXECUTIVE OFFICERS General. The following table sets forth certain information with respect to each person who is currently an executive officer of the Corporation: | | | | | | | | Name | | Age | | Position and Offices with the Corporation | | | | John W. Peyton | | 56 | | Chief Executive Officer | | | | Vance Y. Chang | | 47 | | Chief Financial Officer | | | | Tony E. Moralejo | | 58 | | President, Applebee’s | | | | Jay D. Johns | | 62 | | President, IHOP | | | | Christine K. Son | | 48 | | Senior Vice President, Legal, General Counsel and Ernst & Young prior to public release. The Audit Committee reviewed the Corporation’s quarterly financial statements with management and Ernst & Young.Management has represented to the Audit Committee that the Corporation’s consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America. The Audit Committee reviewed and discussed with management and Ernst & Young the Corporation’s fiscal year ended December 31, 2019 annual consolidated financial statements. The Audit Committee has also discussed the following with Ernst & Young:Secretary
|
Executive officers of the Corporation are appointed by, and serve at the discretion of, the Board of Directors. Biographical information for Mr. Peyton is provided in the section entitled “Proposal One: Election of Directors” Certain biographical information for the other executive officers is set forth below. Mr. Chang was appointed as Chief Financial Officer of the Corporation in June 2021. Mr. Chang served as the Chief Financial Officer of Exer Urgent Care, a medical services company, from 2019 to 2021. From 2016 to 2019, Mr. Chang was the Chief Financial Officer for YogaWorks. In October 2020, YogaWorks filed bankruptcy and sold its assets, which the company stated was largely due to the impact of the COVID-19 pandemic on their business. Mr. Moralejo was appointed to the position of President, Applebee’s Business Unit in January 2023. Mr. Moralejo served as President, International and Global Development of the Corporation from February 2020 to January 2023. From August 2016 to February 2020, Mr. Moralejo was Executive Vice President, International Business & Global Development at Cajun Operating Company. Mr. Johns was appointed to the position of President, IHOP in June 2019. Mr. Johns served as the Senior Vice President, Operations for IHOP from April 2017 to June 2019. Mr. Johns has been with the Corporation in various operations leadership roles since February 2009, including serving as the Senior Vice President, Strategic Operations Implementation from November 2013 to April 2017. Ms. Son was appointed as Senior Vice President, Legal, General Counsel and Secretary of the Corporation in April 2021. Ms. Son joined the Corporation in 2011 and served as Vice President, Deputy General Counsel and Assistant Secretary from 2019 to 2021 and as Vice President, Associate General Counsel from 2014 to 2019. | | | | 56 | | |
the matters required to be discussed under the applicable requirements of the Public Company Accounting Oversight Board (United States) and the SEC which include, among other items, matters related to the conduct of the audit of the Corporation’s annual consolidated financial statements;
| the critical accounting policies and practices used in the preparation of the Corporation’s annual consolidated financial statements, alternative treatments of financial information within generally accepted accounting principles that Ernst & Young discussed with management, the ramifications of using such alternative treatments, and the treatment preferred by Ernst & Young; and
other written communications between Ernst & Young and management.
In addition, the Audit Committee has received and reviewed the written disclosures and the letter from Ernst & Young required by applicable requirements of the Public Company Accounting Oversight Board regarding Ernst & Young’s communications with the Audit Committee concerning independence, and has discussed with Ernst & Young the firm’s independence from the Corporation and management, including all relationships between Ernst & Young and the Corporation. 2023 PROXY STATEMENT
| | | | | 53 |
AUDIT-RELATED MATTERS REPORT OF THE AUDIT COMMITTEE The Board of Directors has determined that: each Audit Committee member is “independent” under the corporate governance listing standards of the NYSE and is or will become “financially literate,” as defined by the NYSE, within a reasonable period of time after appointment to the Audit Committee; each member of the Audit Committee satisfies the “financial management expertise” standard, as required by the NYSE; and Douglas M. Pasquale, Chairman of the Audit Committee, is an “audit committee financial expert,” as defined by the SEC. Management is responsible for the preparation of financial statements and the financial reporting process, including the system of internal controls over financial reporting. Ernst & Young LLP (“Ernst & Young”), the Corporation’s independent auditor, is responsible for performing an independent audit of the Corporation’s consolidated financial statements in accordance with auditing standards generally accepted in the United States of America and for issuing a report thereon. The Audit Committee is responsible for assisting the Board of Directors in monitoring: the integrity of the Corporation’s financial statements; the Corporation’s compliance with legal and regulatory requirements; the Corporation’s independent auditor’s qualifications and independence; and the performance of the Corporation’s independent auditor and the Corporation’s internal audit function. It is the Audit Committee’s policy to review and approve in advance all proposed audit and non-audit services to be provided by the Corporation’s independent auditor. During 2022, the Audit Committee met nine times and held separate discussions with management, the Corporation’s internal auditors and Ernst & Young. The Audit Committee reviewed and discussed the Corporation’s interim financial information contained in each quarterly earnings announcement with the Corporation’s Chief Executive Officer, Chief Financial Officer, General Counsel and Ernst & Young prior to public release. The Audit Committee reviewed the Corporation’s quarterly financial statements with management and Ernst & Young. Management has represented to the Audit Committee that the Corporation’s consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America. The Audit Committee reviewed and discussed with management and Ernst & Young the Corporation’s fiscal year ended December 31, 2022 annual consolidated financial statements. The Audit Committee has also discussed the following with Ernst & Young: the matters required to be discussed under the applicable requirements of the Public Company Accounting Oversight Board (United States) and the SEC which include, among other items, matters related to the conduct of the audit of the Corporation’s annual consolidated financial statements; the critical accounting policies and practices used in the preparation of the Corporation’s annual consolidated financial statements, alternative treatments of financial information within generally accepted accounting principles that Ernst & Young discussed with management, the ramifications of using such alternative treatments, and the treatment preferred by Ernst & Young; and other written communications between Ernst & Young and management. In addition, the Audit Committee has received and reviewed the written disclosures and the letter from Ernst & Young required by applicable requirements of the Public Company Accounting Oversight Board regarding Ernst & Young’s communications with the Audit Committee concerning independence, and has discussed with Ernst & Young the firm’s independence from the Corporation and management, including all relationships between Ernst & Young and the Corporation. 2020
| | | | | | 57 |
| 2023 PROXY STATEMENT | AUDIT-RELATED MATTERS |
The Audit Committee has considered whether the provision of non-audit services by Ernst & Young in the fiscal year ended December 31, 2022 is compatible with maintaining the auditors’ independence and determined that the provision of non-audit services by Ernst & Young is compatible with maintaining the auditors’ independence. The Audit Committee discussed with the Corporation’s internal auditors, Ernst & Young and management the overall scope and plans for their respective audits. The Audit Committee met with the internal auditors and Ernst & Young, with and without management present, to discuss the results of their respective audits, the evaluations of the Corporation’s internal controls over financial reporting, and the overall quality of the Corporation’s financial reporting. The Audit Committee also discussed with Ernst & Young whether there were any audit problems or difficulties, and management’s response. In addition, the Audit Committee monitored the Corporation’s compliance activities relating to the Sarbanes-Oxley Act of 2002. Based on the reviews and discussions described above, the Audit Committee recommended to the Board of Directors that the audited consolidated financial statements be included in the Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022, for filing with the SEC. The Audit Committee also selected Ernst & Young as the Corporation’s independent auditor for the fiscal year ending December 31, 2023. The Board of Directors is recommending that stockholders ratify this appointment at the Annual Meeting. THIS REPORT IS SUBMITTED BY THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS Douglas M. Pasquale (Chairman) Howard M. Berk Susan M. Collyns Richard J. Dahl Martha C. Poulter Independent Auditor Fees The following table sets forth information concerning Ernst & Young’s fees for the fiscal years ended December 31, 2022 and 2021. All of the fees shown in the table were approved by the Audit Committee in conformity with its pre-approval process. | | | | | | | | | | | | Type of Fee | | 2022 | | | 2021 | | | | | Audit Fees | | $ | 1,895,500 | | | $ | 1,585,000 | | | | | Audit-Related Fees | | $ | — | | | $ | — | | | | | Tax Fees | | $ | 54,073 | | | $ | 58,608 | | | | | All Other Fees | | $ | 2,000 | | | $ | 2,000 | | | | | Total | | $ | 1,951,573 | | | $ | 1,645,608 | |
Audit Fees comprise fees for professional services necessary to perform an audit or review in accordance with the standards of the Public Company Accounting Oversight Board, including services rendered for the audit of the Corporation’s annual financial statements (including services incurred in rendering an opinion under Section 404 of the Sarbanes-Oxley Act of 2002) and review of quarterly financial statements. Audit fees also include fees for services that are normally incurred in connection with statutory and regulatory filings or engagements, such as comfort letters, statutory audits, attest services, consents, and review of documents filed with the SEC. Audit-Related Fees comprise fees for services that are reasonably related to the performance of the audit or review of the Corporation’s financial statements, including the support of business acquisition and divestiture activities, independent assessment of controls related to outsourcing services, and review of retirement and other benefit-related programs. Tax Fees comprise fees for tax compliance, tax planning, and tax advice, including the provision of such services in connection with business acquisition and divestiture activities. All Other Fees consists of fees relating to other non-audit and non-tax services. | | | | 58 | | |
| 2023 PROXY STATEMENT | AUDIT-RELATED MATTERS |
Pre-Approval of Audit and Permissible Non-Audit Services of the Independent Auditor The Audit Committee reviews and, as appropriate, approves in advance the independent auditor’s annual engagement letter, including the proposed fees contained therein. The Audit Committee also reviews all audit and permitted non-audit engagements and relationships between the Corporation and its independent auditor, and approves in advance all of the fees related thereto. These services may include audit services, audit-related services, tax services, and other specifically designated non-audit services. | | | | | | 59 |
| 2023 PROXY STATEMENT | AUDIT-RELATED MATTERS |
The Audit Committee has considered whether the provision ofnon-audit services by Ernst & Young in the fiscal year ended December 31, 2019 is compatible with maintaining the auditors’ independence and determined that the provision ofnon-audit services by Ernst & Young is compatible with maintaining the auditors’ independence. The Audit Committee discussed with the Corporation’s internal auditors, Ernst & Young and management the overall scope and plans for their respective audits. The Audit Committee met with the internal auditors and Ernst & Young, with and without management present, to discuss the results of their respective audits, the evaluations of the Corporation’s internal controls over financial reporting, and the overall quality of the Corporation’s financial reporting. The Audit Committee also discussed with Ernst & Young whether there were any audit problems or difficulties, and management’s response. In addition, the Audit Committee monitored the Corporation’s compliance activities relating to the Sarbanes-Oxley Act of 2002.
Based on the reviews and discussions described above, the Audit Committee recommended to the Board of Directors that the audited consolidated financial statements be included in the Corporation’s Annual Report onForm 10-K for the fiscal year ended December 31, 2019, for filing with the SEC.
The Audit Committee also selected Ernst & Young as the Corporation’s independent auditor for the fiscal year ending December 31, 2020. The Board of Directors is recommending that stockholders ratify this appointment at the Annual Meeting.
