There’s no doubt 2024 was a historic year
for our company, our shareholders, and all
of Roadie Nation. We celebrated a number
of significant company milestones and
achievements in 2024 and our operators
once again delivered record results. Our
revenue grew to nearly $5.4 billion, and
our average-unit-volume exceeded $8
million for the first time in our history.
We also grew traffic at all three brands
and opened our 750th systemwide
restaurant, which at just 32-years-old,
means we are just gettin’ started!
In October, we commemorated our 20th
year as a public company by participating
in the closing bell ceremony at NASDAQ.
What made the moment so special was
being surrounded by our operators who
have helped deliver an approximate 18%
average annual increase in earnings per
share since our IPO in October 2004.
Also in October, we were honored to receive
the Brand Icon Award, which is presented by
Nation’s Restaurant News. This award is one of
the highest honors in the restaurant industry.
Having the best operators in the industry
paired with the best support team is what
drove the results that earned us the respect
of being a Brand Icon.
After receiving this award, I was asked to
describe our company. “Rowdy enthusiasm”
are the words that came to mind. It’s the
rowdiness and enthusiasm of our Roadies that
creates the energy in our restaurants. And
despite any challenges we face, our operators
always show up with rowdy enthusiasm for
providing Legendary Food, Legendary Service
and with their commitment to keeping our
culture alive in their stores. This commitment,
which creates a place where Roadies want to
work and guests want to dine, was reflected
in the overall success and growth of all of our
brands last year.
The commitment of our operators was
also reflected in our 2024 operating
results. Average weekly sales across all
brands exceeded $155,000, which was
driven by comparable restaurant sales
growth of 8.5%, including 4.4% guest
traffic growth. Additionally, we generated
over $750 million in operating cash flow.
This cash flow enabled us to self-fund
$354 million of capital expenditures and
return capital to our shareholders through
$163 million in dividends and $80 million
in share repurchases.
On the development front in 2024, we
opened 45 new restaurants systemwide
for the second consecutive year. This
consisted of 31 company restaurants across
all three brands, and our franchise partners
opened 14 new restaurants.
For 2025, we expect to open approximately
30 new company restaurants across our
three brands. We will also benefit from
the acquisition of 13 franchise restaurants
in three states that was completed on the
first day of January 2025. In addition, we
expect our franchise partners to open 10
restaurants, including seven international
Texas Roadhouse locations and three
domestic Jaggers locations.
On the technology front, our digital kitchen
rollout continues as planned. We ended the
year with over 250 conversions complete
and are encouraged by positive feedback
from our operators. We remain on track to
convert nearly all our restaurants to a digital
kitchen by the end of 2025. Additionally, we
are making progress with the upgrade of our
restaurant guest management system, which
we believe will allow us to be more efficient
in seating guests.
Another program we launched in 2024 and
are excited to expand nationwide in 2025 is
our local All Day, Every Day $5 drink menu.
The menu, which is available at the bar and
in the dining room, includes our Original
10-ounce Margarita, a 16-ounce beer, and a
Long Island Tea (LIT). We are also rolling out
a selection of mocktails. Early indications are
that guests are responding positively to the
additional everyday value and the mocktails
are resonating with guests who are looking
for a hand-crafted, non-alcoholic drink.
Bubba’s 33 had an exciting 2024, opening
four restaurants and ending the year with
49 restaurants in 15 states. In 2025, we plan
to open as many as seven new Bubba’s 33
restaurants. As we continue to focus on
creating Food for All, we tested and rolled
out several new items. We added the Monte
Cristo Sandwich and the Combo Appetizer
nationwide on our menus. Both items are
popular with our operators and guests. The
efforts of our operators were rewarded by
receiving several local awards, including
being named Best Burger and Best Family and
Casual Dining Restaurant in Chesapeake, VA,
and Best Pizza in Buford, GA. These accolades
support the success our Bubba’s 33 operators
are having as they continue to build name
recognition and create guest loyalty with
scratch-made food.
Jaggers, our fast-casual concept, continues
to grow and we ended the year with nine
company and five franchise restaurants. We
were also proud to open our first Jaggers
international location in 2024 on Camp
Humphreys, South Korea. In 2025, we plan
to open two company locations in addition
to the previously mentioned three domestic
franchise locations.
Dear SHAREHOLDERS,
To celebrate 20 years of supporting
Homes for Our Troops (HFOT), we raised over
$1 million to fully fund the 400th home build.
We launched Texas Roadhouse Mini Rolls with Honey
Cinnamon Butter at Wal-Mart, which was named a
2025 Product of the Year in the bread category.
Our super fans, Judy and Mike McNamara
visited their 400th Texas Roadhouse location
in Mansfield, OH to kick off 2024.
Jerry Morgan
CEO
On the retail front, the launch of our Texas
Roadhouse Mini Rolls with Honey Cinnamon
Butter at Wal-Mart was a success. The Mini
Rolls were recently named a 2025 Product
of the Year in the bread category. This
recognition is a testament to the quality of
our “inspired by products” and reflects the
power of our brand outside the “four walls”
of our restaurants. We will continue to look
for new products that we believe can align
with our retail strategy, which is to create
brand awareness and guest engagement in
the retail channel.
We were also thrilled to strengthen our
Board of Directors with the appointment of
Jane Grote Abell. With over 30 years in the
restaurant industry, Jane brings incredible
experience as the current Executive
Chairwoman of the Board of Directors and
Chief Purpose Officer for Donatos Pizza. Jane
has valuable retail experience and a history
of creating and supporting an incredible
employee-first culture at Donatos.
Our commitment to giving back remains
at the heart of how we show up for our
communities. In 2024, we marked 20
years of supporting Homes For Our Troops
(HFOT), a milestone that speaks to our
dedication to honoring veterans and their
families. As part of this commitment, Texas
Roadhouse, Bubba’s 33, and Jaggers hosted
in-store fundraising events and motorcycle
rides to raise over $1 million for the 400th
home build. The recipient of this home was
Marine Lance Corporal Alberto Flores, who
sustained life-changing injuries while serving
our country. This new, specially adapted,
mortgage-free home will provide him with
the support he needs in his daily life.
In November, for the 14th consecutive year,
our restaurants proudly banded together
on Veterans Day to honor over one million
of our nation’s heroes with a free meal or a
voucher for a free meal. Being able to serve
those who protect and serve our country is
often described by Roadies as their favorite
day of the year.
Our overall community giving was $34.9
million in food and monetary donations
given to local non-profits, schools, and
organizations in the communities we
serve. We also continued our support of
organizations that are close to our hearts like
the American Tinnitus Association, Special
Olympics, Camp Sunshine, and the Dickie V
Foundation to combat pediatric cancer.
As we continue to prioritize our People-
First culture, we celebrated the incredible
achievements of our Roadies throughout
the year. In April, we awarded our Texas
Roadhouse Managing Partner of the Year to
Casey Cohen, from Turnersville, NJ. We also
celebrated our Bubba’s 33 Managing Partner
of the Year, Vanessa Blanco-Quezada, from
Albuquerque, NM. Both Casey and Vanessa
are incredible operators who drive results,
support their communities, and have created
a People-First culture in their restaurants.
At our annual Support Center Awards, Frank
Fernandez from our IT Department was
named Roadie of the Year for his passion
and operator-first approach. Prior to his
current role at the Support Center, Frank
spent 11 years in the field holding a variety
of positions – from Host to Kitchen Manager.
These success stories point to the growth
opportunities provided within our company.
At our Annual Managing Partner
Conference, we also unveiled our updated
Inverted Pyramid. The pyramid has been
a cornerstone of our company since the
beginning. Our Founder, Kent Taylor,
created the original pyramid that placed
the Managing Partner at the center of all we
do. With the update, we added our purpose
statement of “Serving Communities Across
America—and the World.” Our purpose
builds clarity and inspiration for our
journey ahead.
Finally, I couldn’t be prouder of our 2024
results and the momentum we have with
Texas Roadhouse, Bubba’s 33, and Jaggers.
As we look forward to the future, we are
more committed than ever to growing
our brands, serving our communities, and
delivering everyday value to our guests. We
will continue to honor our past as we focus
on our future of Legendary Food, Legendary
Service for years to come.
Let’s go, Texas Roadhouse, Bubba’s 33,
and Jaggers!
We commemorated our 20th year as a
public company by participating in the
closing bell ceremony at NASDAQ.
Bubba’s 33 rolled out the Monte Cristo
Sandwich nationwide.
Texas Roadhouse was honored as the first
casual-dining concept to be named a
Brand Icon by Nation’s Restaurant News.
Since Day One in 1993, Texas Roadhouse
has been focused on being a People-First
company that just happens to serve
steak. Thirty-two years later, our People-
First culture remains rooted in the
alignment of our company values, our
commitment to listening, and programs
that make Texas Roadhouse a great place
to work and dine. As we reflect on 2024,
we believe the new initiatives we rolled
out continue to enhance our legendary
People-First culture.
At the Support Center,
we have a list of
expectations called
the Support Center
Top 10. The vision was
based upon Kent’s
Top 10, which our
Founder developed to
set expectations and
standards for food,
service, and community.
Our operators have
used Kent’s Top 10 for
over 30 years to stay
focused on our mission
of Legendary Food,
Legendary Service.
Our Roadies responded
to leadership’s vision
and collaborated to roll out the Support
Center Top 10. To make sure these
standards stay top-of-mind, our Roadies
display them in their departments, at
their desks, and they are even part of
the criteria for determining our
Employee of the Quarter. But the
importance of the Support Center Top 10
extends beyond our office in Louisville,
KY, and in many ways provides a
framework for outlining our success as a
People-First company.
Listen, Learn, and Grow
In 2024, we continued to prioritize
listening and creating feedback loops
throughout our company to understand
where we are exceeding expectations
and where there are opportunities in our
restaurants and at the Support Center.
To better understand our store
managers’ quality of life and overall job
satisfaction, we launched Market Partner
Pulse Surveys. This feedback creates
conversations and direction for our
Market Partners to provide support to
their store management teams.
At the Support Center, we deployed our
Roadie Engagement Survey – The Culture
Compass, which is an annual survey
used to assess and improve employee
engagement within our organization.
The survey provides insights into how
connected, motivated, and engaged
our Support Center Roadies feel.
Our participation rate for the survey
increased to 93% in 2024 and teams will
work together to create action plans
based on the feedback. We are proud
of the results, which reflect strong
engagement levels.
In September, we hosted our Vendor
Partner Summit where our Leadership
Team met with a dozen of our key
vendor partners, both large and small.
The goal of the meeting was to gain a
clearer understanding of what
challenges they are facing, the future
of their industries, how we can continue
to be legendary partners, and what
we can improve on. It’s gatherings like
this and the different ways we receive
feedback that foster a culture
of listening, learning, and growing.
Live the Culture
In April, we celebrated Texas Roadhouse
Managing Partner Casey Cohen from
Turnersville, NJ, and Bubba’s 33
Managing Partner Vanessa Blanco-
Quezada from Albuquerque, NM, as our
top operators. At our annual conference,
both of these leaders were awarded
our highest company honor, Managing
Partner of the Year. The award recognizes
the Managing Partner who best displays
characteristics of an operational leader.
We were also proud to host our first
African American Leadership Summit
in July. It was an impactful event full
of professional development and
networking with Roadies from across
our company.
Championing these programs and
offering mentorship opportunities are
just a few examples of how we continue
to live the culture by elevating and
empowering all Roadies.
Partner Up
Our purpose of “Serving Communities
Across America—and the World”
goes beyond supporting our Roadies
and guests. We encourage and provide
opportunities for our individual
restaurants and Support Center
employees to offer time, support, food
donations, and fundraising opportunities
to give back to local charities.
We are proud to support Special
Olympics throughout the country. Our
Support Center Team hosts an annual
golf scramble where we’ve raised more
than $2.8 million for Special Olympics of
Kentucky since 2000. In our restaurants,
our Tip-A-Cop Fundraisers have donated
more than $2.2 million to Special
Olympics of Texas over the past 16 years.
It’s partnerships like this that make our
company about something bigger than
steaks and potatoes.
People-First Since Day One
Since we first opened our doors, Texas
Roadhouse has been a People-First
company. We support our employees
through prioritizing company values,
listening to feedback, and offering
programs that encourage an inclusive
culture. We are proud of our efforts
in 2024, but we are committed to
continuing to find ways to keep our
people at the center of everything we do.
This letter includes just some of our
2024 highlights. For a detailed overview
of what “People-First” means at Texas
Roadhouse, visit texasroadhouse.com/
people-first.
Gina Tobin
President
Dear SHAREHOLDERS,
April 4, 2025
To our Shareholders:
You are cordially invited to attend the 2025 Annual Meeting of Shareholders of Texas Roadhouse, Inc.
(the “Company”) on Thursday, May 15, 2025. The meeting will be held at the Texas Roadhouse Support Center
located at 6040 Dutchmans Lane, Louisville, Kentucky at 9:00 a.m. eastern daylight time.
The official Notice of Annual Meeting, Proxy Statement, and Proxy Card are enclosed with this letter.
Please take the time to read carefully each of the proposals for shareholder action described in the
accompanying proxy materials. Whether or not you plan to attend, you can ensure that your shares are
represented at the meeting by promptly completing, signing and dating your Proxy Card and returning it in the
enclosed postage-paid envelope. Shareholders of record can also vote by touch-tone telephone from the United
States, using the toll-free number on the Proxy Card, or by the Internet, using the instructions on the Proxy
Card. If you attend the meeting, then you may revoke your proxy and vote your shares in person.
Your interest and participation in the affairs of the Company are greatly appreciated. Thank you for
your continued support.
Sincerely,
Gerald L. Morgan
Chief Executive Officer
TEXAS ROADHOUSE, INC.
6040 Dutchmans Lane
Louisville, Kentucky 40205
2025 Annual Meeting of Shareholders (the “Annual Meeting”)
of Texas Roadhouse, Inc., a Delaware corporation (the “Company”)
Date and Time:
Thursday, May 15, 2025
9:00 A.M. Eastern Daylight Time
Place:
Texas Roadhouse Support Center
6040 Dutchmans Lane
Louisville, Kentucky 40205
PROPOSALS FOR BUSINESS
Proposal 1: To elect eight directors to the Board
of Directors of the Company, each for a term of
one year
Proposal 2: To ratify the appointment of
KPMG LLP as the Company’s independent
auditors for the Company’s 2025 fiscal year
Proposal 3: To hold an advisory vote on
executive compensation
Proposal 4: An advisory vote on a shareholder
proposal regarding the adoption of a policy
requiring the disclosure of the Company’s
Consolidated EEO-1 Report, if properly presented
at the Annual Meeting
NOTICE ON VOTING
Whether or not you expect to be present at the Annual
Meeting, please submit your vote by using one of the voting
methods described in the attached materials. If you attend
the Annual Meeting, then you may revoke your proxy and vote
your shares in person.
WHO CAN VOTE
Only shareholders of record at the close of business on
March 17, 2025 are entitled to receive notice of and to vote at
the Annual Meeting.
DATE OF MAILING
This Notice of the Annual Meeting and the attached Proxy
Statement describing matters to be described at the Annual
Meeting are being distributed or otherwise furnished to
shareholders on April 4, 2025.
Important Notice Regarding the Availability of Proxy
Materials For the 2025 Annual Meeting of Shareholders
to be Held on May 15, 2025: Our Annual Report containing
our Proxy Statement relating to our 2025 Annual Meeting of
Shareholders and Form 10-K for the fiscal year ended on
December 31, 2024 is available on our website at
www.texasroadhouse.com in the Investors Section.
By Order of the Board of Directors,
Christopher C. Colson
Corporate Secretary
Table of Contents
SUMMARY OF MATTERS REQUIRING SHAREHOLDER ACTION
1
Proposal 1: Election of Directors
1
Proposal 2: Ratification of Independent Auditors
1
Proposal 3: Advisory Vote on Approval of Executive Compensation
1
Proposal 4: Advisory Vote on a Shareholder Proposal Regarding the Adoption of a Policy
Requiring the Disclosure of the Company’s Consolidated EEO-1 Report
2
Other Matters
2
INFORMATION ABOUT PROXIES AND VOTING
3
Record Date and Voting Securities
3
Revocability of Proxies
3
Solicitation of Proxies
3
Other Voting Considerations
3
ANNUAL MEETING FAQs
5
CORPORATE GOVERNANCE AND OUR BOARD
8
2024 Corporate Governance Overview
8
Director Summary Overview
11
Director Summaries
12
Meetings of the Board
16
Leadership Structure of the Board
16
Role of the Board in Strategy and Risk Oversight
17
Committees of the Board
21
Policy Regarding Consideration of Candidates for Director
25
Compensation of Directors
26
Code of Conduct and Related Corporate Governance Policies
29
Stock Ownership Guidelines
31
Succession Planning
31
Mandatory Retirement Age for Board Service
31
Shareholder Engagement
32
Board Orientation and Continuing Education
32
Director Independence
32
STOCK OWNERSHIP INFORMATION
33
Delinquent Section 16(a) Reports
34
EXECUTIVE COMPENSATION
35
2024 Executive Summary
35
2024 Financial Highlights
39
Compensation Discussion and Analysis
40
Summary Compensation Table
65
Grants of Plan-Based Awards in Fiscal Year 2024
68
Outstanding Equity Awards
69
Stock Vested
71
Termination, Change of Control and Change of Responsibility Payments
72
Pay Versus Performance
74
CEO Pay Ratio
81
AUDIT COMMITTEE REPORT
82
Related Party Transactions
84
PRESENTATION OF PROPOSALS
86
Proposal 1: Election of Directors
86
Proposal 2: Ratification of Independent Auditors
87
Proposal 3: Advisory Vote on Approval of Executive Compensation
89
Proposal 4: Advisory Vote on a Shareholder Proposal Regarding the Adoption of a Policy
Requiring the Disclosure of the Company’s Consolidated EEO-1 Report
92
SHAREHOLDER PROPOSALS
95
SHAREHOLDERS’ COMMUNICATIONS WITH THE BOARD
95
FORM 10-K
95
OTHER BUSINESS
96
1
PROXY STATEMENT
2025 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 15, 2025
TEXAS ROADHOUSE, INC.
6040 Dutchmans Lane
Louisville, Kentucky 40205
This proxy statement and accompanying proxy card are being furnished in connection with the
solicitation of proxies by the board of directors (the “Board”) of Texas Roadhouse, Inc., a Delaware corporation,
to be voted at the 2025 Annual Meeting of Shareholders (the “Annual Meeting”) and any adjournments thereof.
In this proxy statement, references to the “Company,” “we,” “us” or “our” refer to Texas Roadhouse, Inc. This
proxy statement and accompanying proxy card are first being mailed to shareholders on or about April 4, 2025.
The Annual Meeting will be held at the Texas Roadhouse Support Center located at 6040 Dutchmans
Lane, Louisville, Kentucky on Thursday, May 15, 2025 at 9:00 a.m. eastern daylight time, for the purposes set
forth in this proxy statement and the accompanying notice of the Annual Meeting.
SUMMARY OF MATTERS REQUIRING SHAREHOLDER ACTION
Proposal 1—Election of Directors (Page 86)
The affirmative vote of a majority of the votes cast by the holders of the Company’s common stock is
required to elect each nominee. You may vote “FOR” or “AGAINST” each nominee. A vote to “ABSTAIN” is not
treated as a vote cast, and will have no effect on this proposal.
The Bylaws require that each director nominee tender an irrevocable conditional resignation to the
Company, to be effective only upon (i) the director’s failure to receive the required shareholder vote in an
uncontested election, and (ii) Board acceptance of such resignation. Our nominating and corporate governance
committee will then consider the offer of resignation and make a recommendation to the Board as to the action
to be taken with respect to the offer. The Board will act on the nominating and corporate governance committee’s
recommendation within 90 days, and will promptly disclose publicly its decision to accept or reject such
resignation and the reasons therefor.
THE BOARD RECOMMENDS THAT YOU VOTE “FOR” THE NOMINEES.
Proposal 2—Ratification of Independent Auditors (Page 87)
The proposal to ratify the appointment of KPMG LLP as the Company’s independent auditors for the
fiscal year ending December 30, 2025 must be approved by the affirmative vote of a majority of the shares cast.
You may vote “FOR” or “AGAINST” the ratification, or you may “ABSTAIN” from voting on this proposal. A vote
to “ABSTAIN” is not treated as a vote cast, and will have no effect on this proposal.
THE BOARD RECOMMENDS THAT YOU VOTE “FOR” THIS PROPOSAL.
Proposal 3—Advisory Vote on Approval of Executive Compensation (Page 89)
The outcome of the advisory vote on whether to approve the executive compensation detailed in this
proxy statement (including the Compensation Discussion and Analysis, the Executive Compensation section
2
and the other related executive compensation tables and related discussions) will be determined by the
affirmative vote of the votes cast. You may vote “FOR” or “AGAINST” approval of the executive compensation,
or you may “ABSTAIN” from voting on this proposal. A vote to “ABSTAIN” is not treated as a vote cast, and will
have no effect on approval of the executive compensation.
THE BOARD RECOMMENDS THAT YOU VOTE “FOR” THIS PROPOSAL.
Proposal 4—Advisory Vote on the Shareholder Proposal Regarding the Adoption of a Policy Requiring
the Disclosure of the Company’s Consolidated EEO-1 Report (Page 92)
The outcome of the vote on whether the Company should adopt a policy requiring the disclosure of its
Consolidated EEO-1 Report will be determined by the affirmative vote of a majority of the shares present (in
person or by proxy) and entitled to vote. You may vote “FOR” or “AGAINST” the shareholder proposal, or you
may “ABSTAIN” from voting on this proposal. A vote to “ABSTAIN” is not treated as a vote cast, and will have
no effect on the approval of the shareholder proposal.
THE BOARD RECOMMENDS THAT YOU VOTE “AGAINST” THIS PROPOSAL.
Other Matters
As of the date of this proxy statement, the Board knows of no matters that will be presented for
consideration at the Annual Meeting other than those matters discussed in this proxy statement. If any other
matters should properly come before the Annual Meeting and call for a vote of shareholders, then validly
executed proxies in the enclosed form returned to us will be voted in accordance with the recommendation of
the Board, or, in the absence of such a recommendation, in accordance with the judgment of the proxy holders.
Any such additional matter must be approved by an affirmative vote of a majority of the votes cast.
3
INFORMATION ABOUT PROXIES AND VOTING
Record Date and Voting Securities
The Board has fixed the record date (the “Record Date”) for the Annual Meeting as the close of business
on March 17, 2025. Only shareholders of record at the close of business on the Record Date will be entitled to
vote at the Annual Meeting and at any adjournment or postponement thereof. At the close of business on the
Record Date, there were outstanding 66,427,958 shares of common stock, each of which is entitled to one vote
per share on all matters to be considered at the Annual Meeting.
The presence in person or by proxy of the holders of a majority of the shares of common stock will
constitute a quorum for the transaction of business at the Annual Meeting. Shares of common stock represented
by properly executed proxies received before the close of voting at the Annual Meeting will be voted as directed
by such shareholders, unless revoked as described below.
Revocability of Proxies
A shareholder who completes and returns the proxy card that accompanies this proxy statement may
revoke that proxy at any time before the closing of the polls at the Annual Meeting. A shareholder may revoke a
proxy by voting at a later date by one of the methods described on the proxy card or by filing a written notice of
revocation with, or by delivering a duly executed proxy bearing a later date to, Christopher C. Colson, the
Corporate Secretary of the Company, at the Company’s main office address located at 6040 Dutchmans Lane,
Louisville, Kentucky 40205 at any time before the Annual Meeting. Shareholders may also revoke proxies by
delivering a duly executed proxy bearing a later date to the inspector of election at the Annual Meeting before
the close of voting or by attending the Annual Meeting and voting in person. You may attend the Annual Meeting
even though you have executed a proxy, but your presence at the Annual Meeting will not automatically revoke
your proxy.
Solicitation of Proxies
The cost of solicitation of proxies being solicited on behalf of the Board will be borne by us (as and if
applicable). In addition to solicitation by mail, proxies may be solicited personally, by telephone or by other
means by our directors, officers or employees, who receive no additional compensation for these solicitation
activities. We will, upon request, reimburse brokerage houses and persons holding common stock in the names
of their nominees for their reasonable out-of-pocket expenses in sending materials to their principals.
Other Voting Considerations
Broker Non-Votes. Under rules of the New York Stock Exchange, matters subject to shareholder vote
are classified as “routine” or “non-routine.” In the case of routine matters, brokers may vote shares held in “street
name” in their discretion if they have not received voting instructions from the beneficial owner. In the case of
non-routine matters, brokers may not vote shares unless they have received voting instructions from the
beneficial owner (“broker non-votes”); therefore, it is important that you complete and return your proxy early
so that your vote may be recorded. Broker non-votes will be counted for quorum purposes but will not be counted
as votes cast either for or against a proposal. In other words, broker non-votes are not considered “votes cast.”
4
The election of directors (Proposal 1) is a non-routine matter under the applicable rules, so broker
non-votes may occur. However, broker non-votes do not count as shares entitled to vote. Because the election
is decided by a majority of votes cast, and because our majority voting policy for directors only considers “FOR”
votes and “AGAINST” votes, any broker non-votes will not affect the outcome of Proposal 1. In a contested
election (an election in which the number of nominees exceeds the number of directors to be elected), the
directors will be elected by a plurality of the votes cast on the election of directors. The election of directors to
be held at the Annual Meeting is an uncontested election, and, therefore, the majority of votes cast standard will
apply. Any incumbent director who receives fewer “FOR” votes than “AGAINST” votes is required to offer his or
her irrevocable resignation. Our Nominating and Corporate Governance Committee will consider the offer of
resignation and make a recommendation to the Board as to whether to accept or reject the resignation of such
incumbent director. The Board will then act on the resignation, taking into account the committee’s
recommendation, and publicly disclose its decision regarding the resignation and the rationale for its decision
within a period of 90 days following certification of the election results.
The ratification of the appointment of the Company’s independent auditors (Proposal 2) is a routine
matter under the applicable rules so broker non-votes should not occur.
The advisory vote on the approval of executive compensation (Proposal 3), the advisory vote on the
shareholder proposal regarding the adoption of a policy requiring the adoption of a policy requiring the disclosure
of our Consolidated EEO-1 Report (Proposal 4), and any other matters that may properly come before the Annual
Meeting are also non-routine matters under the applicable rules, so broker non-votes may occur. Because broker
non-votes are not counted as votes cast, they do not affect the outcome of the vote on Proposals 3 and 4.
Abstentions. As with broker non-votes, abstentions are counted for quorum purposes but will not be
counted as votes cast either for or against a proposal. In other words, abstentions are not considered “votes
cast.” Accordingly, abstentions will have no impact on the outcome of the proposals contained in this Proxy
Statement.
Executed but Unmarked Proxies. If no instructions are given, then shares represented by properly
executed but unmarked proxies will be voted in accordance with the recommendation of the Board, or, in the
absence of such a recommendation, in accordance with the judgment of the proxy holders.
5
ANNUAL MEETING FAQS
WHEN AND WHERE IS THE ANNUAL MEETING?
The 2025 Annual Meeting of Shareholders will be held at the Texas Roadhouse Support Center located at 6040
Dutchmans Lane, Louisville, Kentucky 40205 on Thursday, May 15, 2025 at 9:00 a.m. eastern daylight time.
WHO CAN ATTEND THE ANNUAL MEETING?
The Annual Meeting is open to all shareholders. If you wish to attend the Annual Meeting, please contact our
Investor Relations Department at investment@texasroadhouse.com or (502) 426-9984.
WHO IS SOLICITING MY PROXY?
The Company’s Board is soliciting your proxy in connection with the Annual Meeting. Certain of our directors,
officers and employees also may solicit proxies on the Board’s behalf by personal contact, telephone, mail, e-
mail or other means.
WHO IS ENTITLED TO VOTE?
Only shareholders of record at the close of business on March 17, 2025 will be entitled to vote at the Annual
Meeting.
WHAT CONSTITUTES A QUORUM?
The presence in person or by proxy of the holders of a majority of the shares of common stock issued and
outstanding on the Record Date will constitute a quorum for the transaction of business at the Annual Meeting.
HOW DO I VOTE?
If you are entitled to vote, then you may cast your vote in accordance with any of the following options:
-
Online, by going to the website shown on your proxy card;
-
By touch-tone telephone from the United States, using the toll-free number on the proxy card;
-
By mail by promptly completing, signing and dating your proxy card and returning it in the enclosed
postage-paid envelope; or
-
In person, by revoking your proxy and attending the Annual Meeting.
Telephone and Internet Voting facilities for Shareholders of record will close on 11:59 p.m. eastern
daylight time on May 14, 2025.
CAN I CHANGE MY VOTE OR REVOKE MY PROXY?
Yes, you may revoke your proxy at any time before the closing of the polls at the Annual Meeting by voting at a
later date by one of the methods described on the proxy card or by filing a written notice of revocation with, or
by delivering a duly executed proxy bearing a later date to, Christopher C. Colson, the Chief Legal and
Administrative Officer and Corporate Secretary of the Company, at the Company’s main office address located
at 6040 Dutchmans Lane, Louisville, Kentucky 40205.
You can also revoke proxies by delivering a duly executed proxy bearing a later date to the inspector of election
at the Annual Meeting before the close of voting or by attending the Annual Meeting and voting in person. You
may attend the Annual Meeting even though you have executed a proxy, but your presence at the Annual
Meeting will not automatically revoke your proxy.
6
WHAT IS A BROKER NON-VOTE?
Under rules of the New York Stock Exchange, matters subject to shareholder vote are classified as “routine” or
“non-routine.” In the case of routine matters, brokers may vote shares held in “street name” in their discretion if
they have not received voting instructions from the beneficial owner.
In the case of non-routine matters, brokers may not vote shares unless they have received voting instructions
from the beneficial owner; therefore, it is important that you complete and return your proxy early so that your
vote may be recorded.
WHAT DOES IT MEAN TO BE A SHAREHOLDER OF RECORD?
In the event your shares are registered directly in your name with ComputerShare, the Company’s transfer agent,
as of the Record Date, then you are considered to be a “shareholder of record”. As a shareholder of record,
you have the ability to vote at the Annual Meeting or by proxy. Regardless of whether or not you are able to
attend the Annual Meeting, we encourage you vote in any of the ways described in the “How Do I Vote” portion
of these Annual Meeting FAQs.
WHAT DOES IT MEAN TO HOLD SHARES IN STREET NAME?
In the event your shares are held in an account at a broker, bank, or other financial institution as of the Record
Date, then you are deemed the beneficial owner of shares held in “street name”, and these proxy materials are
being sent to you by such broker, bank, or other financial institution. The applicable institution holding your
account is considered the shareholder of record for the purposes of voting at the Annual Meeting. While you
may attend the Annual Meeting, you will not be able to vote your shares at the Annual Meeting unless you
request and obtain a legal proxy from such broker, bank, or other financial institution giving you the legal right to
vote such shares.
WHAT ITEMS WILL BE VOTED ON AND WHAT ARE THE RECOMMENDATIONS OF THE BOARD?
The Board is requesting that shareholders vote on the following four proposals at the Annual Meeting and makes
the following recommendations with respect to each proposal:
-
Proposal 1: To elect eight directors to the Board of Directors of the Company, each for a term of one
year.
Recommendation: “FOR”
-
Proposal 2: To ratify the appointment of KPMG LLP as the Company’s independent auditors for the
Company’s 2025 fiscal year.
Recommendation: “FOR”
-
Proposal 3: An advisory vote on executive compensation.
Recommendation: “FOR”
-
Proposal 4: An advisory vote on a shareholder proposal regarding the adoption of a policy requiring the
disclosure of the Company’s Consolidated EEO-1 Report, if properly presented at the Annual Meeting.
Recommendation: “AGAINST”
7
WHO PAYS FOR THE PROXY SOLICITATION?
The cost of solicitation of proxies being solicited on behalf of the Board will be borne by us. In addition to
solicitation by mail, proxies may be solicited personally, by telephone or by other means by our directors, officers
or employees, who receive no additional compensation for these solicitation activities. We will, upon request,
reimburse brokerage houses and persons holding common stock in the names of their nominees for their
reasonable out-of-pocket expenses in sending materials to their principals.
WHO COUNTS THE VOTES?
ComputerShare, the transfer agent for the Company, will count the votes and will serve as the independent
inspector of election at the Annual Meeting.
WHERE DO I FIND THE VOTING RESULTS OF THE ANNUAL MEETING?
Results of the vote held at the Annual Meeting will be included on a Form 8-K which is expected to be filed with
the Securities and Exchange Commission within one business day after the date of the Annual Meeting.
WHO IS “BUBBA” AND WHY IS HE REFERENCED IN THE PROXY?
Bubba was the nickname of W. Kent Taylor, the Company’s late founder, and is the namesake of our Bubba’s
33 restaurant concept. As used in Compensation Discussion and Analysis and in honor of Mr. Taylor, we use
the headings “Bubba Who” (outlining our Named Executive Officers), “Bubba What” (outlining what we do and
do not do from an executive compensation standpoint), and “Bubba How” (outlining our philosophy on executive
compensation).
8
CORPORATE GOVERNANCE AND OUR BOARD
2024 CORPORATE GOVERNANCE OVERVIEW
The following is an executive summary of corporate governance activities for our 2024 fiscal year:
Meetings
We held 29 meetings of the Board and applicable committees comprised of (i) eight meetings of the Board,
(ii) 12 meetings of the audit committee, (iii) five meetings of the compensation committee, and (iv) four
meetings of the nominating and corporate governance committee. Of the eight meetings of the Board, four
were joint meetings among the Board, the audit committee, the compensation committee and/or the
nominating and corporate governance committee.
New Board Member
On February 28, 2024, Jane Grote Abell was appointed to the Board as an independent director. In connection
with the appointment, the Board desired to add an independent Board member with extensive restaurant
industry experience. Ms. Abell was appointed as a non-employee director because of her executive and board
experience as well as her extensive knowledge of the restaurant industry in which she has over 30 years of
experience. The shareholders subsequently elected Ms. Abell to the Board at the 2024 annual shareholder
meeting.
Board Composition
2024
The Board currently consists of nine directors – seven of which are independent, as that term is defined in the
listing standards under Nasdaq Marketplace Rule 5605(a)(2) and meet the criteria for independence under
the Sarbanes-Oxley Act of 2002 and the rules adopted by the Securities and Exchange Commission. The
following is a breakdown of committee membership and leadership during the 2024 fiscal year:
1) Chairman of the Board: Gregory N. Moore
2) Audit Committee: Donna E. Epps (Chair); Michael A. Crawford; Wayne L. Jones; Gregory N. Moore;
and Curtis A. Warfield
3) Compensation Committee: Michael A. Crawford (Chair); Gregory N. Moore; and Kathleen M. Widmer
4) Nominating and Corporate Governance Committee: Curtis A. Warfield (Chair); Donna E. Epps; Wayne
L. Jones; and Kathleen M. Widmer
2025
Following the Annual Meeting, the Board will consist of eight directors – seven of which will be independent,
as that term is defined in the listing standards under Nasdaq Marketplace Rule 5605(a)(2) and meet the criteria
for independence under the Sarbanes-Oxley Act of 2002 and the rules adopted by the Securities and
Exchange Commission. The following is a breakdown of current committee membership and leadership during
the 2025 fiscal year:
1) Chairman of the Board: Gregory N. Moore
2) Audit Committee: Donna E. Epps (Chair); Jane Grote Abell; Michael A. Crawford; Wayne L. Jones;
Gregory N. Moore; and Curtis A. Warfield
3) Compensation Committee: Michael A. Crawford (Chair); Gregory N. Moore; and Kathleen M. Widmer
9
4) Nominating and Corporate Governance Committee: Curtis A. Warfield (Chair); Jane Grote Abell;
Donna E. Epps; Wayne L. Jones; and Kathleen M. Widmer
Compensation Philosophy
With respect to each non-employee director’s 2024 fiscal year service, each non-employee director received
a fixed cash amount for serving on the Board, together with additional compensation relating to leadership
positions on the Board and/or on any Board committee. Additionally, the Chairman of the Board received an
annual grant of service based restricted stock units equal to $320,000 divided by the closing sales price of the
Company’s common stock on the Nasdaq Global Select Market on the trading day immediately preceding the
date of the grant, with such quotient being rounded up or down to the nearest 100 shares, while each remaining
non-employee director received an annual grant of service based restricted stock units equal to $230,000
divided by the closing sales price of the Company’s common stock on the Nasdaq Global Select Market on
the trading day immediately preceding the date of the grant, with such quotient being rounded up or down to
the nearest 100 shares.
In 2024, the compensation committee engaged FW Cook as an independent compensation consultant to
advise the compensation committee on non-employee director compensation beginning with the 2025 fiscal
year. Based on the compensation committee’s review of FW Cook’s reports and recommendations, the
compensation committee (A) increased certain portions of the cash components for the non-director
compensation to further align with its peer companies and industry practices for companies between mid-cap
and large-cap companies; and (B) reduced a portion of the equity component for non-director compensation
so that the total compensation for each non-employee director is not as heavily weighted on equity.
Accordingly, with respect to each non-employee director’s 2025 fiscal year service, each non-employee
director will receive a fixed cash amount for serving on the Board, together with additional compensation
relating to serving in leadership positions on the Board and/or on any Board committee. Additionally, the
Chairman of the Board received an annual grant of service based restricted stock units equal to $315,000
divided by the closing sales price of the Company’s common stock on the Nasdaq Global Select Market on
the trading day immediately preceding the date of the grant, with such quotient being rounded up or down to
the nearest 100 shares, while each remaining non-employee director received an annual grant of service
based restricted stock units equal to $225,000 divided by the closing sales price of the Company’s common
stock on the Nasdaq Global Select Market on the trading day immediately preceding the date of the grant,
with such quotient being rounded up or down to the nearest 100 shares.
Similar to our compensation philosophy for our executive officers, we believe that issuing service based
restricted stock units to our non-employee directors aligns their interests with those of our shareholders.
Specifically, since the bulk of each non-employee director’s compensation lies in the value of the service
based restricted stock units granted, the non-employee directors are motivated to continually improve the
Company’s performance in the hope that the performance will be reflected by the stock price on the vesting
date of their service based restricted stock units. Moreover, we believe that the service based restricted stock
unit awards drive director alignment with maximizing shareholder value because the value of the service based
restricted stock units varies in response to investor sentiment regarding overall Company performance at the
time of vesting.
Cap on Total Compensation
The total compensation for any non-employee director may not exceed $500,000, which amount shall be
calculated by adding (i) the total cash compensation to be paid for services rendered by a non-employee
director in any given fiscal year to (ii) the grant date value of any equity granted to such non-employee director
in that fiscal year. This cap on Board total compensation is included in the Company’s 2021 Long-Term
Incentive Plan.
10
Mandatory Retirement Age for Board Service
The Board and the nominating and corporate governance committee have established a mandatory retirement
age for the non-employee directors on the Board. In furtherance of the foregoing, in no event shall any non-
employee be elected, re-elected, and/or appointed to the Board if such non-employee is 75 years or older at
the time of such election, re-election, and/or appointment; provided, however, any director who began serving
on the Board prior to 2006 shall be permitted to be re-elected to the Board so long as they are not 80 years
or older at the time of such re-election.
In furtherance of this policy, James R. Zarley will not stand for re-election at the Annual Meeting. Mr. Zarley
is our longest tenured member of the Board, being appointed to the Board in 2004 as a part of the Company’s
initial public offering. During his time on the Board, he served on each of the three committees of the Board
and has provided both formal and informal mentorship and leadership. The Company thanks Mr. Zarley for
his nearly 20 years of service on the Board and the tremendous value that he has brought to the Company
during his tenure, including during key transitional moments in the Company’s history (specifically following
the sudden passing of our founder W. Kent Taylor).
Shareholder Engagement
During 2024, management of the Company interacted with shareholders owning approximately 65% of the
outstanding shares of the Company as of the end of fiscal year 2024. These interactions ranged from one-
on-one phone/video calls, face-to-face meetings at investor conferences, video calls during virtual non-deal
roadshows, participants listening to virtual fireside chats between members of management and sell-side
analysts, and conversations with stewardship teams regarding corporate governance.
11
Director Summary Overview
OUR DIRECTOR NOMINEES
Committee Membership
Director
Independent
Nominee
Age
Since
(Y/N)
A
C
N
Jane Grote Abell
58
2024
Y
○
○
Michael A. Crawford
57
2020
Y
○
●
Donna E. Epps
61
2021
Y
●
○
Wayne L. Jones
66
2023
Y
○
○
Gregory N. Moore
75
2005
Y
○
○
Gerald L. Morgan
64
2021
N
N/A
N/A
N/A
Curtis A. Warfield
57
2018
Y
○
●
Kathleen M. Widmer
63
2013
Y
○
○
A (Audit Committee)
C (Compensation Committee) N (Nominating and Corporate Governance Committee)
Chairperson
Committee Member
Nominee Highlights
The charts below illustrate the composition of our director nominees by age, tenure, diversity,
independence, and gender:
DIVERSITY
Diverse*
*Women & BIPOC
INDEPENDENCE
Independent
Not Independent
GENDER
Female
Male
50-59
AGE
60-65
66-70
70+
37.5%
37.5%
12.5%
12.5%
50%
50%
37.5%
62.5%
12.5%
87.5%
TENURE
0-4 Years
5-9 Years
10-15 Years
15+ Years
50%
25%
12.5%
12.5%
12
Director Summaries
Jane Grote Abell
Business Experience:
Director Since: 2024
Age: 58
Board Committees /
Leadership:
Audit Committee; Nominating
and Corporate Governance
Committee
Public Boards: None
Favorite Texas Roadhouse
Food Item:
Herb Crusted Chicken, Baked
Potato and Steamed Vegetables
with the World Famous Texas
Roadhouse Rolls
Ms. Abell is a founding family member, Executive Chairwoman of the Board of Directors,
and Chief Purpose Officer for Donatos Pizza and Jane’s Dough Premium Foods, all
positions she has held since 2010. At Donatos, Ms. Abell previously held the title of Chief
Operations Officer, Chief People Officer, and President. She also previously served as
Senior Vice President of Business Development for Donatos where she led growth for
franchising and development during the period of time in which Donatos was owned by
the McDonald’s corporation.
Reason for Nomination:
Ms. Abell is being nominated as a non-employee director because of her executive and
board experience as well as her extensive knowledge of the restaurant industry where she
has over 30 years of experience in the industry. As a result of these and other professional
experiences, Ms. Abell possesses particular knowledge and experience that strengthen
the Board’s collective qualifications, skills, and experience.
Michael A. Crawford
Business Experience:
Director Since: 2020
Age: 57
Board Committees /
Leadership:
Audit Committee and
Compensation Committee;
Chairperson of Compensation
Committee
Public Boards:
Hall of Fame Resort &
Entertainment Company
(NASDAQ: HOFV); Seaport
Entertainment Group (NYSE:
SEG)
Favorite Texas Roadhouse
Food Item:
6oz Filet and Grilled Shrimp
Mr. Crawford is currently serving as Chairman of the Board, President and Chief Executive
Officer for Hall of Fame Resort & Entertainment Company (NASDAQ: HOFV), including
Hall of Fame Village, Hall of Fame Village Media and Gold Summit Gaming divisions,
which he joined in December 2018. Hall of Fame Resort & Entertainment Company is a
sports, entertainment, and media enterprise headquartered in Canton, Ohio which was
established in 2020 as a result of a merger between HOF Village, LLC, a partnership
between the Pro Football Hall of Fame and Industrial Realty Group (IRG) which began in
2016 and Gordon Pointe (GPAQ) Acquisition Corp. From 2014 to 2018, Mr. Crawford held
numerous executive positions with the Four Seasons Hotels and Resorts Company,
starting as the President of Asia Pacific and subsequently becoming Global President of
Portfolio Management. While at Four Seasons, he was responsible for business and
capital planning, along with the design and construction of all new Four Seasons Hotels
and Resorts worldwide. Prior to Four Seasons, Mr. Crawford spent almost 25 years at the
Walt Disney Company (NYSE: DIS) where he rose to Senior Vice President and General
Manager of Shanghai Disney Resort and President of Shanghai’s Walt Disney Holdings
Company. Mr. Crawford also serves as an independent director for Seaport
Entertainment Group (NYSE: SEG), which develops, owns and operates a real estate and
entertainment portfolio.
Reason for Nomination:
Mr. Crawford is being nominated as a non-employee director because of his chief
executive experience, his hospitality and international experience, and his strategic
planning experience. As a result of these and other professional experiences,
Mr. Crawford possesses particular knowledge and experience that strengthen the Board’s
collective qualifications, skills, and experience.
13
Donna E. Epps
Business Experience:
Director Since: 2021
Age: 61
Board Committees /
Leadership:
Audit Committee and
Nominating & Corporate
Governance Committee;
Chairperson of Audit Committee
Public Boards:
Saia, Inc. (NASDAQ: SAIA)
Texas Pacific Land
Corporation (NYSE: TPL)
Favorite Texas Roadhouse
Food Item:
Fall-Off-The-Bone Ribs
Ms. Epps is a certified public accountant licensed in the State of Texas who previously
served in various capacities at Deloitte LLP for over 31 years, including over 17 years of
focus on providing attest services to private and public companies across industries
including distribution, commercial and industrial products, energy, technology, and
telecommunications. Following her retirement from Deloitte in 2017, Ms. Epps serves as
an independent director for Saia, Inc. (NASDAQ: SAIA), a transportation company that
predominantly transports less-than-truckload shipments across 45 states but also offers
a wide range of other services, including non-asset truckload, expedited transportation
and logistics services across North America. Ms. Epps also serves as an independent
director for Texas Pacific Land Corporation (NYSE: TPL), one of the largest landowners
in the state of Texas with approximately 900,000 acres of land located in 19 counties of
West.
Reason for Nomination:
Ms. Epps is being nominated as a non-employee director because of her extensive audit,
risk, financial and accounting experience and her extensive board experience. As a result
of these and other professional experiences, Ms. Epps possesses particular knowledge
and experience that strengthen the Board’s collective qualifications, skills, and
experience.
Wayne L. Jones
Business Experience:
Director Since: 2023
Age: 66
Board Committees /
Leadership:
Audit Committee and
Nominating & Corporate
Governance Committee
Public Boards: None
Favorite Texas Roadhouse
Food Item:
Ribeye, Loaded Baked Potato
and Rattlesnake Bites with the
World Famous Texas
Roadhouse Rolls
Mr. Jones has over 40 years of experience in the restaurant industry, where his career
spans several well-respected brands, including BJ’s Restaurants, P.F. Chang’s,
Anthony’s Coal Fired Pizza and The Cheesecake Factory. Most recently, Mr. Jones
served as the Chief Executive Officer of Anthony’s Coal Fired Pizza from 2017 until his
retirement in 2020. In addition to his executive level experience, Mr. Jones served on the
Board of Directors as an independent director at Craftworks Restaurants from 2015 to
2018.
Reason for Nomination:
Mr. Jones is being nominated because of his chief executive and board of director
experience as well as his extensive knowledge of the restaurant industry where he has
over 40 years of experience in the industry. As a result of these and other professional
experiences, Mr. Jones possesses particular knowledge and experience that strengthen
the Board’s collective qualifications, skills, and experience.
14
Gregory N. Moore
Business Experience:
Director Since: 2005
Age: 75
Board Committees /
Leadership:
Audit Committee and
Compensation Committee;
Chairman of the Board
Public Boards:
Newegg Commerce, Inc.
(NASDAQ: NEGG)
Favorite Texas Roadhouse
Food Item:
Texas Size Combo of 6oz Filet
and Fall-Off-The Bone Ribs
Mr. Moore served as the Senior Vice President and Controller of Yum! Brands, Inc. until
he retired in 2005. Yum! Brands is the worldwide parent company of Taco Bell, KFC, and
Pizza Hut. Prior to becoming Yum! Brands’ Controller, Mr. Moore was the Vice President
and General Auditor of Yum! Brands. Before that, he was with PepsiCo, Inc. and held the
position of Vice President, Controller of Taco Bell and Controller of PepsiCo Wines &
Spirits International, a division of PepsiCola International. Before joining PepsiCo, he was
an Audit Manager with Arthur Young & Company in its New York, New York and
Stamford, Connecticut offices. Mr. Moore is a certified public accountant in the States of
New York and California. In July 2011, Mr. Moore joined the board of Newegg Commerce,
Inc. (NASDAQ: NEGG), an on-line retailer specializing in computer and computer-related
equipment.
Reason for Nomination:
Mr. Moore is being nominated as a non-employee director because of his extensive
financial, accounting, and international experience as well as his experience in the
restaurant industry. As a result of these and other professional experiences, Mr. Moore
possesses particular knowledge and experience that strengthen the Board’s collective
qualifications, skills, and experience.
Gerald L. Morgan
Business Experience:
Director Since: 2021
Age: 64
Board Committees /
Leadership:
Company’s Chief Executive
Officer
Public Boards: None
Favorite Texas Roadhouse
Food Item:
Dickie V Pizza from Bubba’s 33
Mr. Morgan is a 28-year veteran of Texas Roadhouse and has nearly 40 years of total
foodservice experience, including with Bennigan’s and Burger King. His career with Texas
Roadhouse began in 1997 as Managing Partner in Grand Prairie, Texas, which was store
number 26 and the first in Texas. Mr. Morgan was named Managing Partner of the Year
in 2001, which is the Company’s highest recognition. Mr. Morgan was promoted to Market
Partner in 2001, where he oversaw and grew operations in Texas and Oklahoma. In 2014,
Mr. Morgan was awarded the Texas Roadhouse Legends Award at the Company’s
Managing Partner Conference. The following year, he was promoted to Regional Market
Partner. Mr. Morgan was named Chief Executive Officer in 2021. Mr. Morgan also
previously served as President of the Company from December 2020 through
January 2023.
Reason for Nomination:
Mr. Morgan is being nominated as an executive director because of his role as Chief
Executive Officer of the Company, his knowledge of the restaurant industry and his in-
depth knowledge of the Company. As a result of these and other professional
experiences, Mr. Morgan possesses particular knowledge and experience that strengthen
the Board’s collective qualifications, skills, and experience.
15
Curtis A. Warfield
Business Experience:
Director Since: 2018
Age: 57
Board Committees /
Leadership:
Audit Committee and
Nominating & Corporate
Governance Committee;
Chairperson of Nominating &
Corporate Governance
Committee
Public Boards:
Talkspace, Inc.
(NASDAQ: TALK)
Favorite Texas Roadhouse
Food Item:
Beef Tips, Mashed Potatoes
and Gravy with the World
Famous Texas Roadhouse
Rolls
Mr. Warfield is a certified public accountant licensed in the Commonwealth of Kentucky
and is currently the President and Chief Executive Officer of Windham Advisors LLC, a
private equity and strategic advisory firm that offers innovative business solutions for
companies in technology, healthcare, and real-estate industries. He served as part of
the senior leadership team of Anthem, Inc. (NYSE: ANTM), one of the nation’s largest
health insurers with over $100 billion in revenues from 2017 to 2019. Previously he
served in a variety of roles from 1997 to 2016 at HCA, the largest healthcare provider in
the country. He began as the Chief Financial Officer of the Columbia Healthcare Network
with a majority of his tenure serving as the Chief Executive Officer of NPAS, a healthcare
services company. In 2021, Mr. Warfield joined the board of Talkspace, Inc. (NASDAQ:
TALK),
a
digital
company
which
offers
mental
health
treatment
services.
Mr. Warfield also served on the board of OneOncology, before the sale to Amerisource
Bergen (NYSE:ABC), a company that invests in and collaborates with community
oncology practices.
Reason for Nomination:
Mr. Warfield is being nominated as a non-employee director because of his extensive
financial and accounting experience, his executive management experience, and his
information technology experience. As a result of these and other professional
experiences, Mr. Warfield possesses particular knowledge and experience that
strengthen the Board’s collective qualifications, skills, and experience.
Kathleen M. Widmer
Business Experience:
Director Since: 2013
Age: 63
Board Committees /
Leadership:
Compensation Committee, and
Nominating & Corporate
Governance Committee
Public Boards: None
Favorite Texas Roadhouse
Food Item:
All American Burger
Ms. Widmer is President and Chief Executive Officer of PRPL Skincare, a position she
has held since April 2024. PRPL Skincare is a startup in the consumer personal care
industry. Prior to this position, she served as Company Group Chairman for Consumer
North America and Latin America for Johnson & Johnson Consumer Health (NYSE:JNJ),
a position she held from December 2018 through May 2023. She helped lead the spinoff
from Johnson & Johnson to form Kenvue (NYSE:KVUE), a stand-alone public company
dedicated to Consumer Healthcare. She retired from this position in December 2023. In
both her roles at Johnson & Johnson and Kenvue, Ms. Widmer led the North America and
Latin America teams and their portfolio of well-known brands including Neutrogena,
Tylenol, Aveeno, Zyrtec, Band-Aid, Listerine and Benadryl. Prior to these roles, she held
numerous positions in Johnson & Johnson Consumer Healthcare in both supply chain
and commercial. In 2017, Ms. Widmer was appointed to the Board of Directors for
Wounded Warrior Project, a board position in which she served until 2023, including
serving as Chairman of the Board from 2021 through 2023. Ms. Widmer is one of the
earliest women graduates of the United States Military Academy at West Point, and she
subsequently served in the US Army Field Artillery as one the artillery’s first women
officers.
Reason for Nomination:
Ms. Widmer is being nominated as a non-employee director because of her leadership
and executive management experience, her extensive commercial and supply chain
experience in the consumer industry, and her knowledge of the global retail industry. As a
result of these and other professional experiences, Ms. Widmer possesses particular
knowledge and experience that strengthen the Board’s collective qualifications, skills, and
experience.
16
Meetings of the Board
The Board met on eight occasions and its standing committees (audit committee, compensation
committee, and nominating and corporate governance committee) met on 21 occasions during our fiscal year
ended December 31, 2024, which consisted of (i) 12 meetings of the audit committee, (ii) five meetings of the
compensation committee, and (iii) four meetings of the nominating and corporate governance committee. Of the
eight meetings of the Board, four were joint meetings among the Board, the audit committee, the compensation
committee and/or the nominating and corporate governance committee. Each incumbent director attended at
least 75% of the aggregate number of meetings of the Board and its committees on which such director served
during his or her period of service in fiscal 2024. In addition, the Company expects all members of the Board to
attend the Annual Meeting. All incumbent directors attended the 2024 annual meeting. Four regular Board
meetings are currently scheduled for the 2025 fiscal year. Executive sessions of non-employee directors, without
management directors or employees present, are typically scheduled in conjunction with each regularly
scheduled Board meeting. The role of each standing committee is more fully described below.
Leadership Structure of the Board
The Board currently consists of seven independent directors, one non-independent non-employee
director and one executive director. Following the Annual Meeting, the Board will consist of seven independent
directors and one executive director. Following the passing of W. Kent Taylor, the Company’s founder and then
Chairman of the Board and Chief Executive Officer of the Company, the Board named Gregory N. Moore as
Chairman of the Board on March 19, 2021. Mr. Moore joined the Board in 2005 following the Company’s initial
public offering in 2004. Until his appointment as Chairman of the Board, Mr. Moore had previously served as the
Board’s Lead Independent director since the creation of that position in 2012. The responsibility and authority of
the Lead Independent director are delineated in our Corporate Governance Guidelines, which can be found on
the Company’s website at www.texasroadhouse.com. The Board determined that a separation of the duties and
responsibilities of the Chairman of the Board from those of the Chief Executive Officer was appropriate during
the transition following the death of the Company’s founder. As more particularly described below, Mr. Morgan,
the Company’s Chief Executive Officer, was appointed to the Board on June 15, 2021.
17
Role of the Board in Strategy and Risk Oversight
BOARD OVERSIGHT-AT-A-GLANCE
Board’s General Oversight Responsibilities
•
Establishing Board corporate policies
•
Overseeing management and strategic direction of
the Company
•
Overseeing the Company’s strategy and initiatives
Board’s Strategic Planning and Strategic
Initiatives Oversight Responsibilities
•
Oversight
roles
include
succession
and
organizational
planning,
human
capital
management, governance, corporate policy and
process development, enterprise risk management,
capital structure and allocation, and long-term
financial and business planning
•
Ensure alignment on long-term goals and strategic
initiatives
•
Every Board meeting – strategic overview of one of
our restaurant brands and a business update of
each restaurant brand
Board’s Risk Oversight Responsibilities
•
Responsible for overseeing our risk management
strategy – directly and through Board committees
•
Key risk management responsibilities have been
delegated to the Audit Committee
Role of the Board and Management. As more specifically described in our Corporate Governance
Guidelines, the Company’s business is conducted by the officers and employees under the direction of the
Chairman of the Company, and if there is no Chairman, then the Chief Executive Officer of the Company, and
under the oversight of the Board. In connection with the same, the Board’s role is to enhance the long-term
value of the Company for its shareholders. The Board is elected annually by the Company’s shareholders to
oversee management and the execution of the Company’s strategy, and to ensure that the long-term interests
of the shareholders are being served. In order to fulfill these obligations, the Board is responsible for establishing
broad corporate policies, setting and overseeing the Company’s strategic direction, and overseeing the
management of the Company.
Strategic Planning and Strategic Initiatives. In addition to and as part of the broad responsibilities
described in the immediately preceding paragraph, the Board plays an instrumental oversight role in the strategic
planning and initiatives of the Company to ensure that the appropriate processes, systems, and organizational
infrastructure is in place to support and align all management teams and functions toward the execution of the
Company’s mission, values, and purpose. The Board’s oversight role includes succession and organizational
planning, human capital management, governance, corporate policy and process development, enterprise risk
management, capital structure and allocation, and long-term financial and business planning.
As a part of this role, the Board reviews the Company’s strategy with management to ensure that the
Company and the Board are aligned on the long-term goals and strategic initiatives of the Company. At every
quarterly Board meeting, the Board and management conduct a strategic overview of one of the Company’s
18
main restaurant brands (including the international business) and is continually updated throughout the year on
the performance of each brand or business unit. Additionally, the Board conducts periodic reviews of the manner
in which the Company is allocating its capital to ensure that the Board and the management of the Company are
in agreement on how the Company is managing its asset portfolio. Finally, the Board provides direct oversight
over certain other strategic initiatives or transactions implemented by the Company, including new store
development, franchise acquisitions and development, international development, retail or other business
development initiatives, technology initiatives, and the Company’s share repurchase activities and dividend
program (as applicable). The Board executes its strategic oversight responsibility directly and through its
committees as more particularly described below.
Risk Oversight. The Board is also responsible for overseeing the Company’s risk management strategy,
including the Company’s implementation of appropriate processes to administer day-to-day risk management.
The Board executes its oversight responsibility directly and through its committees and is informed about risk
management matters as part of its role in its general oversight and approval of corporate matters. The Board
provides the Company’s management with clear guidance on the risks it believes face the Company, such as
the matters disclosed as risk factors in the Company’s Annual Report on Form 10-K. Additionally, the Board has
delegated certain risk management responsibilities to its audit committee and compensation committee.
Pursuant to the audit committee’s charter, the Board has authorized the audit committee to oversee the
Company’s risk assessment and risk management practices, and disclosures, including, without limitation, the
Company’s financial strategies, insurance plans, cyber risk, artificial intelligence, business continuity, human
capital, and corporate sustainability. As a part of its oversight responsibilities and as more specifically discussed
below, the audit committee evaluates the overall enterprise risk of the entire Company, as well as regularly and
comprehensively reviews specific risk matters which have been identified by management. This includes a
rotational review of the risks relating to specific departments within the Company. The Company’s internal
auditors regularly report directly to the audit committee on the results of internal audits, the scope and frequency
of which are based on comprehensive risk assessments which have been approved by the audit committee.
As a part of our enterprise risk management process and under the oversight of the audit committee,
the Company has formed a series of subject matter risk committees that are composed of cross-functional
leaders within the Company that specialize in specific areas of risk previously identified by the Company, which
regularly meet and report their activities to the enterprise risk management (“ERM”) team. These subject matter
ILLUSTRATIVE DEPICTION OF ENTERPRISE RISK MANAGEMENT PROGRAM
AUDIT COMMITTEE
EXECUTIVE RISK
COMMITTEE
SUBJECT MATTER
RISK COMMITTEES
ERM TEAM
19
risk committees focus on specific risks relating to business continuity / crisis management, food safety,
responsible alcohol service, employment compliance, information governance (including data privacy
compliance and the Company’s use of artificial intelligence), vendor management, employee and guest safety,
California operations, and corporate sustainability. The ERM team, consisting of our Chief Legal and
Administrative Officer, Chief Financial Officer, Vice President of Finance, Vice President of Legendary People,
Deputy General Counsel, Associate General Counsel – Brand Protection, Director of Risk, Director of Internal
Audit, and Program Director of Business Continuity and Data Privacy, meets regularly to identify emerging risk
areas and key risk areas for the Company, and serves as a liaison between the subject matter risk committees
and the executive risk committee described below. Additionally, the ERM team conducts a periodic review of a
risk register, including an in-depth focus on high priority risks, as well as evaluates the composition of existing
subject matter risk committees and/or the potential need for the creation of new subject matter risk committees
based on its review of the risk register and conducts a gap analysis with respect to the key risks identified on the
Company’s risk register to the Company’s applicable lines of available insurance coverage, as well as a gap
analysis to compare the key risks identified on the Company’s risk register and the risks outlined on a recently
completed materiality assessment. The risk register is reviewed with the audit committee and the executive risk
committee. Finally, the Company has an executive risk committee consisting of the Named Executive Officers,
the ERM team, and the Vice Presidents of Operation for each of the Company’s three main concepts which meet
throughout the year to determine risk priorities, receive reports from the various risk subcommittees on their
respective priorities and initiatives, and make decisions on key areas of risk.
Additionally, as indicated above, the ERM team regularly updates the audit committee on the results of
its risk management activities at least twice per year. Moreover, specific subject matter risk committees
periodically report to the audit committee the risk-based initiatives being performed by the applicable risk
committee. The audit committee is routinely advised of strategic, operational, financial, human capital, legal,
data privacy, corporate sustainability, responsible alcohol service, and cybersecurity risks, and the audit
committee reviews and is informed of specific activities to manage these risks, such as policies and procedures,
insurance plans, indemnification obligations, and internal controls (as and if applicable).
Pursuant to the compensation committee’s charter, the Board has authorized the compensation
committee to oversee the compensation programs for the Company’s executive officers and non-employee
directors. The compensation committee, in fulfilling its oversight responsibilities, designs the compensation
packages applicable to the Company’s executive officers and Board members. The compensation committee
also periodically consults with management on the payments of bonuses and grants of stock awards to key
employees.
The audit committee and the compensation committee jointly perform an annual risk assessment of our
compensation programs for all employees to determine whether these programs encourage unnecessary or
excessive risk taking. In conducting this review, each of our compensation programs is evaluated on a number
of criteria aimed at identifying any incentive programs that deviate from our risk management objectives. Based
on this review in 2024, both the audit committee and the compensation committee concluded that we have the
right combination of rewards and incentives to drive company performance, without encouraging unnecessary
or excessive risk taking by our employees. In connection with the foregoing, the Company has not established
a system of incentives that is reasonably likely to lead to excessive or inappropriate risk taking by employees or
create a risk reasonably likely to have a material adverse effect on the Company. Specifically, the audit and
compensation committees identified the following components of our compensation programs that mitigate the
likelihood of excessive risk taking to meet performance targets: equity incentive compensation in the form of
restricted stock units; long term contracts and a financial buy-in requirement for restaurant management; a
guaranteed base salary within our support center management personnel; minimums and maximums on profit
sharing compensation within our support center management personnel; robust internal controls; operational
focus on top line sales growth; and, a business model which focuses on a strong balance sheet, relatively low
debt, prudent growth, and sustainable long-term profitability.
The Board’s oversight roles, including the roles of the audit committee and the compensation committee,
allow the Board to effectively administer risk management policies while also effectively and efficiently
addressing Company objectives. The Board expects to continue to involve Company management in its
deliberations and decision-making in order to administer risk management policies effectively.
20
Cybersecurity. In the course of our operations, the Company receives and maintains sensitive
information from our guests, employees, partners and business operations. To address cybersecurity threats to
this information, the Company has used a risk-based approach to create and implement a detailed set of
information security policies and procedures that are based on frameworks established by the National Institute
of Standards and Technology. The Company’s Head of Information Security leads the Company’s cybersecurity
efforts under the direct oversight of our Chief Technology Officer. These individuals, including the members of
the cybersecurity team, have an average of 16 years of experience involving information technology, including
security, auditing, compliance, systems, and programming. Additionally, the Company engages in the use of
external cybersecurity experts for training, contingency planning, consultation and process documentation.
The Company has implemented detective and preventative controls designed to ensure the appropriate
level of protection for the confidentiality, integrity and availability of data stored on or transferred through our
information technology resources. Additionally, we have a risk assessment process to identify risks associated
with our use of third-party service providers and have implemented specific processes and controls designed to
mitigate those identified risks. Both internal and third-party audits are performed routinely to verify that these
controls are effective. Additionally, the Company has implemented training programs designed to provide best
practices for protecting our network and systems, and routinely leads exercises for employees to reinforce the
risk and proper handling of targeted emails. The Company’s Head of Information Security is responsible for
developing and implementing these controls and training exercises with support from our information technology
department.
The Company’s enterprise risk management program has established an internal risk committee to
evaluate information governance risks including risks associated with the Company’s use of artificial intelligence.
This committee comprises members of management of the Company’s information technology, human
resources, marketing, accounting, risk, procurement, training, finance, and legal functions, and is focused on
performing risk assessments to identify areas of concern and implement appropriate changes to enhance its
cybersecurity and privacy policies and procedures. The internal risk committee is informed of the Company’s
risk prevention and mitigation efforts on at least a quarterly basis by the Head of Information Security. The
committee is also briefed on detection and remediation of cybersecurity incidents in a timely manner following
the detection of any potential events.
The Company has a crisis response team comprising senior members of various corporate functions to
oversee the response to various crises including potential crises arising from cybersecurity incidents that may
impact the Company and/or its vendor partners. This team conducts regular tabletop exercises to simulate
responses to cybersecurity incidents. To the extent there is a cybersecurity incident impacting the Company
and/or a vendor partner, the crisis response team’s process would be to ensure that our Head of Information
Security and Chief Technology Officer are informed immediately and that the potential impact of the incident and
remedial measures arising from the incident are communicated to the executive officers of the Company.
The Board has authorized the audit committee to oversee the Company’s risk assessment and risk
management practices and strategies. This delegation includes maintaining responsibility for overseeing the
Company’s enterprise risk management program. As a part of this oversight role, the audit committee receives
regular updates from management on cybersecurity and privacy risks impacting the Company, which includes
benchmarking these risks versus the industry. Our Board members also engage in ad hoc conversations with
management on cybersecurity-related news events, receive training specific to cybersecurity risks and threats
and regularly discuss any updates to our cybersecurity risk management and strategy programs.
Corporate Sustainability. The Board and the Company take great pride in our corporate sustainability
program and our appreciation for, and commitment to, our employees and for the communities in which we
serve. Our commitment is evident from our passion and history of dedication to corporate citizenship and the
manner in which we often consider sustainability as part of our strategy, operating model and overall decision-
making process. This commitment also includes the continued execution of our existing corporate sustainability
activities, as well as the identification of future opportunities. We actively pursue opportunities and partnerships
that help conserve resources, reduce waste, and have a positive impact on our communities, as well as partner
with other organizations and source products from suppliers who share our commitment to corporate
21
sustainability. As a result, the Board reviews the Company’s corporate sustainability initiatives as a part of their
oversight role of the Company’s business strategy and risk management. In particular, the Board receives
periodic updates, at least annually, of our corporate sustainability initiatives from management. The Company
also includes an update on some of these initiatives in the Company’s Annual Report.
Additionally and as described above, risks relating to corporate sustainability are managed by the
Company as a part of the Company’s enterprise management program and under the oversight of the audit
committee. In connection with the same, the Company has established an internal subject matter risk committee
to evaluate environmental, social and governance matters. This corporate sustainability risk committee is
comprised of members of management from the Company’s legal, human resources, communications,
procurement, investor relations, internal audit, and financial reporting functions. At least annually, the corporate
sustainability risk committee reports to the audit committee regarding the risk-based initiatives being performed
by the committee.
In 2017, we released our initial corporate sustainability report which outlined the four core pillars of our
corporate sustainability efforts: Food, Community, Employees, and Conservation. Our goal is to update our
corporate sustainability report annually. The current report is available on the Company’s website at
www.texasroadhouse.com. Unless specifically incorporated by reference, the content posted on, or accessible
through, our website is not incorporated by reference into this proxy statement or any of our filings with the
Securities and Exchange Commission (the “SEC”) and may be revised by us (in whole or in part) at any time
and from time to time.
Committees of the Board
The Board has three standing committees:
(i)
the audit committee;
(ii)
the compensation committee; and
(iii)
the nominating and corporate governance committee.
The Board has adopted a written charter for each of these committees, which set out the functions and
responsibilities of each committee. The charters of these committees are available in their entirety on our website
at www.texasroadhouse.com. Please note, however, that the information contained on the website is not
incorporated by reference in, nor considered to be a part of, this proxy statement.
22
Audit Committee.
AUDIT COMMITTEE
Committee Members (2024):
Donna Epps (Chair)
Michael Crawford
Wayne Jones
Gregory Moore
Curtis Warfield
Committee Members (2025):
Donna Epps (Chair)
Jane Grote Abell
Michael Crawford
Wayne Jones
Gregory Moore
Curtis Warfield
Number of Meetings in 2024: 12
Committee Functions:
As described in its charter, the audit committee:
•
assists the Board in fulfilling its oversight responsibilities relating
to:
•
the integrity of the Company’s consolidated financial
statements;
•
the Company’s risk assessment and risk management
practices and strategies;
•
the Company’s compliance with legal and regulatory
requirements;
•
the independence and performance of the Company’s internal
and external auditors; and
•
the Company’s internal controls and financial reporting
practices;
•
is directly responsible for the following:
•
pre-approving all audit and permitted non-audit related
services provided by our independent auditors (which can be
found
on
the
Company’s
website
at
www.texasroadhouse.com);
•
the appointment, compensation, retention, and oversight of
the Company’s independent auditors; and
•
periodically reviewing the Company’s independent auditors
(which entails evaluating the service level of the incumbent
independent auditor on an annual basis, which includes
criteria such as prior year quality of service, industry and
technical expertise, independence, resource availability, and
reasonableness and competitiveness of fees, as well as
soliciting the input of key management employees during its
evaluation);
•
reviews all of the Company’s earnings press releases, Quarterly
and Annual Reports on Form 10-Q and Form 10-K, respectively,
prior to filing with the SEC, and such other applicable financial
disclosure documents (as and if applicable); and
•
is responsible for producing an annual report on its activities for
inclusion in this proxy statement.
Independence: All of the current members of the audit committee are “independent” under all applicable
rules, including the listing standards under Nasdaq Marketplace Rule 5605(a)(2) and the requirements of the
SEC, and all members of the audit committee during the 2024 fiscal year were “independent” under such
applicable rules.
23
Compensation Committee.
COMPENSATION COMMITTEE
Committee Members (2024):
Michael Crawford (Chair)
Gregory Moore
Kathleen Widmer
Committee Members (2025):
Michael Crawford (Chair)
Gregory Moore
Kathleen Widmer
Number of Meetings in 2024: 5
Committee Functions:
As described in its charter, the compensation committee:
•
assists the Board in fulfilling its responsibilities relating to the
design, administration and oversight of employee compensation
programs and benefit plans of the Company’s executive officers;
•
discharges the Board’s duties relating to the compensation of the
Company’s executive officers and non-employee directors;
•
reviews the performance of the Company’s executive officers; and
•
reviews and discusses with management the “Compensation
Discussion and Analysis” in this proxy statement and
recommends its inclusion in this proxy statement to the Board, as
well as performs the other duties and responsibilities described in
its charter.
Independence: All of the current members of the compensation committee are “independent” under all
applicable rules, including the listing standards under Nasdaq Marketplace Rule 5605(a)(2) and the
requirements of the SEC, and all members of the compensation committee during the 2024 fiscal year were
“independent” under such applicable rules.
24
Nominating and Corporate Governance Committee.
NOMINATING AND CORPORATE GOVERNANCE COMMITTEE
Committee Members (2024):
Curtis Warfield (Chair)
Donna Epps
Wayne Jones
Kathleen Widmer
Committee Members (2025):
Curtis Warfield (Chair)
Jane Grote Abell
Donna Epps
Wayne Jones
Kathleen Widmer
Number of Meetings in 2024: 4
Committee Functions:
As described in its charter, the nominating and corporate governance
committee assists the Board in:
•
identifying potential candidates for consideration in the event
of vacancy on the Board and/or the Board determines that a
new director is necessary and screen individuals qualified to
become members of the Board consistent with the nominating
and corporate governance committee’s screening guidelines
and criteria;
•
if a vacancy on the Board occurs, making recommendations to
the Board regarding the selection and approval of the
candidate to fill such vacancy either by election by the
Company’s shareholders or appointment by the Board;
•
reviewing the qualifications and independence of, approving
the nominations of, and recommending to the Board those
persons to be nominated for membership on the Board and
presented for shareholder approval at the annual meeting;
•
developing and recommending to the Board a set of corporate
governance principles; and
•
periodically reporting to the Board the status of succession
planning for senior management, including guidance regarding
succession in the event of an emergency or the retirement of
the executive officers and the identification and evaluation of
potential successors to the executive officers and other
members of senior management.
Independence: All of the current members of the nominating and corporate governance committee are
“independent” under all applicable rules, including the listing standards under Nasdaq Marketplace
Rule 5605(a)(2) and the requirements of the SEC, and all members of the nominating and corporate
governance committee during the 2024 fiscal year were “independent” under such applicable rules.
Self-Assessments; Other Public Boards. The nominating and corporate governance committee annually
conducts on the Board’s behalf a confidential self-assessment. As a part of the annual self-assessment, each
director provides, without limitation, an assessment on the effectiveness and functionality of the Board. Each
director completes an assessment form and sends it to the chairperson of the nominating and corporate
governance committee, who compiles the results and presents them to the Board. In connection with such self-
assessment process and the preparation of the Company’s D&O Questionnaires, the nominating and corporate
governance committee, together with the Chairman of the Board, evaluate each director’s upcoming professional
responsibilities to determine the committees on which such non-employee directors will serve and to evaluate
each director’s ability to perform its duties as set forth in the Company’s Corporate Governance Guidelines.
A similar process occurs in instances in which a director desires to serve on another public company
board. Under our Corporate Governance Guidelines, a director is limited to the number of other public company
boards, in addition to our Board, on which a director may serve to not more than four, except when the Board
determines that specific circumstances exist to allow for the director to serve on the additional Board. Before
25
accepting an invitation on another board, the director is required to advise the Chairman of the Board and the
chairperson of the nominating and corporate governance committee and provide such information reasonably
necessary to allow for the Board to determine whether accepting the position will adversely impact the director’s
ability to serve the Company considering all facts and circumstances, including the potential leadership roles the
applicable director would serve with such additional public company, the various committee(s) that such director
will serve, and the employment status of the director.
Board Matrix. The nominating and corporate governance committee routinely evaluates the size and
composition of the Board and the variety of professional expertise represented by the Board members in relation
to the Company’s business. To assist in this process, the nominating and corporate governance committee has
developed a board skills matrix that is used to identify certain professional and interpersonal skills and
experience desirable for some and/or all of the directors on the Board. The interpersonal skills are personal
attributes that each director should possess and include ethics and integrity, leadership skills, negotiation skills,
and crisis management skills. The professional skills are an assessment of governance and industry-based skill
areas which should be held collectively by the Board but not necessarily by each director and contain skills
relating to (i) management and governance skills, (ii) financial, risk, and compliance skills, and (iii) sector and
industry specific skills. As a part of its review of those persons to be nominated for membership on the Board
at the Annual Meeting, the nominating and corporate governance committee takes a holistic view of the Board
to strive to have a diverse Board in terms of core skills, industry experience, tenure and other diversity
characteristics or experiences.
Policy Regarding Consideration of Candidates for Director
Shareholder recommendations for Board membership should include, at a minimum, the name of the
candidate, age, contact information, present principal occupation or employment, qualifications and skills,
background, last five years’ employment and business experience, a description of current or previous service
as director of any corporation or organization, other relevant biographical information, and the nominee’s consent
to service on the Board. Under the Company’s bylaws, in order for a shareholder nominee to be eligible for
election or reelection as a director of the Company, such shareholder nominee will be required to (i) complete
and deliver a detailed questionnaire in the form that current non-employee directors and executive officers of the
Company complete, and (ii) complete and deliver a signed written representation and agreement in the form that
current non-employee directors and executive officers of the Company have completed providing that such
proposed nominee (A) is not and will not become a party to (i) any transaction, agreement, arrangement or
understanding with, and has not given any commitment or assurance to, any person or entity as to how such
proposed nominee, if elected as a director, will act or vote on any issue or question (a “Voting Commitment”)
that has not been disclosed to the Company or (ii) any Voting Commitment that could limit or interfere with such
proposed nominee’s ability to comply, if elected as a director, with such proposed nominee’s fiduciary duties
under applicable law, (B) is not, and will not become a party to, any transaction, agreement, arrangement or
understanding with any person or entity other than the Company with respect to any direct or indirect
compensation, payment, reimbursement or indemnification in connection with service or action as a director that
has not been disclosed to the Company, (C) in such proposed nominee’s individual capacity, would be in
compliance, if elected as a director, and will comply with applicable law (including applicable fiduciary duties
under state law), stock exchange listing standards and publicly disclosed corporate governance, ethics, conflict
of interest, confidentiality and stock ownership and trading policies and guidelines of the Company, and any
other Company policies and guidelines applicable to directors, (D) intends to serve a full term if elected as a
director, and (E) will provide facts, statements and other information in all communications with the Company
and its stockholders that are or will be true and correct in all material respects, and that do not and will not omit
to state a material fact necessary in order to make the statements made, in light of the circumstances under
which they are made, not misleading.
The nominating and corporate governance committee may consider such other factors as it may deem
are in the best interest of the Company and its shareholders. The Board has adopted Corporate Governance
Guidelines which provide that, if and when the Board determines that it is necessary or desirable to add or
replace a director, the nominating and corporate governance committee will seek diverse candidates, taking into
account diversity in all respects (including gender, race, age, board service, background, education, skill set,
and financial acumen, along with knowledge and experience in areas that are relevant to the Company’s
26
business), when evaluating potential nominees. The manner in which the nominating and corporate governance
committee evaluates a potential nominee will not differ based on whether the nominee is recommended by a
shareholder of the Company.
The Company currently retains a corporate recruiter to assist in identifying candidates for open positions
at the Company. Upon request, this recruiter also assists in identifying and evaluating director candidates. While
the Company does not routinely pay an additional fee for this service, based on the recent additions to our Board
described below, we have paid certain amounts to a corporate recruiter for their assistance in our nationwide
searches in 2024.
Compensation of Directors
As further discussed in the “Compensation Discussion and Analysis,” in 2024, the compensation
committee engaged FW Cook as an independent compensation consultant to advise the compensation
committee on non-employee director compensation beginning with the 2025 fiscal year. As a part of their review,
FW Cook reviewed the non-director compensation of the peer companies described in this proxy statement as
well as utilized their industry knowledge for companies in-between mid-cap and large-cap sizes. Based on the
compensation committee’s review of FW Cook’s report and recommendations, the compensation committee
(A) increased certain portions of the cash components for the non-director compensation to further align with its
peer companies and industry practices for companies in-between mid-cap and large-cap sizes; and (B) reduced
a portion of the equity component for non-director compensation so that the total compensation for each non-
employee director is not as heavily weighted on equity. Similar to our compensation philosophy for our executive
officers, we believe that issuing service based restricted stock units to our non-employee directors aligns their
interests with those of our shareholders. Specifically, since the bulk of each non-employee director’s
compensation lies in the value of the service based restricted stock units granted, the non-employee directors
are motivated to continually improve the Company’s performance in the hope that the performance will be
reflected by the stock price on the vesting date of their service based restricted stock units. Moreover, we believe
that the service based restricted stock unit awards drive director alignment with maximizing shareholder value
because the value of the service based restricted stock units varies in response to investor sentiment regarding
overall Company performance at the time of vesting.
As described more fully below, the following table summarizes the total compensation earned for fiscal
year 2024 for each of the non-employee directors.
2024 Director Compensation Table
Grant Date
Fees Earned
Fair Value of
or Paid in
Stock Awards
Name
Cash ($)
($)(1)
Total ($)
Jane Grote Abell
29,167
192,101 (2)
221,268
Michael A. Crawford
62,000 (3)
224,770
286,770
Donna E. Epps
77,000 (4)
224,770
301,770
Wayne L. Jones
52,000
224,770
276,770
Gregory N. Moore
127,000 (5)
319,410
446,410
Curtis A. Warfield
62,000 (6)
224,770
286,770
Kathleen M. Widmer
49,000
224,770
273,770
James R. Zarley
35,000
224,770
259,770
(1)
The compensation committee agreed that with respect to (i) the Chairman of the Board’s 2024
fiscal year service, he received an annual grant of service based restricted stock units equal to
$320,000 divided by the closing sales price of the Company’s common stock on the Nasdaq
Global Select Market on the trading day immediately preceding the date of the grant, with such
quotient being rounded up or down to the nearest 100 shares; and (ii) for each remaining non-
employee director’s 2024 fiscal year service, each received an annual grant of service based
restricted stock units equal to $230,000 divided by the closing sales price of the Company’s
common stock on the Nasdaq Global Select Market on the trading day immediately preceding
27
the date of the grant, with such quotient being rounded up or down to the nearest 100 shares.
Except as more particularly described below in footnote (2) for Ms. Abell, all service based
restricted stock units described in this paragraph were granted on January 8, 2024 and vested
on January 8, 2025 in accordance with the terms of a previously approved restricted stock unit
agreement.
For the service based restricted stock units described in footnote (1) (other than for Ms. Abell),
fair value is equal to the closing price of the Company’s common stock on the trading day
immediately preceding the date of the grant, which was $118.30 for the grants to the non-
employee directors. Using the formula described in the immediately foregoing paragraph of
footnote (1), Mr. Moore, as Chairman of the Board, was granted 2,700 service based restricted
stock units for his 2024 fiscal year service, and each remaining non-employee director (other
than Ms. Abell) was granted 1,900 service based restricted stock units for their respective 2024
fiscal year service. The amounts listed above represent the grant date fair value determined in
accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) of restricted stock
units granted under the Company’s 2021 Long-Term Incentive Plan. Detailed information under
U.S. GAAP is set forth in Note 14 to the consolidated financial statements included in the
Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024. No other
equity awards were granted to the non-employee directors during the period of time covered by
this table. The Company cautions that the amounts reported in the Director Compensation Table
for these awards may not represent the amounts that the non-employee directors will actually
realize from the awards. Whether, and to what extent, a non-employee director realizes value
on these awards will depend on a number of factors, including the Company’s actual operating
performance, stock price fluctuations, and the non-employee director’s continued service on the
Board.
Additionally, the total compensation for any non-employee director may not exceed $500,000,
which amount shall be calculated by adding (i) the total cash compensation to be paid for
services rendered by a non-employee director in any given fiscal year to (ii) the grant date value
of any equity granted to such non-employee director in that fiscal year. This cap on Board total
compensation is included in the Company’s 2021 Long-Term Incentive Plan.
(2)
Upon Ms. Abell’s appointment to the Board on February 29, 2024, she was granted 1,300
service based restricted stock units, which represents the prorated amount of service based
restricted stock units granted to the other non-employee directors on January 8, 2024 as
described in footnote (1) above. The fair value is equal to the closing price of the Company’s
common stock on the trading day immediately preceding the grant, which was $147.77 for the
grant to Ms. Abell. These service based restricted stock units vested on January 8, 2025.
(3)
This amount includes the $10,000 annual fee for serving as the chairperson of the compensation
committee.
(4)
This amount includes the $25,000 annual fee for serving as the chairperson of the audit
committee.
(5)
This amount includes the $75,000 annual fee for serving as the Chairman of the Board.
(6)
This amount includes the $10,000 annual fee for serving as the chairperson of the nominating
and corporate governance committee.
28
The compensation committee established that all non-employee directors would receive the amounts
set forth below for cash and stock compensation relating to their 2024 fiscal year service:
2024 Director Compensation
Cash Compensation
Non-Employee Director Base Fee
$35,000
Chairman of the Board
$75,000
Chair of Audit Committee
$25,000
Chair of Compensation Committee
$10,000
Chair of Nominating and Corporate
Governance Committee
$10,000
Member of Audit Committee
$10,000
Member of Compensation Committee
$7,000
Member of Nominating and Corporate
Governance Committee
$7,000
Meeting Attendance
N/A
Stock Compensation
Chairman of the Board
Annual grant of service based restricted stock units equal to
$320,000 divided by the closing sales price of the Company’s
common stock on the Nasdaq Global Select Market on the trading
day immediately preceding the date of the grant, with such quotient
being rounded up or down to the nearest 100 shares, which was
$118.30. These restricted stock units were granted on January 8,
2024 and vested on January 8, 2025. Based on the foregoing, the
Chairman of the Board received 2,700 service based restricted
stock units for his 2024 fiscal year service.
Non-Employee Director
Annual grant of service based restricted stock units equal to
$230,000 divided by the closing sales price of the Company’s
common stock on the Nasdaq Global Select Market on the trading
day immediately preceding the date of the grant, with such quotient
being rounded up or down to the nearest 100 shares, which was
$118.30. These restricted stock units were granted on January 8,
2024 and vested on January 8, 2025. Based on the foregoing,
each remaining non-employee director (other than Ms. Abell)
received 1,900 service based restricted stock units for their
respective 2024 fiscal year service.
The compensation committee established that all non-employee directors will receive the amounts set
forth below for cash and stock compensation relating to their 2025 fiscal year service:
2025 Director Compensation
Cash Compensation
Non-Employee Director Base Fee
$45,000
Chairman of the Board
$75,000
Chair of Audit Committee
$25,000
Chair of Compensation Committee
$12,500
Chair of Nominating and Corporate
Governance Committee
$12,500
Member of Audit Committee
$12,500
Member of Compensation Committee
$10,000
Member of Nominating and Corporate
Governance Committee
$10,000
Meeting Attendance
N/A
29
Stock Compensation
Chairman of the Board
Annual grant of service based restricted stock units equal to
$315,000 divided by the closing sales price of the Company’s
common stock on the Nasdaq Global Select Market on the
trading day immediately preceding the date of the grant, with
such quotient being rounded up or down to the nearest 100
shares, which was $181.27. These restricted stock units were
granted on January 8, 2025 and will vest on January 8, 2026.
Based on the foregoing, the Chairman of the Board received
1,700 service based restricted stock units for his 2025 fiscal
year service
Non-Employee Director
Annual grant of service based restricted stock units equal to
$225,000 divided by the closing sales price of the Company’s
common stock on the Nasdaq Global Select Market on the
trading day immediately preceding the date of the grant, with
such quotient being rounded up or down to the nearest 100
shares, which was $181.27. These restricted stock units were
granted on January 8, 2025 and will vest on January 8, 2026.
Based on the foregoing, each remaining non-employee
director received 1,200 service based restricted stock units
for their respective 2025 fiscal year service.
Code of Conduct and Related Corporate Governance Policies
Code of Conduct. The Board has approved and adopted a Code of Conduct that applies to all directors,
officers and employees, including the Company’s principal executive officer and the principal financial officer.
We are committed to Passion, Partnership, Integrity and Fun…All with Purpose! The Code of Conduct is our
guide as we apply these core values in our treatment of our fellow employees and how we run our business.
Our Code of Conduct also encompasses our principles and practices relating to the ethical conduct of the
Company’s business and commitment to complying with all laws affecting the Company’s business.
We take all reported concerns or possible violations of our Code of Conduct seriously and will promptly
and thoroughly investigate each reported concern as confidentially as possible. The Code of Conduct establishes
three separate ways in which any person may submit confidential and anonymous reports of suspected or actual
violations of the Code of Conduct. If an individual files a report, then the concerns will be directed to the
appropriate personnel for investigation. We do not retaliate against any person who raises questions, reports
concerns, or who participates in an investigation related to the Code of Conduct.
The Code of Conduct is available in its entirety on the Company’s website at www.texasroadhouse.com.
The Company will post on its website any amendments to, or waivers from, its Code of Conduct, if any, that
apply to the principal executive officer, the principal financial officer, principal accounting officer or controller, or
persons performing similar functions.
Vendor Expectations. In addition to the Company’s Code of Conduct, the Company has established
vendor expectations setting forth our expectations regarding our relationship with our vendors, including the
manner in which our vendors conduct their business, the manner in which they treat their employees, and our
expectation that our vendors will comply with all applicable laws and regulations relating to their business
operations including those laws prohibiting the use of forced labor or the facilitation of slavery and human
trafficking. Our vendor expectations are available in their entirety on the Company’s website at
www.texasroadhouse.com.
Corporate Governance Guidelines. The Board believes that good corporate governance is critical to the
Company’s objectives of delivering long-term value to its shareholders. In furtherance of this belief, the Board
has adopted its Corporate Governance Guidelines – which set forth flexible guidelines for the framework of the
Board’s key corporate governance practices and policies. The nominating and corporate governance committee
oversees these governance issues, and pursuant to its charter, is responsible for at least annually reviewing the
30
Corporate Governance Guidelines and to make recommendations to the Board for future changes and
modifications. The nominating and corporate governance committee continually evaluates our corporate
governance practices through the ongoing monitoring of emerging best practices and annual benchmarking and
review of our corporate governance practices.
Our Corporate Governance Guidelines cover, without limitation, the following topics:
•
The Board’s Role in Strategy and Risk
Oversight
•
The Board’s Role in Overseeing Company’s
Corporate Sustainability Initiatives
•
Board Size
•
Director Qualifications
•
Age Limit Policy
•
Director Independence
•
Director Responsibilities
•
Board Orientation and Continued Education
•
Role of Lead Director
•
Board Diversity
•
Confidentiality Obligations
•
Board Self-Assessment Process
•
Board’s Access to Management and
Independent Advisors
•
Notification Obligation of Significant Change
in Personal or Professional Circumstances
•
Other Public Company Directorships
•
Stock Ownership Guidelines
•
Board’s Role in Overseeing Succession and
Organizational Planning for Senior
Management
•
Review of Director / Executive
Compensation
The most current version of our Corporate Governance Guidelines, as well as the other corporate
governance documents listed below, are available on our website at www.texasroadhouse.com in the Investors
Section:
•
Amended and Restated Bylaws for Texas Roadhouse, Inc.;
•
Restated Certificate of Incorporation for Texas Roadhouse, Inc.;
•
Code of Conduct and Code of Conduct Changes-At-A-Glance (English and Spanish versions);
•
Committee Charters (Audit, Compensation, and Nominating and Corporate Governance Committees);
•
Anti-Bribery and Corruption Policy; and
•
Policy Relating to Approval of Audit and Non-Audit Services.
Throughout this proxy statement, we may refer to various documents that are available on our website.
The contents posted on, or accessible through, our website are not incorporated by reference into this proxy
statement or any of our filings with the SEC and may be revised by us (in whole or in part) at any time and from
time to time.
Stock Trading Policy. The Company has adopted the Texas Roadhouse, Inc. Stock Trading Policy that
applies to our employees, agents, members of the Board and their respective immediate family members in
order to reduce the risk that such individuals might be found in violation of federal and state securities laws. In
addition, with regard to the Company’s trading in its own securities, it is the Company’s policy to comply with the
federal securities laws and the applicable exchange listing requirements.
Under the Stock Trading Policy, individuals covered by the policy are:
•
Expressly prohibited from trading in securities of the Company and/or any of its vendors if the person
is in possession of material, non-public information;
•
Expressly prohibited from communicating material non-public information to others who trade on the
basis of such information; and
•
Required to comply with certain pre-clearance and blackout procedures as further described in the
policy.
The Stock Trading Policy also describes our prohibition on speculative trading (as further described in
the Compensation Discussions and Analysis section described below), the possible consequences for violating
the policy and securities laws, and the manner in which covered persons may enter into 10b5-1 plans.
31
The Company believes these policies and procedures are reasonably designed to promote compliance
with insider trading laws, rules and regulations and applicable listing standards.
Stock Ownership Guidelines
Our Board has adopted stock ownership guidelines to further align the financial interests of the
Company’s executive officers and non-employee directors with the interests of our shareholders. The table below
outlines the Company’s stock ownership guidelines adopted by the Board:
STOCK OWNERSHIP GUIDELINES
Position
Minimum Stock Ownership
Chief Executive Officer
5x Annual Base Salary
President
4x Annual Base Salary
All Other Named Executive Officers
3x Annual Base Salary
Director
Greater of (A) 5x Annual Cash Compensation or
(B) $500,000
The executive officers and non-employee directors are expected to achieve the stock ownership levels
under these guidelines within five years of assuming their respective positions. The Company evaluates
compliance with these stock ownership guidelines at the end of each fiscal year and it will be calculated based
on the Company’s closing stock price on the last trading day of the applicable fiscal year. All executive officers
and non-employee directors who have been in their role for at least five years were in compliance with these
stock ownership guidelines at the end of the 2024 fiscal year.
Succession Planning
The Board and the Company recognize the importance of continuity of leadership to ensure a smooth
transition for its employees, guests, and shareholders. In furtherance of the foregoing and as described in its
charter, the nominating and corporate governance committee is responsible for periodically reporting to the
Board the status of succession planning for senior management, including guidance regarding succession in the
event of an emergency or retirement and the evaluation of potential successors to the executive officers and
other key members of senior management. As a part of this process, both the Board and the nominating and
corporate governance committee meet with certain members of management to review the top and emerging
talent internally, their level of readiness, and development needs.
Mandatory Retirement Age for Board Service
The Board and the nominating and corporate governance committee have established a mandatory
retirement age for the non-employee directors on the Board. In furtherance of the foregoing, in no event shall
any non-employee be elected, re-elected, and/or appointed to the Board if such non-employee is 75 years or
older at the time of such election, re-election, and/or appointment; provided, however, any director who began
serving on the Board prior to 2006 shall be permitted to be re-elected to the Board so long as they are not 80
years or older at the time of such re-election.
In furtherance of this policy, Mr. Zarley will not stand for re-election at the Annual Meeting. Mr. Zarley
is our longest tenured member of the Board, being appointed to the Board in 2004 as a part of the Company’s
initial public offering. During his time on the Board, he served on each of the three committees of the Board and
has provided both formal and informal mentorship and leadership, most recently as the chairperson of the
compensation committee. The Company thanks Mr. Zarley for his nearly 20 years of service on the Board and
the tremendous value that he has brought to the Company during his tenure, including during key transitional
moments in the Company’s history (specifically following the sudden passing of our founder W. Kent Taylor).
32
Shareholder Engagement
Shareholder engagement is an important component of our overall approach to corporate governance.
It provides us the opportunity to update investors on our business as well as to solicit and receive feedback from
them. Our Investor Relations team serves as our primary point of contact with investors, potential investors, and
investment analysts. Additionally, throughout the year, members of our executive team, Board, and restaurant-
level operators may participate in the investor dialogue.
Our interaction with the investment community occurs in a number of ways, including one-on-one and
group phone calls, analyst-sponsored conferences, our annual shareholder meetings, and our quarterly earnings
calls. Topics discussed vary but typically include corporate strategy, financial results and outlook, new restaurant
development, commodity and wage inflation, capital allocation, and various governance, human capital, and
corporate sustainability matters. Investor feedback and sentiment is shared with senior management and
members of the nominating and corporate governance committee on a regular basis.
During 2024, management of the Company interacted with shareholders owning approximately 65% of
the outstanding shares of the Company as of the end of fiscal year 2024. These interactions ranged from one-
on-one phone/video calls, face-to-face meetings at investor conferences, video calls during virtual non-deal
roadshows, participants listening to virtual fireside chats between members of management and sell-side
analysts, and conversations with stewardship teams regarding corporate governance.
Board Orientation and Continuing Education
The Board believes that a thorough understanding of the Company’s business is required to enable a
director to make a substantial contribution to the Board. As such, all new directors will participate in an orientation
program within a reasonable period of time following such director’s initial appointment or election to the Board.
The orientation program may consist of meetings with senior management of the Company designed to
familiarize each new director with the Company’s strategic plans, financial planning and key policies and
procedures, as well as training within the Company’s restaurant facilities. Additionally, the Company, from time
to time, may provide the Board with internal training programs or presentations from internal or outside third-
party experts on topics that will assist the directors in carrying out their Board responsibilities. Finally, the
directors are encouraged to participate in continuing education and other programs provided by outside sources
and to share any applicable learnings from such programs with the other directors on the Board. As a part of
the Board’s continued education, the directors on the Board annually complete the compliance trainings that are
similar to those provided to certain employees. Further, the Company annually budgets a certain amount of
funding to reimburse directors for related costs to attend such programs and to pay membership dues to a
national association for corporate directors.
Director Independence
The Board currently consists of nine directors – seven of whom are independent, as that term is defined
in the listing standards under Nasdaq Marketplace Rule 5605(a)(2) and meet the criteria for independence under
the Sarbanes Oxley Act of 2002 and the rules adopted by the Securities and Exchange Commission. Following
the Annual Meeting, the Board will consist of eight directors – seven of whom are independent, as that term is
defined as described above. The nominating and corporate governance committee evaluates the relationships
of each director and director nominee and makes a recommendation to the Board as to whether to make an
affirmative determination that such director or director nominee is independent. In connection with such review,
the nominating and corporate governance committee evaluates the relevant transactions or relationships
between each director, or any of his or her family members, and the Corporation, its senior management and its
independent auditors. In connection with determining the directors to stand for re-election at the Annual Meeting
(as more particularly described in Proposal 1) and upon recommendation of the nominating and corporate
governance committee, the Board has affirmatively determined that Messrs. Moore, Crawford, Jones, and
Warfield and Mss. Abell, Epps, and Widmer are independent under the applicable criteria for service on the
Board and the various Board committees upon which each serves (as and if applicable). The nominating and
corporate governance committee determined that Mr. Morgan is not independent due to his service as the
Company’s principal executive officer.
33
STOCK OWNERSHIP INFORMATION
The following table sets forth as of March 17, 2025 certain information with respect to the beneficial
ownership of the Company’s common stock of (i) each executive officer named in the Summary Compensation
Table (the “Named Executive Officers”), (ii) each non-employee director or nominee for director of the
Company, (iii) all directors and current executive officers as a group, and (iv) each shareholder known by the
Company to be the owner of 5% or more of the Company’s common stock.
STOCK OWNERSHIP INFORMATION
Common Stock (1)
Common
Stock
Name
Ownership Percent
Directors, Nominees and Named Executive Officers:
Jane Grote Abell
1,300
*
Michael A. Crawford
10,700
*
Christopher C. Colson
12,000
*
Travis C. Doster
33,633
*
Donna E. Epps
5,432
*
Wayne L. Jones
1,900
*
D. Christopher Monroe
7,955
*
Gregory N. Moore
39,050
*
Gerald L. Morgan
95,313
*
Hernan E. Mujica
19,742
*
Regina A. Tobin
18,414
*
Curtis A. Warfield
6,801
*
Kathleen M. Widmer
19,000
*
James R. Zarley
69,312
*
Directors and All Executive Officers as a Group (14 Persons)
340,552
0.5 %
Other 5% Beneficial Owners**
The Vanguard Group (2)
9.5 %
100 Vanguard Boulevard
Malvern, Pennsylvania 19355
Blackrock, Inc. (3)
10.6 %
55 East 52nd Street
New York, New York 10022
*
Represents beneficial ownership of less than 1.0% of the outstanding shares of class.
(1)
Based upon information furnished to the Company by the named persons and information
contained in filings with the SEC. Under the rules of the SEC, a person is deemed to beneficially
own shares over which the person has or shares voting or investment power or has the right to
acquire beneficial ownership within 60 days, and such shares are deemed to be outstanding for
the purpose of computing the percentage beneficially owned by such person or group. However,
we do not consider shares of which beneficial ownership can be acquired within 60 days to be
outstanding when we calculate the percentage ownership of any other person. As of March 1,
2025, no director or executive officer has the right to acquire any beneficial ownership within 60
days. “Common Stock Ownership” includes (a) stock held in joint tenancy, (b) stock owned as
tenants in common, (c) stock owned or held by spouse or other members of the reporting
person’s household, and (d) stock in which the reporting person either has or shares voting
and/or investment power, even though the reporting person disclaims any beneficial interest in
such stock.
34
(2)
As reported on the Schedule 13G/A filed by The Vanguard Group with the SEC on February 13,
2024, it has shared voting power with respect to 28,917 shares, sole dispositive power with
respect to 6,330,746 shares, and shared dispositive power with respect to 91,891 shares.
(3)
As reported on the Schedule 13G/A filed by Blackrock, Inc. with the SEC on September 10,
2024, it has sole voting power with respect to 6,692,157 shares and sole dispositive power with
respect to 7,073,515 shares.
Delinquent Section 16(a) Reports
Section 16(a) of the Exchange Act requires the Company’s directors and executive officers, and persons
who beneficially own more than 10% of a registered class of the Company’s equity securities, to file with the
SEC initial reports of stock ownership and reports of changes in stock ownership and to provide the Company
with copies of all such filed forms. Based solely on its review of such copies or written representations from
reporting persons, the Company believes that all reports were filed on a timely basis during the fiscal year ended
December 31, 2024.
35
EXECUTIVE COMPENSATION
2024 EXECUTIVE SUMMARY
The following is an executive summary of our compensation program for our 2024 fiscal year:
Compensation Philosophy
We believe that our approach to the compensation program for our Named Executive Officers provides our
Named Executive Officers with a compensation package which promotes the sustained profitability of the
Company and aligns the interests of our Named Executive Officers with those of our shareholders. The
compensation packages also reflect a pragmatic response to external market conditions; that is, total
compensation that is competitive with comparable positions in similar industries, including the casual dining
sector of the restaurant industry, but which is reasonable and in the best interests of our shareholders.
Pay Objectives
Our primary objective in setting and evaluating the compensation for our Named Executive Officers is to
promote the sustained profitability of the Company. Our compensation program is designed to achieve this
objective in the following manner:
o
The creation of a more direct relationship between the compensation for our Named Executive
Officers and shareholder value since a significant portion of our Named Executive Officer’s
performance based restricted stock units and cash bonuses are based upon the achievement of
defined performance goals to be established by the compensation committee.
o
The attraction and retention of top talent, while also encouraging our Named Executive Officers to
keep their focus on both long-term business development and short-term financial growth.
o
The featuring of service based restricted stock unit awards, the value of which is dependent upon
the performance of the Company and the price of our common stock.
o
The opportunity by the compensation committee to adjust a significant portion of the compensation
for the Named Executive Officers through the annual grant of service based restricted stock units
and/or performance based restricted stock units to more accurately reflect the overall performance
of the Company.
Key Pay Components
The compensation packages for our Named Executive Officers are divided into the following three key
components:
o
Base Salary: Designed to provide a secure base of compensation and serve to motivate and retain
our Named Executive Officers.
o
Cash Bonus: Designed to reward our Named Executive Officers for the success of the Company as
measured by growth in the Company’s earnings per diluted share and its overall pre-tax profit, and
for each Named Executive Officer’s individual contribution to that success.
o
Restricted Stock Unit Grants: Designed to offer the Named Executive Officers a financial interest in
the long-term success of the Company and align their interests with those of our shareholders.
36
The compensation packages for our Named Executive Officers may include the following types of restricted
stock units:
o
Service Based Restricted Stock Units, which grant the Named Executive Officers the conditional right
to receive shares of our common stock that vest after a defined period of service;
o
“Retention” Restricted Stock Units, which vest upon the completion of the term of an individual Named
Executive Officer’s agreement or such longer date as determined by the compensation committee;
and
o
Performance Based Restricted Stock Units, which are calculated based on the achievement of certain
Company performance targets established by the compensation committee and vest over a period of
service.
In order to further align the financial interests of the Company’s executive officers with the interests of our
shareholders, our Board has adopted the following stock ownership guidelines: (A) our Chief Executive
Officer should own, at a minimum, five (5) times the then-current amount of his or her annual base salary,
(B) our President should own, at a minimum, four (4) times the then-current amount of his or her annual base
salary, (C) all other Named Executive Officers should, own, at a minimum, three (3) times the then-current
amount of his or her annual base salary, and (D) each non-employee director should own, at a minimum, the
greater of (i) five (5) times the then-current amount of annual Board cash compensation received by each
non-employee director, or (ii) $500,000 in then-current market value. The executive officers are expected to
achieve these levels within five years of assuming their respective positions. The Company evaluates
compliance with these stock ownership guidelines at the end of each fiscal year and it will be calculated based
on the Company’s closing stock price on the last trading day of the applicable fiscal year. All executive officers
who have been in their role for five years are in compliance with these stock ownership guidelines. We
anticipate that any people who are new to their roles within the last five years will, to the extent they are not
currently in compliance, be in compliance with the guidelines within the established time frame.
Setting Compensation
The compensation program for our Named Executive Officers is determined by the compensation committee.
The compensation committee evaluates the stock compensation for each Named Executive Officer on an
annual basis to determine the right combination of rewards and incentives through the issuance of service
based restricted stock units and/or performance based restricted stock units to drive company performance
without encouraging unnecessary or excessive risk taking by all of the Named Executive Officers as a whole.
Pursuant to its charter, the compensation committee may, in its sole discretion, retain or obtain advice from a
compensation consultant to assist in the establishment of executive compensation for each Named Executive
Officer.
2025 Employment Agreements
As more particularly described below, the Company and certain Named Executive Officers entered into new
2025 Employment Agreements (as hereinafter defined) – which replace the Prior Employment Agreement (as
hereinafter defined). These new 2025 Employment Agreements are a response, in part, to the advisory vote
on executive compensation at our 2024 annual shareholder meeting, and reflect market changes to forms of
employment agreement received from outside counsel and from a compensation consultant we engaged in
2024 (which is further discussed below). Under the 2025 Employment Agreements, the compensation
committee has established the following compensation for our Named Executive Officers:
o
Base Salary: Each 2025 Employment Agreement establishes an annual base salary for the term of
the respective 2025 Employment Agreements, with base salary increases being left to the discretion
of the compensation committee.
37
o
Cash Bonus: Each 2025 Employment Agreement provides an annual short-term cash incentive
opportunity with a target bonus based on the achievement of defined goals to be established by the
compensation committee, with increases in the target bonus amount to be made at the discretion of
the compensation committee during the term of the 2025 Employment Agreement.
o
Restricted Stock Units: Each 2025 Employment Agreement provides that the compensation
committee may grant stock awards to the Named Executive Officers during the term of the respective
2025 Employment Agreements, the types and amounts of which are subject to the compensation
committee’s discretion based on their annual review of the performance of the Company and of the
individual Named Executive Officers. While the Company has historically granted retention grants for
our Named Executive Officers, the compensation committee did not make any similar retention grants
for the Named Executive Officers under the 2025 Employment Agreements. The compensation
committee will evaluate whether or not to award retention grants in the future as a part of its annual
evaluation of the compensation packages for the Named Executive Officers.
Executive Compensation
During 2021 and pursuant to the authority granted under its charter, the compensation committee previously
engaged FW Cook as an independent compensation consultant to advise the compensation committee on
compensation for the executive officers, together with analysis and services related to such executive
compensation. Specifically, the compensation committee asked the consultant to provide market data, review
the design of the executive compensation packages, and provide guidance on cash and equity compensation
for the Company’s executive officers. Based in part on the recommendation of our third party compensation
consultant and the review of the market data provided to the compensation committee, the total compensation
package established for each Named Executive Officer contains a more weighted emphasis on non-equity
compensation and a fixed dollar amount with respect to service based restricted stock units and performance
based restricted stock units. FW Cook does not currently provide any other services to the Company, and the
compensation committee has determined that FW Cook has sufficient independence from us and our
executive officers to allow FW Cook to offer objective information and/or advice. The compensation
committee utilized this compensation philosophy and structure when establishing executive compensation for
each executive officer’s 2024 fiscal year service.
During 2024 and pursuant to the authority granted under this charter, the compensation committee re-
engaged FW Cook as an independent compensation consultant to advise the compensation committee on
compensation for our Named Executive Officers beginning with the 2025 fiscal year, together with analysis
and services related to such executive compensation. Specifically, the compensation committee asked the
consultant to provide market data and review the design of the executive compensation packages, provide
guidance on cash and equity compensation for the Company’s executive officers, and provide guidance and
market data on the manner in which separation payments are handled in connection with the preparation and
execution of the 2025 Employment Agreements. This analysis was also performed, in part, in a response to
the advisory vote on executive compensation at our 2024 annual shareholder meeting. Based in part on the
recommendations of our third party compensation consultant and the review of the market data provided to
the compensation committee, the compensation committee (A) approved new 2025 Employment
Agreements, (B) increased certain portions of compensation elements for each Named Executive Officer to
align with peer company benchmarking, (C) shifted the compensation percentage breakdown of the various
compensation components for each Named Executive Officer to align with peer company benchmarking,
(D) extended the length of the applicable performance periods for certain performance based restricted stock
units granted to our Named Executive Officers, and (E) modified the manner and rationale in which separation
payments are paid to Named Executive Officers pursuant to the 2025 Employment Agreements. FW Cook
does not currently provide any other services to the Company, and the compensation committee has
determined that FW Cook has sufficient independence from us and our executive officers to allow FW Cook
to offer objective information and/or advice.
38
Clawback Policy
The Company has established a clawback policy whereby the Company shall reasonably and promptly
recover the Erroneously Awarded Compensation Received (as hereinafter defined) by an Executive Officer
(as defined in the clawback policy) in accordance with the applicable rules of The Nasdaq Stock Market and
Rule 10D-1 following an Accounting Restatement (as hereinafter defined). In such an event, the compensation
committee has the discretion to determine the appropriate method of recovering such Erroneously Awarded
Compensation Received, including, without limitation, requiring reimbursement of cash incentive-based
compensation, seeking recovery of any gain realized on the vesting of any equity-based awards, offsetting
the recouped amount from any compensation otherwise owed by the Company, and/or cancelling outstanding
vested or unvested equity awards. Notwithstanding the foregoing, the Company shall not be required to take
such actions if the compensation committee determines that recovery would be impracticable and either the
committee has determined that the direct expenses paid to a third party to assist in enforcing the Company’s
clawback policy would exceed the amount to be recovered or recovery would likely cause an otherwise tax-
qualified retirement plan, under which benefits are broadly available to employees of the Company, to fail to
meet the requirements of the Internal Revenue Code.
Equity Grant Processes
The compensation committee does not grant equity awards in anticipation of the release of material nonpublic
information (“MNPI”), and the Company does not time the release of MNPI based upon grant dates of equity.
In the event MNPI becomes known to the compensation committee before granting an equity award, the
Compensation Committee will consider such information and use its business judgment to determine whether
to delay the grant of equity to avoid any appearance of impropriety.
39
2024 Financial Highlights
The following is an executive summary of our financial highlights from the 2024 fiscal year:
Topline Revenue; Store Unit Growth (1)
•
Over $5.3 billion in total revenue, an increase of 16% over the prior year
•
Comparable restaurant sales growth of 8.5% with average weekly sales at $155,285 of which
$19,940 were from to-go sales
•
Opened 45 new systemwide locations including 31 company restaurants and 14 franchise
restaurants including the first international franchise restaurant for Jaggers, our fast-casual concept
Key Growth in Financial Metrics (1)
•
Diluted earnings per share growth of 42.5%
•
Net income growth of 42.2%
•
Income from operations growth of 45.9%
•
Store week growth of 7.5%
Acquisition Growth
•
Acquired 13 domestic franchise restaurants on the first day of our 2025 fiscal year
Return to Shareholders
•
Paid dividends of $162.9 million, or $0.61 per share, an increase of 10.9% over the prior year
•
Repurchased 461,662 outstanding shares of our common stock for $79.8 million
(1) Revenue and all financial metrics include the impact of a 53rd week in our 2024 fiscal year
40
Compensation Discussion and Analysis
Bubba Who: Our Executive Officers
GERALD L. MORGAN
CHIEF EXECUTIVE OFFICER
Years with Roadhouse: 28
Mr. Morgan is Chief Executive Officer of the Company, having
been appointed to this position in March 2021. Mr. Morgan
joined the Company in 1997, during which time he has held the
positions of Managing Partner, Market Partner, and Regional
Market Partner. Mr. Morgan also previously served as
President from December 2020 until Ms. Tobin’s appointment
to President in January 2023. Mr. Morgan has nearly 40 years
of restaurant management experience with Texas Roadhouse,
Bennigan’s Restaurants, and Burger King.
Age: 64
Restaurant Industry Experience: 39
REGINA A. TOBIN
PRESIDENT
Years with Roadhouse: 29
Age: 61
Restaurant Industry Experience: 39
Ms. Tobin is President of the Company, having been appointed
to this position in January 2023. Ms. Tobin previously served as
the Company’s Chief Learning and Culture Officer, a position
she held from June 2021 through her appointment to President.
Ms. Tobin joined the Company in 1996, during which time she
has held the positions of Managing Partner, Market Partner,
and Vice President of Training. Ms. Tobin has nearly 40 years
of restaurant industry experience.
D. CHRISTOPHER MONROE
CHIEF FINANCIAL OFFICER
Years with Roadhouse: 2
Age: 58
Finance Experience: 35
Mr. Monroe is Chief Financial Officer of the Company, having
been appointed to this position in June 2023. In this role,
Mr. Monroe is responsible for overseeing the Company’s
accounting, financial reporting, investor relations, tax, treasury,
internal audit, and finance functions, as well as serving as the
Company’s principal financial officer. Mr. Monroe joined
Southwest Airlines in September 1991, where he served in
various positions, including Director of Corporate Finance,
Assistant Treasurer and Vice President Treasurer, until his
promotion in 2017 to Senior Vice President of Finance and
Treasurer. As Senior Vice President of Finance and Treasurer,
he oversaw the overall capital strategy, planning and structure
for Southwest Airlines with responsibility for corporate
insurance and risk management, as well as supply chain
management and corporate sustainability. Mr. Monroe has over
35 years of finance experience.
41
CHRISTOPHER C. COLSON
CHIEF
LEGAL
AND
ADMINISTRATIVE
OFFICER;
CORPORATE SECRETARY
Years with Roadhouse: 19
Age: 48
Restaurant Industry Experience: 23
Mr. Colson is Chief Legal and Administrative Officer and
Corporate Secretary of the Company, having been appointed
to Chief Legal and Administrative Officer in January 2023 and
Corporate Secretary in August 2019. Mr. Colson previously
served as the Company’s General Counsel, a position he held
from March 2021 through his appointment to Chief Legal and
Administrative Officer. Mr. Colson joined the Company in 2005,
during which time he has held the positions of Senior Counsel,
Associate General Counsel, and Executive Director of the
Global Development Group. Mr. Colson has over 20 years of
restaurant industry experience with Texas Roadhouse, Frost
Brown Todd (serving as outside counsel to the Company),
YUM! Brands, and as assurance staff at KPMG.
HERNAN E. MUJICA
CHIEF TECHNOLOGY OFFICER
Years with Roadhouse: 13
Age: 63
Restaurant Industry Experience: 13
Mr. Mujica is Chief Technology Officer of the Company, having
been appointed to this position in January 2023. Mr. Mujica had
been previously designated Chief Information Officer, an
executive officer position that he held from June 2021 through
his appointment to Chief Technology Officer. Mr. Mujica joined
the Company in January 2012 as Vice President of Information
Technology and was subsequently promoted to Chief
Information Officer. Prior to joining the Company, Mr. Mujica
held senior management positions at The Home Depot and
Arthur Andersen. Mr. Mujica has over 30 years of experience in
both restaurant industry and consulting roles.
TRAVIS C. DOSTER
CHIEF COMMUNICATIONS OFFICER
Years with Roadhouse: 19
Mr. Doster is Chief Communications Officer of the Company,
having been appointed to this position in November 2023. In
this role, he is responsible for leading the Company’s
communications, marketing, events, public affairs, government
relations and corporate sustainability functions. Mr. Doster
joined the Company in 2006, as the Director, then Senior
Director, of Communications where he served until his
promotion to Vice President of Communications in 2018. Prior
to joining the Company, Mr. Doster was a Vice President at FSA
Public Relations, where he provided a number of services,
including public relations, crisis management and issues
management, for national clients, including, Jimmy John’s
Gourmet Sandwich Shops, Qdoba Mexican Grill, and Cameron
Mitchell Restaurants. Mr. Doster has over 30 years of media,
public relations, and restaurant industry experience.
Age: 58
Restaurant Industry Experience: 24
42
Bubba Who: Who Plays a Role in Determining Executive Compensation
ROLE IN EXECUTIVE COMPENSATION
Independent Compensation Consultant /
Database Aggregator
•
Partners with the compensation committee and
management to determine peer companies used in
evaluating executive compensation
•
Engaged
by
compensation
committee
(when
appropriate) pursuant to the authority granted under its
charter (FW Cook was engaged in 2021 and in 2024)
•
Provides market data, guidance, and recommendations
on the design of executive compensation packages, the
specific cash and equity compensation for the
Company’s Named Executive Officers, and the manner
and rationale in which separation payments are paid to
our Named Executive Officers
•
Database Aggregator provides executive and director
compensation (when appropriate)
Compensation Committee
•
Partners with our independent compensation consultant
and management to determine peer companies used in
evaluating executive compensation
•
Approves design, administration, and oversight of
executive compensation plans for our Named Executive
Officers
•
Approves employment agreements with our Named
Executive Officers
•
Approves the executive compensation for each Named
Executive Officer in alignment with our pay philosophy
and objectives discussed within this proxy statement
Chief Executive Officer
•
Provides
recommendations
to
the
compensation
committee with respect to adjustments in compensation
for the other Named Executive Officers
•
Provides feedback to the compensation committee on
the design of incentive compensation and percentage
breakdown
of
each
component
of
executive
compensation
•
Meets with the Board, the compensation committee and
nominating and corporate governance committee (as
and if applicable) to discuss performance of the other
Named Executive Officer
•
Does not participate in the creation of his own
compensation package
43
Bubba What: What We Do and What We Don’t Do
WHAT WE DO
WHAT WE DON’T DO
Set and evaluate executive compensation to
promote the sustained profitability of the
Company
Conduct an Annual “Say on Pay” Vote
Maintain stock ownership guidelines for our
executives and directors and ensure annual
compliance
When appropriate, engage an independent
compensation consultant to assist with executive
compensation
Limit accelerated vesting of equity awards by
requiring a “double trigger” upon a change in
control
Employ
a
Clawback
Policy
to
recover
performance based compensation in certain
circumstances
Determine executive compensation through a
fully independent compensation committee
Allow for an annual adjustment of the bonus and
equity portions of executive compensation by the
compensation committee to more accurately
reflect the overall performance of the Company
and the individual executive
No
automatic
increases
on
executive
compensation
No excessive perquisites
No multi-year guarantees for salary increases,
bonus or equity compensation
No short-selling, trading in derivatives or
engaging in hedging transactions by executive or
directors
No compensation or incentives that encourage
unnecessary or excessive risk taking
No payment of dividends on equity awards that
are not fully earned or vested
No grant of equity awards at less than fair market
value
No automatic acceleration of equity awards upon
retirement
Bubba How: How We Pay
The Company’s compensation committee reviews and establishes executive compensation in
connection with each executive officer’s employment agreement. As one purpose of this discussion is to present
the compensation committee’s overall program and philosophy for executive compensation, we have generally
presented the discussion as of the end of the prior fiscal year and as of the beginning of the current fiscal year.
Initial Executive Compensation Under Prior Employment Agreements. We previously entered into
employment agreements with Gerald L. Morgan, Regina A. Tobin, D. Christopher Monroe, Christopher C.
Colson, Hernan E. Mujica, and Travis C. Doster, each of which are Named Executive Officers. As used herein,
the employment agreements, as amended (as and if applicable), with Messrs. Morgan, Monroe, Colson, Mujica,
and Doster and Ms. Tobin shall be referred to collectively as the “Prior Employment Agreements” and with
respect to any Named Executive Officer having an employment agreement, as a “Prior Employment
Agreement”.
Each Prior Employment Agreement (other than with Mr. Doster) had an initial term expiring on
January 7, 2024 which automatically renewed for successive one-year terms thereafter unless either party
elected not to renew by providing written notice to the other party at least 60 days before expiration. Mr. Doster’s
Prior Employment Agreement had an initial term expiring on January 8, 2025 which automatically renewed for
44
successive one-year terms thereafter unless either party elected not to renew by providing written notice to the
other party at least 60 days before expiration.
Each Prior Employment Agreement established an annual base salary for the term of the respective
Prior Employment Agreement. During the term of the Prior Employment Agreement, base salary increases were
at the discretion of the compensation committee; provided, however, none of the Named Executive Officer’s
base salary could be decreased during the term of the Prior Employment Agreement except for decreases that
were applied generally to the other Named Executive Officers in an amount no greater than 10% over the prior
year. Each Prior Employment Agreement also provided an annual short-term cash incentive opportunity with a
target bonus based on the achievement of defined goals to be established by the compensation committee, with
increases in the target bonus amount to be made at the discretion of the compensation committee during the
term of the Prior Employment Agreement. In addition to cash compensation, each Prior Employment Agreement
provided that the compensation committee could grant certain stock awards to the Named Executive Officers
during the term of the respective Prior Employment Agreements, the types and amounts of which were subject
to the compensation committee’s discretion based on their annual review of the performance of the Company
and of the individual Named Executive Officers. As of the date of this proxy statement and as more particularly
described below, certain Named Executive Officers received an annual grant of service based restricted stock
units relating to their 2024 year service pursuant to their Prior Employment Agreement. Additionally, certain
Named Executive Officers received grants of performance based restricted stock units relating to their 2024 year
service pursuant to their Prior Employment Agreement. Finally, while the Company has historically granted
retention grants for our Named Executive Officers, the compensation committee did not make any similar
retention grants for the Named Executive Officers under the Prior Employment Agreements.