THIS REPORT IS SUBMITTED BY THE
AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
Douglas M. Pasquale (Chairman)
Howard M. Berk
Susan M. Collyns
Richard J. Dahl
Gilbert T. Ray
Independent Auditor Fees
The following table sets forth information concerning Ernst & Young’s fees for the fiscal years ended December 31, 2019 and 2018. All of the fees shown in the table were approved by the Audit Committee in conformity with itspre-approval process.
| | | | | | | | | | | | Type of Fee | | 2019 | | | 2018 | | | | | Audit Fees | | $ | 1,643,800 | | | $ | 1,674,724 | | | | | Audit-Related Fees | | | 5,300 | | | | 0 | | | | | Tax Fees | | | 137,433 | | | | 54,340 | | | | | All Other Fees | | | 202,000 | | | | 2,000 | | | | | Total | | $ | 1,988,533 | | | $ | 1,731,064 | |
Audit Fees comprise fees for professional services necessary to perform an audit or review in accordance with the standards of the Public Company Accounting Oversight Board, including services rendered for the audit of the Corporation’s annual financial statements (including services incurred in rendering an opinion under Section 404 of the Sarbanes-Oxley Act of 2002) and review of quarterly financial statements. Audit fees also include fees for services that are normally incurred in connection with statutory and regulatory filings or engagements, such as comfort letters, statutory audits, attest services, consents, and review of documents filed with the SEC.
Audit-Related Fees comprise fees for services that are reasonably related to the performance of the audit or review of the Corporation’s financial statements, including the support of business acquisition and divestiture activities, independent assessment of controls related to outsourcing services, and review of retirement and other benefit-related programs.
Tax Fees comprise fees for tax compliance, tax planning, and tax advice, including the provision of such services in connection with business acquisition and divestiture activities.
| | | 54 | | |
| 2020 PROXY STATEMENT
| AUDIT-RELATED MATTERS
|
All Other Fees consists of fees relating to othernon-audit andnon-tax services.
Pre-Approval of Audit and PermissibleNon-Audit Services of the Independent Auditor
The Audit Committee reviews and, as appropriate, approves in advance the independent auditor’s annual engagement letter, including the proposed fees contained therein. The Audit Committee also reviews all audit and permittednon-audit engagements and relationships between the Corporation and its independent auditor, and approves in advance all of the fees related thereto. These services may include audit services, audit-related services, tax services, and other specifically designatednon-audit services.
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| MATTERS TO BE VOTED UPON AT THE ANNUAL MEETING
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MATTERS TO BE VOTED UPON AT THE ANNUAL MEETING |
MATTERS TO BE VOTED UPON AT THE ANNUAL MEETING PROPOSAL ONE: ELECTION OF DIRECTORS Based on the recommendation of the Nominating and Corporate Governance Committee, the Board of Directors has designated the ten nominees listed below for election as directors of the Corporation, each to serve for a term of one year that will expire at the Corporation’s 2023 annual meeting of stockholders. Your proxy will be voted as specified thereon or, if no instructions are given, for the Board of Directors nominees; however, the persons designated to vote proxies reserve full discretion to vote the shares represented by the proxies for the election of any substitute nominee or nominees designated by the Board of Directors in the event the nominee who would otherwise receive the votes is unavailable or unable to serve as a candidate for election as a director. The Board of Directors has no reason to believe that any of the nominees, each of whom currently serves on the Board of Directors, will be unavailable or unable to serve if elected. The Board of Directors believes that each of the director nominees and continuing directors is well qualified to serve on the Board of Directors, and each of the nominees brings his or her particular business, industry and financial experience and expertise to the Board of Directors. The Board of Directors believes that the backgrounds and qualifications of all of the directors, considered as a group, provide a complementary blend of diversity, experience, knowledge, and abilities. The following paragraphs give the name and age of each director nominee, as well as each nominee’s business experience over the last five years or more. Immediately following the description of each nominee’s business experience is a description of the particular experience, skills and qualifications that were instrumental in the Nominating and Corporate Governance Committee’s determination that the nominee should serve as a director of the Corporation. | | | PROPOSAL ONE: ELECTION OF FOUR CLASS I DIRECTORS AND THREE CLASS II DIRECTORS
At the 2019 annual meeting of stockholders, stockholders approved an amendment to the Corporation’s Restated Certificate of Incorporation to declassify the Board of Directors and provide for the annual election of directors forone-year terms, commencing upon the expiration of a director’s current term. Stockholders approved aphased-in approach whereby Class I and Class II directors would stand for election at the Annual Meeting, and Class I, Class II and Class III directors would stand for election at the 2021 annual meeting (in each case, until their respective successors are duly elected and qualified). As such, all directors will stand for election beginning at the 2021 annual meeting. We are continuing to refer to directors by class until all directors are declassified following the 20201 annual meeting.
Based on the recommendation of the Nominating and Corporate Governance Committee, the Board of Directors has designated the four nominees listed below for election as Class I directors and the three nominees listed below as Class II directors of the Corporation, each to serve for a term of one year that will expire at the Corporation’s 2021 annual meeting of stockholders. The Board of Directors has also designated Richard J. Dahl to serve as the independent Chairman of the Board of Directors.
Your proxy will be voted as specified thereon or, if no instructions are given, for the Board of Directors nominees; however, the persons designated to vote proxies reserve full discretion to vote the shares represented by the proxies for the election of any substitute nominee or nominees designated by the Board of Directors in the event the nominee who would otherwise receive the votes is unavailable or unable to serve as a candidate for election as a director. The Board of Directors has no reason to believe that any of the nominees, each of whom currently serves on the Board of Directors, will be unavailable or unable to serve if elected.
The Board of Directors believes that each of the director nominees and continuing directors is well qualified to serve on the Board of Directors, and each of the nominees brings his or her particular business, industry and financial experience and expertise to the Board of Directors. The Board of Directors believes that the backgrounds and qualifications of all of the directors, considered as a group, provide a complementary blend of diversity, experience, knowledge and abilities.
The following paragraphs give the name and age of each director nominee, as well as each nominee’s business experience over the last five years or more. Immediately following the description of each nominee’s business experience is a description of the particular experience, skills and qualifications that were instrumental in the Nominating and Corporate Governance Committee’s determination that the nominee should serve as a director of the Corporation.
Class I Directors—Terms to Expire in 2020
Howard M. Berk (age 55).58) | | Mr. Berk has served on the Corporation’s Board of Directors since 2009. Since 2002,2021, Mr. Berk has been a partnerSenior Advisor of BDT & MSD Partners, a merchant bank with an advisory and investment platform. From 2002 to 2021, Mr. Berk was a Partner at MSD Capital,Capital/MSD Partners, L.P., a private investment firm. From 1998 to 2002, Mr. Berk was managing director of TG Capital Corp., an investment group that manages the capital of a single family and acquires and invests in both public and private companies. From 1995 to 1998, Mr. Berk was with The Stenbeck Group, acquiring and managing businesses in multiple countries. Prior to that, he was with Goldman, Sachs & Co., where he worked in the principal investment area, as well as the mergers and acquisitions department. Mr. Berk’s qualifications to sit on the Corporation’s Board of Directors include his experience in dealing with public company boards of directors from a public investor perspective and his experience in finance and managing and investing private capital. |
| | | Daniel J. Brestle
Susan M. Collyns (age 74). Mr. Brestle has served on the Corporation’s Board of Directors since 2009. Mr. Brestle has served as56) | | Ms. Collyns is a Senior Advisor to GF Capital Management & Advisors, LLC, a private equityThe Beachbody Company and real estate investment company, since 2009. Previously, Mr. Brestle served as vice chairman and president of Estee Lauder Companies Inc. North America, a manufacturer and marketer of cosmetics products. Mr. Brestle held this position until he retired in 2009 after spending more than 30 years in leadership positions within the Estee Lauder organization and its family of brands. During his tenure, he held numerous positions including chief operating officer and group president of Estee Lauder’s high growth specialty brands. Prior to these positions, he was president of the Estee Lauder, Clinique and Prescriptives brands. Prior to Estee Lauder, Mr. Brestle held various positions of increasing responsibility in distribution, manufacturing and operations at | | | 56 | | |
| 2020 PROXY STATEMENT
| MATTERS TO BE VOTED UPON AT THE ANNUAL MEETING
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Johnson & Johnson and served in the United States Air Force. Mr. Brestle served on the board of directors of Abercrombie & Fitch from 2005 to 2007. Mr. Brestle’s qualifications to sit on the Corporation’s Board of Directors include his experience in senior management at a multi-national consumer products public company, including experience in operations, manufacturing, marketing and brand-building, and his experience on the boards of directors of public companies.
Caroline W. Nahas (age 71). Ms. Nahas has served on the Corporation’s Board of Directors since 1992. She has served as Senior Advisor of Korn Ferry, an organizational and people advisory firm, since September 2019 and previously served as Vice Chair of Korn Ferry from January 2015 to September 2019. From 1998 to 2015, she held the position of managing director, Southern California, or similar positions, at Korn/Ferry International. She also served as a member of the executive committee of Korn/Ferry International from 1995 until 1998. Ms. Nahas is the former chairman of the board of directors and currently serves on the board of the United Way of Greater Los Angeles. Ms. Nahas is also vice chairman and an executive committee member of the UCLA Anderson School of Management-Board of Advisors. She previously served as a director of the Los Angeles Chamber of Commerce and Town Hall Los Angeles. Ms. Nahas’ qualifications to sit on the Corporation’s Board of Directors include her experience in a senior executive position with a professional services firm, her expertise in executive recruiting, human resources and compensation matters, and her experience onfor-profit andnot-for-profit boards of directors.
Gilbert T. Ray (age 75).Mr. Ray has served on the Corporation’s Board of Directors since 2004. He retired as a partner of the law firm of O’Melveny & Myers LLP in 2000. Mr. Ray practiced corporate law and has extensive experience with conventional corporate andtax-exempt transactions, as well as international finance. He served as counsel in connection with numerous securities offerings, acquisitions, dispositions and mergers. In addition, Mr. Ray has been a member of the board of directors of DiamondRock Hospitality Company since 2004. He formerly served on the board of directors of three other publicly-traded companies. Mr. Ray is also a trustee of the Seasons Series Trust, the SunAmerica Series Trust and The John Randolph Haynes and Dora Haynes Foundation. Mr. Ray’s qualifications to sit on the Corporation’s Board of Directors include his years of extensive experience in the legal industry as an advisor, his valuable insights with respect to compensation and corporate governance matters and his perspective in board deliberations drawing from lessons learned from his service on the boards of directors of public and private companies andnon-profit organizations.
Class II Directors—Terms to Expire in 2020
Susan M. Collyns (age 53).Ms. Collyns is the President and Chief Financial Officer of The Beachbody LLC,Company, a health, fitness, and nutrition company, and joined the company infrom August 2014.2014 to May 2022. Previously, Ms. Collyns served as the Chief Financial Officer of Dun and Bradstreet Credibility Corp., a financial data subscription business, from July 2012 to August 2014. From 2001 to 2011, Ms. Collyns served as Chief Financial Officer and Chief Operating Officer of California Pizza Kitchen, Inc. Ms. Collyns has served on the board of directors of Waitr Holdings Inc. sincefrom May 2019 to November 2019 and is a memberwas the chair of its compensation committee and the chair of its audit committee. Ms. Collyns previously served on the board of directors and audit committee of Potbelly, Inc. from May 2018 to May 2019. Ms. Collyns also served on the board of directors of Zoe’s Kitchen, Inc. from February 2014 to November 2018, where she served as the chair of the audit committee and was a member of the nominating and governance committee. Ms. Collyns’ qualifications to sit on the Corporation’s Board of Directors include her deep and pertinent restaurant and food service industry insight and her expertise in accounting, finance and operations.