Initial Executive Compensation Under 2025 Employment Agreements. On December 27, 2024, we
entered into new employment agreements with Messrs. Morgan, Monroe, Colson, Mujica, and Doster and
Ms. Tobin. These new employment agreements are a response, in part, to the advisory vote on executive
compensation at our 2024 annual shareholder meeting, and reflect market changes to forms of employment
agreement received from outside counsel and from a compensation consultant we engaged in 2024 (which is
further discussed below). As used herein, the employment agreements with Messrs. Morgan, Monroe, Colson,
Mujica, and Doster and Ms. Tobin shall be referred to collectively as the “2025 Employment Agreements” and
with respect to any Named Executive Officer having an employment agreement, as a “2025 Employment
Agreement”.
Each 2025 Employment Agreement has an initial term expiring on January 7, 2028 which automatically
renews for successive one-year terms thereafter unless either party elects not to renew by providing written
notice to the other party at least 60 days before expiration.
Each 2025 Employment Agreement establishes an annual base salary for the term of the respective
2025 Employment Agreement. During the term of the 2025 Employment Agreement, base salary increases are
at the discretion of the compensation committee; provided, however, none of the Named Executive Officer’s
base salary may be decreased during the term of the 2025 Employment Agreement except for decreases that
are applied generally to the other Named Executive Officers in an amount no greater than 10% over the prior
year. Each 2025 Employment Agreement also provides an annual short-term cash incentive opportunity with a
target bonus based on the achievement of defined goals to be established by the compensation committee, with
increases in the target bonus amount to be made at the discretion of the compensation committee during the
term of the 2025 Employment Agreement. In addition to cash compensation, each 2025 Employment Agreement
provides that the compensation committee may grant certain stock awards to the Named Executive Officers
during the term of the respective 2025 Employment Agreements, the types and amounts of which are subject to
the compensation committee’s discretion based on their annual review of the performance of the Company and
of the individual Named Executive Officers. As of the date of this proxy statement and as more particularly
described below, certain Named Executive Officers received an annual grant of service based restricted stock
units relating to their 2025 year service pursuant to their 2025 Employment Agreement. Additionally, certain
Named Executive Officers received a three year grant of performance based restricted stock units relating to
their service for 2025, 2026, and 2027, respectively, pursuant to their 2025 Employment Agreement. Finally,
while the Company has historically granted retention grants for our Named Executive Officers, the compensation
committee has not made any similar retention grants for the Named Executive Officers under the 2025
45
Employment Agreements. The compensation committee will evaluate whether to grant additional retention
grants in the future as a part of its annual evaluation of the compensation packages for the Named Executive
Officers.
Clawback Policy. Under both the Prior Employment Agreements and the 2025 Employment Agreements,
each Named Executive Officer has agreed not to compete with us during the term of his or her employment and
for a period of two years following his or her termination of employment. Additionally, both the Prior Employment
Agreements and the 2025 Employment Agreements include certain confidentiality, non-solicitation, and non-
disparagement provisions. Finally, both the Prior Employment Agreement and 2025 Employment Agreement
contain a similar “clawback” provision setting forth that any compensation paid or payable under either of the
Prior Employment Agreements or the 2025 Employment Agreements, or any other agreement or arrangement
with the Company shall be subject to recovery or reduction in future payments in lieu of recovery pursuant to
any Company clawback policy in effect from time to time.
The Company has established a clawback policy whereby the Company shall reasonably and promptly
recover the Erroneously Awarded Compensation Received by an Executive Officer (as defined in the clawback
policy) in accordance with the applicable rules of The Nasdaq Stock Market and Rule 10D-1 following an
Accounting Restatement. In such an event, the compensation committee has the discretion to determine the
appropriate method of recovering such Erroneously Awarded Compensation Received, including, without
limitation, requiring reimbursement of cash incentive-based compensation, seeking recovery of any gain realized
on the vesting of any equity-based awards, offsetting the recouped amount from any compensation otherwise
owed by the Company, and/or cancelling outstanding vested or unvested equity awards. Notwithstanding the
foregoing, the Company shall not be required to take such actions if the compensation committee determines
that recovery would be impracticable and the compensation committee has determined that either (a) the direct
expenses paid to a third party to assist in enforcing the Company’s clawback policy would exceed the amount
to be recovered or (b) recovery would likely cause an otherwise tax-qualified retirement plan, under which
benefits are broadly available to employees of the Company, to fail to meet the requirements of the Internal
Revenue Code.
For the purposes of the clawback policy, (A) the term “Erroneously Awarded Compensation” means,
with respect to each Executive Officer in connection with an Accounting Restatement, the amount of Clawback
Eligible Incentive Compensation (as hereinafter defined) that exceeds the amount of incentive-based
compensation that otherwise would have been received had it been determined based on the restated amounts,
computed without regard to any taxes paid; (B) the term “Clawback Eligible Incentive Compensation” means
all incentive-based compensation received by an Executive Officer (i) on or after October 2, 2023, (ii) after
beginning service as an Executive Officer, (iii) who served as an Executive Officer at any time during the
applicable performance period relating to any Incentive-based Compensation (whether or not such Executive
Officer is serving at the time the Erroneously Awarded Compensation is required to be repaid to the Company),
(iv) while the Company has a class of securities listed on a national securities exchange or a national securities
association, and (v) during the applicable Clawback Period (as hereinafter defined); (C) the term “Clawback
Period” means, with respect to any Accounting Restatement, the three completed fiscal years of the Company
immediately preceding the restatement date, and if the Company changes its fiscal year, any transition period
of less than nine months within or immediately following those three completed fiscal years, provided that a
transition period of greater than nine months will be deemed a completed fiscal year; and (D) the term
“Accounting Restatement” means an accounting restatement due to the material noncompliance of the
Company with any financial reporting requirement under the securities laws, including any required accounting
restatement to correct an error in previously issued financial statements that is material to the previously issued
financial statements (a “Big R” restatement), or that would result in a material misstatement if the error were
corrected in the current period or left uncorrected in the current period (a “little r” restatement).
Executive Compensation for 2024 Fiscal Year. During 2024 and pursuant to the authority granted under
this charter, the compensation committee re-engaged FW Cook as an independent compensation consultant to
advise the compensation committee on compensation for the executive officers beginning with the 2025 fiscal
year, together with analysis and services related to such executive compensation. Specifically, the
compensation committee asked the consultant to provide market data and review the design of the executive
compensation packages, provide guidance on cash and equity compensation for the Company’s executive
46
officers, and provide guidance and market data on the manner in which separation payments are handled in
connection with the preparation and execution of the 2025 Employment Agreements. This analysis was also
performed, in part, as a response to the advisory vote on executive compensation at our 2024 annual
shareholder meeting. As a part of this review, the chairperson of the compensation committee, the independent
compensation consultant, and management of the Company agreed on a list of the following 14 peer companies
to evaluate their executive compensation:
PEER COMPANIES
BJ’s Restaurants, Inc
Bloomin’ Brands, Inc.
Brinker International, Inc.
Chipotle Mexican Grill, Inc.
Cracker Barrel Old Country Store, Inc.
Darden Restaurants, Inc.
Dave & Buster’s Entertainment, Inc.
Denny’s Corporation
Dine Brands Global, Inc.
Jack in the Box Inc.
Papa John’s International, Inc.
Red Robin Gourmet Burgers, Inc.
The Cheesecake Factory Incorporated
The Wendy’s Company
Based in part on the recommendations of our third party compensation consultant and the review of the
market data provided to the compensation committee, the total compensation package established for each
Named Executive Officer contained a more weighted emphasis on non-equity compensation and a fixed dollar
amount with respect to service based restricted stock units and performance based restricted stock units. The
compensation committee utilized this compensation philosophy and structure when establishing executive
compensation for each applicable Named Executive Officer’s 2024 fiscal year service. The compensation
committee previously determined that FW Cook has sufficient independence from us and our executive officers
to allow FW Cook to offer objective information and/or advice.
With respect to establishing executive compensation for the 2024 fiscal year, the compensation
committee and management of the Company utilized the services of Equilar (the Company’s external executive
and director compensation database aggregator) to review the executive compensation by continuing to review
the same peer companies listed in the table above. Equilar does not currently provide any other services to the
Company, and the compensation committee has determined that Equilar has sufficient independence from us
and our executive officers to allow them to offer objective information and/or advice.
Executive Compensation Starting with 2025 Fiscal Year. During 2024 and pursuant to the authority
granted under this charter, the compensation committee re-engaged FW Cook as an independent compensation
consultant to advise the compensation committee on compensation for the executive officers beginning with the
2025 fiscal year, together with analysis and services related to such executive compensation. Specifically, the
compensation committee asked the consultant to provide market data and review the design of the executive
compensation packages, provide guidance on cash and equity compensation for the Company’s executive
officers, and provide guidance and market data on the manner in which separation payments are handled in
connection with the preparation and execution of the 2025 Employment Agreements. This analysis was also
performed, in part, as a response to the advisory vote on executive compensation at our 2024 annual
shareholder meeting. As a part of this review, the chairperson of the compensation committee, the independent
compensation consultant and management of the Company agreed on a list of the following 14 peer companies
to evaluate their executive compensation:
PEER COMPANIES
Bloomin’ Brands, Inc.
Brinker International, Inc.
Chipotle Mexican Grill, Inc.
Cracker Barrel Old Country Store, Inc.
Darden Restaurants, Inc.
Dave & Buster’s Entertainment, Inc.
Dine Brands Global, Inc.
Domino’s Pizza, Inc.
Jack in the Box Inc.
Papa John’s International, Inc.
Restaurant Brands International Inc.
The Cheesecake Factory Incorporated
The Wendy’s Company
Wingstop, Inc.
47
Based in part on the recommendation of our third party compensation consultant and the review of the
market data provided to the compensation committee and in connection with establishing the executive
compensation for our Named Executive Officers for the 2025 fiscal year, the compensation committee
(A) approved the new 2025 Employment Agreements, (B) increased certain portions of compensation elements
for each Named Executive Officer to align with peer company benchmarking (as more particularly shown below),
(C) shifted the compensation percentage breakdown of the various compensation components for each Named
Executive Officer to align with peer company benchmarking, (D) extended the length of the applicable
performance periods for certain performance based restricted stock units granted to our Named Executive
Officers, and (E) modified the manner and rationale in which separation payments are paid to Named Executive
Officers pursuant to the 2025 Employment Agreements. FW Cook does not currently provide any other services
to the Company, and the compensation committee has determined that FW Cook has sufficient independence
from us and our executive officers to allow FW Cook to offer objective information and/or advice.
Summary of Executive Compensation. The compensation packages for our Named Executive Officers
offer base salaries and target cash bonus amounts and feature restricted stock unit awards, the value of which
is dependent upon the performance of the Company and the price of our common stock. Such packages for our
Named Executive Officers are comprised of the following four main components (three of which are expressly
tied to the performance of the Company):
(i)
Base Salary: An annual base salary for the term of the respective Executive Employment
Agreements, with base salary increases being left to the discretion of the compensation
committee;
(ii)
Incentive Based Cash Bonus: An annual short-term cash incentive with a target bonus based
on the achievement of defined goals to be established by the compensation committee, with
increases in the target bonus amount to be made at the discretion of the compensation
committee during the term of the Executive Employment Agreement;
(iii)
Service Based Restricted Stock Units: Restricted Stock Units which grant the Named Executive
Officer the conditional right to receive shares of our common stock that vest after a defined
period of service, the realized value of which shall be dependent on the performance of the
Company upon the vesting of such restricted stock units; and
(iv)
Performance Based Restricted Stock Units: Restricted Stock Units that are calculated based on
the achievement of certain Company performance targets established by the compensation
committee and vest over a period of service, the realized value of which shall be dependent on
the performance of the Company upon the vesting of such restricted stock units and the
satisfaction of such performance targets.
The compensation committee evaluates the stock compensation for each specific Named Executive
Officer on an annual basis to determine the right combination of rewards and incentives through the issuance of
service based restricted stock units and/or performance based restricted stock units to drive company
performance without encouraging unnecessary or excessive risk taking by all of the Named Executive Officers
as a whole. Under this approach, the Named Executive Officers receive a combination of service based restricted
stock units and performance based restricted stock units. Additionally and by conditioning a significant portion
of the Named Executive Officer’s performance based restricted stock unit grants upon the achievement of
defined performance goals to be established by the compensation committee, combined with the stock
ownership guidelines for our Named Executive Officers more particularly described above, we have created a
more direct relationship between compensation and shareholder value. Moreover, by giving the compensation
committee the discretion to grant certain stock awards (if any) in its discretion to our Named Executive Officers
under the Executive Employment Agreements, the compensation committee has the opportunity to adjust a
significant portion of the total compensation for the Named Executive Officers on an annual basis to more
accurately reflect the overall performance of the Company, which may include the issuance of service based
restricted stock units and/or performance based restricted stock units. Overall, we believe this approach provides
the Named Executive Officers with a compensation package which promotes the sustained profitability of the
Company and aligns the interests of our Named Executive Officers with those of our shareholders. The
48
compensation packages also reflect a pragmatic response to external market conditions; that is, total
compensation that is competitive with comparable positions in similar industries, including the casual dining
sector of the restaurant industry, but which is reasonable and in the best interests of our shareholders.
We believe that the overall design of the compensation packages, along with the culture and values of
our Company, allows us to attract and retain top talent, while also keeping the Named Executive Officers focused
on both long-term business development and short-term financial growth. None of the Named Executive
Officers, including Mr. Morgan, participated in the creation of their own compensation packages.
Response to 2024 Advisory Vote on Executive Compensation. At Texas Roadhouse, we value our
shareholders’ feedback and solicit investor views throughout the year in connection with the Company’s ongoing
engagement program. The investor input received is critical to how the Board and the management team make
decisions on a variety of corporate governance practices, including the Company’s executive compensation
program. At the 2024 annual shareholder meeting, approximately 61% of our shareholders cast votes in support
of our advisory Say-on-Pay vote. The Board recognized the significance of the results of the 2024 Say-on-Pay
vote, which was substantially lower than in previous years – in the four years prior, our Say-on-Pay vote
averaged shareholder support of approximately 94%.
In response to the 2024 Say-on-Pay vote, the Board and management team actively sought additional
feedback from investors on our executive compensation program and disclosures. In late 2024, management of
the Company attempted to engage with 22 shareholders owning approximately 42% of outstanding shares of
the Company as of the end of fiscal year 2024 to solicit feedback on the Company’s executive compensation
program. Of the shareholders that the Company contacted, the Company held 10 shareholder calls with
shareholders owning approximately 30% of outstanding shares of the Company as of the end of fiscal year 2024
while the remaining 12 shareholders declined the need for a call. The perspectives received during these
meetings were shared with the full Board and compensation committee, and served as a critical input to
discussions about the Company’s executive compensation program, as well as new enhancements to the 2025
compensation program and associated disclosures. The overwhelming majority of our shareholders provided us
with feedback that votes against our 2024 executive compensation program were driven primarily by the one-
time separation payment paid by the Company in 2023 to our former Chief Financial Officer following her
retirement. Additionally, some shareholders provided feedback regarding the length of the performance period
for performance based restricted stock units granted to certain Named Executive Officers.
In addition to soliciting investor feedback on the topic, we re-engaged FW Cook as an independent
compensation consultant to advise the compensation committee on compensation for the executive officers
beginning with the 2025 fiscal year, together with analysis and services related to such executive compensation,
as more particularly described above. Specifically, the compensation committee requested the consultant
provide market data and review the design of the executive compensation packages, provide guidance on cash
and equity compensation for the Company’s executive officers, and provide guidance and market data on the
manner in which separation payments are handled in connection with the preparation and execution of the 2025
Employment Agreements. Finally, as previously noted above, the Company entered into new 2025 Employment
Agreements – partly in response to the advisory vote on executive compensation at our 2024 annual shareholder
meeting and associated shareholder feedback, as well as to reflect market changes to forms of employment
agreement received from outside legal counsel and our third-party compensation consultant.
Based on the feedback received from our shareholders during our 2024 shareholder engagement, the
recommendations of our third-party compensation consultant, and the compensation committee’s review of the
market data provided to it, the compensation committee (A) approved new 2025 Employment Agreements,
(B) increased certain portions of compensation elements for each Named Executive Officer to align with peer
company benchmarking (as more particularly shown below), (C) shifted the compensation percentage
breakdown of the various compensation components for each Named Executive Officer to align with peer
company benchmarking, (D) extended the length of the applicable performance periods for certain performance
based restricted stock units granted to our Named Executive Officers, and (E) modified the manner and rationale
in which separation payments are paid to Named Executive Officers pursuant to the 2025 Employment
Agreements.
49
Elements of Compensation
The charts below show the annualized target compensation mix for our Chief Executive Officer, our
President and other Named Executive Officers for the 2024 fiscal year and the 2025 fiscal year:
2024
2025
Base Salary.
Base salaries for our Named Executive Officers are designed to provide a secure base of compensation
which will be effective in motivating and retaining key executives.
2024 Base Salary Under Prior Employment Agreement. Pursuant to each Named Executive Officer’s
Prior Employment Agreement, the compensation committee had the right to establish the annual base salary for
the Named Executive Officers at the commencement of the term of their respective Prior Employment
Agreement. During the term of the respective Prior Employment Agreement, base salary increases were at the
discretion of the compensation committee. In furtherance of the foregoing, the compensation committee
established the annual base salary for each Named Executive Officer under the Prior Employment Agreement
for the 2024 fiscal year as shown below.
Base Salary
CEO
25%
30%
30%
40%
31%
24%
45%
25%
50%
Equity
Bonus
Base Salary
PRESIDENT
Equity
Bonus
Base Salary
ALL OTHER NEO’S
Equity
Bonus
20%
20%
60%
30%
25%
45%
25%
25%
50%
Base Salary
CEO
Equity
Bonus
Base Salary
PRESIDENT
Equity
Bonus
Base Salary
ALL OTHER NEO’S
Equity
Bonus
50
Base Salary for 2024 Fiscal Year under Prior Employment Agreements
Starting
January 8, 2024 ($)(1)
Gerald L. Morgan
1,300,000
Chief Executive Officer
Regina A. Tobin
700,000
President
D. Christopher Monroe
550,000
Chief Financial Officer
Christopher C. Colson
550,000
Chief Legal and Administrative Officer, Corporate Secretary
Hernan E. Mujica
550,000
Chief Technology Officer
Travis C. Doster
550,000
Chief Communications Officer
(1)
In order to align with the target percentage parameters used by management of the Company
for compensation adjustments for support center employees during the Company’s annual
review process, on February 28, 2024, the compensation committee increased the annual base
salary for certain Named Executive Officers in the following manner:
(i)
effective January 24, 2024, Mr. Morgan’s annual base salary was increased to
$1,300,000;
(ii)
effective January 24, 2024, Ms. Tobin’s annual base salary was increased to $700,000;
and
(iii)
effective January 24, 2024, the annual base salary for each of Messrs. Monroe, Colson,
Mujica and Doster was increased to $550,000.
2025 Base Salary Under 2025 Employment Agreement. Each Named Executive Officer’s 2025
Employment Agreement established the annual base salary for the Named Executive Officers at the
commencement of the term of their respective 2025 Employment Agreement. Pursuant to each Named
Executive Officer’s 2025 Employment Agreement, the compensation committee established an annual base
salary for each Named Executive Officer as shown in the table below for 2025. During the term of the respective
2025 Employment Agreement, base salary increases are at the discretion of the compensation committee.
Base Salary for 2025 Fiscal Year under 2025 Employment Agreements
Starting
January 8, 2025 ($)
Gerald L. Morgan
1,400,000
Chief Executive Officer
Regina A. Tobin
725,000
President
D. Christopher Monroe
630,000
Chief Financial Officer
Christopher C. Colson
630,000
Chief Legal and Administrative Officer, Corporate Secretary
Hernan E. Mujica
630,000
Chief Technology Officer
Travis C. Doster
630,000
Chief Communications Officer
51
Incentive Bonus.
Incentive bonuses are designed to reward our Named Executive Officers for the success of the
Company, as measured by growth in the Company’s earnings per diluted share (“EPS”) and overall pre-tax
profit, and for each Named Executive Officer’s individual contribution to that success. It is our belief that a
significant amount of each Named Executive Officer’s compensation should be tied to the performance of the
Company.
Under the compensation committee’s charter, the compensation committee may award an annual cash
incentive to the Named Executive Officers, which is the grant of a right to receive a payment of cash that is
subject to targets and maximums, and that is contingent on achievement of performance objectives during the
Company’s fiscal year. These cash incentives are also subject to the terms and conditions of the Prior
Employment Agreements and the 2025 Employment Agreements (as applicable) and reflect each Named
Executive Officer’s job responsibilities and individual contribution to the success of the Company.
In furtherance of the foregoing, the compensation committee established a two-pronged approach to
tying the incentive compensation to the Company’s performance. Under this approach, 50% of the target
incentive bonus is awarded based on whether the Company achieves an annual EPS growth target of 10% (the
“EPS Performance Goal”). The other 50% is based on a profit sharing pool (the “Profit Sharing Pool”)
comprised of 1.75% of the Company’s pre-tax profits (income before taxes less net income attributable to
non-controlling interests, as reported in our audited consolidated financial statements), which pool is distributed
among our Named Executive Officers and certain other members of the Company’s director-level management
based on a pre-determined percentage interest in the pool and subject to certain pre-determined maximum
amounts. After the end of the fiscal year, the compensation committee determines whether and to what extent
the EPS Performance Goal has been met, and the portion of the Profit Sharing Pool to which each Named
Executive Officer is entitled. Depending on the level of achievement of the EPS Performance Goal each year,
50% of the incentive bonus may be reduced to a minimum of $0 or increased to a maximum of two times the
target amount. Each 1% change from the EPS Performance Goal results in an increase or decrease of 10% of
the portion of the target bonus amount attributable to the achievement of the EPS Performance Goal. For
example, if we achieve 11% EPS growth, the bonus payable would be 110% of the portion of the target bonus
attributable to the achievement of the EPS Performance Goal. Conversely, if we achieve 9% EPS growth, the
bonus payable would be 90% of the portion of the target bonus attributable to the achievement of the EPS
Performance Goal. The remaining 50% of the Named Executive Officers’ incentive bonus will fluctuate directly
with Company pre-tax profits at fixed participation percentages and maximum amounts which are determined
within 60 days following the commencement of the Company’s fiscal year.
The annual profit sharing component allows the Named Executive Officers to participate in a profit
sharing pool with other members of the Company’s director-level management team. By allowing this level of
participation in the Company’s overall profits, the compensation committee encourages responsible growth and
aligns the interests of the Named Executive Officers with those of other management employees of the
Company. This portion of the incentive bonus may be reduced to a minimum of $0 if the Company ceases to be
profitable or for other reasons that the compensation committee determines, and may be increased to a
maximum of two times the target amount established for each individual participant. Both portions of the incentive
bonus can be adjusted downward (but not upward) by the compensation committee in its discretion.
Performance based equity awards with respect to fiscal year 2024 were paid at 174.7% of the total target
amount for the fiscal year in which a Named Executive Officer served in such role, based on an increase in
actual EPS of 42.5% and an actual Profit Sharing Pool of $9.0 million calculated on fiscal year 2024 pre-tax profit
of $513.7 million.
2024 Incentive Bonus Under Prior Employment Agreement. Each Prior Employment Agreement
provided an annual short-term cash incentive opportunity with a target bonus as set forth in the table below, with
increases in the target bonus amount to be made at the discretion of the compensation committee. During the
term of each respective Prior Employment Agreement, the performance criteria and terms of bonus awards were
at the discretion of the compensation committee as described above. As further described above, depending
on the level of achievement of the goals, the bonus could be reduced to a minimum of $0 or increased to a
52
maximum of two times the base target amount under the current incentive compensation policy of the
compensation committee of the Board.
In connection with the foregoing, the compensation committee established an annual short-term cash
incentive opportunity with a target bonus as set forth in the table below relating to each Named Executive
Officer’s 2024 fiscal year service pursuant to their Prior Employment Agreements. The performance criteria and
terms of bonus awards are at the discretion of the compensation committee. As more particularly described
above, the compensation committee continued its two pronged approach with 50% of the target incentive bonus
being based on whether the Company achieves an annual EPS growth target of 10% and the remaining 50%
being based on a Profit Sharing Pool comprised of 1.75% of the Company’s pre-tax profits (income before taxes
less net income attributable to non-controlling interests, as reported in our audited consolidated financial
statements). As further described above, depending on the level of achievement of the goals, the bonus could
be reduced to a minimum of $0 or increased to a maximum of two times the base target amount under the
current incentive compensation policy of the compensation committee of the Board.
Executive Incentive Compensation for Fiscal Year 2024
Target
Minimum
Maximum
Bonus
Bonus
Bonus
($)(1)
($)(1)
($)(1)
Gerald L. Morgan
1,300,000
—
2,600,000
Chief Executive Officer
Regina A. Tobin
700,000
—
1,400,000
President
D. Christopher Monroe
425,000
—
850,000
Chief Financial Officer
Christopher C. Colson
425,000
—
850,000
Chief Legal and Administrative Officer, Corporate Secretary
Hernan E. Mujica
425,000
—
850,000
Chief Technology Officer
Travis C. Doster
425,000
—
850,000
Chief Communications Officer
(1)
In order to align with the target percentage parameters used by management of the Company
for compensation adjustments for support center employees during the Company’s annual
review process, on February 28, 2024, the compensation committee increased the target bonus
amounts for certain Named Executive Officers in the following manner:
(i)
the target bonus for Mr. Morgan relating to his 2024 fiscal year service was increased
to $1,300,000;
(ii)
the target bonus for Ms. Tobin relating to her 2024 fiscal year service was increased to
$700,000; and
(iii)
the target bonus for each of Messrs. Monroe, Colson, Mujica and Doster relating to their
respective 2024 fiscal year service was increased to $425,000.
2025 Incentive Bonus Under 2025 Employment Agreement. Each 2025 Employment Agreement
provides an annual short-term cash incentive opportunity with a target bonus as set forth in the table below, with
increases in the target bonus amount to be made at the discretion of the compensation committee. During the
term of each respective 2025 Employment Agreement, the performance criteria and terms of bonus awards are
at the discretion of the compensation committee as described above. As further described above, depending
on the level of achievement of the goals, the bonus may be reduced to a minimum of $0 or increased to a
maximum of two times the base target amount under the current incentive compensation policy of the
compensation committee of the Board.
53
In connection with the foregoing, the compensation committee established an annual short-term cash
incentive opportunity with a target bonus as set forth in the table below relating to each Named Executive
Officer’s 2025 fiscal year service pursuant to each 2025 Employment Agreement. The performance criteria and
terms of bonus awards are at the discretion of the compensation committee. As more particularly described
above, the compensation committee continued its two pronged approach with 50% of the target incentive bonus
being based on whether the Company achieves an annual EPS growth target of 10% and the remaining 50%
being based on a Profit Sharing Pool comprised of 1.75% of the Company’s pre-tax profits (income before taxes
less net income attributable to non-controlling interests, as reported in our audited consolidated financial
statements). As further described above, depending on the level of achievement of the goals, the bonus may
be reduced to a minimum of $0 or increased to a maximum of two times the base target amount under the
current incentive compensation policy of the compensation committee of the Board.
Executive Incentive Compensation for Fiscal Year 2025
Target
Minimum
Maximum
Bonus
Bonus
Bonus
($)
($)
($)
Gerald L. Morgan
1,400,000
—
2,800,000
Chief Executive Officer
Regina A. Tobin
725,000
—
1,450,000
President
D. Christopher Monroe
525,000
—
1,050,000
Chief Financial Officer
Christopher C. Colson
525,000
—
1,050,000
Chief Legal and Administrative Officer, Corporate Secretary
Hernan E. Mujica
525,000
—
1,050,000
Chief Technology Officer
Travis C. Doster
525,000
—
1,050,000
Chief Communications Officer
Stock Awards.
We make equity awards in the form of restricted stock units, which represent the conditional right to
receive one share of our common stock upon satisfaction of the vesting requirements. Restricted stock units
offer the Named Executive Officers a financial interest in the Company and align their interests with those of our
shareholders. We also believe that the market price of our publicly traded common stock represents the most
appropriate metric for determining the value of the equity portion of our Named Executive Officers’ compensation
packages. The overall compensation packages for our Named Executive Officers offer base salaries and target
cash bonus amounts and feature restricted stock unit awards. While the initial grant of restricted stock unit
awards is based on a fixed dollar amount, the ultimate value of the restricted stock unit awards is dependent
upon the performance of the Company and the price of our common stock at the time such restricted stock units
vest. The compensation committee evaluates the stock compensation for each specific Named Executive Officer
on an annual basis to determine the right combination of rewards and incentives through the issuance of service
based restricted stock units and/or performance based restricted stock units to drive company performance
without encouraging unnecessary or excessive risk taking by all of the Named Executive Officers as a whole.
Under this approach, the Named Executive Officers receive a combination of service based restricted stock units
and/or performance based restricted stock units, with a significant portion of some of the Named Executive
Officer’s compensation being tied to the grant of such performance based restricted stock units.
We believe that the service based restricted stock awards are inherently performance based since their
value varies in response to investor sentiment regarding overall Company performance at the time of vesting.
Moreover, by giving the compensation committee the discretion to grant certain stock awards (if any) in its
discretion to our Named Executive Officers under the Prior Employment Agreements and the 2025 Employment
Agreement (as applicable), the compensation committee has the opportunity to adjust a large portion of the total
compensation for the Named Executive Officers on an annual basis to more accurately reflect the overall
performance of the Company, which may include the issuance of service based restricted stock units and/or
restricted stock units based on the achievement of defined goals to be established by the compensation
54
committee for any and/or all of our Named Executive Officer. While the Company has historically granted
retention grants for our Named Executive Officers, neither the Prior Employment Agreements nor the 2025
Employment Agreements include any similar retention grants. The compensation committee will evaluate
whether to grant additional retention grants in the future as a part of its annual evaluation of the compensation
packages for the Named Executive Officers.
In addition, the Prior Employment Agreements and the 2025 Employment Agreements (as applicable)
with our Named Executive Officers permit the compensation committee to grant in its discretion any combination
of service based restricted stock units and/or performance based restricted stock units for any portion of the term
of the Executive Employment Agreements. For the performance based awards that have or may be granted to
the Named Executive Officers under the Prior Employment Agreements, the compensation committee has
established a two-pronged approach which mirrors the approach used for annual cash incentive bonuses. Under
this approach, a percentage of the target equity award is based on whether the Company achieves the annual
EPS Performance Goal, and a percentage is based on the Profit Sharing Pool comprised of 1.75% of the
Company’s pre-tax profits (income before taxes less net income attributable to non-controlling interests, as
reported in our audited financial statements). After the end of the fiscal year, the compensation committee
determines whether and to what extent the EPS Performance Goal has been met, and the portion of the Profit
Sharing Pool to which each officer is entitled. Each 1% change from the EPS Performance Goal results in an
increase or decrease of 10% of the portion of the target amount attributable to the achievement of the EPS
Performance Goal. For example, if we achieve 11% EPS growth, the number of shares awarded would be 110%
of the portion of the target amount attributable to the achievement of the EPS Performance Goal. Conversely, if
we achieve 9% EPS growth, the award would be 90% of the portion of the target amount attributable to the
achievement of the EPS Performance Goal. The remaining percentage of the Named Executive Officers’ equity
award will fluctuate directly with Company pre-tax profits at fixed participation percentages and maximum
amounts which are determined within 60 days following the commencement of the Company’s fiscal year. Both
portions of the performance based equity award may be reduced to a minimum of $0 or increased to a maximum
of two times the target amount for each individual participant. Both portions of the performance based equity
award can also be adjusted downward (but not upward) by the compensation committee in its discretion.
Performance based equity awards with respect to fiscal year 2024 were paid at 174.7% of the total target
amount for the fiscal year in which a Named Executive Officer served in such role, based on an increase in
actual EPS of 42.5% and an actual Profit Sharing Pool of $9.0 million calculated on fiscal year 2024 pre-tax profit
of $513.7 million.
As more particularly described below, in connection with the execution of the 2025 Employment
Agreements, the compensation committee authorized a three year grant of performance based restricted stock
units that will vest in one-third increments, subject to the achievement of defined goals established by the
compensation committee. For these performance based restricted stock units, the compensation committee
established a two-pronged approach. Under this approach, 50% of the target equity award is awarded based
on whether the Company achieves the following EPS growth target (the “2025 EPS Performance Goal”):
(i)
with respect to the one-third portion of the applicable performance-based restricted stock units
relating to their 2025 fiscal year service, a one-year EPS growth target of 10% as compared to
the 2024 fiscal year,
(ii)
with respect to the one-third portion of the applicable performance-based restricted stock units
relating to their 2026 fiscal year service, a two-year EPS growth target of 21% as compared to
the 2024 fiscal year, and
(iii)
with respect to the one-third portion of the applicable performance-based restricted stock units
relating to their 2027 fiscal year service, a three-year EPS growth target of 33% as compared
to the 2024 fiscal year.
The other 50% is based on the Profit Sharing Pool comprised of 1.75% of the Company’s pre-tax profits
(income before taxes less net income attributable to non-controlling interests, as reported in our audited
consolidated financial statements). After the end of the fiscal year, the compensation committee determines
55
whether and to what extent the 2025 EPS Performance Goal has been met, and the portion of the Profit Sharing
Pool to which each officer is entitled. Each 1% change from the 2025 EPS Performance Goal results in an
increase or decrease of 10% of the portion of the target amount attributable to the achievement of the 2025 EPS
Performance Goal. For example, if we achieve 11% EPS growth, the number of shares awarded would be 110%
of the portion of the target amount attributable to the achievement of the 2025 EPS Performance Goal.
Conversely, if we achieve 9% EPS growth, the award would be 90% of the portion of the target amount
attributable to the achievement of the 2025 EPS Performance Goal. The remaining percentage of the Named
Executive Officers’ equity award will fluctuate directly with Company pre-tax profits at fixed participation
percentages and maximum amounts which are determined within 60 days following the commencement of the
Company’s fiscal year. Both portions of the performance based equity award may be reduced to a minimum of
$0 or increased to a maximum of two times the target amount for each individual participant. Both portions of
the performance based equity award can also be adjusted downward (but not upward) by the compensation
committee in its discretion.
The total number of service based restricted stock units and/or performance based restricted stock units
granted to each Named Executive Officer reflects each Named Executive Officer’s job responsibilities and
individual contribution to the success of the Company.
2024 Service Based Restricted Stock Units Under Prior Employment Agreement. Each Prior
Employment Agreement provided that the compensation committee could grant certain stock awards to the
Named Executive Officers during the term of the respective Prior Employment Agreements. In connection with
the same, the compensation committee authorized the grant of service based restricted stock units under each
Prior Employment Agreement equal to the dollar amount described in the table below for each Named Executive
Officer with respect to all or a portion of their 2024 fiscal year service. These service based restricted stock units
were calculated by dividing the dollar amount described in the table below by the per share closing sales price
of the Company’s common stock on the Nasdaq Global Select Market on the trading day immediately preceding
the date of the grant, with such quotient being rounded up or down to the nearest 100 shares. Additionally and
except as described in the footnote below with respect to the grant of restricted stock units to Mr. Doster, these
shares were granted on January 8, 2024 and vested on January 8, 2025.
Service Based Restricted Stock Units for 2024 Fiscal Year
Service Based Restricted
Stock Units vesting on
January 8, 2025 pursuant
to Prior Employment
Agreements ($)
Number of Service Based
Restricted Stock Units vesting
on January 8, 2025 pursuant
to Prior Employment
Agreements (1)
Gerald L. Morgan
1,300,000
11,000
Chief Executive Officer
Regina A. Tobin
500,000
4,200
President
D. Christopher Monroe
500,000
4,200
Chief Financial Officer
Christopher C. Colson
500,000
4,200
Chief Legal and Administrative Officer,
Corporate Secretary
Hernan E. Mujica
500,000
4,200
Chief Technology Officer
Travis C. Doster (2)
325,000
3,100
Chief Communications Officer
(1)
For the service based restricted stock units described in this footnote (1), fair value is equal to
the closing price of the Company’s common stock on the trading day immediately preceding the
date of the grant, which was $118.30 for these grants. Using the formula described in the
immediately foregoing paragraph prior to this table, each Named Executive Officer was granted
the number of service based restricted stock units described in the table above for their
respective 2024 fiscal year service. These are not amounts paid to or received by the Named
Executive Officers. The amounts listed above represent the grant date fair value determined in
accordance with U.S. GAAP of restricted stock units granted under the Company’s 2021 Long-
Term Incentive Plan. Detailed information under U.S GAAP is set forth in Note 14 to the
56
consolidated financial statements included in the Company’s Annual Report on Form 10-K for
the fiscal year ended December 26, 2023. The Company cautions that the amounts reported in
the table above for these awards may not represent the amounts that the Named Executive
Officers will actually realize from the awards. Whether, and to what extent, a Named Executive
Officer realizes value on these awards will depend on a number of factors, including the
Company’s actual operating performance, stock price fluctuations, and the Named Executive
Officer’s continued service with the Company.
(2)
Upon Mr. Doster’s appointment to Chief Communications Officer, the compensation committee
authorized the grant of 3,100 service based restricted stock units with a grant date of
November 9, 2023 for his 2024 fiscal year service and with a vesting date of January 8, 2025,
provided he was still employed as of the vesting date. The number of service based restricted
stock units were calculated by dividing $325,000 by $103.41 (which was the closing sales price
of the Company’s common stock on the Nasdaq Global Select Market on November 8, 2023),
with such quotient being rounded up or down to the nearest 100 shares. As described in
footnote (1) above, these are not amounts paid to or received by Mr. Doster. The amounts listed
above represent the grant date fair value determined in accordance with U.S GAAP of restricted
stock units granted under the Company’s 2021 Long-Term Incentive Plan.
2025 Service Based Restricted Stock Units Under 2025 Employment Agreement. Each 2025
Employment Agreement provides that the compensation committee may grant certain stock awards to the
Named Executive Officers during the term of the respective 2025 Employment Agreements. In connection with
the same, the compensation committee authorized the grant of service based restricted stock units under each
2025 Employment Agreement equal to the dollar amount described in the table below for each Named Executive
Officer with respect to all or a portion of their 2025 fiscal year service. These service based restricted stock units
were calculated by dividing the dollar amount described in the table below by the per share closing sales price
of the Company’s common stock on the Nasdaq Global Select Market on the trading day immediately preceding
the date of the grant, with such quotient being rounded up or down to the nearest 100 shares. Additionally, these
shares were granted on January 8, 2025 and will vest on January 8, 2026, provided the Named Executive Officer
is still employed by the Company as of the vesting date.
Service Based Restricted Stock Units for 2025 Fiscal Year
Service Based Restricted
Stock Units Vesting on
January 8, 2026 pursuant
to 2025 Employment Agreements ($)
Number of Service Based
Restricted Stock Units Vesting
on January 8, 2026 pursuant
to 2025 Employment Agreements (1)
Gerald L. Morgan
2,100,000
11,600
Chief Executive Officer
Regina A. Tobin
725,000
4,000
President
D. Christopher Monroe
472,500
2,600
Chief Financial Officer
Christopher C. Colson
472,500
2,600
Chief Legal and Administrative Officer, Corporate
Secretary
Hernan E. Mujica
472,500
2,600
Chief Technology Officer
Travis C. Doster
472,500
2,600
Chief Communications Officer
(1)
For the service based restricted stock units described in this footnote (1), fair value is equal to
the closing price of the Company’s common stock on the trading day immediately preceding the
date of the grant, which was $181.27 for these grants. Using the formula described in the
immediately foregoing paragraph prior to this table, each Named Executive Officer was granted
the number of service based restricted stock units described in the table above for their
respective 2025 fiscal year service. These are not amounts paid to or received by the Named
Executive Officers. The amounts listed above represent the grant date fair value determined in
accordance with U.S GAAP of restricted stock units granted under the Company’s 2021 Long-
Term Incentive Plan. Detailed information under U.S GAAP is set forth in Note 14 to the
57
consolidated financial statements included in the Company’s Annual Report on Form 10-K for
the fiscal year ended December 31, 2024. The Company cautions that the amounts reported in
the table above for these awards may not represent the amounts that the Named Executive
Officers will actually realize from the awards. Whether, and to what extent, a Named Executive
Officer realizes value on these awards will depend on a number of factors, including the
Company’s actual operating performance, stock price fluctuations, and the Named Executive
Officer’s continued service with the Company.
2024 Performance Based Restricted Stock Units Under Prior Employment Agreement. Each Prior
Employment Agreement provided that the compensation committee could grant certain stock awards to the
Named Executive Officers during the term of the respective Executive Employment Agreements. The number of
performance based restricted stock units granted to Messrs. Morgan, Monroe, Colson, Mujica, and Doster and
Ms. Tobin for the 2024 fiscal year under their Prior Employment Agreement, and the number of shares of
common stock which actually vested based on the Company’s performance, are shown in the table below:
Performance Based Restricted Stock Units for 2024 Fiscal Year
Target Number of
Performance Based
Restricted Stock Units
Granted pursuant to
Prior Employment
Agreements (1)
Minimum Number of
Performance Based
Restricted Stock Units
pursuant to Prior
Employment
Agreements
Maximum Number of
Performance Based
Restricted Stock Units
pursuant to Prior
Employment
Agreements
Actual Number of
Shares Issued for 2024
following Certification
of 2024 Performance
Goals (2)
Gerald L. Morgan
11,000
—
22,000
19,218
Chief Executive Officer
Regina A. Tobin
3,400
—
6,800
5,940
President
D. Christopher Monroe
2,500
—
5,000
4,368
Chief Financial Officer
Christopher C. Colson
2,500
—
5,000
4,368
Chief Legal & Administrative Officer, Corporate
Secretary
Hernan E. Mujica
2,500
—
5,000
4,368
Chief Technology Officer
Travis C. Doster
1,700
—
3,400
2,970
Chief Communications Officer
(1)
The compensation committee authorized the grant of performance based restricted stock units
as described in the table above to Messrs. Morgan, Monroe, Colson, Mujica, and Doster and
Ms. Tobin under their respective Prior Employment Agreements for their respective 2024 fiscal
year service in the following manner:
(i)
With respect to Mr. Morgan, his 11,000 performance based restricted stock units were
calculated by dividing $1,300,000 by $118.30 (which was the closing sales price of the
Company’s common stock on the Nasdaq Global Select Market on the trading day
immediately preceding the date of the grant, with such quotient being rounded up or
down to the nearest 100 shares);
(ii)
With respect to Ms. Tobin, her 3,400 performance based restricted stock units were
calculated by dividing $400,000 by $118.30 (which was the closing sales price of the
Company’s common stock on the Nasdaq Global Select Market on the trading day
immediately preceding the date of the grant, with such quotient being rounded up or
down to the nearest 100 shares);
(iii)
With respect to Mr. Monroe, his 2,500 performance based restricted stock units were
calculated by dividing $300,000 by $118.30 (which was the closing sales price of the
Company’s common stock on the Nasdaq Global Select Market on the trading day
immediately preceding the date of the grant, with such quotient being rounded up or
down to the nearest 100 shares);
(iv)
With respect to Mr. Colson, his 2,500 performance based restricted stock units were
calculated by dividing $300,000 by $118.30 (which was the closing sales price of the
Company’s common stock on the Nasdaq Global Select Market on the trading day
58
immediately preceding the date of the grant, with such quotient being rounded up or
down to the nearest 100 shares);
(v)
With respect to Mr. Mujica, his 2,500 performance based restricted stock units were
calculated by dividing $300,000 by $118.30 (which was the closing sales price of the
Company’s common stock on the Nasdaq Global Select Market on the trading day
immediately preceding the date of the grant, with such quotient being rounded up or
down to the nearest 100 shares); and
(vi)
With respect to Mr. Doster, his 1,700 performance based restricted stock units were
calculated by dividing $175,000 by $103.41 (which was the closing sales price of the
Company’s common stock on the Nasdaq Global Select Market on the trading day
immediately preceding the date of the grant, with such quotient being rounded up or
down to the nearest 100 shares).
(2)
The shares underlying the performance based restricted stock units attributable to the 2024
fiscal year were issued on February 28, 2025. The compensation committee determined that
50% of the performance based restricted stock unit award for the 2024 fiscal year would be
based on an EPS growth target of 10%, which portion would be reduced or increased by 10%
for every 1% of annual growth in EPS less than or in excess of the 10% goal, and that 50% of
the performance based restricted stock unit award for the 2024 fiscal year would be based on a
pre-tax profit target opportunity equal to the percentage payout of 1.75% of pre-tax earnings
divided by the bonus pool target set by the compensation committee for the performance period.
2025 Performance Based Restricted Stock Units Under 2025 Employment Agreement. Each 2025
Employment Agreement provides that the compensation committee may grant certain stock awards to the
Named Executive Officers during the term of the respective 2025 Employment Agreements. The compensation
committee authorized the grant of performance based restricted stock units as described in the table below to
Messrs. Morgan, Monroe, Colson, Mujica, and Doster and Ms. Tobin under their respective 2025 Employment
Agreements for their respective 2025 fiscal year service. These performance based restricted stock units will be
calculated by dividing the target dollar amount described in the table below by the per share closing sales price
of the Company’s common stock on the Nasdaq Global Select Market on the trading day immediately preceding
the date of the grant, with such quotient being rounded up or down to the nearest 100 shares. Additionally, these
performance based restricted stock units were granted to each respective executive officer on January 8, 2025
and will vest on January 8, 2026, subject to the achievement of defined goals established by the compensation
committee of the Board. The actual number of shares that will be issued to each of Messrs. Morgan, Monroe,
Colson, Mujica, and Doster and Ms. Tobin for fiscal year 2025 based on achievement of the performance goals
assigned to these grants by the compensation committee will not be calculated until the first quarter of 2026.
Performance Based Restricted Stock Units for 2025 Fiscal Year
Target Performance
Based Restricted Stock
Units vesting on
January 8, 2026
pursuant to 2025
Employment
Agreements ($)(1)
Minimum Performance
Based Restricted Stock
Units pursuant to 2025
Employment
Agreements ($)
Maximum Performance
Based Restricted Stock
Units pursuant to 2025
Employment
Agreements ($)
Target Number of
Performance Based
Restricted Stock Units
vesting on January 8,
2026 pursuant to 2025
Employment
Agreements (2)
Gerald L. Morgan
2,100,000
—
4,200,000
11,600
Chief Executive Officer
Regina A. Tobin
725,000
—
1,450,000
4,000
President
D. Christopher Monroe
472,500
—
945,000
2,600
Chief Financial Officer
Christopher C. Colson
472,500
—
945,000
2,600
Chief Legal & Administrative Officer, Corporate
Secretary
Hernan E. Mujica
472,500
—
945,000
2,600
Chief Technology Officer
Travis C. Doster
472,500
—
945,000
2,600
Chief Communications Officer
59
(1)
The compensation committee determined that 50% of the performance based restricted stock
unit award for 2025 would be based on an EPS growth target of 10%, which portion would be
reduced or increased by 10% for every 1% of annual growth in EPS less than or in excess of
the 10% goal, and that 50% of the performance based restricted stock unit award for 2025 would
be based on a pre-tax profit target opportunity equal to the percentage payout of 1.75% of
pre-tax earnings divided by the bonus pool target set by the compensation committee for the
performance period. The performance based restricted stock unit award for Messrs. Morgan,
Monroe, Colson, Mujica, and Doster and Ms. Tobin with respect to fiscal year 2025 will be
certified in the first quarter of 2026.
(2)
For the performance based restricted stock units described in this footnote (2), fair value is equal
to the closing price of the Company’s common stock on the trading day immediately preceding
the date of the grant, which was $181.27 for these grants. Using the formula described in the
immediately foregoing paragraph prior to this table, each Named Executive Officer was granted
the target number of performance based restricted stock units described in the table above for
their respective 2025 fiscal year service. These are not amounts paid to or received by these
Named Executive Officers. The amounts listed above represent the grant date fair value
determined in accordance with U.S GAAP of restricted stock units granted under the Company’s
2021 Long-Term Incentive Plan. Detailed information under U.S GAAP is set forth in Note 14 to
the consolidated financial statements included in the Company’s Annual Report on Form 10-K
for the fiscal year ended December 31, 2024. The Company cautions that the amounts reported
in the table above for these awards may not represent the amounts that these Named Executive
Officers will actually realize from the awards.
The table above reflects the performance based restricted stock units granted to each Named Executive
Officer for their respective 2025 fiscal year service but does not include the performance based restricted stock
units granted to each Named Executive Officers during the 2025 fiscal year for their respective 2026 fiscal year
and 2027 fiscal year service.
Separation and Change in Control Arrangements
Prior Employment Agreement
The Prior Employment Agreements generally provided that if a Named Executive Officer’s employment
was terminated during the term of the Prior Employment Agreement for a Qualifying Reason (as defined below),
the Company would pay the Named Executive Officer three months of base salary, unless the termination
occurred within 12 months following a Change in Control (as defined below), in which case the applicable Named
Executive Officer’s current base salary remaining for the then existing term of his or her respective Prior
Employment Agreement would be paid. In addition, if any Named Executive Officer’s termination occurred for a
Qualifying Reason within 12 months following a Change in Control, the applicable Named Executive Officer
would be paid any incentive bonus earned but not yet paid for any fiscal year ended before the date of
termination, plus an incentive bonus for the year in which the date of termination occurs, equal to the applicable
Named Executive Officer’s target bonus for that year, prorated based on the number of days in the fiscal year
elapsed before the date of termination. For purposes of the Prior Employment Agreements, termination for a
“Qualifying Reason” was generally defined to be attributable to one of the following: (i) the result of the
applicable Named Executive Officer having submitted to the Company the Named Executive Officer’s resignation
in accordance with a request by the Board or the Chief Executive Officer, provided that such request is not based
on the Company’s finding that Cause (as defined below) for termination exists, (ii) a termination by the Named
Executive Officer for Good Reason (as defined below) within 12 months of a Change in Control, or (iii) a
termination by the Company for any reason other than Cause or as a result of death or disability which entitles
the Named Executive Officer to benefits under the Company’s long-term disability plan. Under the Prior
Employment Agreements, a termination by a Named Executive Officer (a separation, including a voluntary
retirement, initiated by a Named Executive Office other than per a request described above), other than for Good
Reason within 12 months following a Change in Control, would not be a Qualifying Reason. Additionally,
termination for “Cause” meant a termination by the Company for one or more of the following reasons: (a) a
Named Executive Officer’s conviction of, or being charged with having committed, a felony; (b) a Named
60
Executive Officer’s acts of dishonesty or moral turpitude that are detrimental to the business of the Company;
(c) a Named Executive Officer’s acts or omissions that such Named Executive Officer knew or should have
reasonably known were likely to damage the business of the Company; (d) a Named Executive Officer’s failure
to obey the reasonable and lawful directions of the Company, including, without limitation, the Company’s
policies and procedures (including the Company’s policies prohibiting discrimination, harassment, and
retaliation), and the Texas Roadhouse, Inc. Code of Conduct; (e) a Named Executive Officer’s failure to perform
such Named Executive Officer’s obligations under his or her Prior Employment Agreement; (f) a Named
Executive Officer’s willful breach of any agreement or covenant contained within his or her Prior Employment
Agreement or any fiduciary duty owed to the Company; and/or (g) a Named Executive Officer’s unsatisfactory
performance of such Named Executive Officer’s duties after: (A) he or she received written notice of the general
nature of the unsatisfactory performance, and (B) he or she failed to cure the unsatisfactory performance within
30 days thereafter to the satisfaction of the Company.
As used in the Prior Employment Agreements, a “Change in Control” meant that one of the following
events had taken place: (i) consummation of a merger or consolidation of the Company with any other entity,
other than a merger or consolidation that would result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into
voting securities of the surviving or resulting entity) more than 50% of the combined voting power of the surviving
or resulting entity outstanding immediately after such merger or consolidation; (ii) consummation of a sale or
disposition of all or substantially all of the assets of the Company (other than such a sale or disposition
immediately after which such assets will be owned directly or indirectly by the shareholders of the Company in
substantially the same proportions as their ownership of the common stock of the Company immediately before
such sale or disposition); or (iii) any Person becomes the beneficial owner (as determined pursuant to Section
13(d) of the Exchange Act) of securities representing in excess of 50% of the aggregate voting power of the
outstanding securities of the Company as required to be disclosed in a report on Schedule 13D of the Exchange
Act. The Board had the full and final authority, in its sole discretion, to determine conclusively whether a Change
in Control occurred pursuant to the above definition, the date of the occurrence of such Change in Control, and
any incidental matters relating thereto. The Prior Employment Agreements also provided for the reduction of
Change in Control payments to the maximum amount that could be paid to the Named Executive Officers without
giving rise to the excise tax imposed by Section 4999 of the Internal Revenue Code. Additionally, as used in the
Prior Employment Agreements, “Good Reason” given by a Named Executive Officer in a notice of termination
was based on: (a) the assignment to such Named Executive Officer of a different title or job responsibilities that
result in a substantial decrease in the level of responsibility from those in effect immediately before the Change
in Control; (b) a reduction by the Company or the surviving company in such Named Executive Officer’s base
pay as in effect immediately before the Change in Control; (c) a significant reduction by the Company or the
surviving company in total benefits available to such Named Executive Officer under cash incentive, stock
incentive and other employee benefit plans after the Change in Control compared to the total package of such
benefits as in effect before the Change in Control; (d) the requirement by the Company or the surviving company
that such Named Executive Officer be based more than 50 miles from where such Named Executive Officer’s
office is located immediately before the Change in Control, except for required travel on company business to
an extent substantially consistent with the business travel obligations which such Named Executive Officer
undertook on behalf of the Company before the Change in Control; or (e) the failure by the Company to obtain
from any Successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company an agreement to assume obligations under the
Prior Employment Agreement.
While the individual Prior Employment Agreements did not address the manner in which unvested stock
awards, if any, would be handled upon the termination of a Named Executive Officer, the specific restricted stock
unit award agreement and/or performance restricted stock unit award agreement entered into by the Named
Executive Officers upon the grant of service based restricted stock units and/or performance based restricted
stock units provided that (A) if a Change in Control occurs prior to the vesting date of such restricted stock units
and the Named Executive Officer was terminated by the Company without Cause, or (B) if the Named Executive
Officer was terminated for Good Reason within 12 months following a Change in Control, then such unvested
service based restricted stock units and/or performance based restricted stock units would become vested as of
the date of termination. Additionally, such specific restricted stock unit award agreement and/or performance
restricted stock unit award agreement entered into by the Named Executive Officers provided that if any Named
61
Executive Officer’s continuous service is terminated because of death or disability prior to the vesting date for
the applicable grant of service based restricted stock units and/or performance based restricted stock units (as
and if applicable), then such applicable restricted stock units would become immediately vested in an amount
equal to the total number of granted restricted stock units multiplied by a fraction, the numerator of which is the
number of calendar months or portions thereof from grant date of such restricted stock units through the date on
which such Named Executive Officer’s continuous service is terminated due to death or disability and the
denominator of which is the total number of calendar months or portion thereof in the vesting period for such
restricted stock unit grants.
Under the Prior Employment Agreements, the Company provided these severance payments to allow
for a period of transition and were generally contingent upon the Named Executive Officer’s execution of a full
release of claims against the Company, and continued compliance with the non-competition, non-solicitation,
confidentiality and other restrictive covenants. If the Named Executive Officer’s employment was terminated for
any reason other than a Qualifying Reason (such as the officer’s death, disability or for Cause), then the
Company would pay to the Named Executive Officer only the base salary accrued for the last period of actual
employment and any accrued paid time off in accordance with policies of the Company in effect from time to
time. The salary component of the severance payments was subject to deductions and withholdings and was to
be paid to the Named Executive Officers in periodic installments in accordance with our normal payroll practices.
The fixed sum would be paid in a single lump sum, and any bonus component of the severance payments for a
performance period that ended before termination was to be paid on the same date as the payment would have
been made had his or her employment not been terminated.
The estimated amounts that would have been payable to a Named Executive Officer under the Prior
Employment Agreements are more fully described in “Termination, Change of Control and Change of
Responsibility Payments.”
2025 Employment Agreement
As further discussed above, the Company and certain Named Executive Officers entered into the 2025
Employment Agreements during the 2024 fiscal year. The 2025 Employment Agreements are a response, in
part, to the advisory vote on executive compensation at our 2024 annual shareholder meeting and reflect
changes in the manner and rationale in which separation payments are paid to Named Executive Officers based
on recommendations of our third party compensation consultant, outside legal counsel, and the feedback
received from our shareholders during our shareholder engagement in 2024.
The 2025 Employment Agreements provide that the agreement and a Named Executive Officer’s
employment will terminate during the term of the applicable 2025 Employment Agreement if any of the following
occurs: (i) termination by the Company for Cause (as hereinafter defined); (ii) termination by the Company
without Cause; (iii) resignation by the applicable officer for Good Reason (as hereinafter defined); (iv) resignation
by the applicable Named Executive Officer without Good Reason; (v) a Named Executive Officer’s death or long-
term disability; and/or (vi) a Named Executive Officer’s retirement. The 2025 Employment Agreements also
provide the Company will pay to the applicable officer the Base Termination Payments (as hereinafter defined)
and/or the Separation Pay (as hereinafter defined) based on the applicable termination event. The following
table describes the payment type by applicable termination event.
Termination Event
Payment Type
Termination for Cause
Base Termination Payments
Termination without Cause
Base Termination Payments and Separation Pay
Resignation for Good Reason
Base Termination Payments and Separation Pay
Resignation without Good Reason
Base Termination Payments
Officer Death / Long-Term Disability
Base Termination Payments
Officer Retirement
Base Termination Payments
62
The payment of the Separation Pay is generally contingent upon the Named Executive Officer’s
execution of a full release of claims against the Company and continued compliance with the non-competition,
non-solicitation, confidentially and other restrictive covenants set forth in the 2025 Employment Agreements.
The 2025 Employment Agreements provide for the reduction of Change in Control payments to the maximum
amount that could be paid to the officers without giving rise to the excise tax imposed by Section 4999 of the
Internal Revenue Code. For the purposes of 2025 Employment Agreements, (A) the term “Good Reason”
means a notice of termination given by a Named Executive Officers within 12 months following a Change in
Control for any of the following reasons: (i) assignment to such Named Executive Officer of a different title or
job responsibilities that result in a substantial decrease in the level of responsibility from those in effect
immediately before the Change in Control; (ii) a reduction by the Company or the surviving company in such
Named Executive Officer’s base pay as in effect immediately before the Change in Control; (iii) a significant
reduction by the Company or the surviving company in total benefits available to such Named Executive Officer
under cash incentive, stock incentive and other employee benefit plans after the Change in Control compared
to the total package of such benefits as in effect before the Change in Control; (iv) the requirement by the
Company or the surviving company that such Named Executive Officer be based more than 50 miles from where
such Named Executive Officer’s office is located immediately before the Change in Control, except for required
travel on company business to an extent substantially consistent with the business travel obligations which such
Named Executive Officer undertook on behalf of the Company before the Change in Control; or (v) the failure
by the Company to obtain from any Successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the Company an agreement to assume
obligations under the 2025 Employment Agreement; (B) the term “Base Termination Payments” means (i) the
applicable Named Executive Officer’s base salary through the date of termination, plus (ii) any incentive bonus
earned but not yet paid for any fiscal year ended before the date of termination, plus (iii) any accrued paid time
off that might be due in accordance with the Company’s policies, plus (iv) any expenses owed to the applicable
officer under the employment agreement; and (C) the term “Separation Pay” means the following:
(a)
to the extent the 2025 Employment Agreement is terminated by the Company without Cause,
then (x) with respect to our Chief Executive Officer, (i) two times the Chief Executive Officer’s then current
base salary, plus (ii) an incentive bonus for the year in which the date of termination occurs, equal to the
Chief Executive Officer’s target bonus for that year, prorated based on the number of days in the fiscal year
elapsed before the date of termination, plus (iii) to the extent the Chief Executive Officer is enrolled in the
Company’s insurance plan as of the date of termination, an amount equal to the approximate cost of the
aggregate monthly premiums (less applicable withholdings) for an 18 month period of ongoing medical,
dental, and vision insurance via a timely election made under the Company’s health plan pursuant to the
Consolidated Omnibus Budget Reconciliation Act (COBRA); and (y) with respect to all other Named
Executive Officers, (i) one times the applicable Named Executive Officer’s then current base salary, plus
(ii) an incentive bonus for the year in which the date of termination occurs, equal to the applicable Named
Executive Officer’s target bonus for that year, prorated based on the number of days in the fiscal year
elapsed before the date of termination, plus (iii) to the extent the applicable Named Executive Officer is
enrolled in the Company’s insurance plan as of the date of termination, an amount equal to the approximate
cost of the aggregate monthly premiums (less applicable withholdings) for a 12 month period of ongoing
medical, dental, and vision insurance via a timely election made under the Company’s health plan pursuant
to the Consolidated Omnibus Budget Reconciliation Act (COBRA); and
(b)
to the extent the 2025 Employment Agreement is terminated due to a Named Executive
Officer’s resignation for Good Reason, then (x) with respect to our Chief Executive Officer, (i) two times the
Chief Executive Officer’s then current base salary, plus (ii) two times the Chief Executive Officer’s then
target incentive bonus, plus (iii) an incentive bonus for the year in which the date of termination occurs,
equal to the Chief Executive Officer’s target bonus for that year, prorated based on the number of days in
the fiscal year elapsed before the date of termination, plus (iv) to the extent the Chief Executive Officer is
enrolled in the Company’s insurance plan as of the date of termination, an amount equal to the approximate
cost of the aggregate monthly premiums (less applicable withholdings) for an 18 month period of ongoing
medical, dental, and vision insurance via a timely election made under the Company’s health plan pursuant
to the Consolidated Omnibus Budget Reconciliation Act (COBRA); and (y) with respect to all other Named
Executive Officers, (i) one and a half times the officer’s then current base salary, plus (ii) one and a half
times the applicable Named Executive Officer’s then target incentive bonus, plus (iii) an incentive bonus for
63
the year in which the date of termination occurs, equal to the applicable Named Executive Officer’s target
bonus for that year, prorated based on the number of days in the fiscal year elapsed before the date of
termination, plus (iv) to the extent the applicable Named Executive Officer is enrolled in the Company’s
insurance plan as of the date of termination, an amount equal to the approximate cost of the aggregate
monthly premiums (less applicable withholdings) for an 18 month period of ongoing medical, dental, and
vision insurance via a timely election made under the Company’s health plan pursuant to the Consolidated
Omnibus Budget Reconciliation Act (COBRA).
Additionally, as used in the 2025 Employment Agreements, a “Change in Control” means that one of
the following events has taken place: (i) consummation of a merger or consolidation of the Company with any
other entity, other than a merger or consolidation that would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving or resulting entity) more than 50% of the combined voting power
of the surviving or resulting entity outstanding immediately after such merger or consolidation; (ii) consummation
of a sale or disposition of all or substantially all of the assets of the Company (other than such a sale or disposition
immediately after which such assets will be owned directly or indirectly by the shareholders of the Company in
substantially the same proportions as their ownership of the common stock of the Company immediately before
such sale or disposition); or (iii) any Person becomes the beneficial owner (as determined pursuant to Section
13(d) of the Exchange Act) of securities representing in excess of 50% of the aggregate voting power of the
outstanding securities of the Company as required to be disclosed in a report on Schedule 13D of the Exchange
Act. Similar to the Prior Employment Agreements, the Board has the full and final authority, in its sole discretion,
to determine conclusively whether a Change in Control has occurred pursuant to the above definition, the date
of the occurrence of such Change in Control, and any incidental matters relating thereto.
While the individual 2025 Employment Agreements do not address the manner in which unvested stock
awards, if any, will be handled upon the termination of a Named Executive Officer, the specific restricted stock
unit award agreement and/or performance restricted stock unit award agreement entered into by the Named
Executive Officers upon the grant of service based restricted stock units and/or performance based restricted
stock units provide that (A) if a Change in Control occurs prior to the vesting date of such restricted stock units
and the Named Executive Officer is terminated by the Company without Cause, or (B) if the Named Executive
Officer is terminated for Good Reason within 12 months following a Change in Control, then such unvested
service based restricted stock units and/or performance based restricted stock units shall become vested as of
the date of termination. Additionally, such specific restricted stock unit award agreement and/or performance
restricted stock unit award agreement entered into by the Named Executive Officers provide that if any Named
Executive Officer’s continuous service is terminated because of death or disability prior to the vesting date for
the applicable grant of service based restricted stock units and/or performance based restricted stock units (as
and if applicable), then such applicable restricted stock units become immediately vested in an amount equal to
the total number of granted restricted stock units multiplied by a fraction, the numerator of which is the number
of calendar months or portions thereof from grant date of such restricted stock units through the date on which
such Named Executive Officer’s continuous service is terminated due to death or disability and the denominator
of which is the total number of calendar months or portion thereof in the vesting period for such restricted stock
unit grants.
Hedging and Pledging Policies
The Company has a stock trading policy that, among other things, prohibits all of our employees
(including our executive officers) and our directors from engaging in speculative trading in the Company’s shares,
which prohibition includes any arrangement by which a shareholder or option holder changes his or her economic
exposure to changes in the price of the stock. Prohibited arrangements include buying standardized put or call
options, writing put or call options, selling stock short, buying or selling securities convertible into other securities,
or merely engaging in a private arrangement where the value of the agreement varies in relation to the price of
the underlying security. Such arrangements are prohibited because these transactions may give the appearance
of improper trades and look disloyal. In addition, our stock trading policy strongly discourages employees
(including our executive officers) and our directors from holding the Company’s securities in a margin account
or otherwise pledging these securities as collateral for a loan. As of the date of this proxy statement, none of our
64
Named Executive Officers and non-employee directors hold the Company’s securities in a margin account or
have otherwise pledged them as collateral for a loan.
Signing Bonus for D. Christopher Monroe
Pursuant to Mr. Monroe’s Prior Employment Agreement and in connection with his appointment to Chief
Financial Officer, the Company agreed to pay to Mr. Monroe a one-time signing bonus in the amount of
$500,000. The signing bonus was paid in two equal installments of $250,000 each in the following manner: (i) the
first installment was due and payable on or before July 1, 2023, and (ii) the second installment was paid on or
before January 1, 2024.
Compensation Committee Report
The compensation committee has reviewed and discussed the “Compensation Discussion and Analysis”
required by Item 402(b) of Regulation S-K with management. Based on such review and discussions, the
compensation committee recommended to the Board that the “Compensation Discussion and Analysis” be
included in this proxy statement and incorporated by reference into the Company’s Annual Report on Form 10-K
for the year ended December 31, 2024.
All members of the compensation committee concur in this report.
Michael A. Crawford, Chair
Gregory N. Moore
Kathleen M. Widmer
65
Summary Compensation Table
The following table sets forth the total compensation earned with respect to the fiscal years 2024, 2023,
and 2022 by our Named Executive Officers, which include (i) our Principal Executive Officer (the “PEO”) and
Principal Financial Officer (the “PFO”), including any interim PEO or PFO, and (ii) the Company’s four most
highly compensated executive officers other than the PEO and PFO who were serving as executive officers at
the end of the last completed fiscal year.
Summary Compensation Table
Name and Principal Position
Year
Salary
($)
Bonus
($)(1)
Grant Date
Fair Value
of Stock
Awards
($)(2)(3)
Non-equity
Incentive Plan
Compensation
($)
All Other
Compensation
($)(4)
Total
($)(3)
Gerald L. Morgan
2024
1,295,385
—
2,602,600
2,271,270
16,754
6,186,009
Chief Executive Officer
2023
1,190,000
—
2,599,856
1,527,267
30,404
5,347,527
2022
972,500
—
2,201,368
1,245,138
2,983
4,421,989
D. Christopher Monroe
2024
547,308
250,100
792,610
742,530
12,796
2,345,344
Chief Financial Officer
2023
240,385
250,000
404,484
254,545
249,524
1,398,938
2022
—
—
—
—
—
—
Regina Tobin
2024
697,885
200
899,080
1,222,991
10,572
2,830,728
President
2023
642,500
—
897,792
827,270
32,454
2,400,016
2022
492,500
200
795,166
498,055
2,983
1,788,904
Christopher C. Colson
2024
547,308
200
792,610
742,530
12,915
2,095,563
Chief Legal and Administrative Officer,
2023
500,000
200
794,920
509,089
22,131
1,826,340
Corporate Secretary
2022
492,500
200
496,210
498,055
2,983
1,489,948
Hernan E. Mujica
2024
547,308
200
792,610
742,530
15,903
2,098,551
Chief Technology Officer
2023
500,000
200
794,920
509,089
24,885
1,829,094
2022
492,500
200
496,210
498,055
2,983
1,489,948
Travis C. Doster
2024
547,308
200
92,442
742,530
31,192
1,413,672
Chief Communications Officer
2023
381,538
200
860,836
269,787
5,643
1,518,004
2022
—
—
—
—
—
—
(1)
This column represents holiday bonus awards paid to the Named Executive Officers for the
fiscal years ended December 31, 2024, December 26, 2023, and December 27, 2022.
Additionally, pursuant to Mr. Monroe’s Prior Employment Agreement and in connection with his
appointment to Chief Financial Officer, the Company agreed to pay to Mr. Monroe a one-time
signing bonus in the amount of $500,000. The signing bonus was paid in two equal installments
of $250,000 each in the following manner: (i) the first installment was paid on or before July 1,
2023, and (ii) the second installment was paid on or before January 1, 2024. The amount
included for Mr. Monroe with respect to the 2023 fiscal year includes the initial $250,000 portion
of the signing bonus paid by the Company, and the amount included for Mr. Monroe with respect
to the 2024 fiscal year includes the remaining $250,000 portion of the signing bonus paid by the
Company.
(2)
Reflects the grant date fair value computed in accordance with U.S. GAAP of performance
based restricted stock units and service based restricted stock units granted pursuant to the
Company’s long term incentive plan using the closing price of the Company’s common stock on
the last trading day immediately preceding the grant date.
The Company cautions that the amounts reported in the Summary Compensation Table for
these awards may not represent the amounts that the Named Executive Officers will actually
realize from the awards. Whether, and to what extent, a Named Executive Officer realizes value
on these awards will depend on a number of factors, including the Company’s actual operating
performance, stock price fluctuations, and the Named Executive Officer’s continued service with
the Company. Additional information on all outstanding stock awards is reflected in the “Grants
of Plan-Based Awards Table” and the “Outstanding Equity Awards at Fiscal Year End Table.”
(3)
With respect to Mr. Morgan, (i) amounts for the 2024 fiscal year include the performance based
restricted stock units and service based restricted stock units granted to Mr. Morgan during the
66
2024 fiscal year relating to his 2024 year service, (ii) amounts for the 2023 fiscal year include
the performance based restricted stock units and service based restricted stock units granted
to Mr. Morgan during the 2023 fiscal year relating to his 2023 year service, and (iii) amounts for
the 2022 fiscal year include the performance based restricted stock units and service based
restricted stock units granted to Mr. Morgan during the 2022 fiscal year relating to his 2022 year
service.
With respect to Mr. Monroe, (i) amounts for the 2024 fiscal year include the performance based
restricted stock units and service based restricted stock units granted to Mr. Monroe during the
2024 fiscal year relating to his 2024 year service, and (ii) amounts for the 2023 fiscal year
include the performance based restricted stock units and service based restricted stock units
granted to Mr. Monroe during the 2023 fiscal year relating to his partial 2023 year service.
With respect to Ms. Tobin, (i) amounts for the 2024 fiscal year include the performance based
restricted stock units and service based restricted stock units granted to Ms. Tobin during the
2024 fiscal year relating to her 2024 year service, (ii) amounts for the 2023 fiscal year include
the performance based restricted stock units and service based restricted stock units granted
to Ms. Tobin during the 2023 fiscal year relating to her 2023 year service, and (iii) amounts for
the 2022 fiscal year include the performance based restricted stock units and service based
restricted stock units granted to Ms. Tobin during the 2022 fiscal year relating to her 2022 year
service.
With respect to Mr. Colson, (i) amounts for the 2024 fiscal year include the performance based
restricted stock units and service based restricted stock units granted to Mr. Colson during the
2024 fiscal year relating to his 2024 year service, (ii) amounts for the 2023 fiscal year include
the performance based restricted stock units and service based restricted stock units granted
to Mr. Colson during the 2023 fiscal year relating to his 2023 year service, and (iii) amounts for
the 2022 fiscal year include the service based restricted stock units granted to Mr. Colson during
the 2022 fiscal year relating to his 2022 year service.
With respect to Mr. Mujica, (i) amounts for the 2024 fiscal year include the performance based
restricted stock units and service based restricted stock units granted to Mr. Mujica during the
2024 fiscal year relating to his 2024 year service, (ii) amounts for the 2023 fiscal year include
the performance based restricted stock units and service based restricted stock units granted
to Mr. Mujica during the 2023 fiscal year relating to his 2023 year service, and (iii) amounts for
the 2022 fiscal year include the service based restricted stock units granted to Mr. Mujica during
the 2022 fiscal year relating to his 2022 year service.
With respect to Mr. Doster, (i) amounts for the 2024 fiscal year include service based restricted
stock units granted to Mr. Doster during the 2024 fiscal year relating to his Q4 2023 service and
applicable to the period of time prior to his appointment to Chief Communications Officer, and
(ii) amounts for the 2023 fiscal year include (a) the performance based restricted stock units and
service based restricted stock units granted to Mr. Doster during the 2023 fiscal year relating to
his 2024 fiscal year service, (b) the service based restricted stock units granted to Mr. Doster
during the 2023 fiscal year service relating to his 2023 year service made prior to his
appointment as Chief Communications Officer, and (c) the service based restricted stock units
granted to Mr. Doster during the 2023 fiscal year relating to his Q4 2022 service.
(4)
The amount included for Mr. Monroe with respect to the 2023 fiscal year includes $230,452 paid
by the Company toward Mr. Monroe’s relocation expenses to Louisville, Kentucky, $184,881 of
which relates to the reimbursement of certain expenses arising from the sale of his home as a
part of his relocation to Louisville, Kentucky. These amounts for Mr. Monroe reflect the amount
paid to the applicable service providers.
We believe that the personal safety and security of our senior executives is of the utmost
importance to the Company and its shareholders. In connection with the same, we may from
67
time to time provide personal security services to certain executives. Security services include
home security systems and monitoring and, in some cases, personal security services. For fiscal
year 2023, the Company paid $5,519 toward Mr. Morgan’s personal security, and $7,569 toward
Ms. Tobin’s personal security, and for fiscal year 2024, the Company paid $2,319 toward
Mr. Morgan’s personal security, and $1,234 toward Ms. Tobin’s personal security. We also
completed an executive digital assessment for certain Named Executive Officers during the
2023 fiscal year. In connection with the same, for fiscal year 2024, the Company paid $18,000
for such assessment for Mr. Doster, and for fiscal year 2023, the Company paid $18,000 for
such assessments for each of Ms. Tobin and Messrs. Morgan, Colson, Mujica, and Monroe.
The amounts paid in this paragraph reflect amounts paid to the applicable service providers.
Additionally, these amounts include (A) payments made by the Company for life insurance
premiums maintained for the benefit of the applicable Named Executive Officers, (B) $2,707
paid to each Named Executive Officer for a cellphone allowance during the 2024 fiscal year,
and (C) $5,096 paid to Mr. Morgan, $6,330 paid to Mr. Colson, $5,096 paid to Mr. Doster,
$4,700 paid to Mr. Monroe, and $6,564 paid to Mr. Mujica, respectively, by the Company on
behalf of each Named Executive Officers during the 2024 fiscal year to a comprehensive, multi-
specialty preventative medical center offering individualized annual physical exams.
68
Grants of Plan-Based Awards in Fiscal Year 2024
The following table presents information with respect to grants of stock awards to the applicable Named
Executive Officers during fiscal year 2024.
Grants of Plan-Based Awards Table
Estimated Future Payouts Under
Equity Incentive Plan Awards(1)
Name
Grant Date
Minimum Target
Maximum
All Other
Stock Awards:
Number of
Shares of Stock
or Units (2)
Grant Date
Fair Value of
Stock and
Option
Awards ($)(3)
Gerald L. Morgan
Chief Executive Officer
Service Based RSUs vesting on January 8, 2025
January 8, 2024
—
—
—
11,000
1,301,300
Performance Based RSUs vesting on January 8, 2025
January 8, 2024
— 11,000 (4)
22,000
1,301,300
Regina A. Tobin
President
Service Based RSUs vesting on January 8, 2025
January 8, 2024
—
—
—
4,200
496,860
Performance Based RSUs vesting on January 8, 2025
January 8, 2024
—
3,400 (4)
6,800
—
402,220
D. Christopher Monroe
Chief Financial Officer
Service Based RSUs vesting on January 8, 2025
January 8, 2024
—
—
—
4,200
496,860
Performance Based RSUs vesting on January 8, 2025
January 8, 2024
—
2,500 (4)
5,000
295,750
Christopher C. Colson
Chief Legal and Administrative Officer, Corporate Secretary
Service Based RSUs vesting on January 8, 2025
January 8, 2024
—
—
—
4,200
496,860
Performance Based RSUs vesting on January 8, 2025
January 8, 2024
—
2,500 (4)
5,000
—
295,750
Hernan E. Mujica
Chief Technology Officer
Service Based RSUs vesting on January 8, 2025
January 8, 2024
—
—
—
4,200
496,860
Performance Based RSUs vesting on January 8, 2025
January 8, 2024
—
2,500 (4)
5,000
—
295,750
Travis C. Doster
Chief Communications Officer
Service Based RSUs vesting on February 21, 2025
February 21, 2024
—
—
—
628
92,442
(1)
These amounts reflect the minimum, target, and maximum number of shares issuable under
performance awards. The related performance targets and certain results are described in detail
in the “Compensation Discussion and Analysis.”
(2)
Each stock award consists of service based restricted stock units, where each unit represents
the conditional right to receive one share of our common stock upon satisfaction of vesting
requirements. See the “Compensation Discussion and Analysis” for the conditions of
accelerated vesting upon termination of employment other than for cause.
(3)
Reflects the grant date fair value computed in accordance with U.S. GAAP of the target number
of performance based restricted stock units and service based restricted stock units granted to
the Named Executive Officers using the closing price of the Company’s common stock on the
last trading day immediately preceding the grant date, which was based on the following:
(i)
With respect to Mr. Morgan, 11,000 service based restricted stock units and 11,000
performance based restricted stock units granted on January 8, 2024 at $118.30.
(ii)
With respect to Ms. Tobin, 4,200 service based restricted stock units and 3,400
performance based restricted stock units granted on January 8, 2024 at $118.30.
(iii)
With respect to Mr. Monroe, 4,200 service based restricted stock units and 2,500
performance based restricted stock units granted on January 8, 2024 at $118.30.
(iv)
With respect to Mr. Colson, 4,200 service based restricted stock units and 2,500
performance based restricted stock units granted on January 8, 2024 at $118.30.
(v)
With respect to Mr. Mujica, 4,200 service based restricted stock units and 2,500
performance based restricted stock units granted on January 8, 2024 at $118.30.
69
(vi)
With respect to Mr. Doster, 628 service based restricted stock units granted on
February 21, 2024 at $147.20.
These are not amounts paid to or received by the Named Executive Officers. For discussion of
the assumptions used in determining these values, see Note 14 to the consolidated financial
statements in the Company’s Annual Report on Form 10-K for the fiscal year ended
December 31, 2024.
(4)
The amount included in the table above represents the target award opportunity. Performance
based equity awards with respect to fiscal year 2024 were paid at 174.7% of the total target
amount for the fiscal year in which a Named Executive Officer served in such role, based on an
increase in actual EPS of 42.5% and an actual Profit Sharing Pool of $9.0 million calculated on
fiscal year 2024 pre-tax profit of $513.7 million.
Outstanding Equity Awards
The following table presents information with respect to outstanding stock option awards, stock awards,
and equity incentive plan awards as of December 31, 2024 by the Named Executive Officers.
Outstanding Equity Awards at Fiscal Year End Table
Stock Awards
Equity Incentive Plan Awards
Number of
Market Value
Number of
Market Value
Shares or
of Shares or
Shares or
of Shares or
Units of
Units of
Units of
Units of
Stock That
Stock That
Stock That
Stock That
Have Not
Have Not
Have Not
Have Not
Vested
Vested
Vested
Vested
Name
(#)
($)(1)
(#)
($)(1)
Gerald L. Morgan
11,000 (2)
1,984,730
11,000 (3) 1,984,730
Chief Executive Officer
Regina A. Tobin
4,200 (4)
757,806
3,400 (5)
613,462
President
D. Christopher Monroe
4,200 (6)
757,806
2,500 (7)
451,075
Chief Financial Officer
Christopher C. Colson
4,200 (8)
757,806
2,500 (9)
451,075
Chief Legal and Administrative Officer, Corporate
Secretary
Hernan E. Mujica
4,200 (10)
757,806
2,500 (11)
451,075
Chief Technology Officer
Travis C. Doster
3,728 (12)
672,643
1,700 (13)
306,731
Chief Communications Officer
(1)
Market value was computed using the Company’s closing stock price on the last trading day of
our fiscal year ended December 31, 2024, which was $180.43.
(2)
The vesting schedule is as follows: 11,000 service based restricted stock units on January 8,
2025.
(3)
Consists of performance awards which will vest and be earned, if at all, at the time of a
determination by our compensation committee that certain Company performance measures
have been satisfied. If and to the extent earned, the vesting schedule is as follows: 11,000
performance based restricted stock units on January 8, 2025.
(4)
The vesting schedule is as follows: 4,200 service based restricted stock units on January 8,
2025.
70
(5)
Consists of performance awards which will vest and be earned, if at all, at the time of a
determination by our compensation committee that certain Company performance measures
have been satisfied. If and to the extent earned, the vesting schedule is as follows: 3,400
performance based restricted stock units on January 8, 2025.
(6)
The vesting schedule is as follows: 4,200 service based restricted stock units on January 8,
2025.
(7)
Consists of performance awards which will vest and be earned, if at all, at the time of a
determination by our compensation committee that certain Company performance measures
have been satisfied. If and to the extent earned, the vesting schedule is as follows: 2,500
performance based restricted stock units on January 8, 2025.
(8)
The vesting schedule is as follows: 4,200 service based restricted stock units on January 8,
2025.
(9)
Consists of performance awards which will vest and be earned, if at all, at the time of a
determination by our compensation committee that certain Company performance measures
have been satisfied. If and to the extent earned, the vesting schedule is as follows: 2,500
performance based restricted stock units on January 8, 2025.
(10)
The vesting schedule is as follows: 4,200 service based restricted stock units on January 8,
2025.
(11)
Consists of performance awards which will vest and be earned, if at all, at the time of a
determination by our compensation committee that certain Company performance measures
have been satisfied. If and to the extent earned, the vesting schedule is as follows: 2,500
performance based restricted stock units on January 8, 2025.
(12)
The vesting schedule is as follows: (A) 3,100 service based restricted stock units on January 8,
2025, and (B) 628 service based restricted stock units on February 21, 2025.
(13)
Consists of performance awards which will vest and be earned, if at all, at the time of a
determination by our compensation committee that certain Company performance measures
have been satisfied. If and to the extent earned, the vesting schedule is as follows: 1,700
performance based restricted stock units on January 8, 2025.
See the “Compensation Discussion and Analysis” for the conditions of accelerated vesting upon
termination of employment other than for cause.
71
Stock Vested
The following table presents information with respect to stock awards vested during the fiscal year ended
December 31, 2024 by the Named Executive Officers.
Stock Vested Table
Number of
Shares Acquired
Value Realized
on Vesting
on Vesting
Name
(#)
($)(1)
Gerald L. Morgan
31,591
3,737,215 (i)
Chief Executive Officer
Regina A. Tobin
10,773
1,274,446 (ii)
President
D. Christopher Monroe
4,082
625,248 (iii)
Chief Financial Officer
Christopher C. Colson
9,373
1,108,826 (iv)
Chief Legal and Administrative Officer, Corporate Secretary
Hernan E. Mujica
9,373
1,108,826 (v)
Chief Technology Officer
Travis C. Doster
3,440
582,883 (vi)
Chief Communications Officer
(1)
The value realized upon vesting of restricted stock units represents the fair value of the
underlying shares based on the closing price of the Company’s common stock on the trading
day immediately preceding the vesting date, which is in accordance with the following:
(i)
$118.30 with respect to the 13,900 service based restricted stock units which vested on
January 8, 2024, and $118.30 with respect to the 17,691 performance based restricted
stock units which vested on January 8, 2024 but became reportable on February 23,
2024.
(ii)
$118.30 with respect to the 5,300 service based restricted stock units which vested on
January 8, 2024, and $118.30 with respect to the 5,473 performance based restricted
stock units which vested on January 8, 2024 but became reportable on February 23,
2024.
(iii)
$118.30 with respect to the 1,782 performance based restricted stock units which
vested on January 8, 2024 but became reportable on February 23, 2024, and $180.19
with respect to the 2,300 service based restricted stock units which vested on
December 31, 2024.
(iv)
$118.30 with respect to the 5,300 service based restricted stock units which vested on
January 8, 2024, and $118.30 with respect to the 4,073 performance based restricted
stock units which vested on January 8, 2024 but became reportable on February 23,
2024.
(v)
$118.30 with respect to the 5,300 service based restricted stock units which vested on
January 8, 2024, and $118.30 with respect to the 4,073 performance based restricted
stock units which vested on January 8, 2024 but became reportable on February 23,
2024.
(vi)
$145.70 with respect to the 858 service based restricted stock units which vested on
February 22, 2024, $166.49 with respect to the 834 service based restricted stock units
which vested on May 10, 2024, $173.13 with respect to the 837 service based restricted
72
stock units which vested on August 2, 2024, and $191.12 with respect to 911 service
based restricted stock units which vested on November 1, 2024.
Termination, Change of Control and Change of Responsibility Payments
If a Named Executive Officer had resigned or been terminated for any reason or for cause other than a
Qualifying Reason (as defined above) prior to the expiration of the term of his or her Prior Employment
Agreement, the Named Executive Officer would have received payment of his or her annual base salary then in
effect through the date of resignation or termination as well as any accrued paid time off that might be due at
such termination in accordance with policies of the Company in effect from time to time, and the Company shall
have no other severance obligations under such Prior Employment Agreement.
If a Named Executive Officer had been terminated prior to the expiration of the term of his or her Prior
Employment Agreement for a Qualifying Reason, the Company will pay the Named Executive Officer three
months of base salary, unless the termination occurs within 12 months following a Change in Control (as defined
above), in which case the applicable Named Executive Officer’s current base salary remaining for the then
existing term of his or her respective Prior Employment Agreement will be paid.
In addition, if any Named Executive Officer’s termination occurs for a Qualifying Reason within 12
months following a Change in Control, the applicable Named Executive Officer shall be paid any incentive bonus
earned but not yet paid for any fiscal year ended before the date of termination, plus an incentive bonus for the
year in which the date of termination occurs, equal to the applicable Named Executive Officer’s target bonus for
that year, prorated based on the number of days in the fiscal year elapsed before the date of termination.
While the individual Prior Employment Agreements do not address the manner in which unvested stock
awards, if any, will be handled upon the termination of a Named Executive Officer, the specific restricted stock
unit award agreement and/or performance restricted stock unit award agreement entered into by the Named
Executive Officers upon the grant of service based restricted stock units and/or performance based restricted
stock units provide that (A) if a Change in Control occurs prior to the vesting date of such restricted stock units
and the Named Executive Officer is terminated by the Company without Cause, or (B) if the Named Executive
Officer is terminated for Good Reason within 12 months following a Change in Control, then such unvested
service based restricted stock units and/or performance based restricted stock units shall become vested as of
the date of termination. Additionally, such specific restricted stock unit award agreement and/or performance
restricted stock unit award agreement entered into by the Named Executive Officers provide that if any Named
Executive Officer’s continuous service is terminated because of death or disability prior to the vesting date for
the applicable grant of service based restricted stock units and/or performance based restricted stock units (as
and if applicable), then such applicable restricted stock units become immediately vested in an amount equal to
the total number of granted restricted stock units multiplied by a fraction, the numerator of which is the number
of calendar months or portions thereof from grant date of such restricted stock units through the date on which
such Named Executive Officer’s continuous service is terminated due to death or disability and the denominator
of which is the total number of calendar months or portion thereof in the vesting period for such restricted stock
unit grants.
The following table lists the estimated amounts payable to a Named Executive Officer pursuant to the
Prior Employment Agreements if his or her employment had been terminated for a Qualifying Reason unrelated
to a change of control or death or disability on December 31, 2024, the last day of our fiscal year, provided that
each Named Executive Officer signed a full release of all claims against us.
73
Termination Payments Table
Total
Estimated
Cash
Payments
Name
($)(1)
Gerald L. Morgan
325,000
Chief Executive Officer
Regina A. Tobin
175,000
President
D. Christopher Monroe
137,500
Chief Financial Officer
Christopher C. Colson
137,500
Chief Legal and Administrative Officer, Corporate Secretary
Hernan E. Mujica
137,500
Chief Technology Officer
Travis C. Doster
137,500
Chief Communications Officer
(1)
If the employment of any of Ms. Tobin and Messrs. Morgan, Monroe, Colson, Mujica, and Doster
is terminated under those circumstances, then the Company will pay him or her three months
of their applicable base salary.
The following table lists the estimated amounts payable to a Named Executive Officer pursuant to the
Prior Employment Agreement Agreements and applicable equity incentive agreements if his or her employment
had been terminated without Cause following a Change in Control or if any Named Executive Officer resigns for
Good Reason within 12 months following a Change of Control, on December 31, 2024, the last day of our fiscal
year, provided that each Named Executive Officer signed a full release of claims against us.
Change in Control, Change in Responsibilities Payments Table
Estimated Estimated Value of
Cash
Newly Vested
Payments
Stock Awards
Total
Name
($)(1)
($)(2)
($)
Gerald L. Morgan
3,324,008
3,969,460
7,293,468
Chief Executive Officer
Regina A. Tobin
1,789,850
1,371,268
3,161,118
President
D. Christopher Monroe
1,216,490
1,208,881
2,425,371
Chief Financial Officer
Christopher C. Colson
1,216,490
1,208,881
2,425,371
Chief Legal and Administrative Officer, Corporate
Secretary
Hernan E. Mujica
1,216,490
1,208,881
2,425,371
Chief Technology Officer
Travis C. Doster
1,216,490
979,374
2,195,864
Chief Communications Officer
(1)
If the employment of any of the Named Executive Officers listed above had been terminated
without Cause following a Change of Control, or if any of the Named Executive Officers listed
above had resigned his or her position for Good Reason within 12 months following a Change
of Control, then under the Prior Employment Agreements, the Named Executive Officer would
have received the amount of his or her then current base salary through the end of the term of
the Named Executive Officer’s employment agreement, together any incentive bonus earned
74
but not yet paid for any fiscal year ended before the date of termination, plus an incentive bonus
for the year in which the date of termination occurs, equal to the applicable Named Executive
Officer’s target bonus for that year, prorated based on the number of days in the fiscal year
elapsed before the date of termination. Had a Named Executive Officer’s employment been so
terminated on December 31, 2024, each of Messrs. Morgan, Monroe, Colson, Mujica, and
Doster, and Ms. Tobin would have received payment through January 7, 2025.
Total
Estimated
Salary
Bonus
Payments
Name
($)
($)
($)
Gerald L. Morgan
1,349,863
1,974,145
3,324,008
Chief Executive Officer
Regina A. Tobin
726,849
1,063,001
1,789,850
President
D. Christopher Monroe
571,096
645,394
1,216,490
Chief Financial Officer
Christopher C. Colson
571,096
645,394
1,216,490
Chief Legal and Administrative Officer,
Corporate Secretary
Hernan E. Mujica
571,096
645,394
1,216,490
Chief Technology Officer
Travis C. Doster
571,096
645,394
1,216,490
Chief Communications Officer
(2)
While the individual Prior Employment Agreements do not address the manner in which
unvested stock awards, if any, will be handled upon the termination of a Named Executive
Officer, the specific restricted stock unit award agreement and/or performance restricted stock
unit award agreement entered into by the Named Executive Officers upon the grant of service
based restricted stock units and/or performance based restricted stock units provide that each
Named Executive Officer’s service based restricted stock units and performance based
restricted stock units would have become immediately vested upon a termination of his or her
employment (A) if a Change in Control occurs prior to the vesting date of such restricted stock
units and the Named Executive Officer is terminated by the Company without Cause, or (B) if
the Named Executive Officer is terminated for Good Reason within 12 months following a
Change in Control. The amounts shown in this column represent the value of the restricted stock
units at the closing price of our common stock on the last trading day of our fiscal year ended
December 31, 2024, which was $180.43. The number of service based restricted stock units
and performance based restricted stock units which would have vested on that date are shown
in the table titled “Outstanding Equity Awards at Fiscal Year End Table” set forth above.
Pay Versus Performance
As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and
Item 402(v) of Regulation S-K, we are providing the following information about the relationship between
executive compensation actually paid and certain financial performance of our Company, illustrating pay versus
performance. The compensation actually paid (“CAP”) for the Principal Executive Officer (“PEO”) and the
average CAP for the non-PEO named executive officers is calculated by taking the Summary Compensation
Table (“SCT”) values: (a) less the grant value of equity granted during the covered fiscal year (“CFY”); (b) plus
the year-end fair value of unvested equity awards granted during the CFY; (c) plus for equity awards granted in
prior years that are outstanding and unvested at the end of the CFY, the difference between the year-end fair
value and the immediately prior year-end fair value; (d) plus for equity awards granted in the CFY that vested
during the CFY, the fair value of such awards on the vesting date; (e) plus for equity awards granted in a fiscal
year prior to the CFY that vested during the CFY, the difference between the fair value as of the vesting date
and the immediately prior year-end fair value; and (f) less for equity awards granted in a fiscal year prior to the
75
CFY that failed to meet the applicable vesting conditions during the CFY, the fair value at the end of the prior
fiscal year.
Pay Versus Performance Table
Value of Initial Fixed $100
Investment Based on:
Year
SCT Total
Comp First
PEO
SCT Total
Comp for
Second PEO
CAP to
First PEO
CAP to
Second PEO
Avg. SCT
Total Comp
for Non-
PEO NEOs
Avg. CAP to
Non-PEO
NEOs
TSR
Peer Group
TSR (S&P
Index)
Net Income
(in Millions)
Diluted
EPS
($)(1)
($)(2)
($)(3)
($)(4)
($)(5)
($)(6)
($)(7)
($)(8)
($)
($)
2024
6,186,009
N/A
7,866,236
N/A
2,156,772
2,669,087
345.95
164.08
433.6
6.47
2023
5,347,527
N/A
6,435,377
N/A
1,746,269
1,697,782
236.24
154.53
304.9
4.54
2022
4,421,989
N/A
5,725,465
N/A
1,662,319
1,823,561
173.96
134.26
269.8
3.97
2021
3,769,765
4,986,164
3,801,740
(2,793,754)
2,634,509
1,934,435
164.74
145.77
245.3
3.50
2020
N/A
3,620,939
N/A
7,366,061
1,207,262
1,773,284
140.80
118.90
31.3
0.45
(1)
For the purposes of this table, the First Principal Executive Officer refers to Gerald L. Morgan.
On March 18, 2021, Mr. Morgan was named Chief Executive Officer of the Company following
W. Kent Taylor’s passing. The amounts described in this column relate to amounts disclosed
in the Summary Compensation Table of this proxy statement. Additionally, for the purposes of
the 2021 fiscal year, the amounts also reflect compensation received by Mr. Morgan for
positions within the Company before assuming the role of Chief Executive Officer on March 18,
2021.
(2)
For the purposes of this table, the Second Principal Executive Officer refers to W. Kent Taylor.
Mr. Taylor served as the Chief Executive Officer of the Company until his passing on March 18,
2021. The amounts described in this column relate to amounts disclosed in the Summary
Compensation Table of this proxy statement.
(3)
The dollar amounts reported in the “CAP to First PEO” column have been calculated in
accordance with Item 402(v) of Regulation S-K and do not reflect compensation actually earned,
realized, or received by the First PEO. These amounts reflect the amount set forth in the
“Total” column of the “Summary Compensation Table” for each fiscal year presented, with
certain adjustments as described in the table below, in accordance with the requirements of
Item 402(v) of Regulation S-K. Amounts in the below reconciliation table may not sum to total
due to rounding:
CALCULATION OF FIRST PEO CAP
Year
SCT
Total
Comp
SCT
Stock
Awards
Value of
Unvested
Equity Awards
Granted during
CFY
Change in
Value of
Equity Awards
Granted in
Prior Years
and Unvested
at end of
CFY
Value of
Equity Awards
Granted and
Vested in
CFY
Change in
Value of
Granted in
Prior Years
and Vested in
CFY
Value of
Equity Awards
Previously
Granted that
Failed to Meet
Conditions in
CFY
CAP to First PEO($)
($)(a)
($)(b)
($)(c)
($)(d)
($)(e)
($)(f)
($)(g)(i)
(a)-(b)+(c)+(d)+(e)+(f)-(g)
2024
6,186,009 2,602,600
3,969,460
—
—
313,367
—
7,866,236
2023
5,347,527 2,599,856
3,423,848
—
—
263,858
—
6,435,377
2022
4,421,989 2,201,368
2,297,748
—
4,996
1,202,100
—
5,725,465
2021
3,769,765 2,394,513
2,352,525
—
—
73,963
—
3,801,740
2020
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
(i)
For the purposes of determining the amount that should be included in column (g) of each footnote
throughout the Company’s Pay Versus Performance disclosure, the Company has used (i) the value
of the difference in the target amount of performance based restricted stock units that an applicable
officer was granted for a particular fiscal year and the amount of performance based restricted stock
units that actually vested to the extent the same is less than such target amount, and (ii) the value
of the difference in the target amount of “retention” restricted stock units that an applicable officer
was granted and the amount of “retention” restricted stock units that actually vested (as and if
applicable).
76
(4)
CALCULATION OF SECOND PEO CAP
Year
SCT
Total
Comp
SCT
Stock
Awards
Value of
Unvested
Equity Awards
Granted during
CFY
Change in
Value of
Equity Awards
Granted in
Prior Years
and Unvested
at end of
CFY
Value of
Equity Awards
Granted and
Vested in
CFY
Change in
Value of
Equity Awards
Granted in
Prior Years
and Vested in
CFY
Value of
Equity Awards
Previously
Granted that
Failed to Meet
Conditions in
CFY
CAP to Second PEO($)
($)(a)
($)(b)
($)(c)
($)(d)
($)(e)
($)(f)
($)(g)
(a)-(b)+(c)+(d)+(e)+(f)-(g)
2024
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
2023
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
2022
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
2021
4,986,164 4,753,200
—
—
1,909,885
880,222
5,816,825
(2,793,754)
2020
3,620,939 3,358,800
4,737,600
1,698,000
—
668,322
—
7,366,061
(5)
For the purposes of the 2020 fiscal year, the Non-Principal Executive Officers include Tonya R.
Robinson, Doug W. Thompson, S. Chris Jacobsen, and Gerald L. Morgan.
For the purposes of the 2021 fiscal year, the Non-Principal Executive Officers include Tonya R.
Robinson, Doug W. Thompson, S. Chris Jacobsen, Christopher C. Colson, Hernan E. Mujica
and Regina A. Tobin.
For the purposes of the 2022 fiscal year, the Non-Principal Executive Officers include Tonya R.
Robinson, S. Chris Jacobsen, Christopher C. Colson, Hernan E. Mujica and Regina A. Tobin.
For the purposes of the 2023 fiscal year, the Non-Principal Executive Officers include Regina
A. Tobin, D. Christopher Monroe, Keith V. Humpich, Tonya R. Robinson, Travis C. Doster, S.
Chris Jacobsen, Christopher C. Colson, and Hernan E. Mujica.
For the purposes of the 2024 fiscal year, the Non-Principal Executive Officers include Regina
A. Tobin, D. Christopher Monroe, Travis C. Doster, Christopher C. Colson, and Hernan E.
Mujica.
(6)
CALCULATION OF 2020 NON-PEO CAP
Non PEO
SCT
Total
Comp
($)(a)
SCT
Stock
Awards
($)(b)
Value of
Unvested
Equity Awards
Granted during
CFY
($)(c)
Change in
Value of
Equity Awards
Granted in
Prior Years
and Unvested
at end of
CFY
($)(d)
Value of
Equity Awards
Granted and
Vested in
CFY
($)(e)
Change in
Value of
Equity Awards
Granted in
Prior Years
and Vested in
CFY
($)(f)
Value of
Equity Awards
Previously
Granted that
Failed to Meet
Conditions in
CFY
($)(g)
CAP to Non-PEO($)
(a)-(b)+(c)+(d)+(e)+(f)-(g)
Robinson
920,732
671,760
947,520
226,400
—
(3,400)
—
1,419,492
Thompson
1,818,256 1,679,400
2,368,800
283,000
—
265,278
—
3,055,934
Jacobsen
924,889
671,760
947,520
226,400
—
92,317
—
1,519,366
Morgan
1,165,170
291,726
394,800
—
—
(169,900)
—
1,098,344
Average
1,207,262
828,662
1,164,660
183,950
—
46,074
—
1,773,284
77
CALCULATION OF 2021 NON-PEO CAP
Non PEO
SCT
Total
Comp
($)(a)
SCT
Stock
Awards
($)(b)
Value of
Unvested
Equity Awards
Granted during
CFY
($)(c)
Change in
Value of
Equity Awards
Granted in
Prior Years
and Unvested
at end of
CFY
($)(d)
Value of
Equity Awards
Granted and
Vested in
CFY
($)(e)
Change in
Value of
Equity Awards
Granted in
Prior Years
and Vested in
CFY
($)(f)
Value of
Equity Awards
Previously
Granted that
Failed to Meet
Conditions in
CFY
($)(g)
CAP to Non-PEO($)
(a)-(b)+(c)+(d)+(e)+(f)-(g)
Robinson
1,788,492
998,855
1,120,250
—
—
5,234
147,497
1,767,624
Thompson
7,556,722 2,376,600
—
—
—
6,192
1,475,289
3,711,025
Jacobsen
1,712,853
950,640
1,075,440
—
—
4,020
516,319
1,325,354
Tobin
1,395,079
822,315
761,770
—
—
56,190
—
1,390,724
Colson
1,589,173
945,109
873,795
—
—
66,566
—
1,584,425
Mujica
1,764,732 1,142,043
1,064,238
—
—
140,529
—
1,827,456
Average
2,634,509 1,205,927
815,916
—
—
46,455
356,518
1,934,435
CALCULATION OF 2022 NON-PEO CAP
Non PEO
SCT
Total
Comp
($)(a)
SCT
Stock
Awards
($)(b)
Value of
Unvested
Equity Awards
Granted during
CFY
($)(c)
Change in
Value of
Equity Awards
Granted in
Prior Years
and Unvested
at end of
CFY
($)(d)
Value of
Equity Awards
Granted and
Vested in
CFY
($)(e)
Change in
Value of
Equity Awards
Granted in
Prior Years
and Vested in
CFY
($)(f)
Value of
Equity Awards
Previously
Granted that
Failed to Meet
Conditions in
CFY
($)(g)
CAP to Non-PEO($)
(a)-(b)+(c)+(d)+(e)+(f)-(g)
Robinson
1,755,123
893,178
932,283
—
—
205,623
—
1,999,851
Jacobsen
1,787,674
793,936
828,696
—
—
403,536
—
2,225,970
Tobin
1,788,904
795,166
913,449
—
—
(11,380)
—
1,895,807
Colson
1,489,948
496,210
517,935
—
—
(6,458)
—
1,505,215
Mujica
1,489,948
496,210
517,935
—
—
(20,710)
—
1,490,963
Average
1,662,319
694,940
742,060
—
—
114,122
—
1,823,561
CALCULATION OF 2023 NON-PEO CAP
Non PEO
SCT
Total
Comp
($)(a)
SCT
Stock
Awards
($)(b)
Value of
Unvested
Equity Awards
Granted during
CFY
($)(c)
Change in
Value of
Equity Awards
Granted in
Prior Years
and Unvested
at end of
CFY
($)(d)
Value of
Equity Awards
Granted and
Vested in
CFY
($)(e)
Change in
Value of
Equity Awards
Granted in
Prior Years
and Vested in
CFY
($)(f)
Value of
Equity Awards
Previously
Granted that
Failed to Meet
Conditions in
CFY
($)(g)
CAP to Non-PEO($)
(a)-(b)+(c)+(d)+(e)+(f)-(g)
Tobin
2,400,016
897,792
1,182,336
—
—
90,021
—
2,774,581
Monroe
1,398,938
404,484
455,692
—
—
—
—
1,450,146
Humpich
1,148,979
364,629
421,946
—
—
48,696
—
1,254,992
Robinson
2,021,333
—
—
—
—
—
932,283
1,089,050
Doster
1,518,004
860,836
1,014,838
—
—
70,954
—
1,742,960
Jacobsen
1,827,450
804,272
—
—
—
95,188
—
1,118,366
Colson
1,826,340
794,920
1,046,860
—
—
(3,575)
—
2,074,705
Mujica
1,829,094
794,920
1,046,860
—
—
(3,575)
—
2,077,459
Average
1,746,269
615,232
646,067
—
—
37,214
116,535
1,697,782
78
CALCULATION OF 2024 NON-PEO CAP
Non PEO
SCT
Total
Comp
($)(a)
SCT
Stock
Awards
($)(b)
Value of
Unvested
Equity Awards
Granted during
CFY
($)(c)
Change in
Value of
Equity Awards
Granted in
Prior Years
and Unvested
at end of
CFY
($)(d)
Value of
Equity Awards
Granted and
Vested in
CFY
($)(e)
Change in
Value of
Equity Awards
Granted in
Prior Years
and Vested in
CFY
($)(f)
Value of
Equity Awards
Previously
Granted that
Failed to Meet
Conditions in
CFY
($)(g)
CAP to Non-
PEO($)
(a)-
(b)+(c)+(d)+(e)+(f)-
(g)
Tobin
2,830,728
899,080
1,371,268
—
—
92,110
—
3,395,026
Monroe
2,345,344
792,610
1,208,881
—
—
169,556
—
2,931,171
Doster
1,413,672
92,442
113,310
274,896
—
159,213
—
1,868,649
Colson
2,095,563
792,610
1,208,881
—
—
61,966
—
2,573,800
Mujica
2,098,551
792,610
1,208,881
—
—
61,966
—
2,576,788
Average
2,156,772
673,870
1,022,244
54,979
—
108,962
—
2,669,087
(7)
For the purposes of calculating the Company’s total shareholder return (“TSR”), the Company’s
TSR increased 40.8% in fiscal year 2020, increased 17.0% in fiscal year 2021, increased 5.6%
in fiscal year 2022, increased 35.8% in fiscal year 2023, and increased 46.5% in fiscal year
2024.
(8)
As more particularly shown in the Company’s Annual Report on Form 10-K for the year ended
December 28, 2021, we presented a performance graph by comparing our cumulative TSR
against the Russell 3000 Restaurant Index. In connection with our Annual Report on Form 10-K
for the year ended December 28, 2021, December 27, 2022, December 26, 2023, and
December 31, 2024, the Company presented a performance graph by comparing our
cumulative TSR against the S&P Composite 1500 Restaurant Sub-Index (the “S&P Index”). For
the purposes of the table above, we have shown the TSR for the Company’s peer companies
using the S&P Index. In furtherance of the foregoing, using the S&P Composite 1500
Restaurant Sub-Index, the TSR of the Company’s peer companies increased 18.9% in fiscal
year 2020, increased 22.6% in fiscal year 2021, decreased 7.9% in fiscal year 2022, increased
15.1% in fiscal year 2023, and increased 6.2% in fiscal year 2024.
As shown in the charts as discussed further below, the relationship between the Compensation Actually
Paid to the Principal Executive Officer and the Average Compensation Actually Paid to the Non-Principal
Executive Officers in the 2020 fiscal year, 2021 fiscal year, 2022 fiscal year, 2023 fiscal year, and 2024 fiscal
year, respectively, to each of (i) net income, (ii) total shareholder return, and (iii) diluted earnings per share
demonstrates that such compensation fluctuates to the extent the Company is achieving its goals and increasing
value for shareholders in line with the Company’s compensation philosophy and performance-based objectives.
For the purposes of the charts below, the Principal Executive Officer is determined in the following manner:
(i) for fiscal year 2020, the Principal Executive Officer represented is W. Kent Taylor, (ii) for fiscal year 2021, the
Principal Executive Officer represented is the aggregate compensation of W. Kent Taylor and Gerald L. Morgan,
and (iii) for fiscal years 2022, 2023, and 2024, the Principal Executive Officer represented is Gerald L. Morgan.
79
$7.4
$1.0
$5.7
$6.4
$7.9
$1.8
$1.9
$1.8
$1.7
$2.7
$0.0
$1.0
$2.0
$3.0
$4.0
$5.0
$6.0
$7.0
$8.0
$9.0
2020
2021
2022
2023
2024
Net Income
(In millions)
CAP
(In millions)
Year
CAP vs. Net Income 2020-2024
Compensaon Actually Paid to First PEO
Average Compensaon Actually Paid to Non-PEO NEOs
Net Income ($)
$400.0
$450.0
$350.0
$500.0
$-
$50.0
$100.0
$150.0
$200.0
$250.0
$300.0
$31.3
$245.3
$269.8
$304.9
$433.6
$7.4
$1.0
$5.7
$6.4
$7.9
$1.8
$1.9
$1.8
$1.7
$2.7
$0.0
$1.0
$2.0
$3.0
$4.0
$5.0
$6.0
$7.0
$8.0
$9.0
2020
2021
2022
2023
2024
TSR
($ʹs)
CAP
(In millions)
Year
CAP vs. TSR 2020-2024
$350.00
$400.00
$100.00
$150.00
$200.00
$250.00
$300.00
$118.90
$145.77
$134.26
$154.53
$164.08
$140.80
$164.74
$173.96
$236.24
$345.95
Compensaon Actually Paid to First PEO
Average Compensaon Actually Paid to Non-PEO NEOs
TSR (S&P Composite 1500 Restaurant Index)
TSR (TXRH)
80
The following table lists the three financial performance measures that we believe represent the most
important financial measures to link compensation actually paid to our Named Executive Officers in 2024 to our
performance.
Most Important Performance Measures
1) Diluted Earnings Per Share Growth
2) Profit Growth
3) Change in Stock Price
$7.4
$1.0
$5.7
$6.4
$7.9
$1.8
$1.9
$1.8
$1.7
$2.7
$0.45
$3.50
$3.97
$4.54
$6.47
$0.00
$1.00
$2.00
$3.00
$4.00
$5.00
$6.00
$7.00
$-
$1.0
$2.0
$3.0
$4.0
$5.0
$6.0
$7.0
$8.0
$9.0
2020
2021
2022
2023
2024
EPS
($’s)
CAP
(In millions)
Year
CAP vs. Diluted EPS 2020-2024
Comp. Actually Paid to First PEO ($)(3)
Avg. Comp. Actually Paid to Non-PEO NEOs ($)(6)
Diluted EPS
81
CEO Pay Ratio
Under Section 953(b) of the Dodd Frank Wall Street Reform and Consumer Protection Act, a U.S.
publicly traded corporation is required to disclose the ratio between their Chief Executive Officer’s annual total
compensation to the total compensation of such corporation’s median employee after excluding the Chief
Executive Officer’s compensation. To identify our median employee, we used the 2024 total cash compensation
for all individuals (other than Mr. Morgan, our Chief Executive Officer) who were employed by us as of
December 31, 2024, the last day of our 2024 fiscal year. For the purpose of calculating our employee’s total
cash compensation, we used our employee’s base wages identified on our employees’ W-2 forms. As a part of
our calculation, we included all employees, whether employed by us on a full-time or part-time basis, and we
annualized the compensation of any employee whom we hired during our 2024 fiscal year and who was working
for us at the end of our fiscal year. As of December 31, 2024, approximately 77% of our employees were part-
time employees and our average employee worked approximately 22 hours per week.
We identified our median employee as a server in Louisville, Kentucky who worked an average of
approximately 15 hours per week. After identifying our median employee, we calculated the annual total
compensation for such employee as $20,391, which is determined using the same methodology we used for our
Named Executive Officers as set forth in the 2024 Summary Compensation Table described above.
As more particularly described in the 2024 Summary Compensation Table, the annual total
compensation for Mr. Morgan, our Chief Executive Officer, for our 2024 fiscal year is $6,186,009 and the ratio
between the compensation for our Chief Executive Officer and the compensation for our median employee is
303 to 1. Note that since the SEC rules allow companies to use various methodologies and assumptions, apply
certain exclusions, and make reasonable estimates relating to a specific company’s employee base when
identifying the median employee, the CEO pay ratio disclosed by other companies may not be comparable with
the CEO pay ratio disclosed in this paragraph. Additionally, the pay ratio between our Chief Executive Officer
and our median employee may vary year to year based, in part, on the grant date value of any restricted stock
units granted to our Chief Executive Officer in any given year.
82
AUDIT COMMITTEE REPORT
As of the date of this proxy statement, the audit committee of the Board (the “Committee”) is currently
composed of six directors, all of whom meet the criteria for independence under the applicable Nasdaq and
Securities & Exchange Commission (the “SEC”) rules and the Sarbanes-Oxley Act. The Committee acts under
a written charter adopted by the Board, a copy of which is available on the Company’s website at
www.texasroadhouse.com. During the 2024 fiscal year, the Committee was comprised of Ms. Epps and
Messrs. Crawford, Jones, Moore, and Warfield. During the 2025 fiscal year, the Committee is comprised of Mss.
Abell and Epps and Messrs. Crawford, Jones, Moore, and Warfield. Ms. Epps currently serves as the
chairperson of the Committee and was the chairperson of the Committee during the 2024 fiscal year. The Board
evaluated the credentials of and designated Ms. Epps and Messrs. Moore and Warfield as audit committee
financial experts.
The Committee has prepared the following report on its activities and with respect to the Company’s
audited consolidated financial statements for the fiscal year ended December 31, 2024 (the “Audited Financial
Statements”).
•
The Committee met 12 times during fiscal year 2024, which were comprised of six regular meetings
of the Committee and six meetings solely related to the Committee’s review of the Company’s
quarterly earnings release and filings with the SEC. The Committee’s meetings included private
sessions with the Company’s independent auditors and internal auditors (as needed), as well as
executive sessions consisting of only Committee members. The Committee also met periodically in
private sessions with management, including Named Executive Officers (as needed);
•
The Committee reviewed the acknowledgement process for the Company’s Code of Conduct and
the corresponding results;
•
The Committee reviewed the scope, plans, and results of the testing performed by the Company’s
internal auditors and independent auditors in their assessments of internal control over financial
reporting and the consolidated financial statements;
•
The Committee evaluated and reviewed the Company’s internal audit function, including, without
limitation, the independence, competence, staffing adequacy and authority of the function; the ability
of the internal audit function to raise issues to the appropriate level of authority; and the reporting
relationships among the Company’s internal auditors, financial management, and the Committee;
•
The Committee reviewed matters submitted to it via the Company’s whistleblower hotline and/or
other reporting mechanisms regarding concerns about allegedly questionable financial, accounting,
and/or auditing matters (if any);
•
The Committee reviewed the Company’s risk assessment and risk management policies, practices,
and disclosures, including, without limitation, the Company’s financial strategies, insurance plans,
cyber risk, artificial intelligence, business continuity, human capital, and corporate sustainability with
management, the Company’s Chief Legal and Administrative Officer, the Company’s internal and
independent auditors, and the Company’s enterprise risk management team;
•
The Committee was advised on risks and the Company’s related mitigation efforts in accordance
with acceptable risk tolerance, including, without limitation, strategic, operational, financial, human
capital, legal, data privacy, corporate sustainability, responsible alcohol service, and cybersecurity
risks both during and outside of regularly scheduled meetings;
•
As a part of the Committee’s oversight responsibilities, during the 2024 fiscal year, the Committee
received reports on risks relating to certain business functions within the Company, together with
reports from the Company’s responsible alcohol service risk subcommittee, information governance
subcommittee, Americans with Disability Act (ADA) risk subcommittee, employee and guest safety
risk subcommittee, and corporate sustainability risk subcommittee;
83
•
The Committee reviewed the Company’s legal, regulatory, and ethical compliance programs;
•
The Committee reviewed with the Chief Legal and Administrative Officer of the Company its
disclosures with respect to current lawsuits (as and if applicable);
•
The Committee was advised on the risks and activities relating to the Company’s implementation of
its human capital management system, and the Company’s formation of its wholly-owned captive
insurance company;
•
The Committee reviewed comment letters received from the SEC, if any, together with
management’s response to such letters;
•
The Committee pre-approved all audit, audit-related, and permissible non-audit services provided
to the Company by KPMG LLP, the Company’s independent auditors, for the 2024 fiscal year, before
management engaged the independent auditors for those purposes, pursuant to and in accordance
with the Texas Roadhouse, Inc. Policy for Pre-Approval of Services Provided by External Audit Firm
(which is available on the Company’s website at www.texasroadhouse.com);
•
On a quarterly basis, the Committee discussed with KPMG LLP the matters required to be discussed
by the Public Company Accounting Oversight Board’s Auditing Standard No. 1301, Communications
with Audit Committees;
•
The Committee discussed with KPMG LLP their written disclosures and letter required by the Public
Company Accounting Oversight Board regarding the independent auditor’s communications with
the Committee concerning independence and has discussed with the independent accountant the
independent accountant’s independence;
•
The Committee reviewed the selection, application, and disclosure of critical accounting policies;
•
The Committee reviewed with KPMG LLP the selection and disclosure of the critical audit
matter(s) set forth in the independent auditor’s report of the Company’s Form 10-K;
•
The Committee reviewed the Company’s quarterly earnings press releases prior to issuance;
•
The Committee reviewed and discussed the Company’s Audited Financial Statements for the 2024
fiscal year with management and the independent auditors;
•
As mentioned above, the Committee reviewed the Company’s Quarterly and Annual Reports on
Form 10-Q and Form 10-K prior to filing with the SEC and acknowledged that the Committee did not
have any objections to the filing of the same;
•
The Committee evaluated the appointment, compensation, retention and oversight of KPMG LLP.
In connection with such appointment, the Committee evaluated the service level of the incumbent
independent auditor, which included criteria such as prior year quality of service, industry and
technical expertise, independence, resource availability, and reasonableness and competitiveness
of fees, as well as solicited the input of key management employees during its evaluation; and
•
Based on the review and discussion referred to above, and in reliance thereon, the Committee
recommended to the Board that the Audited Financial Statements be included in the Company’s
Annual Report on Form 10-K for the fiscal year ended December 31, 2024, for filing with the SEC.
All members of the Committee concur in this report.
Donna E. Epps, Chair
Jane Grote Abell
84
Michael A. Crawford
Wayne L. Jones
Gregory N. Moore
Curtis A. Warfield
Related Party Transactions
The Committee’s charter provides that the Committee will review and approve any transactions between
us and any of our executive officers, non-employee directors, and 5% shareholders, or any members of their
immediate families, in which the amount involved exceeds the threshold limits established by the regulations of
the SEC. In reviewing a related-party transaction, the Committee considers the material terms of the transaction,
including whether the terms are generally available to an unaffiliated third party under similar circumstances.
Unless specifically noted, the transactions described below were either entered into before our initial public
offering in 2004 and the subsequent formation of the Committee or before the individual listed below became a
Named Executive Officer.
Grants of Franchise or License Rights
We have franchised restaurants to companies owned in part by a Named Executive Officer. The royalty
rate that is paid by these companies is set forth below, and is the amount we typically charge to franchisees. We
believe that allowing certain Named Executive Officers to have ownership interests in our restaurants provides
an ongoing benefit to the Company by these persons being more invested in the overall success of the brand.
Ownership interests of franchised restaurants by Mr. Morgan as of the end of the 2024 fiscal year are
listed below. Note that the chart below denotes ultimate beneficial ownership percentages and Mr. Morgan may
from time to time hold such interests through another legal entity such as a trust or limited liability company.
RELATED PARTY TRANSACTIONS
Management,
Royalties
Supervision and/or
Paid to
Accounting Fees
Initial
Us in
Paid to Us
Franchise Royalty
Fiscal Year 2024
in Fiscal Year 2024
Restaurant
Name and Ownership
Fee
Rate
($)
($)(1)
El Cajon, CA
Gerald L. Morgan (2.0%)
—
4.0 %
494,924
32,546
McKinney, TX
Gerald L. Morgan (2.0%)
—
4.0 %
441,628
55,203
Brownsville, TX
Gerald L. Morgan (3.06%)
—
4.0 %
457,041
57,130
Oceanside, CA
Gerald L. Morgan (2.0%)
—
4.0 %
530,205
32,456
(1)
The management, supervision and/or accounting fees described in this table are fees paid by
the operating entity of the applicable franchise location to the Company pursuant to a separate
management agreement.
For the 2024 fiscal year, the total amount of distributions received by Mr. Morgan relating to his
ownership interests in the above-referenced franchised restaurants was $188,667. This amount does not reflect
compensation paid by the Company to Mr. Morgan during the 2024 fiscal year; rather, this amount was paid by
the applicable franchise entity and reflects a return on investment in these separate restaurant locations.