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Larry A. Kay (age 72).Mr. Kay has served on the Corporation’s Board of Directors since 1987, before the Corporation went public. Mr. Kay served as the Lead Director of the Board of Directors of the Corporation from 2006 to 2009. He served as Chairman of the Board of Directors of the Corporation from 2003 to 2006. From 1978 to 1993, Mr. Kay was employed by the Corporation in a variety of capacities, including general counsel and executive vice president, administration. Mr. Kay served as chief executive officer and managing member of BSG Technologies, LLC, a sound technology licensing company, from 2008 to 2016. Mr. Kay was a private consultant and investor from 1994 to 2008. He served as a director of Design Center Solutions, Inc. dba Bridgeway Media Group and was an honorary member of the board of directors of the New Century Chamber Orchestra. Mr. Kay’s qualifications to sit on the Corporation’s Board of Directors include his prior experience as the Corporation’s Chairman of the Board of Directors and Lead Director, his experience as a consultant and private investor, his prior experience in senior management of the Corporation and his service on the boards of directors of private companies andnon-profit organizations.
Douglas M. Pasquale (age 65).Mr. Pasquale has served on the Corporation’s Board of Directors since March 2013. He has served as chief executive officer of Capstone Enterprises Corporation, an investment and consulting firm, since January 2012.
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| MATTERS TO BE VOTED UPON AT THE ANNUAL MEETING |
| | | Mr. Pasquale served as Nationwide Health Properties’ chairman of the board of directors from 2009 to 2011, president and chief executive officer from 2004 to 2011 and executive vice president and chief operating officer from 2003 to 2004. Mr. Pasquale served as a director of Nationwide Health Properties from 2003 to 2011. He also served on the board of directors of Ventas, Inc. from 2011 to May 2017. Mr. Pasquale has served on the board of directors of Alexander & Baldwin, Inc. since 2005, Terreno Realty Corporation since 2010 and Sunstone Hotel Investors, Inc. since 2011. Mr. Pasquale’s qualifications to sit on the Corporation’s Board of Directors include his prior experience in senior executive positions at public and private companies, his experience in management, accounting, finance, mergers, acquisitions and strategic planning, and his service on the boards of directors of public and private companies.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE ELECTION
OF ALL OF THE DIRECTOR NOMINEES.
Continuing Directors
Class III Directors—Terms to Expire in 2021
Richard J. Dahl (age 68).71) | | Mr. Dahl serves as the Corporation’s independent Chairman of the Board of Directors, a position he has held since September 2017. From March 2017 to September 2017, Mr. Dahl served as the Chairman of the Board of Directors and Interim Chief Executive Officer of the Corporation. He also served briefly as Interim President, Applebee’s Business Unit in March 2017 prior to Mr. Cywinski’s appointment to that role. He has served on the Corporation’s Board of Directors since 2004 and served as the Corporation’s Lead Director from January 2010 to March 2017. Mr. Dahl served on the board of directors of the James Campbell Company LLC, a privately-held, nationally diversified real estate company, from 2010 to May 2019 and previously served as the president and chief executive officer of James Campbell Company LLC from August 2010 to December 2016 and the chairman of the board of directors from 2010 to May 2018. He has been a member of the board of directors of Hawaiian Electric Industries, Inc. since January 2017 and served as a member of the board of directors of its subsidiary Hawaiian Electric Company, Inc., from January 2017 to May 2019.2019 and American Savings Bank from September 2022 to the present. He has been a member of the boards of directors of IDACORP, Inc. and its principal subsidiary, Idaho Power Company, since 2008 and has been chairman of the boards since May 2019. He served as a member of the board of directors of International Rectifier Corporation from February 2008 to January 2015 and as chairman of the board from May 2008 to January 2015. Mr. Dahl also served on the board of directors and as president and chief operating officer of Dole Food Company, Inc. from 2004 to 2007. Mr. Dahl’s qualifications to sit on the Corporation’s Board of Directors include his experience in senior management of public and private companies, including service as chairman, president, chief executive officer, chief operating officer and chief financial officer, his experience on the boards of directors of public companies, including service as the former chairman of the Audit Committee of the Corporation and on the audit committees of other public companies and his experience as a certified public accountant. |
| | | Stephen P. Joyce
Michael C. Hyter (age 60).66) | | Mr. Joyce serves as the Corporation’s Chief Executive Officer, a position heHyter has held since September 2017. He has also served on the Corporation’s Board of Directors since February 2012.July 2020. Mr. JoyceHyter has served as presidentthe President and chief executive officerChief Executive Officer of Choice Hotelsthe Executive Leadership Council since March 2021, a membership organization for Black CEOs, board directors, and senior executives. Mr. Hyter was the Chief Diversity Officer at Korn Ferry International, Inc.,an organizational and people advisory firm, from June 2020 to February 2021, and was Managing Partner of Korn Ferry International from September 2012 to June 2020. Previously, Mr. Hyter served as the President and Managing Partner of Global Novations LLC, a publicly-traded lodging franchisor,provider of diversity, inclusion, and leadership development solutions, from 20082006 to September 20172012. From 2001 to 2006, Mr. Hyter served as President and as a director from 2008 to September 2017. From 1982 to 2008,Chief Executive Officer of Novations LLC. Mr. Joyce was with Marriott International, Inc., where he attained the role of executive vice president, global development/owner and franchise services, in addition to holding other leadership positions. Mr. Joyce’sHyter’s qualifications to sit on the Corporation’s Board of Directors include his prior experience in senior executive positions, his experience in management, and his leadership in diversity and inclusion-driven corporate growth strategies. |
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| 2023 PROXY STATEMENT | MATTERS TO BE VOTED UPON AT THE ANNUAL MEETING |
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Carline W. Nahas (age 74) | | Ms. Nahas has served on the Corporation’s Board of public companies, including serviceDirectors since 1992. She has served as president,Senior Advisor of Korn Ferry, an organizational and people advisory firm, since September 2019 and previously served as Vice Chair of Korn Ferry from January 2015 to September 2019. From 1998 to 2015, she held the position of managing director, Southern California, or similar positions, at Korn/Ferry International. She also served as a member of the executive committee of Korn/Ferry International from 1995 until 1998. Ms. Nahas is the former chairman of the board of directors and served in various capacities on the board of the United Way of Greater Los Angeles. Ms. Nahas currently serves as Chair of the Board of Advisors of the UCLA Anderson School of Management, previously serving as Vice Chair and Executive Committee member of the Board. She previously served as a director of the Los Angeles Chamber of Commerce and Town Hall Los Angeles. Ms. Nahas’ qualifications to sit on the Corporation’s Board of Directors include her experience in a senior executive position with a professional services firm, her expertise in executive recruiting, human resources and compensation matters, and her leadership experience on for-profit and not-for-profit boards of directors. |
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Douglas M. Pasquale (age 68) | | Mr. Pasquale has served on the Corporation’s Board of Directors since March 2013. He has served as chief executive officer of Capstone Enterprises Corporation, an investment and consulting firm, since January 2012. From September 2021 through March 2022, Mr. Pasquale served as Interim CEO of Sunstone Hotel Investors, a lodging REIT, and served as Executive Chairman of Sunstone Hotel Investors through August 2022. Mr. Pasquale served as Nationwide Health Properties’ chairman of the board of directors from 2009 to 2011, president and chief executive officer from 2004 to 2011 and executive vice president and chief operating officer from 2003 to 2004. Mr. Pasquale served as a director of Nationwide Health Properties from 2003 to 2011. He also served on the board of directors of Ventas, Inc. from 2011 to May 2017. Mr. Pasquale has served on the board of directors of Alexander & Baldwin, Inc. since 2005, Terreno Realty Corporation since 2010 and Sunstone Hotel Investors, Inc. since 2011. Mr. Pasquale’s qualifications to sit on the Corporation’s Board of Directors include his prior experience in senior executive positions at public and private companies, his experience in management, accounting, finance, mergers, acquisitions and strategic planning, and his experienceservice on the boards of directors of public and private companiescompanies. |
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John W. Peyton (age 56) | | Mr. Peyton has served as the Chief Executive Officer of the Corporation since January 2021. Mr. Peyton served as President andnot-for-profit organizations. Chief Executive Officer of Realogy Franchise Group from 2016 to December 2020. Prior to Realogy, Mr. Peyton spent 17 years with Starwood Hotels and Resorts Worldwide, holding various positions including Chief Marketing Officer, Senior Vice President of Global Operations and Chief Operations Officer, North America Hotel Division, among others. |
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| 2023 PROXY STATEMENT | MATTERS TO BE VOTED UPON AT THE ANNUAL MEETING |
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Martha C. Poulter (age 55) | | Ms. Poulter has served on the Corporation’s Board of Directors since September 2021. Ms. Poulter is Senior Vice President and Chief Information Officer for Royal Caribbean Group, a global cruise holding company. In this role, she leads Royal Caribbean Group’s global IT team both on shore and shipboard across multiple brands including Royal Caribbean International, Celebrity Cruises, and Silversea Cruises. Prior to joining Royal Caribbean in 2018, Ms. Poulter was Executive Vice President and Chief Information Officer at Starwood Hotels & Resorts Worldwide, Inc. Before joining Starwood in 2014, Ms. Poulter served as Vice President and Chief Information Officer at GE Capital with global responsibility for IT strategy and operations. Ms. Poulter holds a B.S.E. degree in Computer Science and Engineering from the University of Connecticut and completed her M.B.A. at the University of New Haven. Ms. Poulter’s qualifications to sit on the Corporation’s Board of Directors include her many years of information and IT operations leadership experience in various industries, including hospitality and financial services. |
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Arthur F. Starrs (age 46) | | Mr. Starrs is Chief Executive Officer of Topgolf International, Inc., a sports entertainment company, and has served in such capacity since April 2021. Mr. Starrs is responsible for Topgolf’s global businesses which include domestic and international Topgolf venues, Toptracer, and Topgolf Media. Prior to Topgolf, Mr. Starrs was the Global CEO of Pizza Hut, a division of Yum! Brands and global restaurant business, from July 2019 until April 2021. He was President of Pizza Hut U.S. from April 2016 to July 2019, General Manager of Pizza Hut U.S. October 2015 to April 2016. Prior to that he served as Chief Financial Officer of Pizza Hut U.S. from January 2014 to October 2015 and Vice President – Finance from August 2013 to December 2013. He previously served on the board of directors for Grubhub, Inc. and currently serves as a board member for Five Iron Golf. He is a member of numerous non-profit boards, including The First Tee of Greater Dallas, First Book, The Greater Dallas Youth Orchestra, and Greenhill School. Mr. Starrs’ qualifications to sit on the Corporation’s Board of Directors include his franchise experience across the restaurant and hospitality industries, his experience in management and finance, and his service on the boards of directors or public and private companies. |
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Lilian C. Tomovich (age 52).55) | | Ms. Tomovich has served on the Corporation’s Board of Directors since January 2017. Ms. Tomovich has served as the Chief Marketing Officer of Barclays US Consumer Bank since September 2021. Ms. Tomovich served as the Chief Marketing Officer of Grove Collaborative, a home essentials company, from August 2020 to February 2021. She served as the Chief Experience Officer and Chief Marketing Officer for MGM Resorts International, a global hospitality company, from July 2014 to December 2019. Ms. Tomovich served as the Senior Vice President, US Consumer Marketing for MasterCard Worldwide, a global payments solutions company, from 2013 to 2014 and was the country head of Marketing for Canada from 2010 to 2013. Ms. Tomovich’s qualifications to sit on the Corporation’s Board of Directors include her 25 years of marketing experience across all channels in the hospitality, retail, financial services, and telecom industries. |
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE ELECTION OF ALL OF THE DIRECTOR NOMINEES. | | | | | | 63 |
| 2023 PROXY STATEMENT | | | 58 | | |
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| 2020 PROXY STATEMENT
MATTERS TO BE VOTED UPON AT THE ANNUAL MEETING | MATTERS TO BE VOTED UPON AT THE ANNUAL MEETING
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PROPOSAL TWO: RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP AS THE CORPORATION’S INDEPENDENT AUDITOR FOR THE 2020 FISCAL YEAR
Ernst & Young LLP served as the Corporation’s independent auditor for the fiscal year ended December 31, 2019 and the Audit Committee has unanimously selected Ernst & Young LLP to serve as the Corporation’s independent auditor for the fiscal year ending December 31, 2020.