The franchise agreements that we have entered into with this current Named Executive Officer contain
the same terms and conditions as those agreements that we enter into with our other Texas Roadhouse domestic
franchisees. We have the contractual right, but not the obligation, to acquire the restaurants owned in part by
such Named Executive Officer based on a pre-determined valuation formula which is the same as the formula
contained in the Texas Roadhouse domestic franchise agreements that we have entered into with other
franchisees with whom we have such rights. Once a franchise agreement has been entered into, it may be
terminated if the franchisee defaults in the performance of any of its obligations under the agreement, including
its obligations to operate the restaurant in strict accordance with our standards and specifications. A franchise
agreement may also be terminated if a franchisee becomes insolvent, fails to make its required payments,
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creates a threat to the public health or safety, ceases to operate the restaurant or misuses the Texas Roadhouse
trademarks.
Ownership Interest in Majority-Owned Joint Venture Entities
We have a current Named Executive Officer, Gerald L. Morgan, who has an ownership interest in a
certain Texas Roadhouse restaurant that is owned by an entity that the Company controls and in which the
Company holds a 52.5% ownership interest. We believe that allowing certain Named Executive Officers to have
ownership interests in restaurants provides an ongoing benefit to the Company by making these persons more
invested in the overall success of the brand. As of the end of the 2024 fiscal year, Mr. Morgan held a 34.5%
ultimate beneficial ownership interest in the Mansfield, Texas restaurant, which such entity paid $425,149 to us
for management and supervision fees. Additionally, for the 2024 fiscal year, the total amount of distributions
received by Mr. Morgan relating to his ownership interest in the Mansfield, Texas restaurant was $800,972. This
amount does not reflect compensation paid by the Company to Mr. Morgan during the 2024 fiscal year; rather,
this amount was paid by the entity and reflects a return on investment in this restaurant location.
Other Related Transactions
On February 28, 2024, the Board and the Committee approved a related party transaction involving
Mr. Zarley’s ownership interest in a Jaggers franchise entity as described herein. In connection with the
transaction, the Company entered into a development agreement with a third-party member-managed limited
liability company for the development of fifteen Jaggers franchise locations in Houston, Texas. Mr. Zarley is the
beneficial owner of 20.0% of the franchise entity. Pursuant to the development agreement, the franchise entity
paid a $150,000 development fee to the Company and is required to pay to the Company a $45,000 franchise
fee for every franchise location opened under the development agreement. Mr. Zarley agreed to guarantee
certain obligations of the franchise entity to the Company under any franchise agreement entered into between
the Company and such entity during the term of the development agreement. The franchise agreements will
contain the same terms and conditions as those agreements that we enter into with our other Jaggers
franchisees, with royalties generally at 5.0% of restaurant sales. Pursuant to the terms of the development
agreement, the Company entered into the first franchise agreement with the Jaggers franchise entity on the
same terms and conditions described above; provided, however, as of the date of this proxy statement, the
Jaggers franchise location governed by such franchise agreement has not yet opened.
As of the date of this proxy statement, Mr. Zarley has not received any distributions relating to his
ownership interest in the franchise entity; provided, however, any amounts paid to Mr. Zarley will not reflect
compensation paid by the Company but such amounts will be paid by the franchise entity and will reflect a return
on investment in these restaurant locations. Due to Mr. Zarley’s ownership interest in such thirty party franchise
entity, Mr. Zarley is no longer independent (as such term is defined in the listing standards under Nasdaq
Marketplace Rule 5605(a)(2)), and Mr. Zarley will not be standing for re-election at the Annual Meeting under
the Board’s age limit policy.
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PRESENTATION OF PROPOSALS
PROPOSAL 1
ELECTION OF DIRECTORS
The Company’s Bylaws provide for not less than one and not more than 15 directors. At the Annual
Meeting, we are electing eight directors to hold office until the Annual Meeting of Shareholders in 2026 and until
a successor is elected and qualified. Although it is not anticipated that any of the nominees listed below will
decline or be unable to serve, if that should occur, the proxy holders may, in their discretion, vote for a substitute
nominee.
Nominees for Election as Directors
Set forth below are the Board members who will stand for re-election at the Annual Meeting, together
with their age, all Company positions and offices they currently hold, and the year in which they joined the Board.
NOMINEES FOR ELECTION AS DIRECTORS
Position or
Director
Name
Age
Office
Since
Jane Grote Abell
58
Director
2024
Michael A. Crawford
57
Director
2020
Donna E. Epps
61
Director
2021
Wayne L. Jones
66
Director
2023
Gregory N. Moore
75 Chairman of the Board; Director
2005
Gerald L. Morgan
64 Chief Executive Officer; Director
2021
Curtis A. Warfield
57
Director
2018
Kathleen M. Widmer
63
Director
2013
Recommendation
THE BOARD RECOMMENDS THAT SHAREHOLDERS VOTE “FOR” THE ELECTION OF THE
NOMINEES FOR THE DIRECTORS OF THE COMPANY SET FORTH ABOVE.
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PROPOSAL 2
RATIFICATION OF INDEPENDENT AUDITORS
As more particularly described in this proxy statement, the audit committee is directly responsible for
managing the Company’s independent auditors, which includes, without limitation, (i) pre-approving all audit and
permitted non-audit services provided by our independent auditors, and (ii) the appointment, compensation,
retention and oversight of the Company’s independent auditors. In connection with the audit committee’s
appointment of the Company’s independent auditors, the audit committee evaluates the service level of the
incumbent independent auditor on an annual basis, which includes criteria such as prior year quality of service,
industry and technical expertise, independence, resource availability, and reasonableness and competitiveness
of fees, as well as solicits the input of key management employees during its evaluation.
In connection with the same and pursuant to its charter, the audit committee has appointed the firm of
KPMG LLP to serve as the independent auditors to audit the consolidated financial statements and the internal
control over financial reporting of the Company for the fiscal year which ends on December 30, 2025. The Board
and the audit committee jointly agree that the continued retention of KPMG LLP is in the best interest of the
Company and its shareholders. Accordingly, a resolution will be presented at the Annual Meeting to ratify the
appointment of KPMG LLP. If the shareholders fail to ratify the appointment of KPMG LLP, the audit committee
will take this result into account when appointing an independent auditor for the 2025 fiscal year. Even if the
appointment is ratified, the audit committee in its discretion may direct the appointment of a different independent
registered public accounting firm as the Company’s independent auditors at any time during the year if the audit
committee believes that such a change would be in the best interests of the Company and its shareholders. One
or more representatives of KPMG LLP are expected to be present at the Annual Meeting, will have the
opportunity to make a statement if they desire to do so, and will be available to respond to appropriate questions.
Fees Paid to the Independent Auditors
KPMG LLP FEES FOR FISCAL YEARS 2024 AND 2023
2024($) 2023($)
Audit Fees
1,040,280
857,797
Audit-related Fees
17,000
16,000
Tax Fees
27,137
50,500
All Other Fees
--
--
1,084,417
924,297
Audit Fees. KPMG LLP charged $1,040,280 in fiscal year 2024 and $857,797 in fiscal year 2023 for
audit fees. These include professional services in connection with the audit of the Company’s annual
consolidated financial statements and its internal control over financial reporting. They also include reviews of
the Company’s consolidated financial statements included in the Company’s Quarterly and Annual Reports on
Form 10-Q and Form 10-K and for services that are normally provided by the accountant in connection with
statutory and regulatory filings or engagements for the fiscal years shown. In addition, the fees for fiscal years
2024 and 2023 contain $10,280 and $12,797, respectively, related to statutory audits. Finally, the fees for fiscal
year 2024 contain $135,000 relating to the testing of general information technology and automated controls
related to a human capital system implementation which the Company completed during fiscal 2024.
Audit-related Fees. KPMG LLP charged $17,000 in fiscal year 2024 and $16,000 in fiscal year 2023 for
their consent to include the Company’s annual consolidated financial statements in both of our franchise
disclosure documents.
Tax Fees. KPMG LLP charged $27,137 in fiscal year 2024 and $50,500 in fiscal year 2023 for
consulting and compliance services. The fees charged in fiscal year 2023 include $30,000 for tax structuring
related services.
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All Other Fees. KPMG LLP did not charge any additional amounts during either fiscal year 2024 or fiscal
year 2023.
Pre-approval Policies and Procedures
The audit committee pre-approved all audit, audit-related, and permissible non-audit services provided
to the Company by KPMG LLP before management engaged the auditors for those purposes. The policy of the
audit committee is to review all engagement letters for accounting firms for non-audit services.
Recommendation
THE BOARD RECOMMENDS A VOTE “FOR” THE RATIFICATION OF KPMG LLP AS THE
COMPANY’S INDEPENDENT AUDITORS FOR THE 2025 FISCAL YEAR.
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PROPOSAL 3
ADVISORY VOTE ON APPROVAL OF EXECUTIVE COMPENSATION
The Board requests shareholder approval of the compensation of the Company’s Named Executive
Officers as described in the “Compensation Discussion and Analysis,” the Executive Compensation section and
the other related executive compensation tables and related discussions in this proxy statement. As an advisory
vote, the outcome of the voting on this Proposal 3 is not binding upon the Company; however, the compensation
committee, which is responsible for establishing and administering the Company’s executive compensation
program, values the opinions expressed by shareholders on this Proposal 3 and will consider the outcome of
the vote when making future compensation decisions for the Company’s executive officers. Additionally, the
compensation committee invites shareholders to express any questions or concerns regarding the Company’s
compensation philosophy for our executive officers by correspondence addressed to Texas Roadhouse, Inc.
Compensation Committee, 6040 Dutchmans Lane, Louisville, Kentucky 40205.
The objective of the compensation committee in setting and evaluating the compensation of our
executive officers is to promote the sustained profitability of the Company. Compensation for the Named
Executive Officers is divided into three key components: (1) base salary, which provides a secure base of
compensation and serves to motivate and retain our Named Executive Officers; (2) a cash bonus, which rewards
our Named Executive Officers for the success of the Company as measured by growth in the Company’s
earnings per diluted share and its overall pre-tax profit, and for each Named Executive Officer’s individual
contribution to that success; and (3) grants of restricted stock units, which offer the Named Executive Officers a
financial interest in the long-term success of the Company and align their interests with those of our
shareholders. The types of restricted stock units that may be granted by the compensation committee in its
discretion are (i) service based restricted stock units, which grant the Named Executive Officers the conditional
right to receive shares of our common stock that vest after a defined period of service, (ii) “retention” restricted
stock units, which vest upon the completion of the term of an individual Named Executive Officer’s agreement
or such longer date as determined by the compensation committee, and (iii) performance based restricted stock
units, which are calculated based on the achievement of certain Company performance targets established by
the compensation committee and vest over a period of service. While “retention” restricted stock units have
historically been granted by the compensation committee, the compensation committee has not made any similar
retention grants for the Named Executive Officers under the Prior Employment Agreements and the 2025
Employment Agreements. The compensation committee will evaluate whether to grant additional retention
grants in the future as a part of its annual evaluation of the compensation packages for the Named Executive
Officers.
The compensation packages for our Named Executive Officers offer base salaries and target cash
bonus amounts and feature restricted stock unit awards. While the initial grant of restricted stock unit awards is
based on a fixed dollar amount, the ultimate value of such restricted stock unit awards is dependent upon the
performance of the Company and the price of our common stock at the time such restricted stock units vest.
Under the 2025 Employment Agreements, the compensation committee has flexibility in establishing the
compensation for our Named Executive Officers. Specifically, each 2025 Employment Agreement establishes
an annual base salary for the term of the respective 2025 Employment Agreements, with base salary increases
being left to the discretion of the compensation committee. Additionally, each 2025 Employment Agreement
provides an annual short-term cash incentive opportunity with a target bonus based on the achievement of
defined goals to be established by the compensation committee, with increases in the target bonus amount to
be made at the discretion of the compensation committee during the term of the 2025 Employment Agreement.
Finally and in addition to cash compensation, each Executive Employment Agreement provides that the
compensation committee may grant certain stock awards to the Named Executive Officers during the term of
the respective 2025 Employment Agreements, the types and amounts of which are subject to the compensation
committee’s discretion based on their annual review of the performance of the Company and of the individual
Named Executive Officers. As of the date of this proxy statement and as more particularly described below,
certain Named Executive Officers received an annual grant of service based restricted stock units relating to
their 2025 year service pursuant to their 2025 Employment Agreement. Additionally, certain Named Executive
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Officers received a three year grant of performance based restricted stock units relating to their service for 2025,
2026, and 2027, respectively, pursuant to their 2025 Employment Agreement.
The compensation committee evaluates the stock compensation for each specific Named Executive
Officer on an annual basis to determine the right combination of rewards and incentives through the issuance of
service based restricted stock units and/or performance based restricted stock units to drive company
performance without encouraging unnecessary or excessive risk taking by all of the Named Executive Officers
as a whole. Under this approach, the Named Executive Officers receive a combination of service based restricted
stock units and performance based restricted stock units. Additionally and by conditioning a significant portion
of the Named Executive Officer’s performance based restricted stock unit grants upon the achievement of
defined performance goals to be established by the compensation committee, combined with the stock
ownership guidelines for our Named Executive Officers more particularly described above, we have created a
more direct relationship between compensation and shareholder value. Moreover, by giving the compensation
committee the discretion to grant certain stock awards (if any) in its discretion to our Named Executive Officers
under the 2025 Employment Agreements, the compensation committee has the opportunity to adjust a significant
portion of the total compensation for the Named Executive Officers on an annual basis to more accurately reflect
the overall performance of the Company, which may include the issuance of service based restricted stock units
and/or performance based restricted stock units. Overall, we believe this approach provides the Named
Executive Officers with a compensation package which promotes the sustained profitability of the Company and
aligns the interests of our Named Executive Officers with those of our shareholders. The compensation packages
also reflect a pragmatic response to external market conditions; that is, total compensation that is competitive
with comparable positions in similar industries, including the casual dining sector of the restaurant industry, but
which is reasonable and in the best interests of our shareholders.
This structure, along with the culture and values of our Company, allows the Company to attract and
retain top talent, while also encouraging our Named Executive Officers to keep their focus on both long-term
business development and short-term financial growth.
Response to 2024 Advisory Vote on Executive Compensation. At Texas Roadhouse, we value our
shareholders’ feedback and solicit investor views throughout the year in connection with the Company’s ongoing
engagement program. The investor input received is critical to how the Board and the management team make
decisions on a variety of corporate governance practices, including the Company’s executive compensation
program. At the 2024 annual shareholder meeting, approximately 61% of our shareholders cast votes in support
of our advisory Say-on-Pay vote. The Board recognized the significance of the results of the 2024 Say-on-Pay
vote, which was substantially lower than in previous years – in the four years prior, our Say-on-Pay vote
averaged shareholder support of approximately 94%.
In response to the 2024 Say-on-Pay vote, the Board and management team actively sought additional
feedback from investors on our executive compensation program and disclosures. In late 2024, management of
the Company attempted to engage with 22 shareholders owning approximately 42% of outstanding shares of
the Company as of the end of fiscal year 2024 to solicit feedback on the Company’s executive compensation
program. Of the shareholders that the Company contacted, the Company held 10 shareholder calls with
shareholders owning approximately 30% of outstanding shares of the Company as of the end of fiscal year 2024
while the remaining 12 shareholders declined the need for a call. The perspectives received during these
meetings were shared with the full Board and compensation committee, and served as a critical input to
discussions about the Company’s executive compensation program, as well as new enhancements to the 2025
compensation program and associated disclosures. The overwhelming majority of our shareholders provided us
with feedback that votes against our 2024 executive compensation program were driven primarily by the one-
time separation payment paid by the Company in 2023 to our former Chief Financial Officer following her
retirement. Additionally, some shareholders provided feedback regarding the length of the performance period
for performance based restricted stock units granted to certain Named Executive Officers.
In addition to soliciting investor feedback on the topic, we re-engaged FW Cook as an independent
compensation consultant to advise the compensation committee on compensation for the executive officers
beginning with the 2025 fiscal year, together with analysis and services related to such executive compensation,
as more particularly described above. Specifically, the compensation committee requested the consultant
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provide market data and review the design of the executive compensation packages, provide guidance on cash
and equity compensation for the Company’s executive officers, and provide guidance and market data on the
manner in which separation payments are handled in connection with the preparation and execution of the 2025
Employment Agreements. Finally, as previously noted above, the Company entered into new 2025 Employment
Agreements – partly in response to the advisory vote on executive compensation at our 2024 annual shareholder
meeting and associated shareholder feedback, as well as to reflect market changes to forms of employment
agreement received from outside legal counsel and our third-party compensation consultant.
Based on the feedback received from our shareholders during our 2024 shareholder engagement, the
recommendations of our third-party compensation consultant, and the compensation committee’s review of the
market data provided to it, the compensation committee (A) approved new 2025 Employment Agreements,
(B) increased certain portions of compensation elements for each Named Executive Officer to align with peer
company benchmarking (as more particularly shown below), (C) shifted the compensation percentage
breakdown of the various compensation components for each Named Executive Officer to align with peer
company benchmarking, (D) extended the length of the applicable performance periods for certain performance
based restricted stock units granted to our Named Executive Officers, and (E) modified the manner and rationale
in which separation payments are paid to Named Executive Officers pursuant to the 2025 Employment
Agreements.
Recommendation
THE BOARD RECOMMENDS THAT SHAREHOLDERS VOTE “FOR” THE EXECUTIVE
COMPENSATION DETAILED IN THIS PROXY STATEMENT.
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PROPOSAL 4
ADVISORY VOTE ON A SHAREHOLDER PROPOSAL
REGARDING THE ADOPTION OF A POLICY REQUIRING THE DISCLOSURE OF THE
COMPANY’S CONSOLIDATED EEO-1 REPORT
The Comptroller of the City of New York, as the custodian and trustee of the New York City Employees'
Retirement System, the New York City Teachers' Retirement Systems, and the New York City Police Pension
Fund (individually, a “System”), notified the Company on November 19, 2024 of its intention to present a
resolution to our shareholders for voting at the Annual Meeting. Each System is the beneficial owner of at least
$2,000 in market value of shares of our Common Stock. We will provide the proponent’s address and
shareholdings (to our Company’s knowledge) to any shareholder promptly upon oral or written request made to
Texas Roadhouse, Inc., c/o Christopher C. Colson, Corporate Secretary, 6040 Dutchmans Lane, Louisville,
Kentucky 40205, (502) 426-9984. The text of the proponent’s resolution and supporting statement appear below,
printed verbatim from its submission. We disclaim all responsibility for the content of the proposal and the
supporting statement, including sources referenced therein.
Shareholder Proposal
“Resolved: Shareholders request that the Board of Directors adopt a policy requiring Texas
Roadhouse, Inc. ("TXRH") to publicly disclose its Consolidated EEO-1 Report, a comprehensive
breakdown of its workforce by race, ethnicity and gender (the "EEO-1 Report"), which TXRH is required
to submit annually to the U.S Equal Employment Opportunity Commission (EEOC). The policy should
require that TXRH annually disclose its EEO-1 Report on its website and in its proxy statement.
Supporting Statement
TXRH's 2023 Corporate Sustainability Report asserts: "We believe that diversity, equity, and inclusion
(DE&I) are vital parts of our culture and what truly makes us legendary. We value and welcome
employees of all walks of life to share their gifts, strengths, and voices while working in our restaurants
and the Support Center, as we strive to reflect the communities we are proud to serve.”1
We also believe that employees of color and women can contribute to improved company performance.
In 2020, a McKinsey study found that companies in the top quartile of gender diversity on executive
teams were 25% more likely to experience above-average profitability than peer company diversity
laggards, and that there is an even higher likelihood of outperformance among companies with more
ethnically diverse executive teams.2
The EEO-1 Report breaks down a company's U.S. workforce by race, ethnicity and gender according to
10 employment categories, including senior management, defined to incorporate individuals within two
reporting levels of the CEO.
TXRH discloses aggregate percentages for gender and separately, of racial/ethnic groups with no
mention of job categories.3 EEO-I Report disclosure, however, would provide investors with more
consistent information, in a decision-useful format, including:
•
Standardized, quantitative, and reliable data in categories as defined by the EEOC, that is
comparable across companies and industries, enabling investors to assess the representation of
employees of color and women at various levels of TXRH;
•
Specific data on senior management diversity; and
1 https://www.texasroadhouse.com/media/735/download?inline=1
2 https://www.mckinsey.com/featured-insights/diversity-and-inclusion/diversity-wins-how-inclusion-matters
3 https://www.texasroadhouse.com/edia/735/download?inline=1
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•
Particularized data that allows investors to assess the representation of specific racial and ethnic
groups by gender, such as Black female employees, in a job category - and to make meaningful,
year-over-year comparisons.
Disclosure of its EEO-1 Report is a cost-effective means for TXRH to demonstrate diversity
performance. TXRH already collects the data and submits it to the EEOC. The proposal neither prevents
nor discourages TXRH from disclosing any other information that management believes reflect its
organizational structure or demonstrates its commitment to diversity and inclusion.
EEO-1 Report disclosure will bring TXRH into line with virtually all S&P 100 companies, and nearly 400
of the S&P 500 companies, which disclose or have committed to disclose their EEO-1 Report, including
its acknowledged peers, Chipotle Mexican Grill, Inc. and Darden Restaurants, Inc.
Other shareholders have agreed. In 2021, New York City Retirement Systems' EEO-1 shareholder
proposals at DuPont and Union Pacific received 84% and 86% support, respectively.
We ask shareholders to vote FOR this proposal.”
Board’s Opposition Statement
After careful consideration, the Board unanimously recommends that the shareholders vote
AGAINST this shareholder proposal.
The Board believes that the adoption of a policy requiring the disclosure of the Company’s Consolidated
EEO-1 Report is unnecessary, overly prescriptive, and not in the best interest of the Company and its
shareholders given the Company’s existing workforce data disclosures, and the inherent risks and limitations
relating to public disclosure of and over-reliance upon the EEO-1 Report as a singular measure for identifying or
assessing our workplace diversity.
Texas Roadhouse already discloses EEO-1 data summarizing our workplace diversity.
Texas Roadhouse understands and appreciates that our various stakeholders – including our guests,
employees, and shareholders – desire transparent disclosure relating to the Company’s diversity demographics.
To that end, we began voluntarily disclosing diversity data relating to our workforce in 2023 and continue to
disclose this information, including the following public disclosures:
•
Gender and diversity demographics of our Board of Directors in our annual proxy statement;
•
Consolidated workplace demographics by gender and ethnicity classification in our Corporate
Sustainability Report; and
•
Gender and consolidated diversity demographics for our Support Center employees, restaurant
managers, and restaurant hourly employees in our Annual Report on Form 10-K filed with the SEC.
This level of reporting and disclosure is consistent with many of our full-service sit-down restaurant peer
companies, and with the ever-changing regulatory environment relating to required disclosures, we believe that
our current disclosure is appropriate and provides our shareholders with the necessary information to effectively
evaluate the diversity demographics within our Company and the manner in which our demographics and related
disclosures compare to our peer companies.
Furthermore, we have been consistently recognized above our peer companies as an employer of
choice by Newsweek in 2023 and in 2024 by being named, as one of “America’s Greatest Workplaces”, as well
as by Forbes Magazine in 2021, 2022, and 2023, as one of the “Best Employers for Diversity.”
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There are inherent risks and limitations to using the EEO-1 Report as the measure for identifying our
workplace diversity.
We believe that there are inherent risks and limitations in using the EEO-1 Report as the measure for
evaluating our workplace diversity. As an initial matter, the information contained within the EEO-1 Report is a
backward-looking singular snapshot in time, and does not accurately describe, measure, or properly
contextualize our workplace diversity. Without proper context of the specific information described in the EEO-1
Report, there is a risk that the numbers could be misconstrued and not reflect the very real positive impact to
Texas Roadhouse of our employment initiatives, workplace environment, and the overall effectiveness of our
corporate strategies and programs.
In addition, the information disclosed in the EEO-1 Report is provided voluntarily by our employees and
is based on a pre-determined, government form that categorizes our workforce into certain EEOC-mandated job
categories that fail to account for company or industry-specific roles. As such, there are risks that the EEO-1
Report may not accurately or effectively describe the diversity within our organization.
Finally, part of the basis for encouraging our employees to voluntarily self-identify is the understanding
that we would treat the actual report as confidential and to protect the confidentiality of certain employee
demographic data. This is similar to the approach and analysis that the EEOC itself takes by not otherwise
making a company’s EEO-1 report publicly available. Depending on the number of employees in some of the
demographic groups within the EEO-1 job categories, it may not be difficult to match the information on race or
ethnicity with specific individuals, which in turn could create a chilling effect among our employees of voluntarily
providing this information to us. If this occurs, we would risk a lack of disclosure by our employees, which could
in turn hinder our ability to fully and accurately complete our EEO-1 Report, identify any opportunities we might
want to leverage and/or otherwise evaluate the impact of our employment initiatives, and corporate strategies
and programming moving forward.
For the above-referenced reasons, the Board recommends that the shareholders vote against
the proponent’s proposal.
Recommendation
THE BOARD RECOMMENDS THAT SHAREHOLDERS VOTE “AGAINST” THE SHAREHOLDER
PROPOSAL REGARDING THE ADOPTION OF A POLICY REQUIRING THE DISCLOSURE OF OUR
CONSOLIDATED EEO-1 REPORT.
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SHAREHOLDER PROPOSALS
Under Rule 14a-8 promulgated under the Exchange Act, shareholders may present proposals to be
included in the Company proxy statement for consideration at the next annual meeting of its shareholders by
submitting their proposals to the Company in a timely manner. Any such proposal must comply with Rule 14a-8.
If a shareholder submitting a matter to be raised at the Company’s next annual meeting desires that such matter
be included in the Company’s proxy statement for that meeting, such matter must be submitted to the Company
no later than December 5, 2025. The rules of the SEC set forth standards for what shareholder proposals the
Company is required to include in a proxy statement for an annual meeting.
The Company’s Bylaws, a copy of which is available on the Company’s website at
www.texasroadhouse.com, require shareholders who intend to propose business for consideration by
shareholders at the 2026 annual meeting, other than shareholder proposals that are to be included in the proxy
statement, to deliver written notice to the principal executive offices of the Company on or before December 5,
2025 (reflecting 120 calendar days prior to the one year anniversary of the date of the Company’s proxy
statement issued in connection with the prior year’s annual meeting). This notice must include a description of
the business desired to be brought before the annual meeting, the name and address of the shareholder
proposing such business and of the beneficial owner, if any, on whose behalf the business is being brought, the
class, series and number of shares of the Company which are beneficially owned by the shareholder and such
other beneficial owner and any material interest of the shareholder and such other beneficial owner in such
business. In addition, the Bylaws require shareholders who intend to nominate a candidate for election as a
director to deliver written notice to the principal executive offices of the Company on or before December 5, 2025
(reflecting 120 day calendar days prior to the one year anniversary of the date of the Company’s proxy statement
issued in connection with the prior year’s annual meeting). The notice of nomination must include the information
set forth in the Bylaws for the candidate to be eligible for nomination. Shareholders who intend to solicit proxies
in reliance on the SEC's universal proxy rule for director nominees submitted under the advance notice
requirements of our Bylaws must comply with the additional requirements of Rule 14a-19, and, in accordance
with the Bylaws, must provide the Company with proof of compliance with the requirements of Rule 14a-19 by
no later than five (5) business days prior to the date of the annual meeting, unless the meeting is adjourned or
postponed.
The Exchange Act rules permit management to vote proxies in its discretion in certain cases if the
shareholder does not comply with these deadlines, and in certain other cases notwithstanding the shareholder’s
compliance with these deadlines.
SHAREHOLDERS’ COMMUNICATIONS WITH THE BOARD
Shareholders that want to communicate in writing with the Board, or specific directors individually, may
send proposed communications to the Company’s Corporate Secretary, Christopher C. Colson, at 6040
Dutchmans Lane, Louisville, Kentucky 40205. The proposed communication will be reviewed by Mr. Colson
and/or by the audit committee (as appropriate). If the communication is appropriate and serves to advance or
improve the Company or its performance, then it will be forwarded to the Board or the appropriate director.
FORM 10-K
The Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024,
accompanies this proxy statement. The Company’s Annual Report does not form any part of the material for
solicitation of proxies.
Any shareholder who wishes to obtain, without charge, a copy of the Company’s Annual Report
on Form 10-K for the fiscal year ended December 31, 2024, which includes financial statements, and is
required to be filed with the SEC, may access it at www.texasroadhouse.com in the Investors section or
may send a written request to Christopher C. Colson, Corporate Secretary Texas Roadhouse, Inc., 6040
Dutchmans Lane, Louisville, Kentucky 40205.
96
OTHER BUSINESS
The Board is not aware of any other matters to be presented at the Annual Meeting other than those set
forth herein and routine matters incident to the conduct of the meeting. If any other matters should properly come
before the Annual Meeting or any adjournment or postponement thereof, the persons named in the proxy
statement, or their substitutes, intend to vote on such matters in accordance with their best judgment.
By Order of the Board of Directors,
Christopher C. Colson
Corporate Secretary
Louisville, Kentucky
April 4, 2025
Please vote your shares through any of the methods described on the proxy card as promptly as possible,
whether you plan to attend the Annual Meeting in person. If you do attend the Annual Meeting, you may still vote
in person, since the proxy may be revoked at any time before its exercise by delivering a written revocation of
the proxy to the Company’s Corporate Secretary.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
☒
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2024
OR
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 000-50972
Texas Roadhouse, Inc.
(Exact name of registrant specified in its charter)
Delaware
(State or other jurisdiction of
incorporation or organization)
20-1083890
(IRS Employer
Identification Number)
6040 Dutchmans Lane
Louisville, Kentucky 40205
(Address of principal executive offices) (Zip Code)
(502) 426-9984
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, par value $0.001 per share
TXRH
NASDAQ Global Select Market
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐.
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes ☐ No ☒.
Indicate by check mark whether registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements
for the past 90 days. Yes ☒ No ☐.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of
Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such
files). Yes ☒ No ☐.
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an
emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in
Rule 12b-2 of the Exchange Act.
Large accelerated filer ☒
Accelerated filer ☐
Non-accelerated filer ☐
Smaller reporting company ☐
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or
revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control
over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered accounting firm that prepared or issued its
audit report. ☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing
reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by
any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒.
The aggregate market value of the voting stock held by non-affiliates of the registrant as of the last business day of the second fiscal quarter ended
June 25, 2024 was approximately $11.4 billion based on the closing stock price of $171.66 on the Nasdaq Global Select Market.
The number of shares of common stock outstanding were 66,450,642 on February 19, 2025.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant’s definitive Proxy Statement for the registrant’s 2025 Annual Meeting of Stockholders, which is expected to be filed pursuant to
Regulation 14A within 120 days of the registrant’s fiscal year ended December 31, 2024, are incorporated by reference into Part III of this Form 10-K.
2
TABLE OF CONTENTS
Page
PART I
Item 1.
Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Item 1A.
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Item 1B.
Unresolved Staff Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Item 1C.
Cybersecurity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Item 2.
Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Item 3.
Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Item 4.
Mine Safety Disclosures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
PART II
Item 5.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Item 6.
Reserved . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations . . . . . . . . . 36
Item 7A.
Quantitative and Qualitative Disclosures About Market Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Item 8.
Financial Statements and Supplementary Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Item 9.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure . . . . . . . . . 50
Item 9A.
Controls and Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Item 9B.
Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Item 9C.
Disclosure Regarding Foreign Jurisdictions That Prevent Inspections . . . . . . . . . . . . . . . . . . . . . . . . . . 52
PART III
Item 10.
Directors, Executive Officers and Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Item 11.
Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Item 13.
Certain Relationships and Related Transactions, and Director Independence . . . . . . . . . . . . . . . . . . . . . 53
Item 14.
Principal Accountant Fees and Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
PART IV
Item 15.
Exhibits and Financial Statement Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Item 16.
Form 10-K Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Signatures
3
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
From time to time, in periodic reports and oral statements and in this Annual Report on Form 10-K, we present
statements about future events and expectations that constitute forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as
amended (“Exchange Act”). Forward-looking statements are based on our beliefs, assumptions, and expectations of our
future financial and operating performance and growth plans, taking into account the information currently available to
us. These statements are not statements of historical fact. Forward-looking statements involve risks and uncertainties that
may cause our actual results to differ materially from the expectations of future results we express or imply in any
forward-looking statements. In addition to the other factors discussed under “Risk Factors” elsewhere in this report,
factors that could contribute to these differences include, but are not limited to:
•
our ability to successfully execute our growth strategies;
•
our ability to successfully open new restaurants, acquire franchise restaurants, and/or execute other strategic
initiatives;
•
our ability to increase and/or maintain dine-in and to-go sales as well as profits at our existing restaurants;
•
our ability to integrate the franchise or other restaurants which we acquire or develop;
•
the continued service of key management personnel;
•
the impact of health epidemics or pandemics on our business including restrictions or regulations on our
operations;
•
health, dietary, and other concerns about our food products;
•
our ability to attract, motivate, and retain qualified employees;
•
the impact of federal, state, or local government laws and regulations relating to our employees and the sale of
food and alcoholic beverages;
•
the impact of litigation, including remedial actions, payment of damages and expenses, and negative publicity;
•
disruptions to the availability and price of our principal food and beverage products and all other operating
costs;
•
labor shortages or increased labor costs, such as federal or state minimum wage changes, market wage levels,
health care, sick pay, and workers’ compensation insurance costs;
•
inflationary increases in the costs of construction, including labor and material costs, and/or real estate;
•
changes in consumer preferences and demographic trends;
•
the impact of initiatives by competitors and increased competition generally;
•
our ability to successfully expand into new and existing domestic and international markets;
•
risks associated with partnering in markets with franchisees or other investment partners whose interests may
not align with ours;
•
risks associated with developing and successfully operating additional concepts;
•
security breaches or technology failures including failure to protect and maintain the security of confidential
guest, vendor, and employee information, either internally or by one of our vendors, compliance with privacy
and data protection laws, and risks of failures or breaches of our data protection systems;
4
•
the rate of growth of general and administrative expenses associated with building a strengthened corporate
infrastructure to support our initiatives;
•
negative publicity regarding food safety, health concerns, and other food or beverage related matters, including
the integrity of our or our suppliers’ food processing;
•
our franchisees’ adherence to the terms of their franchise agreements;
•
potential fluctuation in our quarterly operating results due to seasonality and other factors;
•
our ability to adequately protect our intellectual property;
•
our ability to adequately protect the physical security of our employees, guests, and restaurants;
•
our ability to raise capital in the future;
•
volatility of actuarially determined self-insurance losses and loss estimates;
•
adoption of new, or changes in existing, accounting policies and practices;
•
changes in and/or interpretations of federal and state tax laws;
•
adverse weather conditions which impact guest traffic at our restaurants; and
•
unfavorable general economic conditions in the markets in which we operate that adversely affect consumer
spending.
The words “believe,” “may,” “should,” “anticipate,” “estimate,” “expect,” “intend,” “objective,” “seek,” “plan,”
“strive,” “goal,” “projects,” “forecasts,” “will,” or similar words or, in each case, their negative or other variations or
comparable terminology, identify forward-looking statements. We qualify any forward-looking statements entirely by
these cautionary factors.
Other risks, uncertainties, and factors, including those discussed under “Risk Factors,” or those currently deemed
immaterial or unknown, could cause our actual results to differ materially from those projected in any forward-looking
statements we make.
We assume no obligation to publicly update or revise these forward-looking statements for any reason or to update
the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new
information becomes available in the future, except as required by applicable law.
5
PART I
ITEM 1. BUSINESS
Texas Roadhouse, Inc. (the “Company,” “we,” “our” and/or “us”) was incorporated under the laws of the state of
Delaware in 2004. The principal executive office is located in Louisville, Kentucky.
Introduction
The Company is a growing restaurant company operating predominantly in the casual dining segment. Our late
founder, W. Kent Taylor, started the business in 1993 with the opening of the first Texas Roadhouse restaurant in
Clarksville, Indiana. Since then, we have grown to three concepts with 784 restaurants in 49 states, one U.S. territory,
and ten foreign countries.
Our mission statement is “Legendary Food, Legendary Service®” and our core values are “Passion, Partnership,
Integrity, and Fun with Purpose.” Our operating strategy is designed to position each of our casual dining restaurants as
the local hometown favorite for a broad segment of consumers seeking high quality, affordable meals served with
friendly, attentive service. This strategy guides our purpose statement of “Serving Communities Across America and the
World.”
Restaurant Concepts
As of December 31, 2024, we owned and operated 666 restaurants and franchised an additional 118 restaurants. Of
the 666 restaurants we owned and operated, we operated 608 as Texas Roadhouse restaurants, 49 as Bubba’s 33
restaurants, and nine as Jaggers restaurants. Of the 118 franchise restaurants, 56 were domestic Texas Roadhouse
restaurants, four were domestic Jaggers restaurants, 57 were international Texas Roadhouse restaurants, including one
restaurant in a U.S. territory, and one was an international Jaggers restaurant.
Texas Roadhouse is a moderately priced, full-service, casual dining restaurant concept offering an assortment of
specially seasoned and aged steaks hand-cut daily on the premises and cooked to order over open grills. In addition to
steaks, we also offer our guests a selection of ribs, seafood, chicken, pork chops, pulled pork, and vegetable plates, and
an assortment of hamburgers, salads, and sandwiches. The majority of our entrées include two made-from-scratch side
items, and we offer all our dine-in guests free, unlimited roasted in-shell peanuts and fresh baked yeast rolls.
Bubba’s 33 is a moderately priced, full-service, casual dining restaurant concept featuring scratch-made food for all
with a little rock ‘n’ roll, ice-cold beer, and signature cocktails. Our menu features burgers, pizza, and wings as well as a
wide variety of appetizers, sandwiches, and dinner entrées. Bubba’s 33 is open for daily lunch and dinner service and
delivery services are offered at a majority of locations. Our first Bubba’s 33 restaurant opened in May 2013 in
Fayetteville, North Carolina.
Jaggers is a fast-casual restaurant concept offering burgers, hand-breaded chicken sandwiches and chicken tenders,
made-to-order fresh salads, and hand-spun milkshakes. Jaggers offers drive-thru, carry-out, and dine-in service options.
We also offer delivery services at a majority of locations. Our first Jaggers restaurant opened in December 2014 in
Noblesville, Indiana.
Throughout this report, we use the term “restaurants” to include Texas Roadhouse and Bubba’s 33, unless
otherwise noted.
Segment Information
We manage our restaurant and franchising operations by concept and as a result have identified Texas Roadhouse,
Bubba’s 33, Jaggers, and retail initiatives as separate operating segments. In addition, we have identified Texas
Roadhouse and Bubba’s 33 as reportable segments.
6
Operating Strategy
The operating strategy that underlies the growth of our restaurants is built on the following key components:
•
Offering high quality, freshly prepared food. We place a great deal of emphasis on providing our guests with
high quality, freshly prepared food. As part of our process, we have developed proprietary recipes to provide
consistency in quality and taste throughout all restaurants. We expect a management level employee to inspect
every entrée before it leaves the kitchen to confirm it matches the guest’s order and meets our standards for
quality, portion size, appearance, and presentation. In addition, we employ a team of product coaches whose
function is to provide continual, hands-on training and education to our kitchen staff for the purpose of
promoting consistent adherence to recipes, food preparation procedures, food safety standards, and overall food
quality.
•
Creating a fun and comfortable atmosphere with a focus on high quality service. We believe the service
quality and atmosphere we establish in our restaurants is a key component for fostering repeat business. In our
full-service restaurants, we focus on keeping our table-to-server ratios low to allow our servers to truly focus
on their guests and serve their needs in a personal, individualized manner. Our Texas Roadhouse restaurants
feature a rustic southwestern lodge décor accentuated with hand-painted murals, neon signs, and southwestern
prints, rugs, and artifacts. Additionally, our restaurants continuously play upbeat country hits. Our Bubba’s 33
restaurants feature walls lined with televisions playing sporting events and music videos and are decorated with
sports jerseys, neon signs, and other local flair. Our fast-casual concept, Jaggers, offers both drive-thru and
dining room service in a modern design featuring a contemporary exterior and a comfortable and inviting
dining room.
•
Owner-operator partnership model. As part of our effort to maintain a People-First culture, we offer a
performance-based compensation program supported by competitive benefits and health programs to our
individual restaurant managers and multi-restaurant operators, who are called “managing partners” and “market
partners,” respectively. Each of these partners is required to sign a multi-year employment agreement and make
a refundable deposit at the time of hire, that we believe reinforces an ownership mentality. The annual
compensation of these partners includes a base salary plus a performance bonus, which represents a percentage
of each of their respective restaurant’s pre-tax income. By providing our partners with a significant stake in the
success of our restaurants, we believe that we are able to attract and retain talented, experienced, and highly
motivated managing and market partners.
•
Offering everyday value. Our everyday value includes attractive price points, generous portions, and heaping
sides. When we evaluate menu pricing, we focus on remaining disciplined as we balance short-term pressures
with long-term growth while always keeping our guest top of mind. Prices are reviewed individually in each
local market and are offered at moderate price points that we believe are as low as or lower than those offered
by our competitors without sacrificing food quality. Within each menu category, we offer a choice of several
price points with the goal of fulfilling each guest’s budget and value expectations. Based on the results of our
pricing evaluations, we will continue to take pricing actions we feel are needed while striving to maintain our
value proposition.
•
Serving our communities. We strive to be the neighborhood destination in each market in which we operate.
We do not rely on national television or print advertising to promote our brands. To build brand awareness and
become the hometown favorite, our partners engage with their local communities through a variety of
promotional activities, such as contributing time, money, and complimentary meals to charitable, civic, and
cultural programs. Additionally, we employ marketing coordinators at the restaurant and market level to
develop and execute the majority of the local marketing strategies.
•
Focusing on dinner. In nearly all of our Texas Roadhouse restaurants, we limit our operating hours to dinner
only during the weekdays with approximately one half of our restaurants offering lunch on Friday. This focus
on dinner allows our restaurant teams to prepare for and manage only one shift per day during the week and to
prepare for the significant volumes of sales our restaurants generate.
7
Restaurant Development and Unit Economics
We consistently evaluate opportunities to develop restaurants in new and existing markets. Our site selection
process is critical to our growth strategy. In analyzing each prospective site, our real estate team and restaurant market
partners devote significant time and resources to the evaluation of local market demographics, population density,
household income levels, and site-specific characteristics such as visibility, accessibility, traffic generators, proximity of
other retail activities and competitors, traffic counts, and parking. We work actively with experienced real estate brokers
in target markets to select high quality sites and to maintain and regularly update our database of potential sites.
We design our restaurant prototypes to provide a relaxed atmosphere for our guests, while also focusing on
restaurant-level returns over time. Our current prototypical Texas Roadhouse restaurant consists of a freestanding
building with approximately 8,000 square feet with seating for approximately 270 to 325 guests and parking for
approximately 180 vehicles either on-site or in combination with some form of off-site cross parking arrangement. Our
current prototypes are adaptable to in-line and end-cap locations and/or spaces within an enclosed mall or a shopping
center.
Our current prototypical Bubba’s 33 restaurant consists of a freestanding building with approximately 7,600 square
feet with seating for approximately 270 to 330 guests. Some locations include patio seating for approximately 60 guests.
Parking is targeted for approximately 180 vehicles either on-site or in combination with some form of off-site cross
parking arrangement.
Our capital investment for new restaurants, which includes an estimate of pre-opening expense and a 10x initial
base rent factor for those sites that are leased, varies significantly depending on a number of factors. These factors
include, but are not limited to: the concept, square footage, layout, scope of required site work, geographical location,
supply chain costs, type of construction labor (union or non-union), local permitting requirements, our ability to
negotiate with landowners and/or landlords, cost of liquor and other licenses, and pre-opening expense.
In 2024 and 2023, our average capital investment for Texas Roadhouse restaurants was approximately $8.0 million.
In 2024, an increase in building and furniture, fixtures, and equipment costs was offset by a decrease in site work and
liquor license costs. We expect our average capital investment for restaurants to be opened in 2025 to increase to
approximately $8.6 million primarily due to increased site work costs and increased rent.
In 2024 and 2023, our average capital investment for Bubba’s 33 restaurants was $8.6 million and $8.2 million,
respectively. The increase in our 2024 average capital investment was primarily due to an increase in site work costs
partially offset by a decrease in pre-opening costs. We expect our average capital investment for restaurants to be opened
in 2025 to be approximately $8.6 million.
8
Existing Restaurant Locations
As of December 31, 2024, we had 666 company restaurants and 118 franchise restaurants in 49 states, one U.S.
territory, and ten foreign countries as shown in the chart below.
Number of Restaurants
Company Franchise
Total
Alabama . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
12
—
12
Alaska . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2
—
2
Arizona . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
22
—
22
Arkansas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9
—
9
California . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8
11
19
Colorado . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
17
1
18
Connecticut . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6
—
6
Delaware . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5
—
5
Florida . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
48
—
48
Georgia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
17
3
20
Idaho . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6
—
6
Illinois . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
19
—
19
Indiana . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
30
8
38
Iowa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
11
—
11
Kansas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7
1
8
Kentucky . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
20
3
23
Louisiana . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10
1
11
Maine . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3
—
3
Maryland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
14
—
14
Massachusetts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10
1
11
Michigan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
22
3
25
Minnesota . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7
—
7
Mississippi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3
—
3
Missouri . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
18
—
18
Montana . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2
1
3
Nebraska . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4
—
4
Nevada. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4
—
4
New Hampshire . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4
—
4
New Jersey . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10
—
10
New Mexico . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9
—
9
New York . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
22
—
22
North Carolina . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
22
3
25
North Dakota . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2
1
3
Ohio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
38
1
39
Oklahoma . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10
—
10
Oregon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2
—
2
Pennsylvania . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
29
6
35
Rhode Island . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3
—
3
South Carolina . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9
—
9
South Dakota . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2
—
2
Tennessee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
19
1
20
Texas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
93
6
99
Utah . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10
1
11
Vermont . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1
—
1
Virginia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
24
—
24
Washington . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4
1
5
West Virginia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4
3
7
Wisconsin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
11
4
15
Wyoming . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2
—
2
Total domestic restaurants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
666
60
726
Puerto Rico . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
1
1
Bahrain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
1
1
China . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
1
1
South Korea . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
8
8
Kuwait . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
3
3
Mexico. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
4
4
Philippines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
24
24
Qatar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
1
1
Saudi Arabia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
4
4
Taiwan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
6
6
United Arab Emirates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
5
5
Total international restaurants, including a U.S. territory . . . . . . . . . . . . . . .
—
58
58
Total system-wide restaurants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
666
118
784
9
Food
Menu. Our restaurants offer a wide variety of menu items at attractive prices that are designed to appeal to a broad
range of consumer tastes. At Texas Roadhouse restaurants, we offer a broad assortment of specially seasoned and aged
steaks, all cooked over open grills and all but one hand-cut daily on the premises. We also offer our guests a selection of
ribs, seafood, chicken, pork chops, pulled pork, and vegetable plates, and an assortment of burgers, salads, and
sandwiches. Entrée prices include roasted in-shell peanuts, fresh baked yeast rolls, and most include the choice of two
made-from-scratch sides. Other menu items include specialty appetizers such as the “Cactus Blossom®” and
“Rattlesnake Bites”. We also provide a “12 & Under” menu for children that includes a selection of smaller-sized entrées
served with one side item and a beverage.
At Bubba’s 33 restaurants, we offer a broad assortment of burgers, pizza, and wings as well as a wide variety of
appetizers, sandwiches, and dinner entrées. Our Bubba’s 33 restaurants also offer an extensive selection of ice-cold draft
beer and signature cocktails. We provide a “12 & Under” menu for children that includes a selection of items, including
a beverage.
At Jaggers restaurants, we offer fresh, scratch-made food including double-stacked burgers, hand-breaded chicken
sandwiches and chicken tenders, made-to-order fresh salads, and hand-spun milkshakes. We also provide a “12 &
Under” menu for children that includes a selection of smaller-sized entrées, a side, a drink, and a cookie.
Most of our full-service restaurants feature a full bar that offers a selection of draft and bottled beer, major brands
of liquor and wine, as well as made in-house margaritas and signature cocktails. Managing partners are encouraged to
tailor their beer selection to include regional and local brands. In 2024, alcoholic beverages at all company restaurants
accounted for 9.6% of restaurant sales.
We always strive to maintain a consistent menu at our restaurants. We continually review our menu to consider
enhancements to existing menu items or the introduction of new items. We change our menu only after guest feedback
and an extensive study of the operational and economic implications. To maintain our high levels of food quality and
service, we generally remove one menu item for every new menu item introduced to facilitate our ability to execute high
quality meals on a focused range of menu items.
We work with a third-party vendor to manage an online tool to provide nutritional information as well as help
guests identify known allergens in each of our menu items. This information is available for all concepts.
Food Quality and Safety. We are committed to serving a varied menu of high quality, great tasting food items with
an emphasis on freshness. We have developed proprietary recipes to promote consistency in quality and taste throughout
all restaurants and provide a unique flavor experience to our guests. At each domestic Texas Roadhouse restaurant, a
trained meat cutter hand cuts our steaks and other restaurant employees prepare our side items and yeast rolls from
scratch in the restaurants daily. At both Texas Roadhouse and Bubba’s 33 restaurants, we assign individual kitchen
employees to the preparation of designated food items in order to focus on quality, consistency, speed, and food safety.
Additionally, we expect a management level employee to inspect every entrée before it leaves the kitchen to confirm it
matches the guest’s order and meets our standards for quality, portion size, appearance, and presentation.
We employ a team of product coaches whose function is to provide continual, hands-on training and education to
the kitchen staff in all of our restaurants for the purpose of reinforcing food quality, recipe consistency, food preparation
procedures, food safety and sanitation standards, food appearance, freshness, portion size, and crisis management. The
product coach team supports all of our full-service domestic restaurants.
Food safety and sanitation is of utmost importance to us. We currently utilize several additional programs to help
facilitate adherence to proper food preparation procedures and food safety standards including temperature monitoring at
vendor distribution centers and our daily taste and temperature procedures within each restaurant. We have a food team
whose function, in conjunction with our product coaches, is to develop, enforce, and maintain programs designed to
promote compliance with food safety guidelines. This includes the routine performance of a gap analysis through various
tabletop exercises to identify areas of need or improvement. The food team also has incorporated technology in the food
safety program which includes the use of electronic checklists that can capture and report trends and digital temperature
monitoring and cooling automation.
10
We perform regular food safety and sanitation audits on our restaurants and these results are reviewed by various
members of operations and management. To maximize adherence to food safety protocols, we have incorporated Hazard
Analysis Critical Control Points principles and critical procedures (such as hand washing) in each recipe. All restaurant
managers are required to complete the American National Standards Institute Certified Food Manager training. In
addition, product coaches and certain food team members are required to obtain their Certified Professional-Food Safety
designation from the National Environmental Health Association.
Procurement. Our procurement philosophy is designed to supply fresh, quality products to our restaurants at
competitive prices while maximizing operating efficiencies. We negotiate directly with suppliers for substantially all
food and beverage products to maximize quality and freshness and obtain competitive prices. Food and supplies are
ordered by and shipped directly to our domestic restaurants. Most food products used in the operation of our restaurants
are distributed to individual restaurants through a national distribution company. We strive to qualify more than one
supplier for all key food items and believe that beef of comparable quality as well as all other essential food and
beverage products are available, upon short notice, from alternative qualified suppliers.
As a requirement of our quality assurance process, primary food items are purchased from qualified vendors who
are regularly audited by reputable, outside inspection services confirming compliance with United States Food and Drug
Administration and United States Department of Agriculture guidelines, the results of which are reviewed by our food
safety team.
We are committed to building long-term partnerships with suppliers who are dedicated to delivering and producing
safe, high-quality ingredients and products in a sustainable, ethical, and humane manner. All suppliers are expected to
comply with our Vendor Partner Expectations that outlines our standards for vendors, which include without limitation,
adherence to our food safety standards, how they conduct their business, how they treat their employees, and an
expectation that our suppliers will comply with all applicable laws and regulations. We have added these Vendor Partner
Expectations to various contracts with our largest suppliers and distributors and are looking for ways to incorporate them
into our contracts for additional selected vendors.
We are also focused on driving innovation, efficiency, and resiliency in our supply chain by collaborating with our
suppliers to improve quality, enhance visibility, eliminate waste, create redundancy, and drive additional productivity in
our operations.
Service
Service Quality. We believe that guest satisfaction and our ability to continually evaluate and improve the guest
experience at each of our restaurants is important to our success. We employ a team of service coaches whose function is
to provide consistent, hands-on training and education to our managers and service staff in all of our full-service
domestic restaurants. This training and education reinforces service quality, teamwork, responsible alcohol service, staff
attentiveness and guest interactions in the dining room, as well as the implementation of new technologies and process
changes.
Guest Satisfaction. We receive valuable feedback from our guests through the use of guest surveys, our various
websites including “texasroadhouse.com,” “bubbas33.com” or “eatjaggers.com,” a toll-free guest response telephone
line, tabletop kiosks in the restaurant, emails, letters, social media, and personal interaction in the restaurant. We have
implemented several programs to evaluate guest satisfaction, with particular attention given to food, beverage, and
service quality, cleanliness, staff attitude and teamwork, and manager visibility and interaction. We continue to evaluate
and implement new processes and technologies relating to guest satisfaction, including reducing guest wait times,
improving host interaction with the guest, and improving the to-go experience for our guests.
Atmosphere. The atmosphere of our restaurants is intended to appeal to broad segments of the population.
Substantially all Texas Roadhouse restaurants are of our prototype design, reflecting a rustic southwestern lodge
atmosphere. The interiors feature wood walls and stained concrete floors and are decorated with hand-painted murals,
neon signs, southwestern prints, rugs, and artifacts. The restaurants continuously play upbeat country hits. Guests may
also view a display-baking area, where our fresh baked yeast rolls are prepared, and a meat cooler displaying fresh cut
steaks. Once seated at a table, guests can enjoy free fresh baked yeast rolls along with roasted in-shell peanuts. Our
Bubba’s 33 restaurants feature walls lined with televisions playing a variety of sports events and music videos and are
decorated with sports jerseys, neon signs, and other local flair. Our fast-casual concept, Jaggers, offers both drive-thru
11
and dining room service in a modern design featuring a contemporary exterior and a comfortable and inviting dining
room.
People
Management Personnel. Each of our restaurants is generally staffed with one managing partner and a combination
of operations managers, kitchen managers, service managers, and assistant managers. Managing partners are single
restaurant operators who have primary responsibility for the day-to-day operations of the entire restaurant. Operations
managers support the managing partner in overall operations including oversight over the kitchen and service
departments. Kitchen managers have primary responsibility for managing sections of the kitchen staff and certain
kitchen operations including food production, preparation, execution, and quality standards. Service managers have
primary responsibility for managing sections of the front of house staff and certain dining room, bar, and to-go
operations including service quality and the guest experience. Assistant managers support our managing partners,
operations managers, kitchen managers, and service managers in helping maintain our standards of quality and
performance.
We use market partners to oversee the operation of our restaurants. Each market partner oversees a group of
varying sizes of managing partners and their respective management teams. Market partners are also responsible for the
hiring and development of each restaurant’s management team and assisting in the site selection process. Through
regular visits to the restaurants, the market partners facilitate adherence to all aspects of our concepts, strategies, and
standards of quality. To further facilitate adherence to our standards of quality and to maximize uniform execution
throughout the system, we employ product coaches and service coaches who regularly visit the restaurants to assist in
training of both new and existing employees and to grade food and service quality. The attentive service and high quality
food, which results from each restaurant having a managing partner, at least two to four managers, and the hands-on
assistance of a product coach and a service coach, are critical to our success.
Managing partners and market partners are required, as a condition of employment, to sign a multi-year
employment agreement. The annual compensation of our managing partners and market partners includes a base salary
plus a percentage of pre-tax income of the restaurant(s) they operate or supervise. Managing partners and market
partners are eligible to participate in our equity incentive plan and are required to make refundable deposits at the time of
hire, that reinforces an ownership mentality. Generally, the deposits are refunded after five years of continuous service.
Training and Development. All restaurant employees are required to complete varying degrees of training before
and during employment. Our comprehensive training program emphasizes our operating strategy, procedures, and
standards, including responsible alcohol service, and is typically conducted individually at our restaurants or in groups
throughout the country.
Our managing and market partners are generally required to have significant experience in the full-service
restaurant industry and are generally hired at a minimum of nine months before their placement in a new or existing
restaurant to allow time to fully train in all aspects of restaurant operations. All managing partners, kitchen and service
managers, and other management employees are required to complete an extensive training program of up to 20 weeks,
which includes training for every position in the restaurant. Trainees are validated at pre-determined points during their
training by a market partner, managing partner, product coach, and service coach.
We have designated a number of our restaurants to be certified as training centers by our training department. These
stores are utilized to train our new and existing managers to ensure compliance with all operating procedures and
guidelines. Additionally, most restaurants are staffed with training coordinators responsible for ongoing daily training
needs.
For new restaurant openings, a full team of designated trainers, each specializing in a specific restaurant position, is
deployed to the restaurant at least ten days before opening. Formal employee training begins seven days before opening
and follows a uniform, comprehensive training course as directed by a service coach.
Marketing
Our marketing strategy aims to promote our brands while retaining a localized focus. We strive to increase
comparable restaurant sales by increasing the frequency of visits by our current guests and attracting new guests to our
restaurants and also by communicating and promoting our concepts’ food quality, the guest experience, and community
support. We accomplish these objectives through three major initiatives.
12
Local Restaurant Marketing. Given our strategy to be a neighborhood destination, local restaurant marketing is
integral in developing brand awareness in each market. Managing partners are encouraged to participate in creative,
community-based marketing. We also engage in a variety of promotional activities, such as contributing time, money,
and complimentary meals to charitable, civic, and community events. We employ marketing coordinators at the
restaurant level and marketing coaches at the market level to develop and execute the majority of the local marketing
strategies.
In-restaurant Marketing. A significant portion of our marketing fund is spent communicating with our guests
inside our restaurants through point of purchase materials. We believe special promotions such as Valentine’s Day,
Mother’s Day, and Veterans Day drive notable repeat business. Our eight-week holiday gift card campaign is one of our
most impactful promotions.
Advertising. Our restaurants do not rely on national television or print advertising to promote our brands. Earned
local media is a critical part of our strategy that features our products and people in local television, print, and radio. Our
restaurants use a permission-based email loyalty program, as well as social media and digital marketing, to promote the
brand and engage with our guests. Our approach to media aligns with our focus on local store marketing and community
involvement. Additionally, we continue to look for ways through various strategic initiatives to drive awareness and
guest engagement with our brands. This includes the introduction of branded food and retail products that are available
for purchase online or in select retailers. These products include non-royalty based food and accessories as well as
licensing arrangements for frozen rolls, honey cinnamon butter, steak sauces, steak seasonings, and certain non-alcoholic
beverages.
Restaurant Franchise Arrangements
Franchise Restaurants. As of December 31, 2024, we had 22 franchisees that operated 118 Texas Roadhouse and
Jaggers restaurants in 20 states, one U.S. territory, and ten foreign countries.
Our standard Texas Roadhouse domestic franchise agreement has a term of ten years with two renewal options for
an additional five years each if certain conditions are satisfied. Our current form of domestic franchise agreement
generally requires the franchisee to pay a franchise fee for each restaurant opened and royalties based on a percentage of
gross sales. In addition, domestic Texas Roadhouse franchisees are required to pay a percentage of gross sales to a
national marketing fund for system-wide promotions and related efforts. Domestically, franchise rights for our Texas
Roadhouse restaurants are granted for specific restaurants only, as we have not entered into area development
agreements with domestic Texas Roadhouse franchisees. We are currently not accepting new domestic Texas Roadhouse
franchisees.
Internationally, we have entered into area development and franchise agreements for the development and operation
of Texas Roadhouse restaurants in several foreign countries and one U.S. territory. For the existing international
agreements, the franchisee is generally required to pay us a development fee for our grant of development rights in the
named countries, a franchise fee for each restaurant to be opened, and royalties based on a percentage of gross sales.
We have also entered into area development and franchise agreements for Jaggers, our fast-casual concept. Our
standard Jaggers domestic franchise agreement has a term of ten years with two renewal options for an additional five
years each if certain conditions are satisfied. Currently, we have area development agreements in place that allow for the
development and operation of Jaggers restaurants both domestically and internationally. As part of these agreements, the
franchisees are required to pay us a development fee for our grant of development rights in the named territories, a
franchise fee for each restaurant to be opened, and royalties based on a percentage of gross sales.
Our standard Texas Roadhouse and Jaggers domestic franchise agreements give us the right, but not the obligation,
to compel a franchisee to transfer its interests to us based on pre-determined formulas included in our franchise
agreements. Additionally, all of our Texas Roadhouse and Jaggers franchise agreements contain a pre-determined radius
restriction prohibiting us from opening a competing restaurant within such radius.
Our area development or franchise agreements, whether domestic or international, may be terminated if the
franchisee defaults in the performance of any of its obligations under the development or franchise agreement, including
its obligations to develop the territory or operate its restaurants in accordance with our standards and specifications. A
franchise agreement may also be terminated if a franchisee becomes insolvent, fails to make its required payments,
creates a threat to the public health or safety, ceases to operate the restaurant, or misuses our trademarks.
13
Franchise Compliance Assurance. We have various systems in place to promote compliance with our systems and
standards, both during the development and operation of franchise restaurants. We actively work with our franchisees to
support successful franchise operations as well as compliance with our standards and procedures. During the restaurant
development phase, we consent to the selection of restaurant sites and make available copies of our prototype building
plans to franchisees. In addition, we ensure that the building design is in compliance with our standards. We provide
training to a certain number of managers of a franchisee’s first restaurant. We also provide trainers to assist in the
opening of every domestic franchise restaurant and we provide trainers to assist our international franchisees in the
opening of their restaurants until such time as they develop an approved restaurant opening training program. Finally, on
an ongoing basis, we conduct reviews on all franchise restaurants to determine their level of effectiveness in executing
our concept at a variety of operational levels. Our franchisees are required to follow the same standards and procedures
regarding equipment and food purchases, preparation, and safety procedures as we maintain in our company restaurants.
Reviews are conducted by seasoned operations teams and focus on key areas including health, safety, and execution
proficiency. Finally, we perform initial, annual, and/or periodic due diligence from a compliance perspective on certain
franchisees based on a risk assessment and evaluation of the franchise partner.
Management Services. We provide administrative services to certain domestic Texas Roadhouse franchise
restaurants, some in which we have an ownership interest and others in which we have no ownership interest. Such
administrative services may include accounting, tax, operational supervision, payroll, human resources, training, legal,
and food, beverage, and equipment consulting for which we receive monthly fees. We also make available to these
restaurants certain restaurant employees and employee benefits on a pass-through cost basis.
Information Technology
All of our company restaurants utilize management information systems, which are designed to improve operating
efficiencies, provide restaurant and Support Center management with timely access to financial and operating data, and
reduce administrative time and expense. With our current information systems, we have the ability to query, report, and
analyze this intelligent data on a daily, weekly, monthly, quarterly, and year-to-date basis and beyond, on a
company-wide, concept, regional, market, or individual restaurant basis. Together, this enables us to closely monitor
sales and operating expenses at each of our restaurants throughout all concepts. We have a number of systems and
reports that provide comparative information that enables both restaurant and Support Center management to supervise
the financial and operational performance of our restaurants and to recognize and understand trends in the business.
Restaurant hardware and software support for all of our restaurants is provided and coordinated from the restaurant
Support Center in Louisville, Kentucky.
In the course of business, we gather and maintain sensitive information from our guests, employees, partners, and
business operations. To protect this information, we have created and implemented a detailed set of procedures that are
informed by recognized national and international standards. We have implemented extensive detective and preventative
controls designed to ensure the appropriate level of protection for the confidentiality, integrity, and availability of data
stored on or transferred through our information technology resources. We guard against business interruption by
maintaining a disaster recovery plan, which includes, among other things, storing critical business information off-site,
maintaining a redundant data center, testing the disaster recovery plan, and providing on-site power backup.
Additionally, we use a risk-based approach to create and implement a detailed set of information security policies and
procedures to protect against cybersecurity threats.
In addition to cash, we accept credit cards, debit cards, and gift cards as payment at our restaurants. We have
systems and processes in place that focus on the protection of our guests’ credit and debit card information and other
private information that we are required to protect, such as our employees’ personal information. Our systems have been
carefully designed and configured to safeguard against data loss or compromise. We submit our systems to regular audit
and review, ensuring compliance with the requirements of Payment Card Industry Data Security Standards and to assess
vulnerability in our systems. See Risk Factors in Item 1A of this Form 10-K for a discussion of risks associated with
breaches of security related to confidential guest and/or employee information.
We have made several digital enhancements to improve the guest experience and better support increased volumes
at our restaurants. These enhancements include a fully customized digital experience that allows our guests to get on the
waitlist or place an order for pickup or curbside service and has gift card and payment functionality. We have also
implemented texting systems which allows our dine-in guests to wait outside or in their cars and has improved the to-go
experience. In addition, we have implemented systems that enable touchless menus and contactless payments, providing
a smoother guest checkout experience and enhanced turnaround times. Finally, we have implemented digital display
14
systems in our kitchens that increase kitchen efficiency, allow us to handle increased volumes, and enhance the
employee experience. We have installed this system in nearly half of our domestic restaurants with plans to expand to all
domestic restaurants in 2025.
Additionally, in 2024, we implemented a new human capital management system. This system is an integrated,
cloud solution that provides enhanced recruiting, onboarding, time management, absence management, and payroll
solutions.
We believe that our current systems and practice of implementing regular updates will position us well to support
our current needs and future growth. Information systems projects are prioritized based on strategic, financial,
regulatory, and other business advantage criteria.
Competition
Competition in the restaurant industry is intense. We compete with well-established food service companies on the
basis of taste, quality, and price of the food offered, service, atmosphere, location, take-out and delivery options, as well
as the overall dining experience. Our competitors include a large and diverse group of restaurant chains and individual
restaurants that range from independent local operators that have opened restaurants in various markets to
well-capitalized national restaurant chains. We also face competition from meal kit delivery services as well as the
supermarket industry. In addition, improving product offerings of fast-casual and quick-service restaurants and better
execution of to-go sales, together with negative economic conditions could cause consumers to choose less expensive
alternatives. Although we believe that we compete favorably with respect to each of the above channels, other
restaurants and retail establishments compete for the same casual dining guests, quality site locations, and
restaurant-level employees as we do. We expect intense competition to continue across all aspects of the restaurant
industry.
Trademarks
We derive significant value from the ownership and use of our trademarks, service marks, trade dress, and other
intellectual property rights. We rely on these to market our concepts to consumers, distinguish our brands from other
restaurant concepts, establish our unique brands, and prevent consumer confusion with other restaurant concepts.
Accordingly, we have implemented processes to monitor our registrations and identify any infringement of our
intellectual property rights. Our registered trademarks and service marks include, among others, our trade names and
logos related to certain core menu offerings. We have registered all of our significant domestic marks for our restaurants
with the United States Patent and Trademark Office. We have registered or have registrations pending for our most
significant trademarks and service marks in multiple foreign jurisdictions and have registered or have registrations
pending on certain trademarks and service marks for different classifications relating to our retail initiatives. We have
also registered various Internet domain names.
Government Regulation
We are subject to a variety of federal, state, local, and international laws affecting our business. For a discussion of
the risks and potential impact on our business of a failure by us to comply with applicable laws and regulations, see
Item 1A, Risk Factors.
Each of our restaurants is subject to permitting and licensing requirements and regulations by a number of
government authorities, which may include, among others, alcoholic beverage control, health and safety, sanitation,
labor, use of packaging and materials, zoning, and public safety agencies in the state and/or municipality in which each
restaurant is located. The development and operation of restaurants depends on selecting and acquiring suitable sites that
satisfy our financial targets, which are subject to zoning, land use, environmental, traffic, and other regulations. We are
also subject to laws and regulations relating to the preparation and sale of food, including regulations regarding product
safety, nutritional content, and menu labeling.
In addition to domestic regulations, our international business exposes us to additional regulations, including
antitrust and tax requirements, anti-boycott legislation, import/export and customs regulations and other international
trade regulations, the USA Patriot Act, and the Foreign Corrupt Practices Act.
In order to serve alcoholic beverages in our restaurants, we must comply with alcoholic beverage control
regulations which require each of our restaurants to apply to a state authority, and, in certain locations, county or
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municipal authorities, for a license or permit to sell alcoholic beverages at our restaurants. These licenses or permits
must be renewed annually and may be revoked or suspended for cause at any time. We are also subject in certain states
to “dram shop” statutes, which generally provide a person injured by an intoxicated person the right to recover damages
from an establishment that served alcoholic beverages to the intoxicated person. Consistent with industry standards, we
focus on responsible alcohol service training and carry liquor liability coverage as part of our existing comprehensive
general liability insurance as well as excess umbrella coverage. Additionally, and as part of our enterprise risk
management program, we have a cross-functional risk subcommittee focused solely on responsible alcohol service.
Our restaurant operations are also subject to federal and state wage and hour laws and regulations governing such
matters as minimum wage and overtime, meal and rest breaks, proper exempt classification, child labor, paying for all
hours worked (including overtime), and proper handling of tips. A significant number of our hourly restaurant personnel
receive tips as part of their compensation and are paid at or above a minimum wage rate after giving effect to applicable
tips. We rely on our employees to accurately disclose the full amount of their tip income. We base our FICA tax
reporting on the disclosures provided to us by our tipped employees.
Since 2002, we have had a Tip Rate Alternative Commitment agreement with the Internal Revenue Service. By
complying with educational and other requirements of the agreement, we reduce the likelihood of potential employer-
only FICA assessments for unreported or underreported tips.
Our restaurants are also subject to other federal and state labor laws and regulations governing such matters as
health benefits, leaves of absence, unemployment taxes, workers’ compensation, work authorization and eligibility
requirements, working conditions, safety standards, equal employment opportunities, anti-discrimination and
harassment, reasonable accommodation, and other similar legal requirements.
Our restaurants must comply with the applicable requirements of the Americans with Disabilities Act of 1990
(“ADA”) and related state accessibility statutes. Under the ADA and related state laws, we must provide equal access to
our goods and services to disabled guests. In addition, when constructing or undertaking remodeling of our restaurants,
we must comply with the applicable ADA Standards for Accessible Design.
We are subject to laws relating to information security, data privacy, cashless payments, and consumer credit
protection and fraud. An increasing number of governments and industry groups worldwide have established data
privacy laws and standards for the protection of personal information, including social security numbers, financial
information (including credit and debit card numbers), and health information.
Seasonality
Our business is subject to seasonal fluctuations. Historically, sales in most of our restaurants have been higher
during the winter months of each year. Holidays, changes in weather, severe weather, and similar conditions may impact
sales volumes seasonally in some operating regions. As a result, our quarterly operating results and comparable
restaurant sales may fluctuate due to seasonality. Accordingly, results for any one quarter are not necessarily indicative
of results to be expected for any other quarter or for any year and comparable restaurant sales for any particular future
period may fluctuate.
Human Capital Management
At Texas Roadhouse, we take pride in being a People-First company. As of December 31, 2024, we employed
approximately 95,000 people. This included 895 executive and administrative personnel and 3,736 restaurant
management personnel, while the remainder were full and part-time hourly restaurant personnel. None of our employees
are covered by a collective bargaining agreement and we consider our employee relations to be good.
Our business relies on our ability to attract and retain talented employees. To attract and retain talent, we cast a
wide net, sourcing qualified candidates through multiple channels, and maintain our People-First culture through shared
core values and a performance-based compensation program supported by competitive benefits and health programs.
Further, our training and development programs are designed to provide our employees with ample opportunities to
grow and develop in their careers.
Additionally, we believe that diversity of talent and experience and inclusion of all Roadies is what makes us truly
Legendary. We value and welcome employees of all walks of life to share their gifts, strengths, voices, talents, and
inspiration with us while working in our restaurants and Support Center, as we strive to reflect the communities we are
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proud to serve. We are passionate about treating everyone with respect, appreciation, and fairness every day to ensure
that we remain a legendary place to work. As a result, we are committed to attracting, retaining, engaging, recognizing,
and developing a workforce that mirrors the diversity of our guests and is committed to upholding our shared values.
The table below shows the gender and racial and ethnic diversity of our employees as of December 31, 2024:
December 31, 2024
Women
People of Color (1)
Support Center . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
53 %
12 %
Restaurant Managers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
40 %
24 %
Hourly Restaurant Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
57 %
44 %
(1) Denotes employees at company restaurants and our Support Center that identify as American Indian/Alaskan
Native, Asian, Black/African American, Hispanic/Latino, Native Hawaiian/Pacific Islander, or two or more races.
Maintaining our Culture and Core Values. In our restaurants and at our Support Center, we are committed to our
shared “Core Values of Passion, Partnership, Integrity, and Fun with Purpose”. These Core Values form the foundation
of who we are as a company and how we interact with respect, appreciation, and fairness towards one another every day.
Performance-based Compensation and Benefits. We offer a performance-based compensation program to our
managing partners and market partners. Each of these positions earn a base salary plus a performance bonus, which
represents a percentage of each of their respective restaurant’s pre-tax income. By providing our partners with a
significant stake in the success of our restaurants, we believe that we are able to attract and retain talented, experienced,
and highly motivated managing and market partners.
We also support our employees by offering competitive wages and benefits for eligible employees. In addition to
salaries, these programs (which vary by employee level) include, among other items, bonuses, stock awards, retirement
savings plans with employer matching contributions, healthcare and insurance benefits, health savings and flexible
spending accounts, tuition reimbursement, paid time off, paid parental leave, and various employee assistance programs.
Personal Development. We motivate and develop our employees by providing them with opportunities for
increased responsibilities and advancement. As a part of our overall People-First strategy, we are committed to
providing training and development opportunities through a variety of in-person and virtual programs and classes that
are offered to restaurant employees, operators, and Support Center employees, all of which are designed to give
employees at all levels the tools to succeed at their current job as well as opportunities for continuous learning,
networking, growth, and development. With thousands of leadership positions across our restaurants, we provide a
pathway and training for thousands of individuals across the country to advance from entry-level jobs into management
roles. In addition, our geographic footprint often allows us to offer our restaurant team members relocation options at
similar roles due to personal circumstances.
Employee Engagement. We value the diverse thoughts, opinions, and feedback from our employees at all levels
across the Company, which means engaging and listening as a management team to what our employees have to say. We
take an expansive and strategic approach to the manner in which we solicit and receive feedback utilizing a variety of
methods from in-person focus groups to large-scale surveys. Through this employee engagement, we believe these
listening sessions and tools allow us a better opportunity to constructively engage with and understand our employees’
strengths, opportunities, and challenges as we continue to work to evaluate and develop ways to leverage or address
opportunities in our business.
Health and Safety. The health and safety of our employees is a top priority and we are committed to providing a
safe workplace, ensuring the safety and well-being of all team members while also ensuring that we are in compliance
with all laws and regulations as well as internal policies. This commitment includes the deployment of specific protocols
and standards to our restaurants that focus on maintaining the health and safety of our employees.
Andy’s Outreach. Founded in 2005, Andy’s Outreach is a non-profit, tax-exempt organization whose mission is to
provide financial support to employees of Texas Roadhouse and their families in times of severe hardship or crisis and in
cases of tragic or catastrophic need. Andy’s Outreach is mainly funded by the support of Texas Roadhouse employees
through payroll contributions, a domestic franchise store that is owned by Andy’s Outreach, and other fundraising
efforts. Since its inception, Andy’s Outreach has assisted over 24,000 employees and distributed over $30 million.
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Additional information about our People-First initiatives is available through our website at
www.texasroadhouse.com, under the investors section.
Corporate Sustainability
Our corporate sustainability mission is to leave every community better than we found it by focusing on four
pillars – food, community, employees, and conservation. As we test and roll out new programs, we continue to build
champions who are invested in furthering our sustainability efforts. Ongoing initiatives such as our meat cutter program,
support of non-profits, employee development, and focus on conservation, create steady progress for our overall
corporate sustainability program and are integrated into our daily operations. Additional information about our corporate
sustainability mission is available through our website at www.texasroadhouse.com, under the corporate sustainability
section.
Website Access to Reports
We make our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and
amendments to those reports, filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, available, free of
charge on or through our website, www.texasroadhouse.com, as soon as reasonably practical after we electronically file
such material with, or furnish it to, the Securities and Exchange Commission (“SEC”). The SEC maintains a website at
www.sec.gov that contains reports, proxy and information statements, and other information regarding issuers that file
electronically with the SEC.
Information about our Executive Officers
Set forth below are the name, age, position, and a brief account of the business experience of each of our executive
officers. Executive officers are appointed by our Board of Directors (the “Board”) and serve until their successors are
appointed or until resignation or removal, in accordance with their employment agreements. There are no family
relationships among any of our executive officers.
Name
Age
Position
Gerald L. Morgan . . . . . . . . . . . . . . . . . . . . . .
64
Chief Executive Officer
Regina A. Tobin . . . . . . . . . . . . . . . . . . . . . . .
61
President
Christopher C. Colson . . . . . . . . . . . . . . . . . . .
48
Chief Legal and Administrative Officer
Hernan E. Mujica . . . . . . . . . . . . . . . . . . . . . .
63
Chief Technology Officer
D. Christopher Monroe . . . . . . . . . . . . . . . . . .
58
Chief Financial Officer
Travis C. Doster . . . . . . . . . . . . . . . . . . . . . . .
58
Chief Communications Officer
Gerald L. Morgan. Mr. Morgan is Chief Executive Officer of the Company, having been appointed to this position
in March 2021. Mr. Morgan joined the Company in 1997, during which time he has held the positions of Managing
Partner, Market Partner, and Regional Market Partner. Mr. Morgan also previously served as President from
December 2020 until Ms. Tobin’s appointment to President in January 2023. Mr. Morgan has nearly 40 years of
restaurant management experience with Texas Roadhouse, Bennigan’s Restaurants, and Burger King.
Regina A. Tobin. Ms. Tobin is President of the Company, having been appointed to this position in January 2023.
Ms. Tobin previously served as the Company’s Chief Learning and Culture Officer, a position she held from June 2021
through her appointment to President. Ms. Tobin joined the Company in 1996, during which time she has held the
positions of Managing Partner, Market Partner, and Vice President of Training. Ms. Tobin has nearly 40 years of
restaurant industry experience.
Christopher C. Colson. Mr. Colson is Chief Legal and Administrative Officer and Corporate Secretary of the
Company, having been appointed to Chief Legal and Administrative Officer in January 2023 and Corporate Secretary in
August 2019. Mr. Colson previously served as the Company’s General Counsel, a position he held from March 2021
through his appointment to Chief Legal and Administrative Officer. Mr. Colson joined the Company in 2005, during
which time he has held the positions of Senior Counsel, Associate General Counsel, and Executive Director of the
Global Development Group. Mr. Colson has over 20 years of restaurant industry experience with Texas Roadhouse,
Frost Brown Todd (serving as outside counsel to the Company), YUM! Brands, and as assurance staff at KPMG.
18
Hernan E. Mujica. Mr. Mujica is Chief Technology Officer of the Company, having been appointed to this
position in January 2023. Mr. Mujica had been previously designated Chief Information Officer, an executive officer
position that he held from June 2021 through his appointment to Chief Technology Officer. Mr. Mujica joined the
Company in 2012 as Vice President of Information Technology and was subsequently promoted to Chief Information
Officer. Prior to joining the Company, Mr. Mujica held senior management positions at The Home Depot and Arthur
Andersen. Mr. Mujica has over 30 years of experience in both industry and consulting roles.
D. Christopher Monroe. Mr. Monroe is Chief Financial Officer of the Company, having been appointed to this
position in June 2023 upon joining the Company. In this role, Mr. Monroe is responsible for overseeing the Company’s
accounting, financial reporting, investor relations, tax, treasury, internal audit, and finance functions, as well as serving
as the Company’s principal financial officer. Prior to joining the Company, Mr. Monroe served in various positions at
Southwest Airlines, including Director of Corporate Finance, Assistant Treasurer, and Vice President Treasurer, until his
promotion in 2017 to Senior Vice President of Finance and Treasurer. As Senior Vice President of Finance and
Treasurer, he oversaw the overall capital strategy, planning, and structure for Southwest Airlines with responsibility for
corporate insurance and risk management, as well as supply chain management and corporate sustainability. Mr. Monroe
has over 35 years of finance experience.
Travis C. Doster. Mr. Doster is Chief Communications Officer of the Company, having been appointed to this
position in November 2023. In this role, he is responsible for leading the Company’s communications, marketing,
events, public affairs, government relations, and corporate sustainability functions. Mr. Doster joined the Company in
2006, as the Director, then Senior Director, of Communications where he served until his promotion to Vice President of
Communications in 2018. Prior to joining the Company, Mr. Doster was a Vice President at FSA Public Relations,
where he and his staff provided a number of services, including public relations, crisis management, and issues
management, for national clients, including, Jimmy John’s Gourmet Sandwich Shops, Qdoba Mexican Grill, and
Cameron Mitchell Restaurants. Mr. Doster has over 30 years of media, public relations, and industry experience.
ITEM 1A. RISK FACTORS
Careful consideration should be given to the risks described below. If any of the risks and uncertainties described in
the cautionary factors described below actually occur, our business, financial condition, results of operations, liquidity,
and the trading price of our common stock could be materially and adversely affected. Moreover, we operate in a very
competitive and rapidly changing environment. New factors emerge from time to time and it is not possible to predict
the impact of all these factors on our business, financial condition, results of operations, or liquidity.
Risks Related to our Growth and Operating Strategy
Our growth strategy, which primarily depends on our ability to open new restaurants that are profitable, is subject to
many factors, some of which are beyond our control.
We cannot assure you that we will be able to open new restaurants that are profitable in accordance with our
expansion plans. We have experienced delays in opening some of our restaurants in the past and may experience delays
in the future. These delays impact the timing of new restaurant openings and the related pre-opening expenses. Delays or
failures in opening new restaurants could adversely affect our growth strategy. One of our biggest challenges in
executing our growth strategy may be locating and securing an adequate supply of suitable new restaurant sites that
satisfy our financial targets. Competition for suitable restaurant sites in our target markets may be intense.
Once opened, we anticipate that our new restaurants will generally take several months to reach planned operating
levels due to start-up inefficiencies typically associated with new restaurants. We cannot assure you that any restaurant
we open will be profitable or obtain operating results similar to those of our existing restaurants. Some of our new
restaurants will be located in areas where we have little or no meaningful experience. Those new markets may have
smaller trade areas and different competitive conditions, consumer tastes, and discretionary spending patterns than our
traditional, existing markets, which may cause our new store locations to be less successful than restaurants in our
existing market areas. Restaurants opened in new markets may open at lower average weekly sales volume than
restaurants opened in existing markets and may have higher restaurant-level operating expense ratios than in existing
markets. Sales at restaurants opened in new markets may take longer to reach average unit volume, if at all, thereby
affecting our overall profitability. Our localized marketing strategy may not result in brand awareness and guest
engagement. Additionally, the opening of a new restaurant could negatively impact sales at one or more of our existing
nearby restaurants, which could adversely affect our results of operations.
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Our ability to open new restaurants that are profitable will also depend on numerous other factors, many of which
are beyond our control, including, but not limited to, the following:
•
our ability to hire, train, and retain qualified operating personnel, especially market partners, managing
partners, and/or other restaurant management personnel who can execute our business strategy and maintain
our culture and brand standards;
•
our ability to negotiate suitable purchase or lease terms to execute our business strategy;
•
the availability and cost of construction materials, equipment and labor;
•
our ability to control construction and development costs of new restaurants (including increased site, supply
chain, and distribution costs);
•
the potential impact of tariffs on U.S. imports, specifically building materials and restaurant equipment;
•
our ability to secure required governmental approvals and permits in a timely manner, or at all;
•
road construction and other factors limiting access to the restaurant;
•
delays by our landlord or other developers in constructing other parts of a development adjacent to our
premises in a timely manner;
•
redevelopment of other parts of a development adjacent to our premises that affect the parking available for our
restaurant;
•
our ability to secure liquor licenses;
•
competitive and economic conditions, consumer tastes and discretionary spending patterns that are different
from and more difficult to predict or satisfy than in our existing markets;
•
changes in federal, state, and/or local tax laws;
•
the cost and availability of capital to fund construction costs and pre-opening expenses; and
•
the impact of inclement weather, natural disasters, and other calamities.
You should not rely on past changes in our average unit volume or our comparable restaurant sales as an indication
of our future results of operations because they may fluctuate significantly.
A number of factors have historically affected, and will continue to affect, our average unit volume and comparable
restaurant sales, including, among other factors:
•
consumer awareness and understanding of our concepts;
•
our ability to execute our business strategy effectively;
•
our ability to maintain higher levels of to-go sales at our restaurants;
•
competition, from our competitors in the restaurant industry, our own restaurants, and/or other food service
providers (such as delivery services and grocery stores);
•
the impact of permanent changes in weather patterns that can cause inclement weather, natural disasters, and
other calamities which impact guest traffic or product availability at our restaurants;
•
consumer trends and seasonality;
•
our ability to increase menu prices without adversely impacting guest traffic counts or per person average
check growth;
20
•
introduction of new menu items;
•
loss of parking and/or access rights due to government action (such as eminent domain actions) or through
private transactions;
•
closures and/or dining rooms operating at limited capacity due to government mandated restaurant closures
and/or limited availability of staff to meet our business standards;
•
negative publicity regarding food safety, health concerns, quality of service, and other food or beverage related
matters, including the integrity of our or our suppliers’ food processing;
•
general economic conditions, including an economic recession, which can affect restaurant traffic, local labor
costs, and prices we pay for the food and beverage products and other supplies we use;
•
legislation that impacts our suppliers’ ability to maintain compliance with laws and regulations and impacts our
ability to source product; and
•
effects of actual or threatened terrorist attacks (including cyber and/or ransomware attacks).
Our average unit volume and comparable restaurant sales may not increase at rates achieved in the past, which may
affect our sales growth and will continue to be a critical factor affecting our profitability. Our business is also subject to
seasonal fluctuations. Historically, sales in most of our restaurants have been higher during the winter months of each
year. Holidays, changes in weather, severe weather, and similar conditions may impact sales volumes seasonally in some
operating regions. Accordingly, results for one quarter are not necessarily indicative of results to be expected for any
other quarter or for any year and comparable restaurant sales for any particular future period may decrease. In the future,
operating results may fall below the expectations of securities analysts and investors. In that event, the price of our
common stock could decrease.
The development and/or acquisition of additional restaurant concepts may not contribute to our growth.
The development of additional restaurant concepts, including Bubba’s 33 and Jaggers, created internally or
acquired as a part of our other strategic initiatives may not be as successful as our experience in the development of the
Texas Roadhouse concept. These concepts may have lower brand awareness and less operating experience than most
Texas Roadhouse restaurants. In addition, they may have a higher initial investment cost and/or a lower per person
average check amount. As a result, the development and/or acquisition of additional restaurant concepts may not
contribute to our average unit volume growth and/or profitability in an incremental way. We can provide no assurance
that these units will be accepted in the markets targeted for expansion and/or that we or our franchisees will be able to
achieve our targeted returns when opening new locations. In the future, we may determine not to move forward with any
further expansion and/or acquisition of additional restaurant concepts. These decisions could limit or delay our overall
long-term growth. Additionally, expansion and/or acquisition of additional restaurant concepts might divert our
management’s attention from other business concerns or initiatives and could have an adverse impact on our core Texas
Roadhouse business.
Our expansion into international markets presents increased economic, political, regulatory, and other risks.
The entrance into international markets may not be as successful as our experience in the development of our
concepts domestically or any success we have had with our concepts in other international markets. In addition,
operating in international markets may require significant resources and management attention and will subject us to
economic, political, and regulatory risks that are different from and incremental to those in the United States. In addition
to the risks that we face in the United States, our international operations involve risks that could adversely affect our
business, including:
•
the need to adapt our concepts for specific cultural and language differences;
•
new and different sources of competition;
•
the ability to identify appropriate business partners;
•
difficulties and costs associated with staffing and managing foreign operations;
21
•
difficulties in adapting and sourcing product specifications for international restaurant locations;
•
fluctuations in currency exchange rates, which could impact royalties, revenue and expenses of our
international operations, and expose us to foreign currency exchange rate risk;
•
difficulties in complying with local laws, regulations, and customs in foreign jurisdictions;
•
unexpected changes in regulatory requirements or tariffs on goods needed to construct and/or operate our
restaurants;
•
political or social unrest, economic instability, and destabilization of a region;
•
effects of actual or threatened terrorist attacks;
•
health concerns from global pandemics;
•
compliance with U.S. laws such as the Foreign Corrupt Practices Act, and similar laws in foreign jurisdictions;
•
differences in the registration and/or enforceability of intellectual property and contract rights;
•
adverse tax consequences;
•
profit repatriation and other restrictions on the transfer of funds; and
•
different and more stringent user protection, data protection, privacy, and other laws.
Our failure to manage any of these risks successfully could harm our future international operations and our overall
business and results of our operations.
We are also subject to governmental regulations throughout the world impacting the way we do business with our
international franchisees. These include antitrust and tax requirements, anti-boycott regulations, import/export/customs,
tariffs and other international trade regulations, the USA Patriot Act, and the Foreign Corrupt Practices Act. Failure to
comply with any such legal requirements could subject us to monetary liabilities and other sanctions, which could
adversely impact our business and financial performance.
Acquisition of existing restaurants from our domestic franchisees and other strategic initiatives may have
unanticipated consequences that could harm our business and our financial condition.
We plan to continue to opportunistically acquire existing restaurants from our domestic franchisees over time.
Additionally, from time to time, we evaluate potential mergers, acquisitions, joint ventures, or other strategic initiatives
(including retail initiatives utilizing our intellectual property or other brand extensions) to acquire or develop additional
business channels or concepts, and/or change the business strategy regarding an existing concept. To successfully
execute any acquisition or development strategy, we will need to identify suitable acquisition or development candidates,
negotiate acceptable acquisition or development terms, and possibly obtain appropriate financing.
Any acquisition or future development that we pursue, including the on-going development of new concepts or
retail initiatives utilizing our intellectual property, whether or not successfully completed, may involve risks, including:
•
material adverse effects on our operating results, particularly in the fiscal quarters immediately following the
acquisition or development as the restaurants are integrated into our operations;
•
risks associated with entering into new domestic markets or conducting operations where we have no or limited
prior experience;
•
risks associated with successfully integrating new employees, processes, and systems while also maintaining
our culture and brand standards;
22
•
risks inherent in accurately assessing the value, future growth potential, strengths, weaknesses, contingent and
other liabilities and potential profitability of acquisition candidates, and our ability to achieve projected
economic and operating synergies, without impacting our underlying business; and
•
the diversion of management’s attention from other business concerns.
Future acquisitions of existing restaurants from our franchisees or other strategic partners, which may be
accomplished through a cash purchase transaction, the issuance of shares of common stock, or a combination of both,
could have a dilutive impact on holders of our common stock and result in the incurrence of debt and contingent
liabilities and impairment charges related to goodwill and other tangible and intangible assets, any of which could harm
our business and financial condition. Additionally, following a franchise acquisition, we may be required to incur
substantial capital improvement costs to meet company standards, which could impact our return on such acquisition.
Additionally, we may evaluate other means to leverage our competitive strengths, including the expansion of our
products across other strategic initiatives or business opportunities (including retail initiatives utilizing our intellectual
property). The expansion of our products may damage our reputation if products bearing our brands are not of the same
quality or value that guests associate with our concepts or if our partners are accused of any actual or alleged
misconduct. In addition, we may experience dilution of the goodwill associated with our concepts as they become more
common and increasingly accessible.
Approximately 21% of our company restaurants are located in Texas and Florida and, as a result, we are sensitive to
economic and other trends and developments in those states.
As of December 31, 2024, we operated a total of 93 company restaurants in Texas and 48 company restaurants in
Florida. As a result, we are particularly susceptible to adverse trends and economic conditions in those states, including
any state mandated changes in minimum and tipped wage rates and economic pressures that may result in lower sales
and profits at our restaurants. In addition, given our geographic concentration in these states, negative publicity
regarding any of our restaurants in either Texas or Florida could have a material adverse effect on our business and
operations, as could other occurrences in either Texas or Florida such as health epidemics or pandemics, local strikes,
energy shortages or extreme fluctuations in energy prices, droughts, earthquakes, hurricanes, fires, or other natural
disasters.
Our franchisees could take actions that could harm our business.
Both our domestic and international franchisees are contractually obligated to operate their restaurants in
accordance with our applicable restaurant operating standards. We also provide training and support to franchisees.
However, most franchisees are independent third parties that we do not control, and these franchisees own, operate, and
oversee the daily operations of their restaurants. As a result, the ultimate success and quality of any franchise restaurant
rests with the franchisee. If franchisees or their employees do not successfully operate restaurants or act in a manner
consistent with our standards, our image and reputation could be harmed, which in turn could adversely affect our
business and operating results.
Decreased cash flow from operations, or an inability to access credit, could negatively affect our business initiatives
or may result in our inability to execute our revenue, expense, and capital allocation strategies.
Our ability to fund our operating plans and to implement our capital allocation strategies depends on sufficient cash
flow from operations and/or other financing, including the use of funding under our credit facility. We also may seek
access to the debt and/or equity capital markets. There can be no assurance, however, that these sources of financing will
be available on terms favorable to us, or at all. Our capital allocation strategies include, but are not limited to, new
restaurant development, payment of dividends, refurbishment or relocation of existing restaurants, repurchases of our
common stock, and franchise acquisitions. If we experience decreased cash flow from operations, our ability to fund our
operations and planned initiatives, and to take advantage of growth opportunities, may be delayed or negatively affected.
In addition, these disruptions or a negative effect on our revenue could affect our ability to borrow or comply with our
covenants under our credit facility. If we are unable to raise additional capital, our growth could be impeded.
Our existing credit facility limits our ability to incur additional debt.
The lenders’ obligation to extend credit under our credit facility depends on our maintaining certain financial
covenants. If we are unable to maintain these covenants, we would be unable to obtain additional financing under this
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credit facility. The credit facility permits us to incur additional secured or unsecured indebtedness outside the credit
facility, except for the incurrence of secured indebtedness that in the aggregate is equal to or greater than $125.0 million
and 20% of our consolidated tangible net worth or circumstances where the incurrence of secured or unsecured
indebtedness would prevent us from complying with our financial covenants. If we are unable to borrow additional
capital or have sufficient liquidity to either repay or refinance the then outstanding balance at the expiration of our credit
facility, or upon violation of the covenants, our growth could be impeded and our financial performance could be
significantly adversely affected.
We are subject to all of the risks associated with leasing space subject to long-term non-cancelable leases, as well as
risks related to renewal.
The majority of our company restaurants are located on leased premises. Additional sites that we lease are likely to
be subject to similar long-term non-cancelable leases. In connection with the relocation, other operational changes or
closure of any restaurant, we may nonetheless be committed to perform on our obligations under the applicable lease
including, among other things, paying the base rent and real estate taxes for the balance of the lease term. We also are
subject to landlord actions that could negatively impact our business or operations.
In addition, as each of our leases expires, there can be no assurance we will be able to renew our expiring leases
after the expiration of all remaining renewal options, either on commercially acceptable terms or at all. As a result, at the
end of the lease term and expiration of all renewal periods, we may be unable to renew the lease without substantial
additional cost, if at all. As a result, we may be required to relocate or close a restaurant, which could subject us to
construction and other costs and risks and may have an adverse effect on our results of operations.
We may be required to record impairment charges in the future.
In accordance with accounting guidance as it relates to the impairment of long-lived assets, we make certain
estimates and projections with regard to company restaurant operations, as well as our overall performance in connection
with our impairment analysis for long-lived assets. When impairment triggers are deemed to exist for any company
restaurant, the estimated undiscounted future cash flows for the restaurant are compared to its carrying value. If the
carrying value exceeds the undiscounted cash flows, an impairment charge would be recorded equal to the difference
between the carrying value and the estimated fair value.
We review the value of our goodwill on an annual basis and also when events or changes in circumstances indicate
that the carrying value of goodwill may exceed its fair value. Estimates of fair value are based upon the best information
available as of the date of the assessment and incorporate management assumptions about expected future cash flows
and contemplate other valuation measurements and techniques.
The estimates of fair value used in these analyses require the use of judgment regarding certain assumptions and
estimates of future operating results. If actual results differ from our estimates or assumptions, impairment charges may
be required in the future. If impairment charges are significant, our results of operations could be adversely affected.
Risks Related to Consumer Discretionary Spending and Macroeconomic Conditions
Changes in consumer preferences and discretionary spending could adversely affect our business.
Our success depends, in part, upon the popularity of our food products. Continued social concerns or shifts in
consumer preferences away from our restaurants or food offerings, particularly beef, could harm our business. Consumer
preferences regarding food sourcing in response to environmental or welfare concerns could also harm our business.
Additionally, current and new medical treatments may cause consumers to avoid or consume less of our products.
Our success also depends to a significant extent on discretionary consumer spending, which is influenced by
general economic conditions, including high inflationary periods, and the availability of discretionary income.
Accordingly, we may experience declines in sales during economic downturns, pandemics, or other periods of
uncertainty. Any material decline in the amount of discretionary spending could have a material adverse effect on our
business, results of operations, financial condition, or liquidity.
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Our objective to increase sales and profits at existing restaurants could be adversely affected by macroeconomic
conditions.
In future periods, the U.S. and global economies could further suffer from a downturn in economic activity.
Recessionary economic cycles, higher interest rates, higher fuel and other energy costs, sustained labor inflation,
increases in commodity prices, higher levels of unemployment, higher consumer debt levels, higher tax rates and other
changes in tax laws, imposition of tariffs, financial market volatility, political or military conflicts, social unrest,
government spending, a low or stagnant pace of economic recovery and growth, or other economic factors that may
affect consumer spending or buying habits could adversely affect the demand for our products. In addition, there is no
assurance that any governmental plans to stimulate the economy will foster growth in consumer spending or buying
habits. As in the past, we could experience reduced guest traffic or we may be unable or unwilling to increase the prices
we charge for our products to offset higher costs or fewer transactions, either of which could reduce our sales and profit
margins. Also, landlords or other tenants in the shopping centers in which some of our restaurants are located may
experience difficulty as a result of macroeconomic trends or cease to operate, which could in turn negatively affect guest
traffic at our restaurants. All of these factors could have a material adverse impact on our business, results of operations,
financial condition, or liquidity.
Risks Related to Government Regulation and Litigation
We may not be able to obtain and maintain licenses and permits necessary to operate our restaurants and compliance
with governmental laws and regulations could adversely affect our operating results.
The restaurant industry is subject to various federal, state, and local government regulations, including those
relating to the sale of food and alcoholic beverages. Such regulations are subject to change from time to time, sometimes
without notice to us. The failure to obtain and maintain these licenses, permits, and approvals, including liquor licenses,
could adversely affect our operating results. Difficulties or failure to obtain the required licenses and approvals could
delay or result in our decision to cancel the opening of new restaurants. Local authorities may revoke, suspend, or deny
renewal of our liquor licenses if they determine that our conduct violates applicable regulations.
In addition to having to comply with these licensing requirements, various federal and state labor laws govern our
relationship with our employees and affect operating costs. These laws include minimum and tipped wage requirements,
overtime pay, meal and rest breaks, exempt classifications, health benefits, unemployment taxes, workers’
compensation, work authorization and eligibility requirements, equal employment opportunities, anti-discrimination and
harassment requirements, and working conditions. A number of factors could adversely affect our operating results,
including:
•
additional government-imposed increases in minimum and/or tipped wages, hourly and overtime pay, paid
leaves of absence, sick leave, and mandated health benefits;
•
increased tax reporting and tax payment requirements for employees who receive gratuities;
•
any failure of our employees to comply with laws and regulations governing work authorization and eligibility
requirements resulting in disruption of our work force and adverse publicity;
•
a reduction in the number of states that allow gratuities to be credited toward minimum wage requirements, or
a federal mandate prohibiting such credits; and
•
increased government enforcement and/or litigation relating to federal and state employment laws, regulations,
and requirements.
The federal Americans with Disabilities Act prohibits discrimination on the basis of disability in public
accommodations and employment. Although our restaurants and other places of accommodation are designed to be
accessible to the disabled, we could be required to make unexpected modifications to provide service to, or make
reasonable accommodations, for disabled persons.
We are subject to increasing legal complexity and could be party to litigation that could adversely affect us.
Increasing legal complexity will continue to affect our operations and results. We could be subject to legal
proceedings and enforcement actions that may adversely affect our business, including class actions, administrative
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proceedings, government investigations, employment and personal injury claims, claims alleging violations of federal
and state laws regarding consumer, workplace, and employment matters, immigration matters, wage and hour claims,
discrimination and similar matters, landlord/tenant disputes, disputes with current and former suppliers, claims by
current and former franchisees, data privacy claims, and intellectual property claims (including claims that we infringed
upon another party’s trademarks, copyrights or patents). Additionally, we are subject to Securities and Exchange
Commission (“SEC”) and NASDAQ reporting and disclosure requirements. Inconsistent standards imposed by state and
federal governmental authorities can adversely affect our business and increase our cost of compliance and exposure to
litigation which could result in significant judgments, including punitive and liquidated damages, and injunctive relief.
Occasionally, our guests file complaints or lawsuits against us alleging that we are responsible for an illness or
injury they suffered as a result of a visit to our restaurants, or that we have problems with food quality or operations. As
a Company, we take responsible alcohol service seriously. However, we are subject to “dram shop” statutes. These
statutes generally allow a person injured by an intoxicated person to recover damages from an establishment that served
alcoholic beverages to the intoxicated person. Some litigation against restaurant chains has resulted in significant
judgments, including punitive damages, under dram shop statutes. Because a plaintiff may seek punitive damages, which
may not be covered by insurance, this type of action could have an adverse impact on our financial condition and results
of operations.
Litigation involving our relationship with franchisees and the legal distinction between our franchisees and us for
employment law purposes, if determined adversely, could increase costs, negatively impact the business prospects of our
franchisees, and subject us to incremental liability for their actions.
Our operating results could also be affected by the following:
•
the relative level of our defense costs and nature and procedural status of pending proceedings;
•
the cost and other effects of settlements, judgments, or consent decrees, which may require us to make
disclosures or to take other actions that may affect perceptions of our brands and products;
•
adverse results of pending or future litigation, including litigation challenging the composition and preparation
of our products, or the appropriateness or accuracy of our marketing or other communication practices; and
•
the scope and terms of insurance or indemnification protections that we may have (if any).
Regardless of whether any claims against us are valid or whether we are liable, claims may be expensive to defend
and may divert time, attention, and money away from our operations and hurt our performance. A judgment significantly
in excess of any applicable insurance coverage could have a significant adverse effect on our financial condition or
results of operations. Further, adverse publicity resulting from these claims may hurt our business.
Our current insurance may not provide adequate levels of coverage against claims.
We self-insure a significant portion of expected losses related to employee health, workers’ compensation, general
liability, employment practices liability, cybersecurity, and property insurance programs. This includes our wholly-
owned captive insurance company which covers certain lines of coverage. We use third-party insurance with varying
retention levels to limit our exposure to significant losses. However, there are types of losses we may incur that cannot
be insured against or that we believe are not economically reasonable to insure. Such damages could have a material
adverse effect on our business, results of operations, and/or liquidity.
Unanticipated changes in our claims experience and/or the actuarial assumptions and management estimates
underlying our reserves for these losses could result in significant increases in expense under these programs, which
could have a material adverse effect on our financial condition, results of operations, and liquidity. Additionally, if our
insurance costs increase, there can be no assurance we will be able to successfully offset the effect of such increases and
our results of operations may be adversely affected.
Changes in tax laws and unanticipated tax liabilities could adversely affect our financial results.
We are primarily subject to federal, state, and local income and other taxes in the United States. Our effective
income tax rate and other taxes in the future could be affected by a number of factors, including changes in the valuation
of deferred tax assets and liabilities, changes in tax laws or other legislative changes, and the outcome of income tax
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audits. Any significant increases in income tax rates, changes in and/or interpretations of income tax laws, or
unfavorable resolution of tax matters could have a material adverse impact on our results of operations, financial
condition, or liquidity.
Failure to properly address environmental, social, and/or governance (“ESG “) matters could adversely affect our
brand, business, results of operations, and financial condition.
Entities across all industries are facing increased attention related to ESG matters including packaging and waste,
animal health and welfare, human rights, reproductive rights, diversity and inclusion efforts, climate change, greenhouse
gases, and land, energy, and water use. In addition, we have faced enhanced pressure to not only provide expanded
disclosures around ESG matters and establish goals or targets with respect to ESG matters but also pressure to scale back
our programs and/or initiatives relating to the same.
Evolving consumer and investor interest and preferences as well as governmental regulation and scrutiny may result
in additional disclosure, due diligence, reporting, and specific target-setting with regard to our business and supply chain
that could result in additional costs to comply with such demands. However, our ESG-related programs and initiatives
and disclosures relating to the same may also result in brand and/or reputational risks and demands. Failure to balance
these competing demands could result in consumer or investor scrutiny and/or litigation and could have an adverse effect
on our business. Establishing targets or making other public commitments due to these demands, without a full or
complete understanding of the cost or operational impact of changes in our supply chain or operating model, could also
adversely affect our business and financial condition. In addition, some individuals, shareholder activists, government
officials, and regulators have expressed opposing views and actions with respect to ESG matters which includes the
proposal or enactment of “Anti-ESG” policies and initiatives. We may face increased scrutiny, reputational risk, and
other demands from these parties regarding our ESG initiatives.
Risks Related to Human Capital
Failure to retain the services of our key management personnel, to successfully execute succession planning, or
attract additional qualified personnel could harm our business.
Our future success depends on the continued services and performance of our key management personnel and our
ability to develop future successors of such personnel as a part of our succession planning. Our future performance will
depend on our ability to motivate and retain these and other key officers, employees, and managers, particularly regional
market partners, market partners, and managing partners. Competition for these employees is intense. The unplanned
loss of the services of members of our senior management team or other key officers or managers or the inability to
attract additional qualified personnel as needed could significantly harm our business. In addition, our business could
suffer from any actual or alleged misconduct of any of our key personnel.
Our business could be adversely affected by increased labor costs or labor shortages.
Labor is a primary component in the cost of operating our business. We devote significant resources to recruiting
and training our restaurant managers and hourly employees. Increased labor costs due to competition, unionization,
increased minimum and tipped wages, changes in hourly and overtime pay, state unemployment rates, sick pay or other
employee benefits costs (including workers’ compensation and health insurance), company staffing initiatives, or
otherwise any regulatory changes resulting from any of the foregoing would adversely impact our operating expenses. In
addition, failure to adequately monitor and proactively respond to employee dissatisfaction could lead to poor guest
satisfaction, higher turnover, litigation, and unionization efforts, which could negatively impact our results of operations.
Increased competition for qualified employees caused by a shortage in the labor pool exerts upward pressure on
wages paid to attract and retain such personnel, resulting in higher labor costs, together with greater recruitment and
training expense. We could suffer from significant indirect costs, including restaurant disruptions due to management or
hourly labor turnover and potential delays in new restaurant openings. A shortage in the labor pool could also cause our
restaurants to be required to operate with reduced staff which could negatively impact our ability to provide adequate
service levels to our guests resulting in adverse guest reactions and a possible reduction in guest traffic counts.
Additionally, personal or public health concerns might make some existing personnel or potential candidates reluctant to
work in enclosed restaurant environments.
We have many restaurants located in states or municipalities where the minimum and/or tipped wage is greater than
the federal minimum and/or tipped wage. We anticipate that additional legislation increasing minimum and/or tipped
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wage standards will be enacted in future periods either federally or in state and local jurisdictions. In addition, regulatory
actions which result in changes to healthcare eligibility, design, and cost structure could occur. Any increases in
minimum and/or tipped wages or increases in employee benefits costs could result in sustained higher labor costs.
Our operating margin will be adversely affected to the extent that we are unable or are unwilling to offset any
increase in these labor costs through higher prices on our products. Our distributors and suppliers also may be affected
by higher minimum wage and benefit standards which could result in higher costs for goods and services supplied to us.
Our success depends on our ability to attract, motivate, and retain qualified employees to keep pace with our growth
strategy. If we are unable to do so, our results of operations may also be adversely affected.
Risks Related to Technology, Privacy and Intellectual Property
We rely heavily on information technology, and any material failure, weakness, cybersecurity breach, or other
interruption could prevent us from effectively operating our business.
We rely heavily on information systems in all aspects of our operations, including point-of-sale systems, digital
apps, financial systems, marketing programs, e-commerce, and various other processes and transactions. This reliance
has significantly increased in recent years as we have had to depend to a greater extent on systems such as online
ordering, contactless payments, and online waitlists as our guests are increasingly using our website and digital
applications to place and pay for their orders. Our point-of-sale processing in our restaurants includes collection of cash,
credit cards, debit cards, gift cards, and other processes and procedures. Our ability to efficiently and effectively manage
our business depends significantly on the reliability, security, and capacity of these systems. As our business needs
continue to evolve, these systems will require upgrading and maintenance over time, consequently requiring significant
future commitments of resources and capital. As we become increasingly reliant on digital ordering and payment as a
sales channel, our business could be negatively impacted if we are unable to successfully implement, execute, or
maintain our consumer-facing digital initiatives. Additionally, the increased use of remote work has increased the
susceptibility of our infrastructure to disruption.
The failure of these systems to operate effectively, maintenance problems, upgrading or transitioning to new
platforms, or a material breach in the security of these systems could result in delays or errors to guest service and
reduce efficiency in our operations. In addition, as we implement new technology platforms to improve productivity and
overall guest experience, there can be no guarantees that these platforms will operate as reliably or be as operationally
impactful as intended.
We have disaster recovery procedures and business continuity plans in place to address physical and technological
crises, including tornadoes and other natural disasters, and back-up off-site locations for recovery of electronic and other
forms of data information. However, if we are unable to fully implement our disaster recovery and business continuity
plans, we may experience delays in recovery of data, inability to perform vital corporate functions, tardiness in required
reporting and compliance, failures to adequately support field operations, and other breakdowns in normal
communication and operating procedures that could have a material adverse effect on our financial condition, results of
operations, and exposure to administrative and other legal claims.
Our systems may be vulnerable to a variety of threats and the rapid evolution and increased adoption of artificial
intelligence technologies may intensify our cybersecurity risks. These risks can include unauthorized access, theft, use,
destruction, or other compromises of our systems and can occur through a variety of methods, including attacks using
malware, ransomware, denial of service attacks, or phishing incidents. While we have not had a cybersecurity incident
that has had a material impact on our operations, there can be no assurances that such incidents will not occur in the
future. Any such attack or disruption could cause an interruption of normal business operations, damage to our
reputation, and a loss in guest confidence. Additionally, we could be subject to litigation and government enforcement
actions as a result of any such failure. Any such event could cause us to incur significant unplanned expenses in excess
of our insurance coverage, which could have a material impact on our financial condition and results of operations.
Additionally, our ability to expand and update our information technology infrastructure in response to our growing
and changing needs could be inhibited in the event of a cybersecurity incident. This could lead to a delayed
implementation of new service offerings, disruptions to guest experiences including via our website and applications,
and the diversion of resources that would otherwise be invested in expanding our business and operations.
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We outsource certain business processes to third-party vendors that subject us to risks, including disruptions in
business and increased costs.
Some business processes are currently outsourced to third parties, including such processes as information
technology, credit, debit, and gift card authorization and processing, insurance claims processing, unemployment claims
processing, property, sales, and payroll tax filings, vendor payment processing, and other accounting processes. We
continually evaluate our other business processes to determine if additional outsourcing is an appropriate option to
accomplish our goals. These third-party vendors may be subject to cybersecurity risks and any interruptions or
malfunctions in their operations may cause interruptions of our normal business operations for which we may have
limited or no control.
We make a diligent effort to validate that all providers of outsourced services maintain customary internal controls,
such as redundant processing facilities and adequate security frameworks to guard against breaches or data loss;
however, there are no guarantees that failures will not occur. Failure of third parties to provide adequate services or
internal controls over their processes could have an adverse effect on our results of operations, financial condition, or
ability to accomplish our financial and management reporting.
We may incur increased costs to comply with privacy and data protection laws and, if we fail to comply or our systems
are compromised by a security breach, we could be subject to government enforcement actions, private litigation, and
adverse publicity.
New, modified, and existing privacy and data protection laws and regulations may result in significant costs and
compliance challenges and adversely affect our business and financial condition. These privacy laws and regulations,
which are constantly evolving, may be interpreted by regulatory authorities in new and differing manners, including the
issuing of rulings that invalidate prior laws or regulations or increase penalties, and such interpretations may be
inconsistent among jurisdictions. We may incur increased costs to comply with increasingly demanding privacy laws
and regulations and such compliance may impede the development and offering of new products or services and may
adversely impact the guest experience. We could also be subject to government enforcement actions, private litigation,
and adverse publicity including reputational damage and loss of guest confidence.
We receive and maintain certain personal, financial, or other information about our guests, vendors, and employees.
In 2024, approximately 88% of our transactions were by credit or debit cards. In addition, certain of our vendors receive
and/or maintain certain personal, financial, and other information about our employees and guests on our behalf. The use
and handling, including security, of this information is regulated by privacy and data protection laws and regulations in
various jurisdictions, as well as by certain third-party contracts, frameworks, and industry standards, such as the
Payment Card Industry Data Security Standard. Hardware, software, or other applications we develop and procure from
third parties or vendor’s third-party applications could be subject to vulnerabilities or cybersecurity incidents or may
contain unknown defects in design or manufacture or other problems that could unexpectedly compromise information
security. Unauthorized parties may also attempt to gain access to our systems and facilities through fraud, trickery, or
other forms of deceiving our employees or vendors.
In addition, if our security and information systems are compromised as a result of data corruption or loss,
cybersecurity incident, or a network security incident, or if our employees or vendors (or other persons or entities with
which we do business with) fail to comply with such laws and regulations or fail to meet industry standards and this
information is obtained by unauthorized persons or used inappropriately, it could result in liabilities and penalties and
could damage our reputation, cause interruption of normal business performance, cause us to incur substantial costs, and
result in a loss of guest confidence, which could adversely affect our results of operations and financial condition.
Our failure or inability to enforce our trademarks or other proprietary rights could adversely affect our competitive
position or the value of our brand.
We own certain common law trademark rights and a number of federal and international trademark and service
mark registrations, including our trade names and logos, and proprietary rights relating to certain of our core menu
offerings. We believe that our trademarks and other proprietary rights are important to our success and our competitive
position. Therefore, we devote appropriate resources to the protection of our trademarks and proprietary rights.
However, the protective actions that we take may not be enough to prevent unauthorized usage or imitation by others,
which could harm our image, brand, or competitive position and, if we commence litigation to enforce our rights, cause
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us to incur significant legal fees. Our inability to register or protect our marks and other proprietary rights in foreign
jurisdictions could adversely affect our competitive position in international markets.
We cannot assure you that third parties will not claim that our trademarks or menu offerings infringe upon their
proprietary rights. Any such claim, whether or not it has merit, could be time-consuming, result in costly litigation, cause
delays in introducing new menu items in the future or require us to enter into royalty or licensing agreements. As a
result, any such claim could have a material adverse effect on our business, results of operations, financial condition, or
liquidity.
Risks Related to the Restaurant Industry
Changes in food and supply costs and/or availability of products could adversely affect our results of operations.
Our profitability depends in part on our ability to anticipate and react to changes in food and supply costs and/or the
availability of products necessary to operate our business, including increased costs arising from federal and/or state
mandated requirements. Any increase in food prices or loss of supply, particularly proteins, could adversely affect our
operating results. In addition, we are susceptible to increases in food costs as a result of factors beyond our control, such
as food supply constrictions, inflationary cycles, weather conditions, food safety concerns, global pandemics, product
recalls, global market and trade conditions, and government regulations including the imposition of tariffs. We cannot
predict whether we will be able to anticipate and react to changing food costs and/or loss of supply by adjusting our
purchasing practices, menu prices, or menu offerings, and a failure to do so could adversely affect our operating results.
Extreme and/or long term increases in commodity prices could adversely affect our future results, especially if we are
unable, primarily due to competitive reasons, to increase menu prices. Additionally, if there is a time lag between the
increasing commodity prices and our ability to increase menu prices or if we believe the commodity price increase to be
short in duration and we choose not to pass on the cost increases, our short-term results could be negatively affected.
Also, if we adjust pricing there is no assurance that we will realize the full benefit of any adjustment due to changes in
our guests’ menu item selections and guest traffic.
We currently purchase our beef primarily from four beef suppliers coming from the United States or Canada. While
we maintain relationships with additional suppliers, if any of these vendors were unable to fulfill its obligations under its
contracts, we could encounter supply shortages and/or incur higher costs to secure adequate supplies, either of which
would harm our business.
Our success depends on our ability to compete with many food service businesses.
The restaurant industry is intensely competitive. We compete with many well-established food service companies
on the basis of taste, quality, and price of products offered, guest service, atmosphere, location, take-out and delivery
options, and overall guest experience. Our competitors include a large and diverse group of restaurant chains and
individual restaurants that range from independent local operators that have opened restaurants in various markets to
well-capitalized national restaurant chains. We also face competition from meal kit delivery services as well as the
supermarket industry. In addition, improving product offerings of fast-casual and quick-service restaurants, together with
negative economic conditions could cause consumers to choose less expensive alternatives. As our competitors expand
their operations, we expect competition to intensify. We also compete with other restaurant chains and other retail
establishments for quality site locations and employees. Our competitors may generate or more effectively implement
business strategies that improve the value and the relevance of their brands and reputation, relative to ours. This includes
our competitors’ ability to adapt and respond to new technological developments, including artificial intelligence, to
develop new customer insights that allows them to better respond to changing guest expectations.
The food service industry is affected by litigation and publicity concerning food quality, health, and other issues,
which could cause guests to avoid our restaurants and could result in significant liabilities or litigation costs.
Food service businesses can be adversely affected by litigation and complaints from guests, consumer groups, or
government authorities resulting from food quality, illness, injury, or other health concerns or operating issues stemming
from one restaurant or a limited number of restaurants. Adverse publicity about these allegations may negatively affect
us, regardless of whether the allegations are true, by discouraging guests from eating at our restaurants. We could also
incur significant liabilities if a lawsuit or claim results in a decision against us or litigation costs regardless of the result.
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Health, social and environmental concerns relating to the consumption or sourcing of beef or other food products
could affect consumer preferences and could negatively impact our results of operations.
Like other restaurant chains, consumer preferences could be affected by concerns about the consumption or
sourcing of beef, the key ingredient in many of our menu items, or negative publicity concerning food quality and food
safety, including food-borne illnesses. In addition, consumer preferences may be impacted by current and future menu-
labeling requirements or social and environmental concerns about the sourcing of food products throughout our supply
chain. Future regulatory action may occur which could result in further changes in the nutritional and environmental
disclosure requirements. We cannot make any assurances regarding our ability to effectively respond to changes in
consumer perceptions and to adapt our menu offerings to prevailing trends. The imposition of menu-labeling and food
sourcing laws or regulations could have an adverse effect on our results of operations and financial position, as well as
the restaurant industry in general. The labeling and sourcing requirements and any negative publicity concerning any of
the food products we serve may adversely affect demand for our food and could result in a decrease in guest traffic to
our restaurants. If we react to labeling or sourcing requirements or negative publicity by changing our concepts or our
menu offerings or their ingredients, we may lose guests who do not prefer the new concept or products, and we may not
be able to attract sufficient new guests to produce the revenue needed to make our restaurants profitable. In addition, we
may have different or additional competitors for our intended guests as a result of a change in our concept and may not
be able to compete successfully against those competitors. A decrease in guest traffic to our restaurants as a result of
these health, social, and environmental concerns or negative publicity or as a result of a change in our menu or concept
could significantly harm our business.
Food safety and sanitation, food-borne illness, and health concerns may have an adverse effect on our business by
reducing demand and increasing costs.
Food safety and sanitation is a top priority, and we dedicate substantial resources to help our guests enjoy safe,
quality food products. However, food-borne illnesses and food safety issues occur in the food industry from time to time.
Any report or publicity, whether true or not, linking us to instances of food-borne illness or other food safety issues,
including food tampering or contamination, could adversely affect our concepts and reputation as well as results of
operations. In addition, instances of food-borne illness, food tampering, or food contamination occurring solely at
restaurants of our competitors could result in negative publicity about the food service industry generally and adversely
impact our revenue and profits.
Furthermore, our reliance on third-party food suppliers and distributors increases the risk that food-borne illness
incidents could be caused by factors outside of our control and that multiple locations would be affected rather than a
single restaurant. While we attempt to minimize the risk, we cannot assure that all food items are properly maintained
during transport throughout the supply chain and that our employees will identify all products that may be spoiled and
should not be used in our restaurants. If our guests become ill from food-borne illnesses, we could be forced to
temporarily close some restaurants. Furthermore, any instances of food contamination, whether or not at our restaurants,
could subject us or our suppliers to a food recall.
In addition, the United States and other countries have experienced, or may experience in the future, outbreaks of
viruses, such as COVID-19, Hepatitis A, Norovirus, Ebola, Avian Flu, SARS, and H1N1. To the extent that a virus is
food-borne, future outbreaks may adversely affect the price and availability of certain food products and cause our
guests to eat less of a product which may have a significant adverse effect on our business.
Our business could be adversely affected by our inability to respond to or effectively manage social media.
As part of our marketing strategy, we utilize social media platforms to promote our concepts and attract and retain
guests. Our strategy may not be successful, resulting in expenses incurred without improvement in guest traffic or brand
relevance. In addition, a variety of risks are associated with the use of social media, including improper disclosure of
proprietary information, negative comments about us, exposure of personally identifiable information, fraud, or
dissemination of false information. The inappropriate use of social media platforms by our guests or employees could
increase our costs, lead to litigation, or result in negative publicity that could damage our reputation and adversely affect
our results of operations.