Representatives of Ernst & Young LLP are expected to be present at the Annual Meeting and will have an opportunity to make a statement if they desire to do so and are expected to be available to respond to appropriate questions. Unless otherwise indicated thereon, the persons named in the proxy card will vote all proxies in favor of ratifying the appointment of Ernst & Young LLP as the Corporation’s independent auditors. If stockholders do not approve this proposal, the Audit Committee will reconsider the appointment of Ernst & Young LLP as the Corporation’s independent auditor.
THE BOARD OF DIRECTORS AND THE AUDIT COMMITTEE UNANIMOUSLY RECOMMEND A VOTE “FOR” THE
RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP AS THE CORPORATION’S INDEPENDENT
AUDITOR FOR THE 2020 FISCAL YEAR.
PROPOSAL THREE: APPROVAL, ON AN ADVISORY BASIS, OF THE COMPENSATION OF THE CORPORATION’S NAMED EXECUTIVE OFFICERS
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PROPOSAL TWO: RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP AS THE CORPORATION’S INDEPENDENT AUDITOR FOR THE 2023 FISCAL YEAR Ernst & Young LLP served as the Corporation’s independent auditor for the fiscal year ended December 31, 2022 and the Audit Committee has unanimously selected Ernst & Young LLP to serve as the Corporation’s independent auditor for the fiscal year ending December 31, 2023. Representatives of Ernst & Young LLP are expected to be present at the Annual Meeting and will have an opportunity to make a statement if they desire to do so and are expected to be available to respond to appropriate questions. If stockholders do not approve this proposal, the Audit Committee will reconsider the appointment of Ernst & Young LLP as the Corporation’s independent auditor. THE BOARD OF DIRECTORS AND THE AUDIT COMMITTEE UNANIMOUSLY RECOMMEND A VOTE “FOR” THE RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP AS THE CORPORATION’S INDEPENDENT AUDITOR FOR THE 2023 FISCAL YEAR. PROPOSAL THREE: APPROVAL, ON AN ADVISORY BASIS, OF THE COMPENSATION OF THE CORPORATION’S NAMED EXECUTIVE OFFICERS Pursuant to Section 14A of the Exchange Act, the Board of Directors provides stockholders with the opportunity to cast an advisory vote on the Corporation’s executive compensation. Pursuant to an advisory vote at our 2017 annual meeting, our stockholders elected to hold such advisory votes on an annual basis until the next vote regarding the frequency of future advisory votes, which will occur at the Annual Meeting (Proposal Four). The core of the Corporation’s executive compensation policies and practices continues to be to pay-for-performance. Our executive officers are compensated in a manner consistent with our strategy, competitive practice, sound corporate governance principles, and stockholder interests and concerns. The Board of Directors believes the Corporation’s compensation programs and policies are strongly aligned with the long-term interests of the stockholders of the Corporation. Stockholders are urged to read the “Compensation Discussion and Analysis” section of this proxy statement for additional details on executive compensation, including the Corporation’s compensation philosophy and objectives and the 2022 compensation of the Corporation’s NEOs. The Board of Directors recommends that stockholders indicate their support for the compensation of the Corporation’s NEOs and the Corporation’s compensation philosophy as described in this proxy statement by approving the following resolution: “RESOLVED, that the stockholders hereby approve, on an advisory basis, the compensation paid to the named executive officers, as disclosed in the Corporation’s proxy statement for the 2023 Annual Meeting of Stockholders pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, the 2022 Summary Compensation Table, other compensation tables, narrative discussion and related disclosure.” Although this vote is advisory and therefore non-binding on the Corporation, the Board of Directors and the Compensation Committee value the opinions of our stockholders and will consider the outcome of the vote when making future compensation decisions for our NEOs. THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE APPROVAL, ON AN ADVISORY BASIS, OF THE COMPENSATION OF THE CORPORATION’S NAMED EXECUTIVE OFFICERS AS DISCLOSED IN THIS PROXY STATEMENT. | | | | 64 | | |
| 2023 PROXY STATEMENT | MATTERS TO BE VOTED UPON AT THE ANNUAL MEETING |
PROPOSAL FOUR: APPROVAL, ON AN ADVISORY BASIS, OF WHETHER THE ADVISORY VOTE TO APPROVE THE COMPENSATION OF THE CORPORATION’S NAMED EXECUTIVE OFFICERS SHOULD OCCUR EVERY ONE, TWO OR THREE YEARS Pursuant to Section 14A of the Exchange Act, stockholders are being asked to vote on the frequency of future stockholder advisory votes on executive compensation – whether an advisory vote on our executive compensation should be held every one, two or three years. Stockholders also may abstain from voting on this proposal. We currently hold advisory votes on executive compensation annually, consistent with the recommendation of our stockholders at the 2017 annual meeting. Stockholders are provided an opportunity to vote on the frequency of future stockholder advisory votes on executive compensation at least once every six years. We believe that it is important to give our stockholders the opportunity to provide input on our executive compensation in a consistent and meaningful manner. As such, the Board of Directors believes that our stockholders should continue to have the opportunity to voice their approval or disapproval of our executive compensation each year. The Board of Directors believes that annual votes will facilitate the highest level of accountability to and communication with our stockholders. Although this vote is advisory and therefore non-binding on the Corporation, the Board of Directors and the Compensation Committee value the opinions of our stockholders and will consider the outcome of the vote when determining the frequency with which advisory votes on executive compensation should be held. Stockholders may vote for the frequency of future advisory votes on executive compensation to occur every “one year,” “two years,” “three years,” or stockholders may abstain from voting on this proposal. THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR EVERY “ONE YEAR” AS THE FREQUENCY OF FUTURE ADVISORY VOTES ON THE COMPENSATION OF THE CORPORATION’S NAMED EXECUTIVE OFFICERS. PROPOSAL FIVE: AMENDMENT OF THE CERTIFICATE OF INCORPORATION TO ELIMINATE SUPERMAJORITY VOTING REQUIREMENTS TO AMEND THE BYLAWS Background After careful consideration and upon the recommendation of the Nominating and Corporate Governance Committee, the Board of Directors recommends that the Corporation’s stockholders approve and adopt an amendment to the Charter to eliminate supermajority voting requirements for stockholders to amend the Corporation’s Bylaws. The Board of Directors is committed to good corporate governance and believes in maintaining policies and practices that serve the interests of all stockholders. The Charter currently requires that the affirmative vote of holders of at least eighty percent (80%) of the combined voting power of all of the then-outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors is required to amend certain provisions of the Corporation’s Bylaws (the “Supermajority Vote Requirement”). The Corporation established the Supermajority Vote Requirement at a time when it was critical to protect the interests of stockholders by ensuring that changes to certain provisions of the Corporation’s Bylaws have the support of a broad consensus of all stockholders. Such provisions relate to special meetings of stockholders (Article II, Section 3), notice of business requirements (Article II, Section 8), the number and election of directors (Article III, Section 1), director nomination requirements (Article III, Section 2), removal of directors (Article III, Section 3), director vacancies (Article III, Section 4), indemnification (Article VIII) and bylaw amendments (Article IX). If the Corporation’s stockholders approve and adopt the proposed amendment to eliminate the Supermajority Vote Requirement, the Board of Directors will be able to amend all of the Corporation’s Bylaws, without further action of the stockholders, pursuant to clause (b) of Article FIFTH of the Charter. After considering the advantages and disadvantages of the Supermajority Vote Requirement, the Board of Directors has determined this amendment is responsive to the prevailing views regarding best corporate governance practices as evidenced by the fact that many other public companies have transitioned away from supermajority vote requirements for amendments to bylaws by a corporation’s stockholders. On balance, and in contemplation of the considerations described above, the Board of Directors believes this action is in the best interests of the Corporation and its stockholders. | | | | | | 65 |
| 2023 PROXY STATEMENT | MATTERS TO BE VOTED UPON AT THE ANNUAL MEETING |
The Board of Directors also considered that, under certain circumstances, supermajority voting requirements can provide benefits to the Corporation and its stockholders by making it more difficult for one or a few large stockholders to facilitate a takeover of the Corporation or implement certain fundamental changes to the Corporation without more widespread stockholder support. The Board of Directors continues to believe that requiring a supermajority vote to amend certain provisions of the Charter can facilitate corporate governance stability by requiring broad stockholder support in order to effect fundamental changes. Conforming Change to the Bylaws The Corporation’s Bylaws currently include a conforming supermajority stockholder vote requirement with respect to amendments to the Corporation’s Bylaws. Conditional upon the approval and adoption by the stockholders of the proposed amendment to eliminate the Supermajority Vote Requirement and the filing of the Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware as described below, the Board of Directors has approved an amendment to Article IX, Section 1 of the Corporation’s Bylaws substantially in the form included in Appendix B to this proxy statement to eliminate the supermajority stockholder vote requirement with respect to amendments to the Corporation’s Bylaws. The effectiveness of the foregoing amendment to the Corporation’s Bylaws is conditioned upon, and would only take effect concurrently with, the filing of the Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware. Proposed Amendment The proposed amendment to Article EIGHTH of the Charter is as follows, with deleted text stricken: The Corporation reserves the right to amend, alter, change or repeal any provision contained in this Restated Certificate of Incorporation or in the By-Laws of the Corporation, in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders herein are granted subject to this reservation, provided, however, that subject to the powers and rights provided for herein with respect to Preferred Stock issued by the Corporation, if any, but notwithstanding anything else contained in this Restated Certificate of Incorporation to the contrary, the affirmative vote of the holders of at least eighty percent (80%) of the combined voting power of all of the then outstanding shares of capital stock entitled to vote generally in the election of directors, voting together as a single class, shall be required to alter, amend, rescind or repeal (i) Article FOURTH, Article FIFTH, Article SIXTH, Article SEVENTH or this Article EIGHTH of this Restated Certificate of Incorporation or to adopt any provision inconsistent therewith or (ii) Section 3 or 8 of Article II, Section 1, 2, 3 or 4 of Article III, Article VIII or Article IX of the By-Laws of the Corporation or to adopt any provision inconsistent therewith. The full text of the proposed Amended and Restated Certificate of Incorporation, including the additional proposed amendments discussed in Proposal Six of this proxy statement, is included in Appendix B to this proxy statement. The affirmative vote of the holders of 80% of the outstanding shares of our common stock is required to authorize the proposed amendment to the Charter. If this proposal to amend the Charter is approved and adopted by our stockholders, we will file an Amended and Restated Certificate of Incorporation for the Corporation with the Secretary of State of the State of Delaware shortly after the Annual Meeting that includes the above-described amendment. If this proposal to amend the Charter is not approved and adopted, the above-described amendment will not become effective. The Amended and Restated Certificate of Incorporation to be filed with the Secretary of State of the State of Delaware shortly after the Annual Meeting will also include the amendments described in Proposal Six, if those amendments are also approved and adopted by stockholders. FOR THESE REASONS, THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE FOR THIS PROPOSAL. | | | | 66 | | |
| 2023 PROXY STATEMENT | MATTERS TO BE VOTED UPON AT THE ANNUAL MEETING |