Given the marked increase in the use of social media platforms, individuals have access to a broad audience of
consumers and other interested persons. The availability of information on social media platforms is virtually immediate,
as is its impact. Many social media platforms immediately publish the content their subscribers and
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participants post, often without filters or checks on the accuracy of the content posted. Information concerning our
Company may be posted on such platforms at any time. This includes posts by social media influencers that have a
significant number of followers and reach on the variety of social media platforms. Additionally, social media has
increasingly been utilized to target specific companies or brands as a result of a variety of actions or inactions, or
perceived actions or inactions, that are disfavored by interest groups and such campaigns can rapidly accelerate and
impact consumer behavior. If we are unable to quickly and effectively respond to such reports, we may suffer declines in
guest traffic. The impact may be immediate without affording us an opportunity for redress or correction. These factors
could have a material adverse impact on our business.
Risks Related to Stock Ownership and Our Corporate Structure
Provisions in our charter documents and Delaware law may delay or prevent our acquisition by a third party.
Our certificate of incorporation and by-laws contain several provisions that may make it more difficult for a third
party to acquire control of us without the approval of our Board. These provisions include, among other things, advance
notice for raising business or making nominations at meetings and “blank check” preferred stock. Blank check preferred
stock enables our Board, without approval of the shareholders, to designate and issue additional series of preferred stock
with such dividend, liquidation, conversion, voting, or other rights, including the right to issue convertible securities with
no limitations on conversion, as our Board may determine. The issuance of blank check preferred stock may adversely
affect the voting and other rights of the holders of our common stock as our Board may designate and issue preferred
stock with terms that are senior to our common stock. These provisions may make it more difficult or expensive for a
third party to acquire a majority of our outstanding common stock. These provisions also may delay, prevent, or deter a
merger, acquisition, tender offer, proxy contest, or other transaction that might otherwise result in our shareholders
receiving a premium over the market price for their common stock. If we issue preferred shares in the future that have a
preference over our common stock with respect to dividends or upon liquidation, dissolution or winding up, or if we
issue preferred shares with voting rights that dilute the voting power of our common stock, the rights of our common
stockholders or the market price of our common stock may be adversely affected.
The Delaware General Corporation Law prohibits us from engaging in “business combinations” with “interested
shareholders” (with some exceptions) unless such transaction is approved in a prescribed manner. The existence of this
provision could have an anti-takeover effect with respect to transactions not approved in advance by the Board,
including discouraging attempts that might result in a premium over the market price for our common stock.
There can be no assurance that we will continue to pay dividends on our common stock or repurchase our common
stock up to the maximum amounts permitted under our previously announced repurchase program.
Payment of cash dividends on our common stock or repurchases of our common stock are subject to compliance
with applicable laws and depends on, among other things, our results of operations, financial condition, level of
indebtedness, capital requirements, business prospects, macro-economic conditions, and other factors that our Board
may deem relevant. There can be no assurance that we will continue to pay dividends or repurchase our common stock at
the same levels we have historically (if at all).
Our business could be negatively affected as a result of actions of activist shareholders, and such activism could
impact the trading value of our common stock.
We value constructive input from our shareholders and the investment community. Our Board and management
team are committed to acting in the best interests of all of our shareholders. There is no assurance that the actions taken
by our Board and management in seeking to maintain constructive engagement with our shareholders will be successful.
Responding to actions by activist shareholders can be costly and time-consuming, disrupting our operations, and
diverting the attention of management and our employees. Such activities could interfere with our ability to execute our
strategic plan. The perceived uncertainties as to our future direction also resulting from activist strategies could also
affect the market price and volatility of our common stock.
32
Failure to achieve and maintain effective internal control over financial reporting may negatively impact our
business and our financial results.
The Company is responsible for establishing and maintaining effective internal control over financial reporting.
This includes establishing controls around the adoption of new, or changes in existing, accounting policies and practices.
Despite its inherent limitations, effective internal control over financial reporting helps provide reasonable assurance
regarding the reliability of financial reporting for external purposes. A significant accounting error, financial reporting
failure, or material weakness in internal control over financial reporting could cause results in our consolidated financial
statements that do not accurately reflect our financial condition, a loss of investor confidence, and subsequent decline in
the market price of our common stock, increase our costs and regulatory scrutiny, and lead to litigation or result in
negative publicity that could damage our reputation.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 1C. CYBERSECURITY
Risk Management and Strategy
In the course of our operations, the Company receives and maintains sensitive information from our guests,
employees, partners, and business operations. To address cybersecurity threats to this information, the Company uses a
risk-based approach to create and implement a detailed set of information security policies and procedures based on
frameworks established by the National Institute of Standards and Technology. The Company’s Head of Information
Security manages the Company’s cybersecurity efforts and leads the cybersecurity team under the direct oversight of our
Chief Technology Officer. These individuals, including all members of the cybersecurity team, have an average of over
16 years of experience involving information technology, including security, auditing, compliance, systems, and
programming. Additionally, the Company engages in the use of external cybersecurity experts for training, contingency
planning, consultation, and process documentation.
The Company has implemented detective and preventative controls designed to ensure the appropriate level of
protection for the confidentiality, integrity, and availability of data stored on or transferred through our information
technology resources. The Company has a risk assessment process to identify risks associated with our use of third-
party service providers and has implemented specific processes and controls designed to mitigate those identified risks.
Both internal and third-party audits are performed routinely to verify that these controls are effective. Additionally, the
Company has implemented companywide security awareness training programs designed to provide best practices for
protecting our network and systems, and routinely leads exercises for employees to reinforce the risk and proper
handling of targeted emails. The Company’s Head of Information Security is responsible for developing and
implementing these controls and training exercises with support from our information technology department.
The Company’s enterprise risk management program has established an internal risk committee to evaluate
information governance risks including risks associated with the Company’s use of artificial intelligence. This
committee comprises members of management of the Company’s information technology, human resources, marketing,
accounting, risk, procurement, training, finance, and legal functions, and is focused on performing risk assessments to
identify areas of concern and implement appropriate changes to enhance its cybersecurity and privacy policies and
procedures. The internal risk committee is informed of the Company’s risk prevention and mitigation efforts on a regular
basis. The committee is also briefed on detection and remediation of cybersecurity incidents in a timely manner
following the detection of any potential events.
The Company has a crisis response team comprising senior members of various corporate functions to oversee the
response to various crises including potential crises arising from cybersecurity incidents that may impact the Company
and/or its vendor partners. This team conducts regular tabletop exercises to simulate responses to cybersecurity
incidents. To the extent there is a cybersecurity incident impacting the Company and/or a vendor partner, the crisis
response team’s process would be to ensure that our Head of Information Security and Chief Technology Officer are
informed immediately and that the potential impact of the incident and remedial measures arising from the incident are
communicated to the executive officers of the Company.
There can be no guarantee that our policies and procedures will be effective. Although our risk factors include
33
further detail about the material cybersecurity risks we face and how a cybersecurity incident may affect our business
strategy, results of operations, or financial condition, we believe that risks from prior cybersecurity threats, including as
a result of any prior cybersecurity incident, have not materially affected or are reasonably likely to materially affect our
business strategy, results of operations, or financial condition to date. We can provide no assurances that there will not
be incidents in the future or that they will not materially affect us, including our business strategy, results of operations,
or financial condition.
Governance
The Board has authorized the audit committee to oversee the Company’s risk assessment and risk management
practices and strategies. This delegation includes maintaining responsibility for overseeing the Company’s enterprise
risk management program. As a part of this oversight role, the audit committee receives regular updates from
management on cybersecurity threats and privacy risks impacting the Company, which includes benchmarking these
risks versus our industry. Our Board members also engage in ad hoc conversations with management on cybersecurity-
related news events, receive training specific to cybersecurity risks and threats and regularly discuss any updates to our
cybersecurity risk management and strategy programs.
ITEM 2. PROPERTIES
Properties
Our Support Center is located in Louisville, Kentucky. We occupy this facility under a master lease with Paragon
Centre Holdings, LLC, a limited liability company in which we have a minority ownership position. As of
December 31, 2024, we leased 133,023 square feet. Our lease expires on October 31, 2048, including all applicable
extensions.
As of December 31, 2024, we owned and operated 666 company restaurants. Of the 666 company-owned
restaurants, 153 restaurants were on owned sites and 513 restaurants were on leased sites. These leased sites are
classified as either land leases (where we lease the land and construct the building and leasehold improvements) or land
and building or in-line space leases (where we lease the land, building, or in-line space and construct leasehold
improvements as necessary). The breakdown of these leases is as follows:
Land leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
452
Land and building or in-line space leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
61
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
513
Additional information concerning our properties and leasing arrangements is included in Note 2 and Note 8 to the
Consolidated Financial Statements appearing in Part II, Item 8 of this Annual Report on Form 10-K.
ITEM 3. LEGAL PROCEEDINGS
Information regarding legal proceedings is included in Note 13 to the Consolidated Financial Statements appearing
in Part II, Item 8 of this Annual Report on Form 10-K.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
34
PART II
ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER
MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Our common stock is traded on the Nasdaq Global Select Market under the symbol TXRH.
The number of holders of record of our common stock as of February 19, 2025 was 157.
On February 19, 2025, our Board declared a quarterly dividend of $0.68 per share of common stock which will be
distributed on April 1, 2025 to shareholders of record at the close of business on March 18, 2025. The declaration and
payment of cash dividends on our common stock is at the discretion of our Board, and any decision to declare a dividend
will be based on a number of factors including, but not limited to, earnings, financial condition, applicable covenants
under our credit facility and other contractual restrictions, or other factors deemed relevant.
Unregistered Sales of Equity Securities
There were no equity securities sold by the Company during the period covered by this Annual Report on
Form 10-K that were not registered under the Securities Act of 1933, as amended.
Issuer Repurchases of Securities
In 2008, our Board approved our first stock repurchase program. From inception through December 31, 2024, we
have paid $763.3 million through our authorized stock repurchase programs to repurchase 21,958,130 shares of our
common stock at an average price per share of $34.76. On March 17, 2022, the Board approved a stock repurchase
program for the repurchase of up to $300.0 million of our common stock. This stock repurchase program has no
expiration date. All repurchases to date have been made through open market transactions. The timing and amount of
any repurchases through this program are determined by management under parameters approved by the Board, based on
an evaluation of our stock price, market conditions, and other corporate considerations, including complying with Rule
10b5-1 trading arrangements under the Exchange Act.
In 2024, we paid $79.8 million, excluding excise taxes, to repurchase 461,662 shares of our common stock. For the
fourth quarter ended December 31, 2024, we paid $35.1 million, excluding excise taxes, to repurchase 182,748 shares of
our common stock. As of December 31, 2024, $37.1 million remained authorized for stock repurchases.
The following table includes information regarding purchases of our common stock, excluding the impact of excise
taxes, made by us during the quarter ended December 31, 2024:
Total Number Maximum Number
of Shares
(or Approximate
Purchased as
Dollar Value) of
Part of Publicly
Shares that May
Total Number
Average
Announced
Yet Be Purchased
of Shares
Price Paid
Plans or
Under the Plans
Period
Purchased
per Share
Programs
or Programs
September 25 to October 22 . . . . . . . . . . . . . . . . . . . .
— $
—
— $
72,194,874
October 23 to November 19 . . . . . . . . . . . . . . . . . . . .
53,780 $
195.22
53,780 $
61,696,192
November 20 to December 31 . . . . . . . . . . . . . . . . . .
128,968 $
190.74
128,968 $
37,096,422
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
182,748
182,748
On February 19, 2025, our Board approved a stock repurchase program for the repurchase of up to $500.0 million
of our common stock. Any repurchases under this plan will be made by the Company through open market transactions.
This stock repurchase program has no expiration date and replaces the previous stock repurchase program which was
approved in 2022.
35
Stock Performance Graph
The following graph sets forth the cumulative total shareholder return experienced by holders of the Company’s
common stock compared to the cumulative total return of the S&P 500 Index as well as the industry specific S&P
Composite 1500 Restaurant Sub-Index for the five year period ended December 31, 2024, the last trading day of our
fiscal year. The graph assumes the values of the investment in our common stock and each index was $100 on
January 1, 2020 and the reinvestment of all dividends paid during the period of the securities comprising the indices.
Note: The stock price performance shown on the graph below does not indicate future performance.
Comparison of Cumulative Total Return Since January 1, 2020
12/31/2019 12/29/2020 12/28/2021 12/27/2022 12/26/2023 12/31/2024
Texas Roadhouse, Inc. . . . . . . . . . . . . . . . . . . . . . $ 100.00 $ 141.22 $ 162.36 $ 174.38 $ 232.77 $ 345.95
S&P 500 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 100.00 $ 117.46 $ 153.01 $ 124.43 $ 157.72 $ 197.02
S&P Composite 1500 Restaurant Sub-Index . . . $ 100.00 $ 118.92 $ 145.30 $ 134.26 $ 153.38 $ 164.08
ITEM 6—RESERVED
80
120
160
200
240
280
320
TXRH
S&P 500 Index
S&P Composite
36
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The discussion and analysis below of the financial condition and results of operations for Texas Roadhouse, Inc.
(the “Company,” “we,” “our,” and/or “us”) should be read in conjunction with the consolidated financial statements and
the notes to such financial statements (pages F-1 to F-27), “Forward-looking Statements” (page 3), and Risk Factors set
forth in Item 1A. Further, the discussion and analysis below generally discusses 2024 items and year-to-year
comparisons between 2024 and 2023. Discussions of 2023 items and year-to-year comparisons between 2023 and 2022
are not included in this Annual Report on Form 10-K and can be found in “Management’s Discussion and Analysis of
Financial Conditions and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year
ended December 26, 2023, filed with the SEC on February 23, 2024.
Our Company
Texas Roadhouse, Inc. is a growing restaurant company operating predominantly in the casual dining segment. Our
late founder, W. Kent Taylor, started the business in 1993 with the opening of the first Texas Roadhouse restaurant in
Clarksville, Indiana. Since then, we have grown to three concepts with 784 restaurants in 49 states, one U.S. territory,
and ten foreign countries. As of December 31, 2024, our 784 restaurants included:
•
666 company restaurants, of which 647 were wholly-owned and 19 were majority-owned. The results of
operations of company restaurants are included in our consolidated statements of income. The portion of
income attributable to noncontrolling interests in company restaurants that are majority-owned is reflected in
the line item net income attributable to noncontrolling interests in our consolidated statements of income. Of
the 666 company restaurants, we operated 608 as Texas Roadhouse restaurants, 49 as Bubba’s 33 restaurants,
and nine as Jaggers restaurants.
•
118 franchise restaurants, of which 20 we have a 5.0% to 10.0% ownership interest. The income derived from
our minority interests in these franchise restaurants is reported in the line item equity income from investments
in unconsolidated affiliates in our consolidated statements of income. Of the 118 franchise restaurants, 56 were
domestic Texas Roadhouse restaurants, four were domestic Jaggers restaurants, 57 were international Texas
Roadhouse restaurants, including one restaurant in a U.S. territory, and one was an international Jaggers
restaurant.
We have contractual arrangements that grant us the right to acquire at pre-determined formulas the remaining
equity interests in 17 of the 19 majority-owned company restaurants and 55 of the 60 domestic franchise restaurants.
Throughout this report, we use the term “restaurants” to include Texas Roadhouse and Bubba’s 33, unless
otherwise noted.
Presentation of Financial and Operating Data
We operate on a fiscal year that ends on the last Tuesday in December. Fiscal year 2024 was 53 weeks in length
and, as such, the fourth quarter of fiscal 2024 was 14 weeks in length. Fiscal years 2023 and 2022 were both 52 weeks in
length, and the fourth quarters were both 13 weeks in length.
Long-term Strategies to Grow Earnings Per Share and Create Shareholder Value
Our long-term strategies with respect to increasing net income and earnings per share, along with creating
shareholder value, include the following:
•
Expanding Our Restaurant Base. We continue to evaluate opportunities to develop restaurants in existing
markets and in new domestic and international markets. Domestically, we remain focused primarily on markets
where we believe a significant demand for our restaurants exists because of population size, income levels, the
presence of shopping and entertainment centers, and a significant employment base. In addition, we continue to
pursue opportunities to acquire domestic franchise locations to expand our company restaurant base.
37
We have entered into area development and franchise agreements for the development and operation of Texas
Roadhouse restaurants in numerous foreign countries and one U.S. territory. We have also entered into
domestic and international area development agreements for Jaggers, our fast-casual concept.
In 2024, we opened 31 company restaurants while our franchise partners opened 14 restaurants. The company
restaurants included 26 Texas Roadhouse restaurants, four Bubba’s 33 restaurants, and one Jaggers restaurant.
The franchise restaurants included 11 international Texas Roadhouse restaurants, including one restaurant in a
U.S. territory, two domestic Jaggers restaurants, and our first international Jaggers restaurant.
•
Maintaining and/or Improving Restaurant Level Profitability. We continue to focus on driving comparable
restaurant sales to maintain or improve restaurant level profitability. This includes a pricing strategy that
balances the impacts of inflationary pressures with our long-term value positioning. In terms of driving traffic
at our restaurants, we remain focused on encouraging repeat visits by our guests and attracting new guests
through our continued commitment to operational standards relating to food and service quality. To attract new
guests and increase the frequency of visits of our existing guests, we continue to drive various localized
marketing programs, focus on speed of service and kitchen efficiency, increase throughput by adding seats and
parking at certain restaurants, and enhance the guest digital experience.
At our high volume restaurants, we continue to look for opportunities to increase our dining room capacity by
adding on to our existing building and/or to increase our parking capacity by leasing or purchasing property
that adjoins our site. We also continue to make a number of building modifications and/or expansions to
existing restaurants in order to better accommodate increased dine-in and to-go sales. These modifications
include room expansions which add additional guest seating, the addition of to-go areas, and cooler expansions
to accommodate higher inventory levels.
In recent years, we have relocated several existing Texas Roadhouse locations at or near the end of their
associated lease or as a result of eminent domain which allowed us to move to a better site, update them to a
current prototypical design, construct a larger building with more seats and greater number of available parking
spaces, accommodate increased to-go sales, and/or obtain more favorable lease terms. We continue to evaluate
these opportunities particularly as it relates to older locations with strong sales.
•
Leveraging Our Scalable Infrastructure. To support our growth, we have made investments in our
infrastructure across all critical functions, including the development of new strategic initiatives. Our ability to
leverage our infrastructure in future years by growing our general and administrative costs at a slower rate than
our revenue will depend, in part, on our new restaurant openings, our comparable restaurant sales growth rate
going forward, and the level of investment we continue to make in our infrastructure.
•
Returning Capital to Shareholders. We continue to evaluate opportunities to return capital to our shareholders,
including the payment of dividends and the repurchase of common stock. In 2011, our Board declared our first
quarterly dividend of $0.08 per share of common stock which has consistently grown over time. On
February 19, 2025, the Board declared a quarterly cash dividend of $0.68 per share of common stock,
representing an 11% increase compared to the quarterly dividend declared in the prior year period.
In 2008, the Board approved our first stock repurchase program. On February 19, 2025, our Board approved a
stock repurchase program for the repurchase of up to $500 million of our common stock. This stock repurchase
program has no expiration date and replaces the previous stock repurchase program of $300 million which was
approved on March 17, 2022.
In 2024, we paid $79.8 million, excluding excise taxes, to repurchase 461,662 shares of our common stock.
From inception through December 31, 2024, we have paid $763.3 million through our authorized stock
repurchase programs to repurchase 21,958,130 shares of our common stock at an average price per share of
$34.76.
Key Measures We Use To Evaluate Our Company
Key measures we use to evaluate and assess our business include the following:
•
Comparable Restaurant Sales. Comparable restaurant sales reflect the change in sales for all company
restaurants across all concepts, unless otherwise noted, over the same period of the prior year for the
38
comparable restaurant base. We define the comparable restaurant base to include those restaurants open for a
full 18 months before the beginning of the period measured excluding restaurants permanently closed during
the period, if applicable. Comparable restaurant sales can be impacted by changes in guest traffic counts or by
changes in the per person average check amount. Menu price changes, the mix of menu items sold, and the mix
of dine-in versus to-go sales can affect the per person average check amount.
•
Average Unit Volume. Average unit volume represents the average annual restaurant sales for Texas
Roadhouse and Bubba’s 33 restaurants open for a full six months before the beginning of the period measured
excluding sales of restaurants permanently closed during the period, if applicable. Historically, average unit
volume growth is less than comparable restaurant sales growth which indicates that newer restaurants are
operating with sales growth levels lower than the company average. At times, average unit volume growth may
be more than comparable restaurant sales growth which indicates that newer restaurants are operating with
sales growth levels higher than company average.
•
Store Weeks and New Restaurant Openings. Store weeks represent the number of weeks that all company
restaurants across all concepts, unless otherwise noted, were open during the reporting period. Store weeks
include weeks in which a restaurant is temporarily closed. Store week growth is driven by new restaurant
openings and franchise acquisitions. New restaurant openings reflect the number of restaurants opened during a
particular fiscal period, excluding store relocations. We consider store openings that occur simultaneously with
a store closure in the same trade area to be a relocation.
•
Restaurant Margin. Restaurant margin (in dollars, as a percentage of restaurant and other sales, and per store
week) represents restaurant and other sales less restaurant-level operating costs, including food and beverage
costs, labor, rent, and other operating costs. Restaurant margin is not a measurement determined in accordance
with U.S. generally accepted accounting principles (“GAAP”) and should not be considered in isolation, or as
an alternative, to income from operations. This non-GAAP measure is not indicative of overall company
performance and profitability in that this measure does not accrue directly to the benefit of shareholders due to
the nature of the costs excluded. Restaurant margin is widely regarded as a useful metric by which to evaluate
core restaurant-level operating efficiency and performance over various reporting periods on a consistent basis.
In calculating restaurant margin, we exclude certain non-restaurant-level costs that support operations, but do
not have a direct impact on restaurant-level operational efficiency and performance, including general and
administrative expenses. We exclude pre-opening expenses as they occur at irregular intervals and would
impact comparability to prior period results. We exclude depreciation and amortization expenses, substantially
all of which relate to restaurant-level assets, as they represent a non-cash charge for the investment in our
restaurants. We exclude impairment and closure expenses as we believe this provides a clearer perspective of
the Company’s ongoing operating performance and a more useful comparison to prior period results.
Restaurant margin as presented may not be comparable to other similarly titled measures of other companies in
our industry. A reconciliation of income from operations to restaurant margin is included in the Results of
Operations section below.
Other Key Definitions
Restaurant and Other Sales. Restaurant sales include gross food and beverage sales, net of promotions and
discounts, for all company restaurants. Sales taxes collected from customers and remitted to governmental authorities are
accounted for on a net basis and therefore are excluded from restaurant sales in our consolidated statements of income.
Other sales primarily include the net impact of the amortization of third-party gift card fees and gift card breakage
income and content revenue related to our tabletop kiosk devices.
Franchise Royalties and Fees. Franchise royalties consist of royalties, as defined in our franchise agreement, paid
to us by our domestic and international franchisees. Domestic and international franchisees also typically pay an initial
franchise fee and/or development fee for each new restaurant or territory. Revenues related to our royalty-based retail
products are also included within franchise royalties and fees.
Food and Beverage Costs. Food and beverage costs consist of the costs of raw materials and ingredients used in
the preparation of food and beverage products sold in our company restaurants. Approximately half of our food and
beverage costs relate to beef.
39
Restaurant Labor Expenses. Restaurant labor expenses include all direct and indirect labor costs incurred in
operations except for profit sharing incentive compensation expenses earned by our restaurant managing partners and
market partners. These profit sharing expenses are reflected in restaurant other operating expenses. Restaurant labor
expenses also include share-based compensation expense related to restaurant-level employees.
Restaurant Rent Expense. Restaurant rent expense includes all rent, except pre-opening rent, associated with the
leasing of real estate and includes base, percentage, and straight-line rent expense.
Restaurant Other Operating Expenses. Restaurant other operating expenses consist of all other restaurant-level
operating costs, the major components of which are supplies, profit sharing incentive compensation for our restaurant
managing partners and market partners, utilities, credit card fees, general liability insurance, advertising, repairs and
maintenance, property taxes, and outside services.
Pre-opening Expenses. Pre-opening expenses, which are charged to operations as incurred, consist of expenses
incurred before the opening of a new or relocated restaurant and consist principally of opening and training team
compensation and benefits, travel expenses, rent, food, beverage, and other initial supplies and expenses. The majority of
pre-opening costs incurred relate to the hiring and training of employees due to the significant investment we make in
training our people. Pre-opening costs vary by location depending on a number of factors, including the size and
physical layout of each location; the number of management and hourly employees required to operate each restaurant;
the availability of qualified restaurant staff members; the cost of travel and lodging for different geographic areas; the
timing of the restaurant opening; and the extent of unexpected delays, if any, in obtaining final licenses and permits to
open each restaurant.
Depreciation and Amortization Expenses. Depreciation and amortization expenses include the depreciation of fixed
assets and amortization of intangibles with definite lives, substantially all of which relates to restaurant-level assets.
Impairment and Closure Costs, Net. Impairment and closure costs, net include any impairment of long-lived assets,
including property and equipment, operating lease right-of-use assets, and goodwill, and expenses associated with the
closure of a restaurant. Closure costs also include any gains or losses associated with a relocated restaurant or the sale of
a closed restaurant and/or assets held for sale as well as lease costs associated with closed or relocated restaurants.
General and Administrative Expenses. General and administrative expenses comprise expenses associated with
corporate and administrative functions that support development and restaurant operations and provide an infrastructure
to support future growth. This includes salary, incentive-based and share-based compensation expense related to
executive officers and Support Center employees, salary and share-based compensation expense related to market
partners, software hosting fees, professional fees, group insurance, and the realized and unrealized holding gains and
losses related to the investments in our deferred compensation plan.
Interest Income, Net. Interest income, net includes earnings on cash and cash equivalents and is reduced by interest
expense, net of capitalized interest, on our debt or financing obligations including the amortization of loan fees, as
applicable.
Equity Income from Investments in Unconsolidated Affiliates. Equity income includes our percentage share of net
income earned by unconsolidated affiliates and our share of any gain on the acquisition of these affiliates. As of
December 31, 2024 and December 26, 2023, we owned a 5.0% to 10.0% equity interest in 20 domestic franchise
restaurants.
Net Income Attributable to Noncontrolling Interests. Net income attributable to noncontrolling interests represents
the portion of income attributable to the other owners of the majority-owned restaurants. Our consolidated subsidiaries
include 19 and 20 majority-owned restaurants as of December 31, 2024 and December 26, 2023, respectively.
2024 Financial Highlights
Total revenue increased $741.7 million or 16.0% to $5.4 billion in 2024 compared to $4.6 billion in 2023 primarily
due to an increase in comparable restaurant sales and an increase in store weeks. Comparable restaurant sales and store
weeks increased 8.5% and 7.5%, respectively, at company restaurants in 2024. The increase in comparable restaurant
sales was due to an increase in guest traffic along with an increase in per person average check. The increase in store
weeks was due to new store openings and the benefit of the additional week in 2024. The additional week added
$114.7 million in revenue and a 2% benefit to store week growth.
40
Net income increased $128.7 million or 42.2% to $433.6 million in 2024 compared to $304.9 million in 2023
primarily due to higher restaurant margin dollars, as described below, partially offset by higher depreciation and
amortization expenses and higher general and administrative expenses. Diluted earnings per share increased 42.5% to
$6.47 from $4.54 in the prior year primarily due to the increase in net income. Diluted earnings per share growth was
positively impacted by approximately 5% as a result of the additional week.
Restaurant margin dollars increased $207.8 million or 29.4% to $915.8 million in 2024 compared to $708.0 million
in 2023 primarily due to higher sales. Restaurant margin, as a percentage of restaurant and other sales, increased to
17.1% in 2024 compared to 15.4% in 2023. The increase in restaurant margin, as a percentage of restaurant and other
sales, was primarily driven by higher sales. The benefit of a higher average guest check and labor productivity more than
offset wage and other labor inflation of 4.6% and commodity inflation of 0.7%.
In addition, capital allocation spend in 2024 included capital expenditures of $354.3 million, dividends of
$162.9 million, and repurchases of common stock of $79.8 million.
41
Results of Operations
(in thousands)
Fiscal Year Ended
December 31, 2024
December 26, 2023
$
%
$
%
(In thousands)
Consolidated Statements of Income:
Revenue:
Restaurant and other sales . . . . . . . . . . . . . . . . . . . . . . .
5,341,853
99.4
4,604,554
99.4
Franchise royalties and fees . . . . . . . . . . . . . . . . . . . . . .
31,479
0.6
27,118
0.6
Total revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5,373,332
100.0
4,631,672
100.0
Costs and expenses:
(As a percentage of restaurant and other sales)
Restaurant operating costs (excluding depreciation
and amortization shown separately below):
Food and beverage . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,785,119
33.4
1,593,852
34.6
Labor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,764,740
33.1
1,539,124
33.4
Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
80,560
1.5
72,766
1.6
Other operating . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
795,657
14.9
690,848
15.0
(As a percentage of total revenue)
Pre-opening . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
28,090
0.5
29,234
0.6
Depreciation and amortization . . . . . . . . . . . . . . . . . . .
178,157
3.3
153,202
3.3
Impairment and closure, net . . . . . . . . . . . . . . . . . . . . .
1,226
NM
275
NM
General and administrative . . . . . . . . . . . . . . . . . . . . . .
223,264
4.2
198,382
4.3
Total costs and expenses . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,856,813
90.4
4,277,683
92.4
Income from operations . . . . . . . . . . . . . . . . . . . . . . . . . . .
516,519
9.6
353,989
7.6
Interest income, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6,774
0.1
2,984
0.1
Equity income from investments in unconsolidated
affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,197
NM
1,351
NM
Income before taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
524,490
9.8
358,324
7.7
Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
80,145
1.5
44,649
1.0
Net income including noncontrolling interests . . . . . . . . .
444,345
8.3
313,675
6.8
Net income attributable to noncontrolling interests . . . . .
10,753
0.2
8,799
0.2
Net income attributable to Texas Roadhouse, Inc. and
subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
433,592
8.1
304,876
6.6
NM – Not meaningful
42
Reconciliation of Income from Operations to Restaurant Margin
($ In thousands, except restaurant margin $ per store week)
Fiscal Year Ended
December 31, 2024 December 26, 2023
Income from operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
516,519 $
353,989
Less:
Franchise royalties and fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
31,479
27,118
Add:
Pre-opening . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
28,090
29,234
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
178,157
153,202
Impairment and closure, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,226
275
General and administrative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
223,264
198,382
Restaurant margin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
915,777 $
707,964
Restaurant margin $/store week . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
26,572 $
22,090
Restaurant margin (as a percentage of restaurant and other sales) . . . . . . . . . . .
17.1%
15.4%
Restaurant Unit Activity
Total
Texas
Roadhouse Bubba’s 33
Jaggers
Balance at December 26, 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
741
686
45
10
Company openings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
31
26
4
1
Franchise openings - Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2
—
—
2
Franchise openings - International (1) . . . . . . . . . . . . . . . . . . . . . . . . .
12
11
—
1
Franchise closings - International . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(2)
(2)
—
—
Balance at December 31, 2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
784
721
49
14
December 31, 2024 December 26, 2023
Company - Texas Roadhouse . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
608
582
Company - Bubba’s 33 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
49
45
Company - Jaggers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9
8
Total company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
666
635
Franchise - Texas Roadhouse - Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
56
56
Franchise - Jaggers - Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4
2
Franchise - Texas Roadhouse - International (1) . . . . . . . . . . . . . . . . . . . . . . . . . .
57
48
Franchise - Jaggers - International . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1
—
Total franchise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
118
106
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
784
741
(1) Includes a U.S. territory.
43
Restaurant and Other Sales
Restaurant and other sales increased 16.0% in 2024 compared to 2023. The following table summarizes certain key
drivers and/or attributes of restaurant sales at company restaurants for the periods presented. Company restaurant count
activity is shown in the restaurant unit activity table above.
2024
2023
Company Restaurants:
Increase in store weeks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7.5 %
5.8 %
Increase in average unit volume (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7.8 %
9.7 %
Other (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
0.8 %
— %
Total increase in restaurant sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
16.1 %
15.5 %
Other sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(0.1)%
(0.1) %
Total increase in restaurant and other sales . . . . . . . . . . . . . . . . . . . . . . . . . .
16.0 %
15.4 %
Store weeks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
34,464
32,050
Comparable restaurant sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8.5 %
10.1 %
Texas Roadhouse restaurants:
Store weeks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
31,548
29,528
Comparable restaurant sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8.6 %
10.3 %
Average unit volume (in thousands) (1) . . . . . . . . . . . . . . . . . . . . . . . . . . $
8,488
$
7,642
Average unit volume, 2023 adjusted (in thousands) (3) . . . . . . . . . . . . . $
8,488
$
7,824
Weekly sales by group:
Comparable restaurants (549 and 527 units) . . . . . . . . . . . . . . . . . . . . . $
160,365
$
147,274
Average unit volume restaurants (17 and 22 units) . . . . . . . . . . . . . . . . $
153,321
$
139,688
Restaurants less than six months old (42 and 33 units) . . . . . . . . . . . . . $
142,067
$
146,614
Bubba’s 33 restaurants:
Store weeks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,485
2,167
Comparable restaurant sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.5 %
5.5 %
Average unit volume (in thousands) (1) . . . . . . . . . . . . . . . . . . . . . . . . . . $
6,276
$
5,921
Average unit volume, 2023 adjusted (in thousands) (3) . . . . . . . . . . . . . $
6,276
$
6,048
Weekly sales by group:
Comparable restaurants (37 and 34 units) . . . . . . . . . . . . . . . . . . . . . . . $
120,354
$
113,972
Average unit volume restaurants (4 and 3 units) . . . . . . . . . . . . . . . . . . $
100,477
$
112,698
Restaurants less than six months old (8 and 8 units) . . . . . . . . . . . . . . . $
125,511
$
114,312
(1) Average unit volume restaurants include restaurants open a full six to 18 months before the beginning of the period
measured, excluding sales from restaurants permanently closed during the period, if applicable.
(2) Includes the impact of the year-over-year change in sales volume of all Jaggers restaurants, along with Texas
Roadhouse and Bubba’s 33 restaurants open less than six months before the beginning of the period measured and,
if applicable, the impact of restaurants permanently closed or acquired during the period.
(3) For comparative purposes, 2023 was adjusted to include 53 weeks.
The increase in restaurant sales for 2024 was primarily attributable to an increase in store weeks and an increase in
comparable restaurant sales. The increase in store weeks was driven by the opening of new restaurants and the 2%
benefit of the additional week in 2024. The increase in comparable restaurant sales growth was driven by an increase in
guest traffic count along with an increase in our per person average check as shown in the table below.
2024
2023
Guest traffic counts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.4 %
5.4 %
Per person average check . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.1 %
4.7 %
Comparable restaurant sales growth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8.5 %
10.1 %
44
To-go sales as a percentage of restaurant sales were 12.8% in 2024 compared to 12.6% in 2023 and average weekly
to-go sales were $19,940 in 2024 compared to $18,088 in 2023.
Per person average check for 2024 includes the benefit of menu price increases of approximately 2.2% and 0.9%
implemented in Q2 2024 and Q4 2024, respectively. We implemented menu price increases of approximately 2.2% and
2.7% in Q2 2023 and Q4 2023, respectively. In addition, we plan to implement a menu price increase of approximately
1.4% in early April.
In 2024, we opened 31 company restaurants, which included 26 Texas Roadhouse restaurants, four Bubba’s
33 restaurants, and one Jaggers restaurant. In 2024, we had store week growth of approximately 7.5% across all
concepts, including a benefit of 2% from the additional week. In 2025, we expect store week growth of approximately
5% across all concepts, including a benefit of 2% from the acquisition of 13 domestic franchise restaurants at the
beginning of our 2025 fiscal year.
Other sales primarily include the net impact of the amortization of third-party gift card fees and gift card breakage
income and content revenue related to our tabletop kiosk devices. The net impact of these items was $(9.8) million and
$(5.4) million for 2024 and 2023, respectively. The change was driven primarily by increased third-party gift card fee
amortization from increased gift card sales and a decrease in our breakage adjustment recorded in 2024 of $0.6 million
compared to $3.7 million recorded in 2023. The breakage adjustments relate to changes in our estimate of gift card
breakage due to a shift in our historic redemption pattern which indicated that the percentage of gift cards sold that are
not expected to be redeemed had increased.
Franchise Royalties and Fees
Franchise royalties and fees increased by $4.4 million or 16.1% compared to 2023. The increases were due to
comparable franchise restaurant sales growth and new store openings partially offset by $1.5 million related to the
reclassification of certain items that were reported in general and administrative expenses in our consolidated statement
of income in 2023. Franchise comparable restaurant sales increased 6.4% in 2024.
In 2024, our franchise partners opened 11 international Texas Roadhouse restaurants, including one in a U.S.
territory, two domestic Jaggers restaurants, and one international Jaggers restaurant. In addition, two international Texas
Roadhouse restaurants closed during the year.
Food and Beverage Costs
Food and beverage costs, as a percentage of restaurant and other sales, decreased to 33.4% in 2024 compared to
34.6% in 2023. The decrease was primarily driven by the benefit of a higher average guest check partially offset by
commodity inflation of 0.7% in 2024 primarily due to higher beef costs.
In 2025, we expect commodity inflation of 3% to 4% for the year with prices locked for approximately 40% of our
forecasted costs and the remainder subject to floating market prices.
Restaurant Labor Expenses
Restaurant labor expenses, as a percentage of restaurant and other sales, decreased to 33.1% in 2024 compared to
33.4% in 2023. The decrease was primarily driven by the benefit of a higher guest check and labor productivity partially
offset by wage and other labor inflation of 4.6% in 2024. Wage and other labor inflation was driven by higher wage and
benefit expense due to labor market pressures along with increases in state-mandated minimum and tipped wage rates
and increased investment in our people.
In 2025, we anticipate our labor costs will continue to be pressured by wage and other labor inflation of 4% to 5%.
Restaurant Rent Expense
Restaurant rent expense, as a percentage of restaurant and other sales, decreased to 1.5% in 2024 compared to 1.6%
in 2023. The decrease was driven by the increase in average unit volume partially offset by higher rent expense at our
newer restaurants.
45
Restaurant Other Operating Expenses
Restaurant other operating expenses, as a percentage of restaurant and other sales, decreased to 14.9% in 2024
compared to 15.0% in 2023. The decrease was driven by the increase in average unit volume partially offset by higher
incentive compensation expense and higher general liability insurance expense. The increase in incentive compensation
expense was due to favorable operating results and the increase in general liability insurance expense was due to
unfavorable claims experience and an increase in retention levels.
Restaurant Pre-opening Expenses
Pre-opening expenses were $28.1 million in 2024 compared to $29.2 million in 2023. Pre-opening costs will
fluctuate from period to period based on the specific pre-opening costs incurred for each restaurant, the number and
timing of restaurant openings, and the number and timing of restaurant managers hired.
Depreciation and Amortization Expenses
Depreciation and amortization expenses, as a percentage of revenue, were 3.3% in both 2024 and in 2023. The
increase in average unit volume was offset by higher depreciation expense at our newer restaurants.
Impairment and Closure Costs, Net
Impairment and closure costs, net were $1.2 million and $0.3 million in 2024 and 2023, respectively. In 2024,
impairment and closure costs, net included $0.8 million related to the impairment of a building at a previously relocated
store and $0.4 million related to ongoing closure costs for stores which have been relocated. In 2023, impairment and
closure costs, net primarily related to ongoing closure costs for stores which have been relocated.
General and Administrative Expenses
General and administrative expenses, as a percentage of total revenue, decreased to 4.2% in 2024 compared to 4.3%
in 2023. The decrease was driven by the increase in average unit volume and a separation payout of $2.6 million in Q1
2023, related to the retirement of an executive officer, partially offset by higher restricted stock expense and incentive
compensation expense. The increase in restricted stock expense was primarily due to shifting our restricted stock grants
from quarterly to annually.
Interest Income, Net
Interest income, net was $6.8 million in 2024 compared to $3.0 million in 2023. The increase was driven by
increased earnings on our cash and cash equivalents and decreased borrowings on our revolving credit facility in 2024.
Equity Income from Investments in Unconsolidated Affiliates
Equity income was $1.2 million in 2024 compared to $1.4 million in 2023. The decrease in 2024 was primarily
driven by a $0.6 million gain on the acquisition of four of these affiliates in 2023 partially offset by increased earnings
on these remaining affiliates.
Income Tax Expense
Our effective tax rate increased to 15.3% in 2024 compared to 12.5% in 2023. The increase was driven by a
decrease in the impact of the FICA tip tax credit, due to increased profitability. In 2025, we expect an effective tax rate
of 15% to 16% based on forecasted operating results.
Segment Information
We manage our restaurant and franchising operations by concept and as a result have identified Texas Roadhouse,
Bubba’s 33, Jaggers, and our retail initiatives as separate operating segments. Our reportable segments are Texas
Roadhouse and Bubba’s 33. The Texas Roadhouse reportable segment includes the results of our company and franchise
Texas Roadhouse restaurants. The Bubba’s 33 reportable segment includes the results of our company Bubba’s 33
restaurants. Our remaining operating segments, which include the results of our company and franchise Jaggers
restaurants and our retail initiatives, are included in Other. In addition, corporate-related assets, depreciation and
amortization, and capital expenditures are also included in Other.
46
Management uses restaurant margin as the primary measure for assessing performance of our segments. Restaurant
margin (in dollars and as a percentage of restaurant and other sales) represents restaurant and other sales less restaurant-
level operating costs, including food and beverage costs, labor, rent, and other operating costs. Restaurant margin is used
by our chief operating decision maker to evaluate restaurant-level operating efficiency and performance. A reconciliation
of income from operations to restaurant margin is included in the Results of Operations section above.
The following table presents a summary of restaurant margin by segment (in thousands):
Fiscal Year Ended
December 31, 2024
December 26, 2023
Texas Roadhouse . . . . . . . . . . . . . . . . . . . . . . . . . $
864,999
17.3 % $
671,158
15.5 %
Bubba’s 33 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
46,422
15.6
33,942
13.7
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,356
13.8
2,864
11.2
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
915,777
17.1 % $
707,964
15.4 %
In our Texas Roadhouse reportable segment, restaurant margin dollars increased $193.8 million or 28.9% in 2024.
The increase was primarily due to higher sales and improved labor productivity partially offset by wage and other labor
inflation as well as higher general liability insurance expense.
In our Bubba’s 33 reportable segment, restaurant margin dollars increased $12.5 million or 36.8% in 2024. The
increase was primarily due to higher sales and improved labor productivity partially offset by wage and other labor
inflation.
Liquidity and Capital Resources
The following table presents a summary of our net cash provided by (used in) operating, investing, and financing
activities (in thousands):
Fiscal Year Ended
December 31, 2024 December 26, 2023
Net cash provided by operating activities . . . . . . . . . . . . $
753,629 $
564,984
Net cash used in investing activities . . . . . . . . . . . . . . . .
(336,901)
(367,167)
Net cash used in financing activities . . . . . . . . . . . . . . . .
(275,749)
(267,432)
Net increase (decrease) in cash and cash equivalents . . . $
140,979 $
(69,615)
Net cash provided by operating activities was $753.6 million in 2024 compared to $565.0 million in 2023. The
increase was primarily due to an increase in net income, an increase in depreciation and amortization expense, and a
favorable change in working capital.
Our operations have not required significant working capital and, like many restaurant companies, we have been
able to operate with negative working capital, if necessary. Sales are primarily for cash, and restaurant operations do not
require significant inventories or receivables. In addition, we receive trade credit for the purchase of food, beverages,
and supplies, thereby reducing the need for incremental working capital to support growth.
Net cash used in investing activities was $336.9 million in 2024 compared to $367.2 million in 2023. The decrease
was primarily due to the acquisition of franchise stores in 2023 partially offset by an increase in capital expenditures in
2024.
We require capital principally for the development of new company restaurants, the refurbishment or relocation of
existing restaurants, and the acquisition of franchise restaurants, as applicable. We either lease our restaurant site
locations under operating leases for periods generally of five to 30 years (including renewal periods) or purchase the
land when appropriate. As of December 31, 2024, 153 of the 666 company restaurants have been developed on land
which we own.
47
The following table presents a summary of capital expenditures (in thousands):
Fiscal Year Ended
December 31, 2024 December 26, 2023
New company restaurants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
198,367
$
201,234
Refurbishment or expansion of existing restaurants . . . . . . . . . . . . . . . . . . . . . . . . .
122,905
119,785
Relocation of existing restaurants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
25,633
20,629
Capital expenditures related to Support Center office . . . . . . . . . . . . . . . . . . . . . . .
7,436
5,386
Total capital expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
354,341
$
347,034
Our future capital requirements will primarily depend on the number and mix of new restaurants we open, the
timing of those openings, and the restaurant prototype developed in a given fiscal year. These requirements will include
costs directly related to opening, maintaining, or relocating restaurants and may also include costs necessary to ensure
that our infrastructure is able to support a larger restaurant base.
We intend to satisfy our capital requirements over the next 12 months with cash on hand, net cash provided by
operating activities, and if needed, funds available under our revolving credit facility. In 2025, we expect capital
expenditures of approximately $400 million.
Net cash used in financing activities was $275.7 million in 2024 compared to $267.4 million in 2023. The increase
is primarily due to an increase in share repurchases and an increase in our quarterly dividend payments partially offset by
the $50 million repayment of our revolving credit facility in 2023.
On March 17, 2022, our Board approved a stock repurchase program for the repurchase of up to $300.0 million of
our common stock. This stock repurchase program has no expiration date. All repurchases to date under our stock
repurchase programs have been made through open market transactions.
In 2024, we paid $79.8 million, excluding excise taxes, to repurchase 461,662 shares of our common stock. In
2023, we paid $50.0 million, excluding excise taxes, to repurchase 455,026 shares of our common stock. As of
December 31, 2024, $37.1 million remained under our authorized stock repurchase program.
On February 19, 2025, our Board approved a stock repurchase program for the repurchase of up to $500.0 million
of our common stock. Any repurchases under this plan will be made by the Company through open market transactions.
This stock repurchase program has no expiration date and replaces the previous stock repurchase program which was
approved in 2022.
On February 14, 2024, our Board authorized the payment of a quarterly dividend of $0.61 per share of common
stock compared to the quarterly dividend of $0.55 per share of common stock declared in 2023. The payment of
quarterly dividends totaled $162.9 million and $147.2 million in 2024 and 2023, respectively. On February 19, 2025, our
Board declared a quarterly cash dividend of $0.68 per share of common stock.
We paid distributions of $10.4 million and $8.0 million in 2024 and 2023, respectively, to equity holders of our
majority-owned company restaurants.
We maintain a revolving credit facility (the “credit facility”) with a syndicate of commercial lenders led by
JPMorgan Chase Bank, N.A. and PNC Bank, N.A. The credit facility is an unsecured, revolving credit agreement and
has a borrowing capacity of up to $300.0 million with the option to increase by an additional $200.0 million subject to
certain limitations, including approval by the syndicate of lenders. The credit facility has a maturity date of May 1, 2026.
As of December 31, 2024, we had no outstanding borrowings under the credit facility and had $296.8 million of
availability, net of $3.2 million of outstanding letters of credit. As of December 26, 2023, we had no outstanding balance
on the credit facility and had $295.3 million of availability, net of $4.7 million of outstanding letters of credit.
The interest rate for the credit facility as of December 31, 2024 and December 26, 2023 was 5.47% and 6.23%,
respectively.
The lenders’ obligation to extend credit pursuant to the credit facility depends on us maintaining certain financial
covenants, including a minimum consolidated fixed charge coverage ratio and a maximum consolidated leverage ratio.
48
The credit facility permits us to incur additional secured or unsecured indebtedness, except for the incurrence of secured
indebtedness that in the aggregate is equal to or greater than $125.0 million and 20% of our consolidated tangible net
worth. We were in compliance with all financial covenants as of December 31, 2024.
Contractual Obligations
The following table summarizes the amount of payments due under specified contractual obligations as of
December 31, 2024 (in thousands):
Payments Due by Period
Less than
More than
Total
1 year
1 - 3 Years 3 - 5 Years
5 years
Obligations under finance leases . . . . . . . . . . . . . .
2,758
31
72
89
2,566
Interest (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,893
312
615
599
2,367
Real estate operating lease obligations . . . . . . . . . 1,472,259
79,801
163,025
167,477
1,061,956
Capital obligations. . . . . . . . . . . . . . . . . . . . . . . . . . 243,569 243,569
—
—
—
Total contractual obligations (2) . . . . . . . . . . . . . . $ 1,722,479 $ 323,713 $ 163,712 $ 168,165 $ 1,066,889
(1) Includes interest on our financing leases and assumes a constant interest rate until maturity.
(2) Unrecognized tax benefits under Accounting Standards Codification 740, Income Taxes, are not significant and
excluded from this amount.
We have no material minimum purchase commitments with our vendors that extend beyond a year. Refer to
Notes 5, 8, and 13 to the consolidated financial statements for details of contractual obligations.
Guarantees
As of December 31, 2024 and December 26, 2023, we were contingently liable for $9.4 million and $10.4 million,
respectively, for seven lease guarantees. These amounts represent the maximum potential liability of future payments
under the guarantees. In the event of default, the indemnity and default clauses in our assignment agreements govern our
ability to pursue and recover damages incurred. No material liabilities have been recorded as of December 31, 2024 or
December 26, 2023, as the likelihood of default was deemed to be less than probable and the fair value of the guarantees
is not considered significant.
Critical Accounting Policies and Estimates
The above discussion and analysis of our financial condition and results of operations are based upon our
consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these
financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities,
revenue and expenses, and disclosures of contingent assets and liabilities. Our significant accounting policies are
described in Note 2 to the accompanying consolidated financial statements. Critical accounting policies are those that we
believe are most important to portraying our financial condition and results of operations and also require the greatest
amount of subjective or complex judgments by management. Judgments or uncertainties regarding the application of
these policies may result in significantly different amounts being reported under different conditions or using different
assumptions. We consider the following policies to be the most critical in understanding the judgments that are involved
in preparing the consolidated financial statements.
Impairment of Long-lived Assets. We evaluate long-lived assets to be held and used in the business, such as
property and equipment, operating lease right-of-use assets, and intangible assets subject to amortization, for impairment
whenever events and circumstances indicate that the carrying amount of a restaurant may not be recoverable. For the
purposes of this evaluation, we define the asset group at the individual restaurant level. When we evaluate the
restaurants, cash flows are the primary indicator of impairment. Recoverability of assets to be held and used is measured
by comparison of the carrying amount of the restaurant to estimated undiscounted future cash flows expected to be
generated by the restaurant.
Under our policies, trailing 12-month cash flow results under a predetermined amount at the individual restaurant
level signals a potential impairment. In our evaluation of restaurants that do not meet the cash flow threshold, we
estimate future undiscounted cash flows from operating the restaurant over the remaining useful life of the primary asset,
which is the building or the operating lease right-of-use asset. In the estimation of future cash flows, we consider the
49
period of time the restaurant has been open, the trend of operations over such period, and future periods and expectations
for future sales growth. We limit assumptions about important factors such as trend of future operations and sales growth
to those that are supportable based upon our plans for the restaurant and actual results at comparable restaurants. Both
qualitative and quantitative information are considered when evaluating for potential impairments. As we assess the
ongoing expected cash flows and carrying amounts of our long-lived assets, these factors could cause us to realize a
material impairment charge. Based on our reviews performed on the cash flows of our restaurants, the carrying amount
associated with restaurants deemed at risk for impairment is not material to our consolidated financial statements.
If assets are determined to be impaired, we measure the impairment charge by calculating the amount by which the
asset carrying amount exceeds its estimated fair value. The determination of asset fair value is also subject to significant
judgment. We generally measure estimated fair value by discounting estimated future cash flows. When fair value is
measured by discounting estimated future cash flows, the assumptions used are consistent with what we believe
hypothetical market participants would use. We also use a discount rate that is commensurate with the risk inherent in
the projected cash flows. If these assumptions change in the future, we may be required to record impairment charges for
these assets.
In 2024, we recorded impairment and closure costs, net of $1.2 million which related to the impairment of a
building at a previously relocated store and ongoing closure costs for stores which have relocated. Refer to Note 17 in
the consolidated financial statements for further discussion regarding impairment and closure costs recorded in 2024,
2023, and 2022.
Goodwill. Goodwill is tested annually for impairment and is tested more frequently if events and circumstances
indicate that the asset might be impaired. An impairment loss is recognized to the extent that the carrying amount
exceeds the fair value of the reporting unit, up to the amount of goodwill recorded. Goodwill is required to be tested for
impairment at the reporting unit level, or the level of internal reporting that reflects the way in which an entity manages
its businesses. A reporting unit is defined as an operating segment, or one level below an operating segment. Our
reporting units are at the concept level. An entity may first assess qualitative factors in order to determine whether it is
more likely than not that the fair value of the reporting unit is less than its carrying amount. The entity may also elect to
bypass the qualitative assessment and determine the fair value of the reporting unit and compare it to its carrying
amount. The fair value of the reporting unit may be based on several valuation approaches including capitalization of
earnings, discounted cash flows, comparable public company market multiples, and comparable acquisition market
multiples.
At December 31, 2024, our Texas Roadhouse reporting unit had allocated goodwill of $169.7 million. No other
reporting units had goodwill balances.
In performing the qualitative assessment, we reviewed factors such as macroeconomic conditions, industry and
market considerations, cost factors, changes in management or key personnel, sustained decreases in share price, and the
overall financial performance of the Company’s Texas Roadhouse reporting unit. As a result of the qualitative
assessment, no indicators of impairment were identified, and no additional indicators of impairment were identified
through the end of the fourth quarter that would require additional testing. Changes in circumstances existing at the
measurement date or at other times in the future could result in an impairment loss.
Effects of Inflation
During recent years, we have operated during periods of inflation, led primarily by wage and other labor inflation
and commodity inflation. Some of the impacts of inflation have been offset by menu price increases and other
adjustments. Whether we are able and/or choose to continue to offset the effects of inflation will determine to what
extent, if any, inflation affects our restaurant profitability in future periods.
50
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are exposed to market risk from changes in interest rates on variable rate debt and changes in commodity
prices. Our exposure to interest rate fluctuations is limited to our outstanding bank debt. The terms of the credit facility
require us to pay interest on outstanding borrowings at the Term Secured Overnight Financing Rate (“SOFR”), plus a
fixed adjustment of 0.10% and a variable adjustment of 0.875% to 1.875% depending on our leverage ratio. As of
December 31, 2024, we had no outstanding borrowings on our credit facility.
In an effort to secure high quality, low-cost ingredients used in the products sold in our restaurants, we employ
various purchasing and pricing contract techniques. When purchasing certain types of commodities, we may be subject
to prevailing market conditions resulting in unpredictable price volatility. For certain commodities, we may also enter
into contracts for terms of one year or less that are either fixed price agreements or fixed volume agreements where the
price is negotiated with reference to fluctuating market prices. We currently do not use financial instruments to hedge
commodity prices, but we will continue to evaluate their effectiveness. Extreme and/or long-term increases in
commodity prices could adversely affect our future results, especially if we are unable, primarily due to competitive
reasons, to increase menu prices. Additionally, if there is a time lag between the increasing commodity prices and our
ability to increase menu prices or if we believe the commodity price increase to be short in duration and we choose not
to pass on the cost increases, our short-term financial results could be negatively affected.
We are subject to business risk as our beef supply is highly dependent upon four vendors. If these vendors are
unable to fulfill their obligations under their contracts, we may encounter supply shortages and/or higher costs to secure
adequate supply and a possible loss of sales, any of which would harm our business.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY FINANCIAL DATA
See Index to Consolidated Financial Statements at Item 15.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
51
ITEM 9A. CONTROLS AND PROCEDURES
Evaluation of disclosure controls and procedures
We have evaluated the effectiveness of the design and operation of our disclosure controls and procedures pursuant
to, and as defined in, Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of the end of the period covered by this
report. Based on the evaluation, performed under the supervision and with the participation of our management,
including the Chief Executive Officer (the “CEO”) and the Chief Financial Officer (the “CFO”), our management,
including the CEO and CFO, concluded that our disclosure controls and procedures were effective as of
December 31, 2024.
Changes in internal control
There were no changes in the Company’s internal control over financial reporting that occurred during the quarter
ended December 31, 2024 that materially affected or are reasonably likely to materially affect, the Company’s internal
control over financial reporting.
Management’s Report on Internal Control over Financial Reporting
Under Section 404 of the Sarbanes-Oxley Act of 2002, our management is required to assess the effectiveness of
the Company’s internal control over financial reporting as of the end of each fiscal year and report, based on that
assessment, whether the Company’s internal control over financial reporting is effective.
Management of the Company is responsible for establishing and maintaining adequate internal control over
financial reporting. As defined in Exchange Act Rule 13a-15(f), internal control over financial reporting is a process
designed by, or under the supervision of, our principal executive and principal financial officers and effected by our
Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. Therefore, internal control over financial reporting determined to be effective can
provide only reasonable assurance with respect to financial statement preparation and may not prevent or detect all
misstatements.
Under the supervision and with the participation of our management, including our CEO and CFO, we assessed the
effectiveness of the Company’s internal control over financial reporting as of the end of the period covered by this
report. In this assessment, the Company applied criteria based on the “Internal Control—Integrated Framework (2013)”
issued by the Committee of Sponsoring Organizations of the Treadway Commission. These criteria are in the areas of
control environment, risk assessment, control activities, information and communication, and monitoring. The
Company’s assessment included documenting, evaluating and testing the design and operating effectiveness of its
internal control over financial reporting. Based upon this evaluation, our management concluded that our internal control
over financial reporting was effective as of December 31, 2024.
KPMG LLP, the independent registered public accounting firm that audited our Consolidated Financial Statements
included in the Annual Report on Form 10-K, has also audited the effectiveness of the Company’s internal control over
financial reporting as of December 31, 2024 as stated in their report at F-3.
52
ITEM 9B. OTHER INFORMATION
Rule 10b5-1 Trading Plans
In accordance with the disclosure requirement set forth in Item 408 of Regulation S-K, the following table discloses
any executive officer or director who is subject to the filing requirements of Section 16 of the Exchange Act that adopted
a Rule 10b5-1 trading arrangement during the fourth quarter ended December 31, 2024. These trading arrangements are
intended to satisfy the affirmative defense conditions of Rule 10b5-1(c).
Name
Title
Adoption Date
End Date (1)
Aggregate Number of
Securities to be Sold
Gerald L. Morgan . . . . . . . . . . . . . . . Chief Executive Officer 11/14/2024
5/14/2026
20,000
Regina A. Tobin . . . . . . . . . . . . . . . .
President
11/18/2024
11/18/2025
3,370
(1) A trading plan may expire on such earlier date that all transactions under the trading plan are completed.
Other than as disclosed above, no other executive officer or director adopted, modified, or terminated a Rule 10b5-1
or a non-Rule 10b5-1 trading arrangement during the 14 weeks ended December 31, 2024.
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
None.
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Information regarding our directors is incorporated herein by reference to the information set forth under “Election
of Directors” in our Definitive Proxy Statement to be dated on or about April 4, 2025.
Information regarding our executive officers has been included in Part I of this Annual Report under the caption
“Executive Officers of the Company.”
Information regarding our corporate governance is incorporated herein by reference to the information set forth in
our Definitive Proxy Statement to be dated on or about April 4, 2025.
ITEM 11. EXECUTIVE COMPENSATION
Incorporated by reference from our Definitive Proxy Statement to be dated on or about April 4, 2025.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
Incorporated by reference from our Definitive Proxy Statement to be dated on or about April 4, 2025.
Equity Compensation Plan Information
As of December 31, 2024, shares of common stock authorized for issuance under our equity compensation plans are
summarized in the following table. Refer to Note 14 to the Consolidated Financial Statements for a description of the
plans.
Shares to Be
Shares
Issued Upon
Available for
Plan Category
Vest Date (1)
Future Grants
Plans approved by shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
441,190
6,219,382
Plans not approved by shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
—
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
441,190
6,219,382
(1) Total number of shares consist of 410,890 restricted stock units and 30,300 performance stock units. Shares in this
column are excluded from the Shares Available for Future Grants column.
53
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
Incorporated by reference from our Definitive Proxy Statement to be dated on or about April 4, 2025.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Incorporated by reference from our Definitive Proxy Statement to be dated on or about April 4, 2025.
54
PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
1.
Consolidated Financial Statements
Description
Page Number
in Report
Reports of Independent Registered Public Accounting Firm (PCAOB ID: 185) . . . . . . . . . . . . . . . . . . . . . . .
F-1
Consolidated Balance Sheets as of December 31, 2024 and December 26, 2023 . . . . . . . . . . . . . . . . . . . . . .
F-4
Consolidated Statements of Income for the years ended December 31, 2024, December 26, 2023 and
December 27, 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-5
Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2024,
December 26,2023, and December 27, 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-6
Consolidated Statements of Cash Flows for the years ended December 31, 2024, December 26, 2023,
and December 27, 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-7
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-8
2.
Financial Statement Schedules
Omitted due to inapplicability or because required information is shown in our Consolidated Financial Statements
or Notes thereto.