PROPOSAL SIX: AMENDMENT OF THE CERTIFICATE OF INCORPORATION TO PROVIDE FOR THE EXCULPATION OF OFFICERS AS PERMITTED BY DELAWARE LAW Background The Delaware General Corporation Law (the “DGCL”) was recently amended to permit Delaware companies to exculpate their officers, in addition to their directors, for personal liability in certain actions. After careful consideration, on February 16, 2023, the Board approved and adopted an amendment and restatement of the Charter to include the exculpation of officers pursuant to these recent amendments to the DGCL. As amended, the DGCL only permits, and our proposed amendment would only permit, exculpation of officers for claims that do not involve breaches of the duty of loyalty, acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law, or any transaction in which the officer derived an improper personal benefit. In addition, the exculpation of officers would not apply to claims brought by or in the right of the Corporation, such as derivative claims. If the proposed amendment is adopted, the types of claims that would be barred against certain senior officers are a subset of those claims that are already barred against directors under the Charter, as permitted by Delaware law. Officers, like directors, are exposed to a substantial risk of lawsuits or proceedings seeking to impose personal monetary liability. Officer exculpation is intended to enable our officers to exercise their business judgment in furtherance of the interests of our stockholders while minimizing the potential for distraction posed by frivolous lawsuits and costs which are often borne by the Company either directly, through indemnification, or indirectly through higher insurance premiums. Without officer exculpation, the potential for such frivolous claims may impede the Corporation’s ability to attract and retain quality executives to work on its behalf, present barriers to the Corporation’s ability to accomplish its business objectives due to the diversion of management attention and result in a waste of corporate resources. The Board believes that eliminating personal monetary liability for officers under the circumstances permitted by the DGCL is reasonable and appropriate. This limitation provides the proper balance between shareholders’ interest in accountability and their interest in limiting the assertion of potentially frivolous claims for negligence. We expect that many of our peers incorporated in Delaware, with whom we compete for executive talent, will adopt exculpation clauses that limit the personal liability of officers in their Certificates of Incorporation. Although the amendment is not being proposed in response to any specific resignation, threat of resignation or refusal to serve by any officer, we believe a failure to adopt the proposed amendment could impact our recruitment and retention of exceptional officer candidates who may conclude that, without the protection of exculpation, the potential exposure to liabilities, costs of defense and other risks of proceedings exceeds the benefits of serving as an officer of the Corporation. Taking into account the limits on the type of claims for which officers’ liability would be exculpated, and the benefits the Board believes would accrue to the Corporation and its stockholders, the Board determined that it is in the best interests of the Corporation and our stockholders to amend the Charter as described herein. Proposed Amendment The proposed amendment to Article FIFTH, paragraph (e) of the Charter is as follows, with added text underlined and deleted text stricken: No director or officer shall be personally liable to the Corporation or any of its stockholders for monetary damages for breach of fiduciary duty as a director or officer, except to the extent such exemption from liability or limitation thereof is not permitted under the DGCL, as it presently exists or may hereafter be amended from time to timeexcept for liability (i) for any breach of the director’s duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) pursuant to Section 174 of the DGCL or (iv) for any transaction from which the director derived an improper personal benefit. Any repeal or modification of this Article FIFTH by the stockholders of the Corporation shall not adversely affect any right or protection of a director or officer of the Corporation existing at the time of such repeal or modification with respect to acts or omissions occurring prior to such repeal or modification. For purposes of this Article FIFTH, paragraph (e), “officer” shall have the meaning provided in Section 102(b)(7) of the DGCL, as it presently exists or may hereafter be amended from time to time. | | | | | | 67 |
| 2023 PROXY STATEMENT | MATTERS TO BE VOTED UPON AT THE ANNUAL MEETING |
The full text of the proposed Amended and Restated Certificate of Incorporation, including the additional proposed amendments discussed in Proposal Five of this proxy statement, is included in Appendix B to this proxy statement. The affirmative vote of the holders of 80% of the outstanding shares of our common stock is required to approve and adopt the proposed amendment to the Charter. If this proposal to amend the Charter is approved and adopted by our stockholders, we will file an Amended and Restated Certificate of Incorporation for the Corporation with the Secretary of State of Delaware shortly after the Annual Meeting that includes the above-described amendment. If this proposal to amend the Charter is not approved and adopted, the above-described amendment will not become effective. The Amended and Restated Certificate of Incorporation to be filed with the Secretary of State of Delaware shortly after the Annual Meeting will also include the amendments described in Proposal Five, if those amendments are also approved and adopted by stockholders. FOR THESE REASONS, THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE FOR THIS PROPOSAL. PROPOSAL SEVEN: A STOCKHOLDER PROPOSAL TO PRODUCE A REPORT RELATING TO THE CORPORATION’S CAGE-FREE EGG COMMITMENT The Corporation received from The Humane Society of the United States (“HSUS”) the following stockholder proposal (for purposes of this section, the “HSUS Proposal”) for action at the Annual Meeting. HSUS has indicated that it has held at least $2,000 in market value of the Corporation’s securities entitled to be voted on the HSUS Proposal for at least one year, and confirmed HSUS’s intention to continue to hold those securities through the date of the Annual Meeting. The HSUS Proposal will be voted on at the Annual Meeting upon proper presentation by HSUS. The following text of the HSUS Proposal and supporting statement appears exactly as received by the Corporation. All statements contained in the HSUS Proposal are the sole responsibility of HSUS. HSUS Proposal THEREFORE, BE IT RESOLVED: Shareholders ask Dine Brands to disclose any updated cage-free egg targets it may have with the goal of accelerating its progress. If the company has no such updated targets, then shareholders ask it to develop and disclose them. This should happen within six months of the 2023 annual meeting, at a reasonable cost, and omitting proprietary information. Supporting Statement: This proposal simply seeks updated disclosure from Dine Brands regarding one of its longtime ESG commitments. Corporate accountability for significant policy commitments, particularly those relating to ESG matters, is being subjected to increasing public and stakeholder scrutiny. In 2022, for example, irregularities in what McDonald’s was publicly reporting (compared to what it was actually doing) on one of its animal welfare commitments were thrust into the global spotlight. This controversy was featured in the Wall Street Journal, New York Times, Washington Post, Bloomberg, Financial Times, BBC, and many other major news outlets. Two board members were challenged in a proxy contest by Carl Icahn, and when Institutional Shareholder Services (ISS) evaluated the issue in detail, it concluded that only “cautionary support” was warranted for them, pointing out that it, “serves as a reminder to shareholders to demand greater specificity from corporate leaders seeking to address ESG concerns[.]” It is precisely that “greater specificity” which this proposal calls for. Here’s the background: In 2016, Dine Brands pledged to use 100% cage-free eggs by 2025. By 2020, the company was using only about 5% cage-free eggs. In 2021, Dine Brands then announced that it was, “aiming to have at least 20% of our U.S. egg supply chain be cage-free by the end of 2022, 33% by the end of 2023, 66% by the end of 2024, 100% by the end of 2025.” At the time, the company also wrote this: “we continue to work with our suppliers and plan to adjust our targets annually with the goal of accelerating our progress.” However, 2022 came and went with no annual adjustment to these targets. | | | | 68 | | |
| 2023 PROXY STATEMENT | MATTERS TO BE VOTED UPON AT THE ANNUAL MEETING |
The McDonald’s example above illustrates the need for companies to ensure they take meaningful actions in furtherance of their ESG promises—that they actually do what they say they’ll do. Whether a company keeps or breaks its animal welfare (or other significant policy) commitments can carry weighty consequences indeed. In this case, shareholders have no information that Dine Brands ever did adjust its cage-free egg targets so as to accelerate its progress. THE BOARD OF DIRECTORS’ RESPONSE TO THE STOCKHOLDER PROPOSAL The Board of Directors recommends that you vote AGAINST this proposal. The Corporation’s disclosures relating to our cage-free egg commitment are available to stockholders in our annual ESG report. | | | | | | 69 |
| 2023 PROXY STATEMENT | PROPOSALS OF STOCKHOLDERS |
PROPOSALS OF STOCKHOLDERS The Board of Directors will make provision for presentation of proposals of stockholders at the 2024 annual meeting of stockholders provided such proposals are submitted by eligible stockholders who have complied with the Bylaws of the Corporation and/or the relevant regulations of the SEC. In order for any such proposals to be considered for inclusion in the proxy materials for the 2024 annual meeting of stockholders, the proposal should be mailed to Dine Brands Global, Inc., Attn: Office of the Secretary, 10 West Walnut, Pasadena, California 91103, and must be received no later than [●], 2023. Stockholders who intend to present a proposal at the 2024 annual meeting of stockholders without inclusion of such proposal in the Corporation’s proxy materials or to nominate a director to stand for election at the 2024 annual meeting of stockholders are required to provide notice of such proposal or nomination to the Corporation no earlier than February 11, 2024 and no later than March 12, 2024 and must otherwise comply with the requirements set forth in our Bylaws. In addition to satisfying these, to comply with the universal proxy rules, stockholders who intend to solicit proxies in support of director nominees other than our nominees must provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act no later than March 12, 2024. The Corporation reserves the right to reject, rule out of order, or take other appropriate action with respect to any proposal or nomination that does not comply with these and other applicable requirements. | | | | 70 | | |
| 2023 PROXY STATEMENT | HOUSEHOLDING OF PROXY MATERIALS |
HOUSEHOLDING OF PROXY MATERIALS The SEC permits us to deliver a single copy of the notice, proxy statement and annual report to stockholders who have the same address and last name, unless we have received contrary instructions from such stockholders. Each stockholder will continue to receive a separate proxy card. This procedure, called “householding,” will reduce the volume of duplicate information you receive and reduce our printing and postage costs. We will promptly deliver a separate copy of the notice, proxy statement and annual report to any such stockholder upon written or oral request. A stockholder wishing to receive a separate notice, proxy statement or annual report can notify us at Dine Brands Global, Inc., Investor Relations, 10 West Walnut, Pasadena, California 91103, telephone: (866) 995-DINE. Similarly, stockholders currently receiving multiple copies of these documents can request the elimination of duplicate documents by contacting us as described above. | | | | | | 71 |
| 2023 PROXY STATEMENT | OTHER BUSINESS |
OTHER BUSINESS As of the date of this proxy statement, the management of the Corporation is not aware of any other matters to be brought before the Annual Meeting. However, if any other matters are properly brought before the Annual Meeting, the persons named in the enclosed form of proxy will have discretionary authority to vote all proxies with respect to such matters in accordance with their best judgment. By Order of the Board of Directors, Christine K. Son Senior Vice President, Legal, General Counsel and Secretary March [●], 2023 Glendale, California | | | | 72 | | |
| 2023 PROXY STATEMENT | APPENDIX A |
Appendix A RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (In thousands, except per share amounts) This proxy statement includes references to the Corporation’s non-GAAP financial measure “adjusted EBITDA.” Management may use non-GAAP financial measures along with the corresponding U.S. GAAP measures to evaluate the performance of the business and to make certain business decisions. Additionally, adjusted EBITDA is a metric used in determining payouts under the Corporation’s annual cash incentive plan. Management believes that non-GAAP financial measures provide additional meaningful information that should be considered when assessing the business and the Corporation’s performance compared to prior periods and the marketplace. Adjusted EBITDA is a supplemental non-GAAP financial measure and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with U.S. GAAP. Reconciliation of the Company’s net income to “adjusted EBITDA.” The Company defines adjusted EBITDA as net income or loss, adjusted for the effect of closure and impairment charges, interest charges, income tax provision or benefit, depreciation and amortization, non-cash stock-based compensation, gain or loss on disposition of assets, merger and acquisition costs, other non-income based taxes and other items deemed not reflective of current operations. Management may use certain non-GAAP measures along with the corresponding U.S. GAAP measures to evaluate the performance of the Company and to make certain business decisions. | | | | | | | | | | | | | | | | | | | | Three Months Ended
December 31, | | | Twelve Months Ended
December 31, | | | | | | | | | | 2022 | | | 2021 | | | 2022 | | | 2021 | | | | | | | Net income, as reported | | $ | 11,351 | | | $ | 19,788 | | | $ | 81,111 | | | $ | 97,864 | | | | | | | Closure and impairment charges | | | (31 | ) | | | 385 | | | | 3,062 | | | | 5,409 | | | | | | | Interest charges on finance leases | | | 849 | �� | | | 1,246 | | | | 4,519 | | | | 5,397 | | | | | | | All other interest charges | | | 17,813 | | | | 16,362 | | | | 67,713 | | | | 66,454 | | | | | | | Income tax provision | | | 8,009 | | | | 8,691 | | | | 33,674 | | | | 24,059 | | | | | | | Depreciation and amortization | | | 9,073 | | | | 9,882 | | | | 37,918 | | | | 39,851 | | | | | | | Non-cash stock-based compensation | | | 4,003 | | | | 3,006 | | | | 16,131 | | | | 11,580 | | | | | | | (Gain) loss on extinguishment of debt | | | (1,371 | ) | | | 17 | | | | (210 | ) | | | 34 | | | | | | | Loss (gain) on disposition of assets | | | 496 | | | | 609 | | | | (2,536 | ) | | | 2,045 | | | | | | | Merger and acquisition costs | | | 5,052 | | | | — | | | | 6,027 | | | | — | | | | | | | Other | | | 1,756 | | | | 113 | | | | 4,463 | | | | 567 | | | | | | | Adjusted EBITDA | | $ | 57,000 | | | $ | 60,099 | | | $ | 251,872 | | | $ | 253,260 | |
| | | | | | A-1 |
| 2023 PROXY STATEMENT | APPENDIX B |
Appendix B AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF DINE BRANDS GLOBAL, INC. Dine Brands Global, Inc., a corporation organized and existing under the laws of the State of Delaware, does hereby certify and by virtue of the General Corporation Law of the State of Delaware does hereby amend and restate the Certificate of Incorporation of the Corporation, which was originally filed on May 7, 1976, under the name “IHOP Corp.”: FIRST: The name of the Corporation is Dine Brands Global, Inc. (hereinafter the “Corporation”). SECOND: The address of the registered office of the Corporation in the State of Delaware is 2711 Centerville Road, Suite 400, Wilmington, Delaware 19808, County of New Castle. The name of its registered agent at that address is Corporation Service Company. THIRD: The purpose of the Corporation is to engage in any lawful act or activity for which a corporation may be organized under the General Corporation Law of the State of Delaware as set forth in Title 8 of the Delaware Code (the “DGCL”). FOURTH: The total number of shares which the Corporation shall have authority to issue is 50,000,000 shares, consisting of (a) 40,000,000 shares of common stock, par value $.01 per share (the “Common Stock”), and (b) 10,000,000 shares of preferred stock, par value $1.00 per share (the “Preferred Stock”). The Board of Directors of the Corporation (the “Board of Directors”) is expressly authorized, at any time and from time to time, to fix, by resolution or resolutions, the following provisions for shares of any class or classes of Preferred Stock of the Corporation or any series of any class of Preferred Stock: | (a) | the designation of such class or series, the number of shares to constitute such class or series and the stated value thereof if different from the par value thereof; |
| (b) | whether the shares of such class or series shall have voting rights, in addition to any voting rights provided by law, and, if so, the terms of such voting rights, which may (i) be general or limited, (ii) subject to applicable law or regulation, including without limitation the rules of any securities exchange on which securities of any class of the Corporation may be listed, permit more than one vote per share, or (iii) vary among stockholders of the same class based upon such factors as the Board of Directors provides stockholdersmay determine including, without limitation, the size of a stockholder’s position and/or the length of time with respect to which such position has been held; |
| (c) | the dividends, if any, payable on such class or series, whether any such dividends shall be cumulative, and, if so, from what dates, the conditions and dates upon which such dividends shall be payable, the preference or relation which such dividends shall bear to the dividends payable on any shares of stock of any other class or any other series of the same class; |
| (d) | whether the shares of such class or series shall be subject to redemption by the Corporation, and, if so, the times, prices and other conditions of such redemption; |
| (e) | the amount or amounts payable upon shares of such series upon, and the rights of the holders of such class or series in, the voluntary or involuntary liquidation, dissolution or winding up, or upon any distribution of the assets, of the Corporation; |
| (f) | whether the shares of such class or series shall be subject to the operation of a retirement or sinking fund and, if so, the extent to and manner in which any such retirement or sinking fund shall be applied to the purchase or redemption of the shares of such class or series for retirement or other corporate purposes and the terms and provisions relative to the operation thereof; |
| (g) | whether the shares of such class or series shall be convertible into, or exchangeable for, shares of stock of any other class or any other series of the same class or any other securities (including Common Stock) and, if so, the |
| | | | | | B-1 |
| 2023 PROXY STATEMENT | APPENDIX B |
| price or prices or the rate or rates of conversion or exchange and the method, if any, of adjusting the same and any other terms and conditions of conversion or exchange; |
| (h) | the limitations and restrictions, if any, to be effective while any shares of such class or series are outstanding upon the payment of dividends or the making of other distributions on, and upon the purchase, redemption or other acquisition by the Corporation of, the Common Stock or shares of stock of any other class or any other series of the same class; |
| (i) | the conditions or restrictions, if any, upon the creation of indebtedness of the Corporation or upon the issue of any additional stock, including additional shares of such class or series or of any other series of the same class or of any other class; |
| (j) | the ranking (be it pari passu, junior or senior) of each class or series vis-a-vis any other class or series of any class of Preferred Stock as to the payment of dividends, the distribution of assets and all other matters; and |
| (k) | any other powers, preferences and relative, participating, optional and other special rights, and any qualifications, limitations and restrictions thereof, insofar as they are not inconsistent with the opportunityprovisions of this Restated Certificate of Incorporation, to cast an advisory vote on the Corporation’s executive compensation. Pursuant to an advisory vote at our 2017 annual meeting, our stockholders elected to hold such advisory votes on an annual basis untilfull extent permitted in accordance with the next vote regarding the frequency of future advisory votes which will occur at the annual meeting in 2023. The corelaws of the Corporation’s executive compensation policiesState of Delaware.
|
The powers, preferences and relative, participating, optional and other special rights of each class or series of Preferred Stock, and the qualifications, limitations or restrictions thereof, if any, may differ from those of any and all other series at any time outstanding. FIFTH: The following provisions are inserted for the management of the business and the conduct of the affairs of the Corporation, and for further definition, limitation and regulation of the powers of the Corporation and of its directors and stockholders: | (a) | The business and practices continuesaffairs of the Corporation shall be managed by or under the direction of the Board of Directors. |
| (b) | The directors shall have concurrent power with the stockholders to make, alter, amend, change, add to or repeal the By-Laws of the Corporation. |
| (c) | The business and affairs of the Corporation shall be topay-for-performance. Our executive officers are compensated inmanaged by or under the direction of a manner consistent with our strategy, competitive practice, sound corporate governance principles, and stockholder interests and concerns. The Board of Directors believesconsisting of not less than three nor more than 13 directors, the Corporation’s compensation programs and policies are strongly aligned withexact number of directors to be determined from time to time by resolution adopted by the long-term interestsaffirmative vote of a majority of the directors then in office. No decrease in the number of directors shall shorten the term of any incumbent director. Directors shall be elected for a term expiring at the next annual meeting of stockholders of the Corporation. Stockholders are urgedafter their election and each director shall hold office until his or her successor shall be elected and shall qualify, subject, however, to read the “Compensation Discussion and Analysis” section of this proxy statement for additional details on executive compensation, including the Corporation’s compensation philosophy and objectives andprior death, resignation, disqualification or removal from office; provided, however, that any director elected or appointed prior to the 2019 compensationannual meeting of stockholders shall complete the Corporation’s NEOs.
The Board of Directors recommends that stockholders indicate their support for the compensation of the Corporation’s NEOs and the Corporation’s compensation philosophy as described in this proxy statement by approving the following resolution:
“RESOLVED, that the stockholders hereby approve,term to which such director has been elected or appointed. Any vacancy on an advisory basis, the compensation paid to the named executive officers, as disclosed in the Corporation’s proxy statement for the 2020 Annual Meeting of Stockholders pursuant to Item 402 ofRegulation S-K, including the Compensation Discussion and Analysis, the 2019 Summary Compensation Table, other compensation tables, narrative discussion and related disclosure.”
Although this vote is advisory and thereforenon-binding on the Corporation, the Board of Directors and the Compensation Committee value the opinions of our stockholders and will consider the outcome of the vote when making future compensation decisions for our NEOs.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE APPROVAL,
ON AN ADVISORY BASIS, OF THE COMPENSATION OF THE CORPORATION’S NAMED
EXECUTIVE OFFICERS AS DISCLOSED IN THIS PROXY STATEMENT.
| | | | | 59 |
| 2020 PROXY STATEMENT
| MATTERS TO BE VOTED UPON AT THE ANNUAL MEETING
|
PROPOSAL FOUR: A STOCKHOLDER PROPOSAL REQUESTING THAT THE BOARD OF DIRECTORS ENGAGE AN INVESTMENT BANKING FIRM TO EFFECTUATE ASPIN-OFF THE CORPORATION’S IHOP BUSINESS UNIT
The Corporation receivedthat results from JCP Investment Partnership, LP (“JCP”) the following stockholder proposal (for purposes of this section, the “JCP Proposal”) for action at the Annual Meeting. JCP is located at 1177 West Loop South, Suite 1320, Houston, TX 77027. JCP has indicated that it has held at least $2,000 in market value of the Corporation’s securities entitled to be voted on the JCP Proposal for at least one year, and confirmed JCP’s intention to continue to hold those securities through the date of the Annual Meeting.
The JCP Proposal will be voted on at the Annual Meeting upon proper presentation by JCP. The following text of the JCP Proposal and supporting statement appears exactly as received by the Corporation. All statements containedan increase in the JCP Proposal are the sole responsibilitynumber of JCP.
JCP Proposal
RESOLVED, that the stockholders of Dine Brands Global, Inc. (the “Company”) hereby request that the Board of Directors (the “Board”) and management act expeditiously, consistent with effective tax considerations, to engage an investment banking firm to effectuate aspin-off of the Company’s IHOP business segment (“IHOP”) into a separately traded public company.
Supporting Statement:
We believe that the market significantly undervalues the Company due to its segments, IHOP and Applebee’s Grill & Bar (“Applebee’s”), having vastly different growth opportunities. Based on the Company’s 2018 Annual Report filed onForm 10-K, the Key Performance Indicators of IHOP’s same store sales and net unit growth have outpaced those of Applebee’sdirectors may be filled by a material amount over the last 5 years.
Based on its performance metrics, we believe that a standalone IHOP would be valued and classified as a growth company, which would allow IHOP to trade at a materially higher multiple than the Company currently trades. Today, the Company’s valuation multiple is significantly discounted relative to its peers. Separating the IHOP and Applebee’s businesses would allow the market to value each business as a “pure play” in line with peer trading multiples in their respective sectors and allow the respective management teams to focus on each company’s growth. We believe that the valuation increase and potential earnings increase for IHOP would vastly outweigh the existing synergies associated with keeping IHOP and Applebee’s together.
At the JP Morgan Gaming, Lodging, Restaurant & Leisure Conference on March 14, 2019, the Company acknowledged that its valuation differs from peers.
Even if improvements in operating metrics were to materialize, we believe the Company would still trade at a discount relative to its potential value due to the widely divergent growth opportunities of its businesses.
Further, aspin-off of IHOP would be similar to actions taken by a number major restaurant companies over the last decade, including Brinker International’s sale of On the Border and Darden Restaurants’ sale of Red Lobster. Notably, both companies have experienced significant share price appreciation since such dispositions.
We believe that aspin-off of IHOP into a separately traded public company could create significant stockholder value and urge stockholders to voteFOR this proposal.
THE BOARD OF DIRECTORS’ RESPONSE TO THE STOCKHOLDER PROPOSAL
The Board of Directors recommends that you voteAGAINSTthis proposal.
For the reasons set forth below, the Board of Directors has determined that aspin-off of the Company’s IHOP business unit is not in the best interests of the Company and its stockholders at this time.
The Board of Directors and management regularly evaluate the optimal business portfolio composition and allocation of capital to generate stockholder value, including capital expenditures, acquisitions, divestitures and returning capital to stockholders in the form of dividends and share repurchases. The Board remains open to considering all alternatives that
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| 2020 PROXY STATEMENT
| MATTERS TO BE VOTED UPON AT THE ANNUAL MEETING
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could create value for our stockholders, although the Board does not believe that aspin-off of IHOP is recommended at this time. In addition, the Board believes that aspin-off of IHOP would materially affect the Company’s ability to continue engaging in share repurchases and dividends at current levels.
Further, the Board strongly believes that it should be free to evaluate and pursue the strategies and opportunities that have the greatest potential to maximize stockholder value. In contrast, the proposal requests the Board to engage an investment banking firm solely to effectuate aspin-off without accounting for whether another strategy would be likely to create more value. In so doing, the proposal may preclude the Board from considering other value-enhancing strategies and transactions. The Board believes it is not in the best long-term interests of stockholders to limit the Board’s flexibility in making decisions regarding the optimal business portfolio and capital allocation policy of the Company.
The Board will continue to evaluate the Company’s strategy and structure on a regular basis to ensure it is well-positioned to create value for stockholders for the future, including the consideration of aspin-off of IHOP.
FOR THESE REASONS, THE BOARD OF DIRECTORS RECOMMENDS
THAT STOCKHOLDERS VOTEAGAINST THIS PROPOSAL.
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| 2020 PROXY STATEMENT
| PROPOSALS OF STOCKHOLDERS
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PROPOSALS OF STOCKHOLDERS
The Board of Directors will make provision for presentation of proposals of stockholders at the 2021 annual meeting of stockholders provided such proposals are submitted by eligible stockholders who have complied with the Bylaws of the Corporation and/or the relevant regulations of the SEC. In order for any such proposals to be considered for inclusion in the proxy materials for the 2021 annual meeting of stockholders, the proposal should be mailed to Dine Brands Global, Inc., Attn: Office of the Secretary, 450 North Brand Boulevard, Glendale, California 91203, and must be received no later than December 2, 2020.
Stockholders who intend to present a proposal at the 2021 annual meeting of stockholders without inclusion of such proposal in the Corporation’s proxy materials or to nominate a director to stand for election at the 2021 annual meeting of stockholders are required to provide notice of such proposal or nomination to the Corporation no earlier than February 11, 2021 and no later than March 13, 2021. The Corporation reserves the right to reject, rule out of order, or take other appropriate action with respect to any proposal or nomination that does not comply with these and other applicable requirements.
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| 2020 PROXY STATEMENT
| HOUSEHOLDING OF PROXY MATERIALS
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HOUSEHOLDING OF PROXY MATERIALS
The SEC permits us to deliver a single copy of the notice, proxy statement and annual report to stockholders who have the same address and last name, unless we have received contrary instructions from such stockholders. Each stockholder will continue to receive a separate proxy card. This procedure, called “householding,” will reduce the volume of duplicate information you receive and reduce our printing and postage costs. We will promptly deliver a separate copy of the notice, proxy statement and annual report to any such stockholder upon written or oral request. A stockholder wishing to receive a separate notice, proxy statement or annual report can notify us at Dine Brands Global, Inc., Investor Relations, 450 North Brand Boulevard, 7th Floor, Glendale, CA 91203, telephone:(866) 995-DINE. Similarly, stockholders currently receiving multiple copies of these documents can request the elimination of duplicate documents by contacting us as described above.
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| 2020 PROXY STATEMENT
| OTHER BUSINESS
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OTHER BUSINESS
As of the date of this proxy statement, the management of the Corporation is not aware of any other matters to be brought before the Annual Meeting. However, if any other matters are properly brought before the Annual Meeting, the persons named in the enclosed form of Proxy will have discretionary authority to vote all proxies with respect to such matters in accordance with their best judgment.
By Order of the Board of Directors,
Bryan R. Adel
Senior Vice President, Legal, General Counsel and Secretary
April 1, 2020
Glendale, California
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| 2020 PROXY STATEMENT
| APPENDIX A
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Appendix A
RECONCILIATION OFNON-GAAP FINANCIAL MEASURES
(In thousands, except per share amounts)
This proxy statement includes references to the Corporation’snon-GAAP financial measures “adjusted net income available to common stockholders per diluted share (AEPS or adjusted EPS).” Management may usenon-GAAP financial measures along with the corresponding U.S. GAAP measures to evaluate the performance of the business and to make certain business decisions. Additionally, adjusted EPS is one of the metrics used in determining payouts under the Corporation’s annual cash incentive plan. Management believes thatnon-GAAP financial measures provide additional meaningful information that should be considered when assessing the business and the Corporation’s performance compared to prior periods and the marketplace. Adjusted EPS is supplementalnon-GAAP financial measures and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with U.S. GAAP.
Reconciliation of net income available to common stockholders to net income available to common stockholders, as adjusted for the following items: Amortization of intangible assets; loss on extinguishment of debt;non-cash interest expense; administrative reorganization costs; closure and impairment charges; debt refinancing costs; business acquisition costs; nonrecurring restaurant costs; gain or loss on disposition of assets; the combined tax effect of the preceding adjustments, and income tax adjustments considered unrelated to the respective current period operations, as well as related per share data:
| | | | | | | | | | | | Twelve Months Ended
December 31, | | | | | | | | 2019 | | | 2018 | | | | | Net income available to common stockholders, as reported | | $ | 100,814 | | | $ | 77,643 | | | | | Amortization of intangible assets | | | 11,702 | | | | 10,105 | | | | | Loss on extinguishment of debt | | | 8,276 | | | | — | | | | | Non-cash interest expense | | | 3,369 | | | | 3,792 | | | | | Administrative reorganization costs | | | 1,606 | | | | — | | | | | Closure and impairment charges | | | 1,487 | | | | 2,107 | | | | | Debt refinancing costs | | | — | | | | 2,523 | | | | | Business acquisition costs | | | — | | | | 1,114 | | | | | Nonrecurring restaurant costs | | | 385 | | | | — | | | | | (Gain) loss on disposition of assets | | | (332 | ) | | | (625 | ) | | | | Net income tax provision for above adjustments | | | (6,888 | ) | | | (4,944 | ) | | | | Income tax adjustments(1) | | | — | | | | 4,434 | | | | | Net income allocated to unvested participating restricted stock | | | (673 | ) | | | (631 | ) | | | | Net income available to common stockholders, as adjusted | | $ | 119,746 | | | $ | 95,518 | |
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| 2020 PROXY STATEMENT
| APPENDIX A
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| | | | | | | | | | | | Twelve Months Ended
December 31, | | | | | | | | 2019 | | | 2018 | | | | | Diluted net income available to common stockholders per share: | | | | | | | | | | | | Net income available to common stockholders, as reported | | $ | 5.85 | | | $ | 4.37 | | | | | Amortization of intangible assets | | | 0.50 | | | | 0.42 | | | | | Loss on extinguishment of debt | | | 0.36 | | | | — | | | | | Non-cash interest expense | | | 0.14 | | | | 0.16 | | | | | Administrative reorganization costs | | | 0.07 | | | | — | | | | | Closure and impairment charges | | | 0.06 | | | | 0.09 | | | | | Debt refinancing costs | | | — | | | | 0.10 | | | | | Business acquisition costs | | | — | | | | 0.05 | | | | | Nonrecurring restaurant costs | | | 0.02 | | | | — | | | | | (Gain) loss on disposition of assets | | | (0.01 | ) | | | (0.03 | ) | | | | Income tax adjustments(1) | | | — | | | | 0.25 | | | | | Net income allocated to unvested participating restricted stock | | | (0.04 | ) | | | (0.04 | ) | | | | Rounding | | | — | | | | — | | | | | Diluted net income available to common stockholders per share, as adjusted | | $ | 6.95 | | | $ | 5.37 | | | | | Numerator for basicEPS-income available to common stockholders, as adjusted | | $ | 119,746 | | | $ | 95,518 | | | | | Effect of unvested participating restricted stock using thetwo-class method | | | 44 | | | | 25 | | | | | Numerator for dilutedEPS-income available to common stockholders, as adjusted | | $ | 119,790 | | | $ | 95,543 | | | | | Denominator for basicEPS-weighted-average shares | | | 16,934 | | | | 17,533 | | | | | Dilutive effect of stock options | | | 311 | | | | 256 | | | | | Denominator for dilutedEPS-weighted-average shares | | | 17,245 | | | | 17,789 | |
(1) | Charges related to adjustments resulting from IRS audits for tax years 2011 through 2013
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| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Using ablack ink pen, mark your votes with anX as shown in this example. Please do not write outside the designated areas.
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| | | | | | | | | | | | | | 2020 Annual Meeting Proxy Card
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q IF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.q
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| | Proposals – The Board of Directors recommend a voteFOR all the nominees listed,FOR Proposals 2 and 3, andAGAINST Proposal 4.
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1. Election of Class I and Class II Directors:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | For | | Against | | Abstain | | | | | | For | | Against | | Abstain | | | | | | For | | Against | | Abstain | | | 01 - Howard M. Berk | | ☐ | | ☐ | | ☐ | | | | 02 - Daniel J. Brestle | | ☐ | | ☐ | | ☐ | | | | 03 - Susan M. Collyns | | ☐ | | ☐ | | ☐ | | | 04 - Larry A. Kay | | ☐ | | ☐ | | ☐ | | | | 05 - Caroline W. Nahas | | ☐ | | ☐ | | ☐ | | | | 06 - Douglas M. Pasquale | | ☐ | | ☐ | | ☐ | | | 07 - Gilbert T. Ray | | ☐ | | ☐ | | ☐ | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | For | | Against | | Abstain | | | | | | For | | Against | | Abstain | 2. Ratification of the appointment of Ernst & Young LLP as the Corporation’s independent auditor for the fiscal year ending December 31, 2020.
| | ☐ | | ☐ | | ☐ | | | | 3. Approval, on an advisory basis, of the compensation of the Corporation’s named executive officers.
| | ☐ | | ☐ | | ☐ | | | | | | | | | | 4. A stockholder proposal to engage an investment banking firm to effectuate a spin-off of the Corporation’s IHOP business unit.
| | ☐ | | ☐ | | ☐ | | | | | | | | | | |
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| | Authorized Signatures – This section must be completed for your vote to count. Please date and sign below.
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Please sign exactly as name(s) appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or custodian, please give full title.
| | | | | | | | | Date (mm/dd/yyyy) – Please print date below.
| | Signature 1 – Please keep signature within the box. | | Signature 2 – Please keep signature within the box. | / / | | | | | | | | |
| | | | | | | | | | | | |  | | | | 1 U P X
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Important notice regarding the Internet availability of proxy materials for the Annual Meeting of Stockholders.
The material is available at: www.edocumentview.com/DIN
q IF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.q
Notice of 2020 Annual Meeting of Stockholders
Proxy Solicited by Board of Directors for Annual Meeting – May 12, 2020
Stephen P. Joyce and Bryan R. Adel, or any of them, each with the power of substitution, are hereby authorized to represent and vote the shares of the undersigned, with all the powers which the undersigned would possess if personally present, at the Annual Meeting of Stockholders of Dine Brands Global, Inc. to be held on May 12, 2020 or at any postponement or adjournment thereof.
Shares represented by this proxy will be voted by the stockholder. If no such directions are indicated, the Proxies will have authority to vote FOR the electionmajority of the Board of Directors FOR items 2then in office, provided that a quorum is present, and 3,any other vacancy occurring in the Board of Directors may be filled by a majority of the directors then in office, even if less than a quorum, or by a sole remaining director. Any director appointed in accordance with the preceding sentence shall serve for a term expiring at the next annual meeting of stockholders after his or her appointment and AGAINST item 4.shall hold office until his or her successor shall be elected and shall qualify, subject, however, to prior death, resignation, disqualification or removal from office.
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| | Notwithstanding the foregoing, whenever the holders of any one or more classes or series of Preferred Stock issued by the Corporation, if any, shall have the right, voting separately by class or series, to elect directors at an annual or special meeting of stockholders, the election, term of office, filling of vacancies and other features of such directorships shall be governed by the terms of this Restated Certificate of Incorporation applicable thereto. |
| (d) | Directors of the Corporation may be removed by stockholders of the Corporation with or without cause. |
| (e) | No director or officer shall be personally liable to the Corporation or any of its stockholders for monetary damages for breach of fiduciary duty as a director or officer, except to the extent such exemption from liability or limitation thereof is not permitted under the DGCL, as it presently exists or may hereafter be amended from time to time. Any repeal or modification of this Article FIFTH by the stockholders of the Corporation shall not adversely affect any |
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| 2023 PROXY STATEMENT | APPENDIX B |
| right or protection of a director or officer of the Corporation existing at the time of such repeal or modification with respect to acts or omissions occurring prior to such repeal or modification. For purposes of this Article FIFTH, paragraph (e), “officer” shall have the meaning provided in Section 102(b)(7) of the DGCL, as it presently exists or may hereafter be amended from time to time. |
| (f) | In their discretion,addition to the Proxiespowers and authority hereinbefore or by statute expressly conferred upon them, the directors are authorizedhereby empowered to vote uponexercise all such other businesspowers and do all such acts and things as may properly come beforebe exercised or done by the meeting. (ItemsCorporation, subject, nevertheless, to be voted appear on reverse side)
2020 Annual Meeting Admission Ticket
2020 Annual Meetingthe provisions of Stockholders
Dine Brands Global, Inc.
Tuesday, May 12, 2020 at 8:00 a.m. Local Time
Dine Brands Global, Inc.
450 North Brand Boulevard
Glendale, California 91203
Upon arrival, please presentthe DGCL, this admission ticketRestated Certificate of Incorporation, and photo identification atany By-Laws adopted by the registration desk.
Important notice regardingstockholders; provided, however, that no By-Laws hereafter adopted by the Internet availabilitystockholders shall invalidate any prior act of proxy materials for the Annual Meeting of Stockholders.directors which would have been valid if such By-Laws had not been adopted.
The material is available at: www.envisionreports.com/DIN
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SIXTH: Whenever a compromise or arrangement is proposed between the Corporation and its creditors or any class of them and/or between the Corporation and its stockholders or any class of them, any court of equitable jurisdiction within the State of Delaware may, on the application in a summary way of the Corporation or of any creditor or stockholder thereof or on the application of any receiver or receivers appointed for the Corporation under the provisions of Section 291 of the DGCL or on the application of trustees in dissolution or of any receiver or receivers appointed for the Corporation under the provisions of Section 279 of the DGCL, order a meeting of the creditors or class of creditors, and/or of the stockholders or class of stockholders of the Corporation, as the case may be, to be summoned in such manner as the said court directs. If a majority in number representing seventy-five percent (75%) in value of the creditors or class of creditors, and/or of the stockholders or class of stockholders of the Corporation, as the case may be, agree to any compromise or arrangement and to any reorganization of the Corporation as a consequence of such compromise or arrangement, the said compromise or arrangement and the said reorganization shall, if sanctioned by the court to which the said application has been made, be binding on all the creditors or class of creditors, and/or on all the stockholders or class of stockholders, of the Corporation, as the case may be, and also on the Corporation. SEVENTH: Any action required or permitted to be taken by the stockholders of the Corporation must be effected at an annual or special meeting of stockholders of the Corporation and may not be effected by any consent in writing by such stockholders. Special meetings of stockholders of the Corporation may be called only by the Chairman of the Board, if there be one, the President or the Board of Directors pursuant to a resolution adopted by a majority of the total number of authorized directors (whether or not there exist any vacancies in previously authorized directorships at the time any such resolution is presented to the Board of Directors for adoption). Written notice of a special meeting stating the place, date and hour of the meeting and the purpose or purposes for which the meeting is called shall be given not less than ten (10) nor more than sixty (60) days before the date of the meeting to each stockholder entitled to vote at such meeting. EIGHTH: The Corporation reserves the right to amend, alter, change or repeal any provision contained in this Restated Certificate of Incorporation or in the By-Laws of the Corporation, in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders herein are granted subject to this reservation, provided, however, that subject to the powers and rights provided for herein with respect to Preferred Stock issued by the Corporation, if any, but notwithstanding anything else contained in this Restated Certificate of Incorporation to the contrary, the affirmative vote of the holders of at least eighty percent (80%) of the combined voting power of all of the then outstanding shares of capital stock entitled to vote generally in the election of directors, voting together as a single class, shall be required to alter, amend, rescind or repeal Article FOURTH, Article FIFTH, Article SIXTH, Article SEVENTH or this Article EIGHTH of this Restated Certificate of Incorporation or to adopt any provision inconsistent therewith. The foregoing Amended and Restated Certificate of Incorporation was duly adopted in accordance with the provisions of Section 242 of the DGCL. IN WITNESS WHEREOF, Dine Brands Global, Inc. has caused this Amended and Restated Certificate of Incorporation to be duly executed in its corporate name on [ ], 2023 and this Amended and Restated Certificate of Incorporation shall become effective at 12 a.m. on [ ], 2023. | | | | | | | 
| | Small steps make an impact.
Help the environment by consenting to receive electronic
delivery, sign up at www.envisionreports.com/DIN
| | 
| | | | DINE BRANDS GLOBAL, INC. | | | | By: | | |
q IF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.q
| | | John W. Peyton | | | Chief Executive Officer |
Dine Brands Global, Inc.
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Notice of 2020 Annual Meeting of Stockholders
Proxy Solicited by Board of Directors for Annual Meeting – May 12, 2020
Stephen P. Joyce and Bryan R. Adel, or any of them, each with the power of substitution, are hereby authorized to represent and vote the shares of the undersigned, with all the powers which the undersigned would possess if personally present, at the Annual Meeting of Stockholders of Dine Brands Global, Inc. to be held on May 12, 2020 or at any postponement or adjournment thereof.
Shares represented by this proxy will be voted by the stockholder. If no such directions are indicated, the Proxies will have authority to vote FOR the election of the Board of Directors, FOR items 2 and 3, and AGAINST item 4.
In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the meeting.
(Items to be voted appear on reverse side)
| | | | | Change of Address – Please print new address below.
| | Comments – Please print your comments below.
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DINE SM BRANDS VOTE ENDORSEMENT_LINE SACKPACK MR A SAMPLE DESIGNATION (IF ANY) ADD 1 ADD 2 ADD 3 ADD 4 ADD 5 ADD 6 Preliminary Proxy Card Subject to Completion Using a black ink pen, mark your votes with an X as shown in this example. Please do not write outside the designated areas. C123456789 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext Your vote matters – here’s how to vote! You may vote online or by phone instead of mailing this card. Votes submitted electronically must be received by 11:59 P.M., Eastern time, on May 10, 2023. Online Go to www.envisionreports.com/DIN or scan the QR code – login details are located in the shaded bar below. Phone Call toll free 1-800-652-VOTE (8683) within the USA, US territories and Canada Save paper, time and money! Sign up for electronic delivery at www.envisionreports.com/DIN 2023 Annual Meeting Proxy Card 1234 5678 9012 345 IF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. A Proposals – The Board of Directors recommend a vote FOR all nominees and FOR 2, 3, 5, and 6, ONE YEAR on 4, AGAINST on 7. 1. To elect ten directors to serve until the next annual meeting of stockholders and to serve until their successors are elected and qualified: + For Against Abstain For Against Abstain For Against Abstain 01 - Howard M. Berk [ ] [ ] [ ] 02 - Susan M. Collyns [ ] [ ] [ ] 03 - Richard J. Dahl [ ] [ ] [ ] 04 - Michael C. Hyter [ ] [ ] [ ] 05 - Caroline W. Nahas [ ] [ ] [ ] 06 - Douglas M. Pasquale [ ] [ ] [ ] 07 - John W. Peyton [ ] [ ] [ ] 08 - Martha C. Poulter [ ] [ ] [ ] 09 - Arthur F. Starrs [ ] [ ] [ ] 10 - Lilian C. Tomovich [ ] [ ] [ ] For Against Abstain [ ] [ ] [ ] For Against Abstain [ ] [ ] [ ] 2. Ratification of the appointment of Ernst & Young LLP as the Corporation’s independent auditor for the fiscal year ending December 31, 2023. 3. Approval, on an advisory basis, of the compensation of the Corporation’s named executive officers. 1 Year 2 Years 3 Years Abstain [ ] [ ] [ ] [ ] 4. Approval, on an advisory basis, of whether the advisory vote to approve the compensation of the Corporation’s named executive officers should be held every one, two or three years. 5. Approval of an amendment to the Dine Brands Global, Inc. Certificate of Incorporation (the “Charter”) to eliminate the supermajority stockholder approval requirement for amendments to specified bylaw provisions. [ ] [ ] [ ] 6. Approval of an amendment to the Charter to provide for the exculpation of officers as permitted by Delaware law. For Against Abstain [ ] [ ] [ ] 7. Stockholder proposal requesting that the Corporation produce a report relating to our cage-free egg commitment. [ ] [ ] [ ] C 1234567890 J N T MR A SAMPLE (THIS AREA IS SET UP TO ACCOMMODATE 140 CHARACTERS) MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND 1 U P X 5 7 2 3 1 1 03SEUA | | | | | |
2023 Annual Meeting Admission Ticket 2023 Annual Meeting of Dine Brands Global Inc. Stockholders May 11, 2023, 8:00 a.m., CT 8700 State Line Rd. Leawood, KS 66206 Upon arrival, please present this admission ticket and photo identification at the registration desk. Important notice regarding the Internet availability of proxy materials for the Annual Meeting of Stockholders. The material is available at: www.envisionreports.com/DIN Small steps make an impact. Help the environment by consenting to receive electronic delivery, sign up at www.envisionreports.com/DIN IF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. Dine Brands Global, Inc. + Notice of 2023 Annual Meeting of Stockholders Preliminary Proxy Card Subject to Completion Proxy Solicited by Board of Directors for Annual Meeting – May 11, 2023 John W. Peyton and Christine K. Son, or any of them, each with the power of substitution, are hereby authorized to represent and vote the shares of the undersigned, with all the powers which the undersigned would possess if personally present, at the Annual Meeting of Stockholders of Dine Brands Global, Inc. to be held on May 11, 2023 or at any postponement or adjournment thereof. Shares represented by this proxy will be voted by the stockholder. If no such directions are indicated, the Proxies will have authority to vote FOR the election of the Board of Directors and FOR items 2, 3, 5, and 6, ONE YEAR on item 4, AGAINST on item 7. In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the meeting. (Items to be voted appear on reverse side) B Authorized Signatures – This section must be completed for your vote to count. Please date and sign below. Please sign exactly as name(s) appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or custodian, please give full title. Date (mm/dd/yyyy) – Please print date below. Signature 1 – Please keep signature within the box. Signature 2 – Please keep signature within the box. C Non-Voting Items Change of Address – Please print new address below. Comments – Please print your comments below.+ |
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