3.
Exhibits
Exhibit
No.
Description
3.1
Restated Certificate of Incorporation for Texas Roadhouse, Inc. dated as of May 16, 2024 (incorporated
by reference to Exhibit 3.2 of the Registrant’s Current Report on Form 8-K May 16, 2024)
3.2
Amended and Restated Bylaws for Texas Roadhouse, Inc. dated as of May 16, 2024 (incorporated by
reference to Exhibit 3.3 to the Registrant’s Current Report on Form 8-K dated May 16, 2024)
4.1
Description of Securities
10.1*
Form of Indemnification Agreement for Director and Executive Officer (incorporated by reference to
Exhibit 10.1 of Registrant’s Annual Report on Form 10-K for the year ended December 28, 2021)
10.2
Form of Limited Partnership Agreement and Operating Agreement for certain company-managed Texas
Roadhouse restaurants, including schedule of the owners of such restaurants and the aggregate interests
held by directors, executive officers and 5% stockholders who are parties to such an agreement
(incorporated by reference to Exhibit 10.10 to the Registration Statement on Form S-1 of Registrant)
10.3
Form of Franchise Agreement and Preliminary Agreement for a Texas Roadhouse restaurant franchise,
including schedule of directors, executive officers and 5% stockholders which have entered into either
agreement (incorporated by reference to Exhibit 10.14 to the Registration Statement on Form S-1 of
Registrant)
10.4
Schedule of the owners of company-managed Texas Roadhouse restaurants and the aggregate interests
held by directors, executive officers and 5% stockholders who are parties to Limited Partnership
Agreements and Operating Agreements as of December 31, 2024 the form of which is set forth in
Exhibit 10.2 of this Form 10-K
10.5
Schedule of the directors, executive officers and 5% stockholders which have entered into Franchise
Agreements or Preliminary Agreements for a Texas Roadhouse Franchise as of December 31, 2024 the
form of which is set forth in Exhibit 10.3 of this Form 10-K
10.6*
Texas Roadhouse, Inc. 2013 Long-Term Incentive Plan (incorporated by reference from Appendix A to
the Texas Roadhouse, Inc. Proxy Statement on Schedule 14A filed with the Securities and Exchange
Commission on April 5, 2013)
10.7*
Amended and Restated Form of Restricted Stock Unit Award Agreement under the Texas
Roadhouse, Inc. 2013 Long-Term Incentive Plan for non-officers (incorporated by reference to Exhibit
10.41 to the Registrant’s Annual Report on Form 10-K for the year ended December 30, 2014)
10.8*
Second Amended and Restated Deferred Compensation Plan of Texas Roadhouse Management Corp., as
amended December 19, 2007 and December 31, 2008 (incorporated by reference to Exhibit 10.42 to the
Registrant’s Annual Report on Form 10-K for the year ended December 30, 2014)
55
Exhibit
No.
Description
10.9*
Third Amended and Restated Deferred Compensation Plan of Texas Roadhouse Management Corp.,
effective January 1, 2010 (incorporated by reference to Exhibit 10.43 to the Registrant’s Annual Report
on Form 10-K for the year ended December 30, 2014)
10.10
Master Lease Agreement dated October 26, 2018 between Paragon Centre Holdings, LLC and Texas
Roadhouse Holdings LLC (incorporated by reference to Exhibit 10.2 to the Registrant’s Quarterly Report
on Form 10-Q for the quarter ended September 25, 2018)
10.11
Amended and Restated Credit Agreement dated as of August 7, 2017, by and among Texas Roadhouse
Inc., and the lenders named therein and JPMorgan Chase Bank, N.A., as Administrative Agent
(incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K dated
August 7, 2017)
10.12
Assignment and Assumption Agreement between Texas Roadhouse Holdings LLC and Texas Roadhouse,
Inc. dated October 26, 2018 (incorporated by reference to Exhibit 10.27 to the Registrant’s Annual Report
on Form 10-K for the year ended December 31, 2019)
10.13
First Amendment to Paragon Centre Master Lease Agreement between Paragon Centre Holdings, LLC
and Texas Roadhouse, Inc. dated December 13, 2019 (incorporated by reference to Exhibit 10.28 to the
Registrant’s Annual Report on Form 10-K for the year ended December 31, 2019)
10.14
First Amendment to Amended and Restated Credit Agreement, dated as of May 11, 2020, by and among
Texas Roadhouse, Inc., and the lenders named therein and JPMorgan Chase Bank, N.A. as Administrative
Agent (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on 8-K dated
May 11, 2020)
10.15
Second Amendment to Amended and Restated Credit Agreement dated as of May 4, 2021 by and among
Texas Roadhouse, Inc. and the lenders named therein and JPMorgan Chase Bank, N.A. as Administrative
Agent (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K dated
May 4, 2021)
10.16*
Texas Roadhouse, Inc. 2021 Long-Term Incentive Plan (incorporated by reference from Appendix A to
the Texas Roadhouse, Inc. Proxy Statement on Schedule 14A filed with the Securities and Exchange
Commission on April 2, 2021)
10.17*
Form of Texas Roadhouse, Inc. 2021 Long-Term Incentive Plan Performance Stock Unit Award
Agreement (incorporated by reference to Exhibit 10.1 of Registrant’s Current Report on Form 8-K dated
June 15, 2021)
10.18*
Form of Texas Roadhouse, Inc. 2021 Long-Term Incentive Plan Restricted Stock Unit Award Agreement
(Officers) (incorporated by reference to Exhibit 10.1 of Registrant’s Current Report on Form 8-K dated
June 15, 2021)
10.19*
Form of Texas Roadhouse, Inc. 2021 Long-Term Incentive Plan Restricted Stock Unit Award Agreement
(Member of Board of Directors) (incorporated by reference to Exhibit 10.1 of Registrant’s Current Report
on Form 8-K dated June 15, 2021)
10.20*
Employment Agreement between Texas Roadhouse Management Corp. and Christopher C. Colson dated
December 27, 2024
10.21*
Employment Agreement between Texas Roadhouse Management Corp. and Travis C. Doster dated
December 27, 2024
10.22*
Employment Agreement between Texas Roadhouse Management Corp. and David Christopher Monroe
dated December 27, 2024
10.23*
Employment Agreement between Texas Roadhouse Management Corp. and Gerald L. Morgan dated
December 27, 2024
10.24*
Employment Agreement between Texas Roadhouse Management Corp. and Hernan E. Mujica dated
December 27, 2024
10.25*
Employment Agreement between Texas Roadhouse Management Corp. and Regina A. Tobin dated
December 27, 2024
10.26
Amendment No. 3 to Amended and Restated Credit Agreement dated May 19, 2023 by and among Texas
Roadhouse, Inc., the lenders named therein and JPMorgan Chase Bank, N.A., as Administrative Agent
(incorporated by reference to Exhibit 10.1 to Registrant’s Current Report on Form 8‑K dated
May 19, 2023)
10.27*
Form of Texas Roadhouse, Inc. 2021 Long-Term Incentive Plan Restricted Stock Unit Award Agreement
(Non-Officers) (incorporated by reference to Exhibit 10.2 to Registrant’s of the Registrant’s Quarterly
Report on Form 10-Q for the period ended September 26, 2023)
19.1
Texas Roadhouse, Inc. Stock Trading Policy
56
Exhibit
No.
Description
21.1
List of Subsidiaries
23.1
Consent of KPMG LLP, Independent Registered Public Accounting Firm
31.1
Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2
Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.3
Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1
Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
97*
Texas Roadhouse, Inc. Policy for Recovery of Incentive Compensation for Executive Officers dated
November 9, 2023
101
The following financial statements from the Texas Roadhouse, Inc. Annual Report on Form 10-K for the
year ended December 31, 2024, filed February 28, 2025, formatted in inline eXtensible Business
Reporting Language (iXBRL): (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Income,
(iii) Consolidated Statements of Stockholders’ Equity, (iv) Consolidated Statements of Cash Flows, and
(v) the Notes to the Consolidated Financial Statements.
104
Cover page, formatted in iXBRL and contained in Exhibit 101.
*
Management contract or compensatory plan or arrangement required to be filed as an exhibit to Form 10-K.
57
ITEM 16. FORM 10-K SUMMARY
Not applicable.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the
registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
TEXAS ROADHOUSE, INC.
By:
/s/ GERALD L. MORGAN
Chief Executive Officer, Director
Date: February 28, 2025
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Annual Report has been
signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature
Title
Date
/s/ GERALD L. MORGAN
Chief Executive Officer, Director
February 28, 2025
Gerald L. Morgan
(Principal Executive Officer)
/s/ D. CHRISTOPHER MONROE
Chief Financial Officer
February 28, 2025
D. Christopher Monroe
(Principal Financial Officer)
/s/ KEITH V. HUMPICH
Vice President of Finance
February 28, 2025
Keith V. Humpich
(Principal Accounting Officer)
/s/ GREGORY N. MOORE
Chairman of the Board, Director
February 28, 2025
Gregory N. Moore
/s/ JANE GROTE ABELL
Director
February 28, 2025
Jane Grote Abell
/s/ MICHAEL A. CRAWFORD
Director
February 28, 2025
Michael A. Crawford
/s/ DONNA E. EPPS
Director
February 28, 2025
Donna E. Epps
/s/ WAYNE L. JONES
Director
February 28, 2025
Wayne L. Jones
/s/ CURTIS A. WARFIELD
Director
February 28, 2025
Curtis A. Warfield
/s/ KATHLEEN M. WIDMER
Director
February 28, 2025
Kathleen M. Widmer
/s/ JAMES R. ZARLEY
Director
February 28, 2025
James R. Zarley
(This page has been left blank intentionally.)
F-1
Report of Independent Registered Public Accounting Firm
To the Stockholders and Board of Directors
Texas Roadhouse, Inc.:
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheets of Texas Roadhouse, Inc. and subsidiaries (the
Company) as of December 31, 2024 and December 26, 2023, the related consolidated statements of income,
stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2024, and the
related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements
present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and
December 26, 2023, and the results of its operations and its cash flows for each of the years in the three-year period
ended December 31, 2024, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2024, based on criteria
established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of
the Treadway Commission, and our report dated February 28, 2025 expressed an unqualified opinion on the
effectiveness of the Company’s internal control over financial reporting.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to
express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm
registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.
federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the
PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material
misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material
misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that
respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and
disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used
and significant estimates made by management, as well as evaluating the overall presentation of the consolidated
financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated
financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates
to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially
challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way
our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical
audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it
relates.
Potential indicators of impairment of long-lived assets
As discussed in Note 2 to the consolidated financial statements, the Company assesses long-lived assets, primarily
related to restaurants held and used in the business, including property and equipment and right-of-use assets, for
potential impairment whenever events or changes in circumstances indicate that the carrying amount of a restaurant, or
asset group, may not be recoverable. Trailing 12-month cash flows under predetermined amounts at the individual
restaurant level are the Company’s primary indicator that the carrying amount of a restaurant may not be recoverable.
Property and equipment, net of accumulated depreciation, and the operating lease right-of-use assets, net as of
December 31, 2024 were $1,617.7 million and $769.9 million, respectively.
We identified the assessment of the Company’s determination of potential indicators of impairment of long-lived assets
as a critical audit matter. Subjective auditor judgement was required to evaluate the events or circumstances
F-2
indicating the carrying amount of an asset group may not be recoverable, including the determination of the cash flow
thresholds and the utilization of trailing 12-month cash flows to identify a potential impairment trigger.
The following are the primary procedures we performed to address this critical audit matter. We evaluated the design
and tested the operating effectiveness of certain internal controls over the Company’s long-lived asset impairment
process, including controls relating to determination and identification of potential indicators of impairment. We
evaluated the Company’s methodology of using trailing 12-month cash flow results under predetermined thresholds at
the individual restaurant level as a potential indicator of impairment. Specifically, we evaluated the Company’s
assessment of the factors considered, including the cash flows at the individual restaurant level and the cash flow
thresholds used in the Company’s analysis. We tested that those restaurants with trailing 12-month cash flows were
evaluated for potential impairment triggers, and we compared trailing 12-month cash flows used in the Company’s
analysis to historical financial data. We also assessed other events and circumstances that could have been indicative of a
potential impairment trigger by reviewing management’s development reports and related meeting minutes and the
board of directors meeting minutes.
/s/ KPMG LLP
We have served as the Company’s auditor since 1998.
Louisville, Kentucky
February 28, 2025
F-3
Report of Independent Registered Public Accounting Firm
To the Stockholders and Board of Directors
Texas Roadhouse, Inc.:
Opinion on Internal Control Over Financial Reporting
We have audited Texas Roadhouse, Inc. and subsidiaries’ (the Company) internal control over financial reporting as of
December 31, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the
Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all
material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria
established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of
the Treadway Commission.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2024 and December 26, 2023, the
related consolidated statements of income, stockholders’ equity, and cash flows for each of the years in the three-year
period ended December 31, 2024, and the related notes (collectively, the consolidated financial statements), and our
report dated February 28, 2025 expressed an unqualified opinion on those consolidated financial statements.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its
assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s
Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s
internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB
and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and
the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was
maintained in all material respects. Our audit of internal control over financial reporting included obtaining an
understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing
and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also
included performing such other procedures as we considered necessary in the circumstances. We believe that our audit
provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles. A company’s internal control over financial reporting includes those policies
and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are
recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting
principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of
management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the
financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may
deteriorate.
/s/ KPMG LLP
Louisville, Kentucky
February 28, 2025
F-4
Texas Roadhouse, Inc. and Subsidiaries
Consolidated Balance Sheets
(in thousands, except share and per share data)
December 31, 2024
December 26, 2023
Assets
Current assets:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
245,225
$
104,246
Receivables, net of allowance for doubtful accounts of $7 at December 31, 2024
and $35 at December 26, 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
193,170
175,474
Inventories, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
40,756
38,320
Prepaid income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
3,262
Prepaid expenses and other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
37,417
35,172
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
516,568
356,474
Property and equipment, net of accumulated depreciation of $1,223,064 at
December 31, 2024 and $1,078,855 at December 26, 2023 . . . . . . . . . . . . . . . . . . . . .
1,617,673
1,474,722
Operating lease right-of-use assets, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
769,865
694,014
Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
169,684
169,684
Intangible assets, net of accumulated amortization of $23,147 at December 31, 2024
and $20,929 at December 26, 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,265
3,483
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
115,724
94,999
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
3,190,779
$
2,793,376
Liabilities and Stockholders’ Equity
Current liabilities:
Current portion of operating lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
28,172
$
27,411
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
144,791
131,638
Deferred revenue-gift cards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
401,198
373,913
Accrued wages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
101,981
68,062
Income taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,986
112
Accrued taxes and licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
56,824
42,758
Other accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
92,178
101,540
Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
828,130
745,434
Operating lease liabilities, net of current portion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
826,300
743,476
Restricted stock and other deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9,288
8,893
Deferred tax liabilities, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8,184
23,104
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
145,154
114,958
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,817,056
1,635,865
Texas Roadhouse, Inc. and subsidiaries stockholders’ equity:
Preferred stock ($0.001 par value, 1,000,000 shares authorized; no shares issued
or outstanding) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
—
Common stock ($0.001 par value, 100,000,000 shares authorized, 66,574,626 and
66,789,464 shares issued and outstanding at December 31, 2024 and
December 26, 2023, respectively) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
67
67
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,358,280
1,141,595
Total Texas Roadhouse, Inc. and subsidiaries stockholders’ equity . . . . . . . . . . . . .
1,358,347
1,141,662
Noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
15,376
15,849
Total equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,373,723
1,157,511
Total liabilities and equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
3,190,779
$
2,793,376
See accompanying Notes to Consolidated Financial Statements.
F-5
Texas Roadhouse, Inc. and Subsidiaries
Consolidated Statements of Income
(in thousands, except per share data)
Fiscal Year Ended
December 31, December 26, December 27,
2024
2023
2022
Revenue:
Restaurant and other sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 5,341,853 $ 4,604,554 $ 3,988,791
Franchise royalties and fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
31,479
27,118
26,128
Total revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5,373,332
4,631,672
4,014,919
Costs and expenses:
Restaurant operating costs (excluding depreciation and
amortization shown separately below):
Food and beverage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,785,119
1,593,852
1,378,192
Labor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,764,740
1,539,124
1,319,959
Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
80,560
72,766
66,834
Other operating . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
795,657
690,848
596,305
Pre-opening . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
28,090
29,234
21,883
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
178,157
153,202
137,237
Impairment and closure, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,226
275
1,600
General and administrative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
223,264
198,382
172,712
Total costs and expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,856,813
4,277,683
3,694,722
Income from operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
516,519
353,989
320,197
Interest income (expense), net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6,774
2,984
(124)
Equity income from investments in unconsolidated affiliates . . . . . . . .
1,197
1,351
1,239
Income before taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
524,490
358,324
321,312
Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
80,145
44,649
43,715
Net income including noncontrolling interests . . . . . . . . . . . . . . . . . . . .
444,345
313,675
277,597
Less: Net income attributable to noncontrolling interests . . . . . . . . . . .
10,753
8,799
7,779
Net income attributable to Texas Roadhouse, Inc. and subsidiaries . . . $
433,592 $
304,876 $
269,818
Net income per common share attributable to Texas
Roadhouse, Inc. and subsidiaries:
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
6.50 $
4.56 $
3.99
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
6.47 $
4.54 $
3.97
Weighted average shares outstanding:
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
66,752
66,893
67,643
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
67,011
67,149
67,920
Cash dividends declared per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
2.44 $
2.20 $
1.84
See accompanying Notes to Consolidated Financial Statements.
F-6
Texas Roadhouse, Inc. and Subsidiaries
Consolidated Statements of Stockholders’ Equity
(tabular amounts in thousands, except share data)
Total Texas
Additional
Roadhouse, Inc.
Par
Paid-in-
Retained
and
Noncontrolling
Shares
Value
Capital
Earnings
Subsidiaries
Interests
Total
Balance, December 28, 2021 . . . . . . . . . . . . . . . .
69,382,418 $
69 $
114,504 $
943,551 $
1,058,124 $
15,360 $ 1,073,484
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
—
—
269,818
269,818
7,779
277,597
Distributions to noncontrolling interest holders . . .
—
—
—
—
—
(7,775)
(7,775)
Acquisition of noncontrolling interest . . . . . . . . . .
—
—
(1,395)
—
(1,395)
(340)
(1,735)
Dividends declared ($1.84 per share) . . . . . . . . . .
—
—
—
(124,137)
(124,137)
—
(124,137)
Shares issued under share-based compensation
plans including tax effects . . . . . . . . . . . . . . . . . .
474,771
—
—
—
—
—
—
Indirect repurchase of shares for minimum
tax withholdings . . . . . . . . . . . . . . . . . . . . . . . .
(149,873)
—
(13,576)
—
(13,576)
—
(13,576)
Repurchase of shares of common stock . . . . . . . . .
(2,734,005)
(2)
(123,057)
(89,800)
(212,859)
—
(212,859)
Share-based compensation . . . . . . . . . . . . . . . . .
—
—
36,663
—
36,663
—
36,663
Balance, December 27, 2022 . . . . . . . . . . . . . . . .
66,973,311 $
67 $
13,139 $
999,432 $
1,012,638 $
15,024 $ 1,027,662
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
—
—
304,876
304,876
8,799
313,675
Distributions to noncontrolling interest holders . . .
—
—
—
—
—
(7,974)
(7,974)
Dividends declared ($2.20 per share) . . . . . . . . . .
—
—
—
(147,182)
(147,182)
—
(147,182)
Shares issued under share-based compensation
plans including tax effects . . . . . . . . . . . . . . . . . .
391,793
—
—
—
—
—
—
Indirect repurchase of shares for minimum
tax withholdings . . . . . . . . . . . . . . . . . . . . . . . .
(120,614)
—
(12,688)
—
(12,688)
—
(12,688)
Repurchase of shares of common stock, including
excise taxes . . . . . . . . . . . . . . . . . . . . . . . . . . .
(455,026)
—
(34,681)
(15,531)
(50,212)
—
(50,212)
Share-based compensation . . . . . . . . . . . . . . . . .
—
—
34,230
—
34,230
—
34,230
Balance, December 26, 2023 . . . . . . . . . . . . . . . .
66,789,464 $
67 $
— $ 1,141,595 $
1,141,662 $
15,849 $ 1,157,511
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
—
—
433,592
433,592
10,753
444,345
Distributions to noncontrolling interest holders . . .
—
—
—
—
—
(10,361)
(10,361)
Acquisition of noncontrolling interest, net of
deferred taxes . . . . . . . . . . . . . . . . . . . . . . . . . .
—
—
(3,297)
—
(3,297)
(865)
(4,162)
Dividends declared ($2.44 per share) . . . . . . . . . .
—
—
—
(162,864)
(162,864)
—
(162,864)
Shares issued under share-based compensation
plans including tax effects . . . . . . . . . . . . . . . . . .
358,077
—
—
—
—
—
—
Indirect repurchase of shares for minimum
tax withholdings . . . . . . . . . . . . . . . . . . . . . . . .
(111,253)
—
(17,608)
—
(17,608)
—
(17,608)
Repurchase of shares of common stock,
including excise taxes . . . . . . . . . . . . . . . . . . . .
(461,662)
—
(26,150)
(54,043)
(80,193)
—
(80,193)
Share-based compensation . . . . . . . . . . . . . . . . .
—
—
47,055
—
47,055
—
47,055
Balance, December 31, 2024 . . . . . . . . . . . . . . . .
66,574,626 $
67 $
— $ 1,358,280 $
1,358,347 $
15,376 $ 1,373,723
See accompanying Notes to Consolidated Financial Statements.
F-7
Texas Roadhouse, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(in thousands)
Fiscal Year Ended
December 31, December 26, December 27,
2024
2023
2022
Cash flows from operating activities:
Net income including noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . .
$
444,345 $
313,675 $
277,597
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
178,157
153,202
137,237
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(13,803)
3,115
9,456
Loss on disposition of assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,572
3,783
5,206
Impairment and closure costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
845
200
1,770
Equity income from investments in unconsolidated affiliates . . . . . . . . . .
(1,197)
(1,351)
(1,239)
Distributions of income received from investments in unconsolidated
affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,133
689
1,022
Provision for doubtful accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(28)
(14)
33
Share-based compensation expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
47,055
34,230
36,663
Changes in operating working capital, net of acquisitions:
Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(17,668)
(24,420)
11,062
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(2,436)
105
(6,099)
Prepaid expenses and other current assets . . . . . . . . . . . . . . . . . . . . . . . . .
(2,245)
(5,612)
(6,540)
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(20,097)
(22,617)
5,775
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
13,142
23,083
5,408
Deferred revenue—gift cards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
27,285
37,347
33,799
Accrued wages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
33,919
13,518
(10,172)
Prepaid income taxes and income taxes payable . . . . . . . . . . . . . . . . . . . .
6,136
1,514
5,953
Accrued taxes and licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
14,393
6,581
1,889
Other accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,842
(3,460)
2,147
Operating lease right-of-use assets and lease liabilities . . . . . . . . . . . . . . .
8,085
6,313
5,268
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
30,194
25,103
(4,510)
Net cash provided by operating activities . . . . . . . . . . . . . . . . . . . . . . . .
753,629
564,984
511,725
Cash flows from investing activities:
Capital expenditures—property and equipment . . . . . . . . . . . . . . . . . . . . . .
(354,341)
(347,034)
(246,121)
Acquisitions of franchise restaurants, net of cash acquired . . . . . . . . . . . . . .
—
(39,153)
(33,069)
Proceeds from sale of investments in unconsolidated affiliates . . . . . . . . . .
—
627
316
Proceeds from sale of property and equipment . . . . . . . . . . . . . . . . . . . . . . .
1,441
2,110
2,269
Proceeds from sale leaseback transactions . . . . . . . . . . . . . . . . . . . . . . . . . .
15,999
16,283
12,871
Net cash used in investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(336,901)
(367,167)
(263,734)
Cash flows from financing activities:
Payments on revolving credit facility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
(50,000)
(50,000)
Distributions to noncontrolling interest holders . . . . . . . . . . . . . . . . . . . . . .
(10,361)
(7,974)
(7,775)
Acquisitions of noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(5,279)
—
(1,735)
Proceeds from restricted stock and other deposits, net . . . . . . . . . . . . . . . . .
366
405
307
Indirect repurchase of shares for minimum tax withholdings . . . . . . . . . . . .
(17,608)
(12,688)
(13,576)
Repurchase of shares of common stock, including excise taxes as
applicable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(80,003)
(49,993)
(212,859)
Dividends paid to shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(162,864)
(147,182)
(124,137)
Net cash used in financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(275,749)
(267,432)
(409,775)
Net increase (decrease) in cash and cash equivalents . . . . . . . . . . . . . . .
140,979
(69,615)
(161,784)
Cash and cash equivalents—beginning of period . . . . . . . . . . . . . . . . . . . . . .
104,246
173,861
335,645
Cash and cash equivalents—end of period . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
245,225 $
104,246 $
173,861
Supplemental disclosures of cash flow information:
Interest paid, net of amounts capitalized . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
891 $
1,119 $
1,547
Income taxes paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
87,333 $
39,861 $
25,910
Capital expenditures included in current liabilities . . . . . . . . . . . . . . . . . . . .
$
34,509 $
47,550 $
34,689
See accompanying Notes to Consolidated Financial Statements.
Texas Roadhouse, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(Tabular amounts in thousands, except share and per share data)
F-8
(1) Description of Business
Texas Roadhouse, Inc. and subsidiaries in which we have a controlling interest (collectively, the “Company,” “we,”
“our,” and/or “us”), is a growing restaurant company operating predominantly in the casual dining segment. Our late
founder, W. Kent Taylor, started the business in 1993 with the opening of the first Texas Roadhouse restaurant in
Clarksville, Indiana.
The Company maintains three restaurant concepts operating as Texas Roadhouse, Bubba’s 33, and Jaggers. As of
December 31, 2024, we owned and operated 666 restaurants and franchised an additional 118 restaurants in 49 states,
one U.S. territory, and ten foreign countries. Of the 118 franchise restaurants, there were 60 domestic and 58
international restaurants, including one in a U.S. territory. As of December 26, 2023, we owned and operated 635
restaurants and franchised an additional 106 restaurants in 49 states and ten foreign countries. Of the 106 franchise
restaurants, 58 were domestic and 48 were international restaurants.
(2) Summary of Significant Accounting Policies
Principles of Consolidation
The accompanying consolidated financial statements present the financial position, results of operations, and cash
flows of the Company. All significant intercompany balances and transactions have been eliminated in consolidation.
As of December 31, 2024 and December 26, 2023, we owned a majority interest in 19 and 20 company restaurants,
respectively. The operating results of these majority-owned restaurants are consolidated and the portion of income
attributable to noncontrolling interests is recorded in the line item net income attributable to noncontrolling interests in
our consolidated statements of income.
As of December 31, 2024 and December 26, 2023, we owned a 5.0% to 10.0% equity interest in 20 domestic
franchise restaurants. These unconsolidated restaurants are accounted for using the equity method. Our investments in
these unconsolidated affiliates are included in other assets in our consolidated balance sheets, and our percentage share
of net income earned by these unconsolidated affiliates is recorded in the line item equity income from investments in
unconsolidated affiliates in our consolidated statements of income.
Fiscal Year
We utilize a 52 or 53 week accounting period that typically ends on the last Tuesday in December. We utilize a
13 week accounting period for quarterly reporting purposes, except in years containing 53 weeks when the fourth quarter
contains 14 weeks. Fiscal year 2024 was 53 weeks in length and fiscal years 2023 and 2022 were 52 weeks in length. In
fiscal year 2024, the additional week increased restaurant and other sales by $114.7 million and increased net income by
approximately 5% in our consolidated statements of income.
Use of Estimates
We have made a number of estimates and assumptions relating to the reporting of assets and liabilities, the
disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reporting of
revenue and expenses during the period to prepare these consolidated financial statements in conformity with U.S.
generally accepted accounting principles (“GAAP”). Significant items subject to such estimates and assumptions include
the valuation of property and equipment, goodwill, lease liabilities and right-of-use assets, obligations related to
insurance reserves, legal reserves, income taxes, and gift card breakage and fees. Actual results could differ from those
estimates.
Texas Roadhouse, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(Tabular amounts in thousands, except share and per share data)
F-9
Segment Reporting
Operating segments are defined as components of a company that engage in business activities from which it may
earn revenue and incur expenses, and for which separate financial information is available and is regularly reviewed by
the chief operating decision maker (“CODM”) to assess the performance of the individual segments and make decisions
about resources to be allocated to the segments. The Company’s operating segments have been identified in accordance
with the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”)
ASC 280, Segment Reporting, as amended by ASU 2023-07, Segment Reporting (Topic 280): Improvements to
Reportable Segment Disclosure.
We have identified Texas Roadhouse, Bubba’s 33, Jaggers, and our retail initiatives as separate operating segments.
In addition, we have identified Texas Roadhouse and Bubba’s 33 as reportable segments. For further discussion of
segment reporting, refer to Note 19.
Cash and Cash Equivalents
We consider all highly liquid debt instruments with original maturities of three months or less to be cash
equivalents. Cash and cash equivalents also include receivables from credit card companies as these balances are highly
liquid in nature and are settled within two to three business days. These amounted to $49.4 million and $27.8 million at
December 31, 2024 and December 26, 2023, respectively.
Receivables
Receivables consist principally of amounts due from retail gift card providers, certain franchise restaurants for
reimbursement of labor costs, pre-opening, and other expenses, and franchise restaurants for royalties and advertising
fees.
Receivables are recorded at the invoiced amount and do not bear interest. The allowance for doubtful accounts is
our best estimate of the amount of probable credit losses in our existing accounts receivable. We determine the
allowance based on historical collection experience, adjusted for current and forecasted economic conditions and other
factors such as credit risk or industry trends, and the age of receivables. We review our allowance for doubtful accounts
quarterly. Past due balances over 120 days are reviewed individually for collectability. Account balances are charged off
against the allowance after all means of collection have been exhausted and the potential for recovery is considered
remote.
Inventories
Inventories, consisting principally of food, beverages, and supplies, are valued at the lower of cost (first-in,
first-out) or net realizable value.
Property and Equipment
Property and equipment are stated at cost less accumulated depreciation. Expenditures for major renewals and
betterments are capitalized while expenditures for maintenance and repairs are expensed as incurred. Depreciation is
computed on property and equipment, including assets located on leased properties, over the shorter of the estimated
useful lives of the related assets or the underlying lease term using the straight-line method. In most cases, assets on
leased properties are depreciated over a period of time which includes both the initial term of the lease and one or more
option periods.
Texas Roadhouse, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(Tabular amounts in thousands, except share and per share data)
F-10
The estimated useful lives are:
Land improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 - 25 years
Buildings and leasehold improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 - 25 years
Furniture, fixtures and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3 - 10 years
The cost of purchasing transferable liquor licenses through open markets in jurisdictions with a limited number of
authorized liquor licenses are capitalized as indefinite-lived assets and included in Property and equipment, net.
Cloud Computing Arrangements
The Company capitalizes cloud computing implementation costs and amortizes these costs on a straight-line basis
over the term of the related service agreement, including renewal periods that are reasonably certain to be exercised.
Capitalized cloud computing implementation costs were $5.9 million and $3.0 million, net of accumulated amortization,
as of December 31, 2024 and December 26, 2023, respectively. These costs are included in prepaid expenses and other
current assets and other assets in our consolidated balance sheets. Related amortization expense was $3.9 million,
$1.4 million, and $1.0 million for the years ended December 31, 2024, December 26, 2023, and December 27, 2022,
respectively, and is included in general and administrative expenses in our consolidated statements of income.
Leases
We recognize operating lease right-of-use assets and operating lease liabilities for real estate leases, including our
restaurant leases and Support Center lease, as well as certain restaurant equipment leases based on the present value of
the lease payments over the lease term. At lease inception, we include option periods that we are reasonably certain to
exercise in the lease term. To determine if an option is reasonably certain to be exercised, we analyze the economic
penalties that would be imposed from a failure to renew a lease, including the loss of our investment in leasehold
improvements or the loss of future cash flows. We estimate the present value of lease payments based on our
incremental borrowing rate which considers our estimated credit rating for a secured or collateralized instrument and
corresponds to the underlying lease term. In addition, operating lease right-of-use assets are reduced for accrued rent and
increased for any initial direct costs recognized at lease inception. For real estate and restaurant equipment leases
commencing in 2019 and later, we account for lease and non-lease components as a single lease component. Reductions
of the right-of-use asset and the changes in the lease liability are included within the changes in operating lease right-of-
use assets and lease liabilities in our consolidated statements of cash flows.
Certain of our operating leases contain predetermined fixed escalations of the minimum rent over the lease term.
For these leases, we recognize the related total rent expense on a straight-line basis over the lease term. We may receive
rent concessions or leasehold improvement incentives upon opening a restaurant that is subject to a lease which we
consider when determining straight-line rent expense. We also may receive rent holidays, which would begin on the
possession date and end when the store opens, during which no cash rent payments are typically due under the terms of
the lease. Rent holidays are included in the lease term when determining straight-line rent expense.
Certain of our operating leases contain clauses that provide for additional contingent rent based on a percentage of
sales greater than certain specified target amounts. We recognize contingent rent expense as variable rent expense prior
to the achievement of the specified target that triggers the contingent rent, provided achievement of the target is
considered probable. In addition, certain of our operating leases have variable escalations of the minimum rent that
depend on an index or rate. For these leases, we recognize operating lease right-of-use assets and operating lease
liabilities based on the index or rate at the commencement date. Any subsequent changes to the index or rate are
recognized as variable rent expense when the escalation is determinable.
Sale-leasebacks are transactions through which we sell previously acquired land at fair value and subsequently enter
into a lease agreement on the same land. The resulting lease agreement is evaluated to determine classification as an
operating or finance lease and is recorded based on the lease classification. Refer to Note 8 for further discussion of
leases.
Texas Roadhouse, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(Tabular amounts in thousands, except share and per share data)
F-11
Goodwill
Goodwill represents the excess of cost over fair value of assets of businesses acquired. In accordance with ASC
350, Intangibles—Goodwill and Other (“ASC 350”), goodwill is not subject to amortization and is evaluated for
impairment on an annual basis, or sooner if an event or other circumstance indicates that goodwill may be impaired. The
annual assessment date is the first day of our fourth quarter.
ASC 350 requires that goodwill be tested for impairment at the reporting unit level, or the level of internal reporting
that reflects the way in which an entity manages its businesses. A reporting unit is defined as an operating segment, or
one level below an operating segment. Our goodwill reporting units are at the concept or operating segment level.
As stated in ASC 350, an entity may first assess qualitative factors in order to determine if it is necessary to perform
the quantitative test. In 2024 and 2023, we elected to perform a qualitative assessment for our annual review of goodwill.
This review included evaluating factors such as macroeconomic conditions, industry and market considerations, cost
factors, changes in management or key personnel, sustained decreases in share price, and the overall financial
performance of the Company’s reporting units at the concept level. As a result of the qualitative assessment, no
indicators of impairment were identified, and no additional indicators of impairment were identified through the end of
the fiscal year that would require additional testing.
In 2024, 2023, and 2022, we determined there was no goodwill impairment. Refer to Note 7 for additional
information related to goodwill and intangible assets.
Other Assets
Other assets consist primarily of deferred compensation plan assets, capitalized cloud computing implementation
costs, investments in unconsolidated affiliates, and deposits. For further discussion of the deferred compensation plan,
refer to Note 15 and Note 16.
Impairment or Disposal of Long-lived Assets
In accordance with ASC 360, Property, Plant, and Equipment, long-lived assets to be held and used in the business,
such as property and equipment, operating lease right-of-use assets, and intangible assets subject to amortization, are
reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be
recoverable. For the purposes of this evaluation, we define the asset group at the individual restaurant level. When we
evaluate the restaurants, cash flows are the primary indicator of impairment.
Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the restaurant
to estimated undiscounted future cash flows expected to be generated by the restaurant. Under our policies, trailing
12- month cash flow results under a predetermined amount at the individual restaurant level signals potential impairment.
In our evaluation of restaurants that do not meet the cash flow threshold, we estimate future undiscounted cash flows
from operating the restaurant over its remaining useful life, which can be for a period of over 20 years. In the estimation
of future cash flows, we consider the period of time the restaurant has been open, the trend of operations over such
period, and future periods and expectations of future sales growth. Assumptions about important factors such as the trend
of future operations and sales growth are limited to those that are supportable based upon the plans for the restaurant and
actual results at comparable restaurants.
If the carrying amount of the restaurant exceeds its estimated undiscounted future cash flows, an impairment charge
is recognized by the amount by which the carrying amount exceeds the estimated fair value of the assets. We generally
measure fair value by discounting estimated future cash flows. When fair value is measured by discounting estimated
future cash flows, the assumptions used are consistent with what we believe hypothetical market participants would use.
We also use a discount rate that is commensurate with the risk inherent in the projected cash flows. The adjusted
carrying amounts of assets to be held and used are depreciated over their remaining useful life. Refer to Note 17 for
further discussion of amounts recorded as part of our impairment analysis.
Texas Roadhouse, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(Tabular amounts in thousands, except share and per share data)
F-12
Insurance Reserves
We self-insure a significant portion of expected losses related to employee health, workers’ compensation, general
liability, employment practices liability, cybersecurity, and property claims. This includes our wholly-owned captive
insurance company which covers certain lines of coverage. We use third-party insurance with varying retention levels to
limit our exposure to significant losses.
We record a liability for unresolved claims and for an estimate of incurred but not reported claims based on
historical experience. The estimated liability is based on a number of assumptions and factors regarding economic
conditions, the frequency and severity of claims, and claim development history and settlement practices. Our
assumptions are reviewed, monitored, and adjusted when warranted by changing circumstances.
Revenue Recognition
We recognize revenue in accordance with ASC 606, Revenue from Contracts with Customers, which requires an
entity to allocate the transaction price received from customers to each separate and distinct performance obligation and
recognize revenue as these performance obligations are satisfied. We recognize revenue from company restaurant sales
when food and beverage products are sold. Restaurant sales include gross food and beverage sales, net of promotions
and discounts, for all company restaurants. Sales taxes collected from customers and remitted to governmental
authorities are accounted for on a net basis and therefore are excluded from restaurant sales in the consolidated
statements of income.
We record deferred revenue for gift cards that have been sold but not yet redeemed. When the gift cards are
redeemed, we recognize restaurant sales and reduce deferred revenue. For some of the gift cards that are sold we have
determined that, based on our historic gift card redemption patterns, the likelihood of redemption is remote. For these
gift cards, we record a breakage adjustment as a component of restaurant and other sales in the consolidated statements
of income and reduce deferred revenue by the amount never expected to be redeemed. We use historic gift card
redemption patterns to determine the breakage rate to utilize and recognize the expected breakage amount in a manner
generally consistent with the actual redemption pattern of the associated gift card. We review the breakage rate on an
annual basis, or sooner if circumstances indicate that the rate may have significantly changed and update the rate as
needed. In addition, we incur fees on all gift cards that are sold through third-party retailers. These fees are also deferred
and generally recorded consistent with the actual redemption pattern of the associated gift cards and are recorded as a
component of restaurant and other sales in the consolidated statements of income.
We also recognize revenue from our franchising of Texas Roadhouse and Jaggers restaurants. This includes
franchise royalties and domestic marketing and advertising fees, initial and upfront franchise fees, domestic and
international development agreements, and supervisory and administrative service fees. We recognize franchise royalties
and domestic marketing and advertising fees as franchise restaurant sales occur. For initial and upfront franchise fees
and fees from development agreements, because the services we provide related to these fees do not contain separate and
distinct performance obligations from the franchise right, these fees are recognized on a straight-line basis over the term
of the associated franchise agreement. We recognize fees from supervision and administrative services as incurred.
Income Taxes
We account for income taxes in accordance with ASC 740, Income Taxes, under which deferred assets and
liabilities are recognized based upon anticipated future tax consequences attributable to differences between financial
statement carrying values of assets and liabilities and their respective tax bases. We recognize both interest and penalties
on unrecognized tax benefits as part of income tax expense. A valuation allowance is established to reduce the carrying
value of deferred tax assets if it is considered more likely than not that such assets will not be realized. Any change in
the valuation allowance would be charged to income in the period such determination was made. For all years presented,
no valuation allowances have been recorded.
Texas Roadhouse, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(Tabular amounts in thousands, except share and per share data)
F-13
Advertising
We have a domestic system-wide marketing and advertising fund. We maintain control of the marketing and
advertising fund and, as such, have consolidated the fund’s activity for all the years presented. Domestic company and
franchise restaurants are required to remit a designated portion of sales to the advertising fund. Advertising contributions
related to company restaurants are expensed as incurred and recorded as a component of other operating costs in our
consolidated statements of income. Advertising contributions received from our franchisees are recorded as a component
of franchise royalties and fees in our consolidated statements of income. The associated advertising expenses are
recorded as incurred within general and administrative expenses in our consolidated statements of income.
Other costs related to local restaurant area marketing initiatives are included in other operating costs in our
consolidated statements of income. These costs and the company restaurant advertising contribution amounted to
$31.8 million, $28.3 million, and $25.0 million for the years ended December 31, 2024, December 26, 2023, and
December 27, 2022, respectively.
Pre-opening Expenses
Pre-opening expenses, which are charged to operations as incurred, consist of expenses incurred before the opening
of a new or relocated restaurant and consist principally of opening team and training team compensation and benefits,
travel expenses, rent, food, beverage, and other initial supplies and expenses.
Fair Value of Financial Instruments
Fair value is defined as the price that we would receive to sell an asset or pay to transfer a liability in an orderly
transaction between market participants on the measurement date. ASC 820, Fair Value Measurement, establishes a
framework for measuring fair value and expands disclosures about fair value measurements. This includes a three-level
hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable
inputs in measuring fair value. The valuation hierarchy is based upon the transparency of inputs to the valuation of an
asset or liability on the measurement date.
Level 1
Inputs based on quoted prices in active markets for identical assets.
Level 2
Inputs other than quoted prices included within Level 1 that are observable for the assets, either
directly or indirectly.
Level 3
Inputs that are unobservable for the asset.
Fair value measurements are separately disclosed by level within the fair value hierarchy. Refer to Note 16 for
further discussion of fair value measurement.
Recently Adopted Accounting Pronouncements
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable
Segment Disclosure. This ASU primarily provides enhanced disclosures about significant segment expenses including
requiring segment disclosures to include a description of other segment items by reportable segment and any additional
measures of a segment’s profit or loss used by the CODM when deciding how to allocate resources. The ASU also
requires all annual disclosures currently required by Topic 280 to be included in interim periods as well as the title of the
CODM and an explanation of how the CODM uses the reported measure of segment profit or loss in assessing
performance and allocating resources. The amendments in this update are effective for fiscal years beginning after
December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. We adopted this
guidance during the fourth quarter of the 2024 fiscal year and provided additional detail and disclosures in our segment
reporting disclosures. Refer to Note 19 for further discussion of segment reporting.
Texas Roadhouse, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(Tabular amounts in thousands, except share and per share data)
F-14
Recently Issued Accounting Pronouncements
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax
Disclosures. This ASU primarily provides enhanced disclosures about an entity’s income tax including requiring
consistent categories and greater disaggregation of the information included in the rate reconciliation and income taxes
paid disaggregated by jurisdiction. The amendments in this update are effective for fiscal years beginning after
December 15, 2024, and interim periods within fiscal years beginning after December 15, 2025. We are currently
assessing the impact of this new standard on our income tax disclosures and expect to provide additional detail and
disclosures under this new guidance.
In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income
(Subtopic 220-40): Disaggregation of Income Statement Expenses. This ASU primarily provides enhanced disclosures
about the components of expenses within the income statement including purchases of inventory, employee
compensation, depreciation, and intangible asset amortization. The amendments in this update are effective for fiscal
years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027.
We are currently assessing the impact of this new standard on our disclosures and expect to provide additional detail and
disclosures under this new guidance.
(3) Revenue
The following table disaggregates our revenue by major source:
Fiscal Year Ended
December 31, 2024 December 26, 2023 December 27, 2022
Restaurant and other sales. . . . . . . . . . . . . . . . . . . . . . . . . . . . $
5,341,853 $
4,604,554 $
3,988,791
Franchise royalties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
28,342
24,169
23,058
Franchise fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,137
2,949
3,070
Total revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
5,373,332 $
4,631,672 $
4,014,919
The following table presents a rollforward of deferred revenue-gift cards:
Fiscal Year Ended
December 31, 2024 December 26, 2023
Beginning balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
373,913
$
335,403
Gift card activations, net of third-party fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
479,244
420,047
Gift card redemptions and breakage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(451,959)
(381,537)
Ending balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
401,198
$
373,913
We recognized restaurant sales of $234.0 million for the year ended December 31, 2024 related to amounts in
deferred revenue as of December 26, 2023. We recognized restaurant sales of $209.2 million for the year ended
December 26, 2023 related to amounts in deferred revenue as of December 27, 2022.
(4) Acquisitions
On December 28, 2022, the first day of the 2023 fiscal year, we completed the acquisition of eight franchise Texas
Roadhouse restaurants located in Maryland and Delaware, including four in which we previously held a 5.0% equity
interest. Pursuant to the terms of the acquisition agreements, we paid a total purchase price of $39.1 million, net of cash
acquired. The transactions in which we held an equity interest were accounted for as step acquisitions, and we recorded a
gain of $0.6 million on our previous investments in equity income from investments in unconsolidated affiliates in the
consolidated statements of income.
Texas Roadhouse, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(Tabular amounts in thousands, except share and per share data)
F-15
These transactions were accounted for using the acquisition method as defined in ASC 805, Business
Combinations. These acquisitions are consistent with our long-term strategy to increase net income and earnings per
share.
The following table summarizes the consideration paid for these acquisitions and the estimated fair value of the
assets acquired and the liabilities assumed at the acquisition date, which are adjusted for final measurement-period
adjustments.
Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
410
Property and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
17,763
Operating lease right-of-use assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,775
Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
20,067
Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,700
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
293
Deferred revenue-gift cards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(1,164)
Current portion of operating lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(110)
Operating lease liabilities, net of current portion . . . . . . . . . . . . . . . . . . . . . . . .
(4,665)
$
39,069
Intangible assets represent reacquired franchise rights which are being amortized over a weighted-average useful
life of 2.2 years. We expect all of the goodwill will be deductible for tax purposes and believe the resulting amount of
goodwill reflects the benefit of sales and unit growth opportunities as well as the benefit of the assembled workforce of
the acquired restaurants.
(5) Long-term Debt
We maintain a revolving credit facility (the “credit facility”) with a syndicate of commercial lenders led by
JPMorgan Chase Bank, N.A. and PNC Bank, N.A. The credit facility is an unsecured, revolving credit agreement and
has a borrowing capacity of up to $300.0 million with the option to increase by an additional $200.0 million subject to
certain limitations, including approval by the syndicate of commercial lenders. The credit facility has a maturity date of
May 1, 2026.
We are required to pay interest on outstanding borrowings at the Term Secured Overnight Financing Rate
(“SOFR”), plus a fixed adjustment of 0.10% and a variable adjustment of 0.875% to 1.875% depending on our
consolidated leverage ratio.
As of December 31, 2024, we had no outstanding borrowings under the credit facility and had $296.8 million of
availability, net of $3.2 million of outstanding letters of credit. As of December 26, 2023, we had no outstanding
borrowings under the credit facility and had $295.3 million of availability, net of $4.7 million of outstanding letters of
credit.
The interest rate for the credit facility as of December 31, 2024 and December 26, 2023 was 5.47% and 6.23%,
respectively.
The lenders’ obligation to extend credit pursuant to the credit facility depends on us maintaining certain financial
covenants, including a minimum consolidated fixed charge coverage ratio and a maximum consolidated leverage ratio.
The credit facility permits us to incur additional secured or unsecured indebtedness, except for the incurrence of secured
indebtedness that in the aggregate is equal to or greater than $125.0 million and 20% of our consolidated tangible net
worth. We were in compliance with all financial covenants as of December 31, 2024.
Texas Roadhouse, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(Tabular amounts in thousands, except share and per share data)
F-16
(6) Property and Equipment, Net
Property and equipment were as follows:
December 31,2024 December 26,2023
Land and improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
174,027 $
165,919
Buildings and leasehold improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,523,169
1,369,400
Furniture, fixtures, and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,027,644
908,489
Construction in progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
98,662
93,527
Liquor licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
17,235
16,242
2,840,737
2,553,577
Accumulated depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(1,223,064)
(1,078,855)
Total property and equipment, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
1,617,673 $
1,474,722
For the year ended December 31, 2024, there was no interest capitalized in connection with restaurant construction.
For the years ended December 26, 2023 and December 27, 2022, the amount of interest capitalized in connection with
restaurant construction was $0.5 million and $1.3 million, respectively.
(7) Goodwill and Intangible Assets
All of our goodwill and intangible assets reside within the Texas Roadhouse reportable segment. The gross carrying
amounts of goodwill and intangible assets were as follows:
Goodwill
Intangible Assets
Balance as of December 27, 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
148,732 $
5,607
Additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
20,952
900
Amortization expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
(3,024)
Balance as of December 26, 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
169,684 $
3,483
Additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
—
Amortization expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
(2,218)
Balance as of December 31, 2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
169,684 $
1,265
As of December 31, 2024, the gross carrying amount and accumulated amortization of the intangible assets were
$24.4 million and $23.1 million, respectively. As of December 26, 2023, the gross carrying amount and accumulated
amortization of the intangible assets were $24.4 million and $20.9 million, respectively.
Intangible assets consist of reacquired franchise rights. We amortize reacquired franchise rights on a straight-line
basis over the remaining term of the franchise operating agreements, which varies by franchise agreement. Amortization
expense for the next three years is expected to range from zero to $1.2 million. Refer to Note 4 for discussion of the
acquisitions completed for the year ended December 26, 2023.
Texas Roadhouse, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(Tabular amounts in thousands, except share and per share data)
F-17
(8) Leases
We recognize right-of-use assets and lease liabilities for both real estate and equipment leases that have a term in
excess of one year. As of December 31, 2024 and December 26, 2023, these amounts were as follows:
December 31, 2024
Real estate
Equipment
Total
Operating lease right-of-use assets . . . . . . . . . . . . . . . . . . . . . . . . $
764,135
$
5,730
$
769,865
Current portion of operating lease liabilities . . . . . . . . . . . . . . . .
26,501
1,671
28,172
Operating lease liabilities, net of current portion . . . . . . . . . . . .
823,240
3,060
826,300
Total operating lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . $
849,741
$
4,731
$
854,472
December 26, 2023
Real estate
Equipment
Total
Operating lease right-of-use assets . . . . . . . . . . . . . . . . . . . . . . . . $
686,271
$
7,743
$
694,014
Current portion of operating lease liabilities . . . . . . . . . . . . . . . .
25,812
1,599
27,411
Operating lease liabilities, net of current portion . . . . . . . . . . . .
740,446
3,030
743,476
Total operating lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . $
766,258
$
4,629
$
770,887
Texas Roadhouse, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(Tabular amounts in thousands, except share and per share data)
F-18
Information related to our real estate operating leases for the fiscal years ended December 31, 2024 and
December 26, 2023 were as follows:
Fiscal Year Ended
Real estate costs
December 31, 2024
December 26, 2023
Operating lease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
82,739 $
75,068
Variable lease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7,007
5,079
Total lease costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
89,746 $
80,147
Real estate lease liabilities maturity analysis
December 31, 2024
2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
79,801
2026 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
80,985
2027 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
82,040
2028 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
83,220
2029 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
84,257
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,061,956
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,472,259
Less interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
622,518
Total discounted operating lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
849,741
Fiscal Year Ended
Real estate leases other information
December 31, 2024 December 26, 2023
Cash paid for amounts included in measurement of operating lease
liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
74,654
$
68,755
Right-of-use assets obtained in exchange for new operating lease
liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
104,548
$
83,310
Weighted-average remaining lease term (years) . . . . . . . . . . . . . . . . . . . . .
17.35
17.71
Weighted-average discount rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.53 %
6.49 %
Operating lease payments exclude $48.0 million of future minimum lease payments for executed real estate leases
of which we have not yet taken possession. In addition to the above operating leases, as of December 31, 2024, we had
two finance leases with a right-of-use asset balance and lease liability balance of $1.9 million and $2.8 million,
respectively. As of December 26, 2023, we had two finance leases with a right-of-use asset balance and lease liability
balance of $2.0 million and $2.8 million, respectively. The right-of-use asset balance is included as a component of other
assets and the lease liability balance as a component of other liabilities in the consolidated balance sheets.
In 2024, we entered into five sale leaseback transactions that generated proceeds of $16.0 million and no gain or
loss was recognized on these transactions. In 2023, we entered into six sale leaseback that generated proceeds of
$16.3 million and no gain or loss was recognized on these transactions. The resulting operating leases are included in the
operating lease right-of-use assets and lease liabilities noted above.
Texas Roadhouse, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(Tabular amounts in thousands, except share and per share data)
F-19
(9) Income Taxes
Components of our income tax expense for the years ended December 31, 2024, December 26, 2023, and
December 27, 2022 were as follows:
Fiscal Year Ended
December 31, 2024 December 26, 2023 December 27, 2022
Current:
Federal . . . . . . . . . . . . . . . . . . . . . . . . $
63,816 $
21,694 $
15,549
State . . . . . . . . . . . . . . . . . . . . . . . . . . .
28,992
19,105
18,120
Foreign . . . . . . . . . . . . . . . . . . . . . . . .
1,140
735
590
Total current . . . . . . . . . . . . . . . . . . .
93,948
41,534
34,259
Deferred:
Federal . . . . . . . . . . . . . . . . . . . . . . . .
(11,096)
4,518
9,664
State . . . . . . . . . . . . . . . . . . . . . . . . . . .
(2,707)
(1,403)
(208)
Total deferred . . . . . . . . . . . . . . . . . .
(13,803)
3,115
9,456
Income tax expense . . . . . . . . . . . . . . . . . $
80,145 $
44,649 $
43,715
Our pre-tax income is substantially derived from domestic restaurants.
A reconciliation of the statutory federal income tax rate to our effective tax rate for December 31, 2024,
December 26, 2023, and December 27, 2022 is as follows:
Fiscal Year Ended
December 31, 2024 December 26, 2023 December 27, 2022
Tax at statutory federal rate . . . . . . . . . .
21.0 %
21.0 %
21.0 %
State and local tax, net of federal
benefit . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.6
3.6
3.7
FICA tip tax credit . . . . . . . . . . . . . . . . .
(8.7)
(11.1)
(10.5)
Work opportunity tax credit . . . . . . . . . .
(0.5)
(1.0)
(1.3)
Share-based compensation . . . . . . . . . . .
(0.9)
(0.5)
(0.1)
Net income attributable to
noncontrolling interests . . . . . . . . . . . . . .
(0.4)
(0.4)
(0.4)
Officers compensation . . . . . . . . . . . . . .
0.6
0.6
0.7
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
0.6
0.3
0.5
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
15.3 %
12.5 %
13.6 %
Texas Roadhouse, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(Tabular amounts in thousands, except share and per share data)
F-20
Components of deferred tax liabilities, net were as follows:
December 31, 2024 December 26, 2023
Deferred tax assets:
Deferred revenue—gift cards . . . . . . . . . . . . . . . . . . . . . . $
35,915 $
32,999
Insurance reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
11,768
8,351
Other reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,027
1,884
Share-based compensation . . . . . . . . . . . . . . . . . . . . . . . .
7,635
5,241
Operating lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . .
212,341
191,422
Deferred compensation . . . . . . . . . . . . . . . . . . . . . . . . . . .
26,241
21,697
Tax credit carryforwards . . . . . . . . . . . . . . . . . . . . . . . . . .
—
45
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,430
3,907
Total deferred tax asset . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
300,357
265,546
Deferred tax liabilities:
Property and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . .
(91,161)
(90,638)
Goodwill and intangibles . . . . . . . . . . . . . . . . . . . . . . . . . .
(8,693)
(9,116)
Operating lease right-of-use asset . . . . . . . . . . . . . . . . . . .
(191,065)
(171,999)
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(17,622)
(16,897)
Total deferred tax liability . . . . . . . . . . . . . . . . . . . . . . . . . . .
(308,541)
(288,650)
Net deferred tax liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
(8,184) $
(23,104)
We have not provided a valuation allowance for any of our deferred tax assets as their realization is more likely
than not.
A reconciliation of the beginning and ending liability for unrecognized tax benefits was as follows:
Balance at December 27, 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
3,925
Additions to tax positions related to prior years . . . . . . . . . . . . . . . . . . . . . . . . . . .
964
Additions to tax positions related to current year . . . . . . . . . . . . . . . . . . . . . . . . . .
139
Reductions due to statute expiration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(246)
Reductions due to exam settlement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
Balance at December 26, 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,782
Additions to tax positions related to prior years . . . . . . . . . . . . . . . . . . . . . . . . . . .
317
Additions to tax positions related to current year . . . . . . . . . . . . . . . . . . . . . . . . . .
383
Reductions due to statute expiration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
Reductions due to exam settlement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(221)
Balance at December 31, 2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
5,261
As of December 31, 2024 and December 26, 2023, the amount of unrecognized tax benefits that would impact the
effective tax rate if recognized was $2.9 million and $2.5 million, respectively.
As of December 31, 2024 and December 26, 2023, the total amount of accrued penalties and interest related to
uncertain tax provisions was recognized as a part of income tax expense and these amounts were not material.
All entities for which unrecognized tax benefits exist as of December 31, 2024 possess a December tax year-end.
As a result, as of December 31, 2024, the tax years ended December 26, 2023, December 27, 2022, and
December 28, 2021 remain subject to examination by all tax jurisdictions. As of December 31, 2024, no audits were in
process by a tax jurisdiction that, if completed during the next twelve months, would be expected to result in a material
change to our unrecognized tax benefits. Additionally, as of December 31, 2024, no event occurred that is likely to result
in a significant increase or decrease in the unrecognized tax benefits through December 30, 2025.
Texas Roadhouse, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(Tabular amounts in thousands, except share and per share data)
F-21
(10) Preferred Stock
Our Board of Directors (the “Board”) is authorized, without further vote or action by the holders of common stock,
to issue from time to time up to an aggregate of 1,000,000 shares of preferred stock in one or more series. Each series of
preferred stock will have the number of shares, designations, preferences, voting powers, qualifications, and special or
relative rights or privileges as shall be determined by the Board, which may include, but are not limited to, dividend
rights, voting rights, redemption and sinking fund provisions, liquidation preferences, conversion rights, and preemptive
rights. There were no shares of preferred stock outstanding as of December 31, 2024 and December 26, 2023.
(11) Stock Repurchase Program
On March 17, 2022, our Board approved a stock repurchase program for the repurchase of up to $300.0 million of
our common stock. This stock repurchase program has no expiration date. All repurchases to date under our stock
repurchase programs have been made through open market transactions. The timing and the amount of any repurchases
are determined by management under parameters approved by the Board, based on an evaluation of our stock price,
market conditions, and other corporate considerations, including complying with Rule 10b5-1 trading arrangements
under the Securities Exchange Act of 1934, as amended.
For the year ended December 31, 2024, we paid $79.8 million, excluding excise taxes, to repurchase 461,662 shares
of our common stock. For the year ended December 26, 2023, we paid $50.0 million, excluding excise taxes, to
repurchase 455,026 shares of our common stock. As of December 31, 2024, we had $37.1 million remaining under our
authorized stock repurchase program. Refer to Note 20 for further discussion of our authorized stock repurchase
program.
(12) Earnings Per Share
The share and net income per share data for all periods presented are based on the historical weighted-average
shares outstanding. The diluted earnings per share calculations show the effect of the weighted-average restricted stock
units outstanding from our equity incentive plans. Performance stock units are not included in the diluted earnings per
share calculation until the performance-based criteria have been met. Refer to Note 14 for further discussion of our
equity incentive plans.
For all periods presented, the weighted-average shares of nonvested stock units that were outstanding but not
included in the computation of diluted earnings per share because they would have had an anti-dilutive effect were not
significant.
The following table sets forth the calculation of earnings per share and weighted average shares outstanding as
presented in the accompanying consolidated statements of income:
Fiscal Year Ended
December 31, December 26, December 27,
2024
2023
2022
Net income attributable to Texas Roadhouse, Inc.
and subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 433,592 $ 304,876 $ 269,818
Basic EPS:
Weighted-average common shares outstanding . . . .
66,752
66,893
67,643
Basic EPS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
6.50 $
4.56 $
3.99
Diluted EPS:
Weighted-average common shares outstanding . . . .
66,752
66,893
67,643
Dilutive effect of nonvested stock units . . . . . . . . . .
259
256
277
Shares-diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
67,011
67,149
67,920
Diluted EPS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
6.47 $
4.54 $
3.97
Texas Roadhouse, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(Tabular amounts in thousands, except share and per share data)
F-22
(13) Commitments and Contingencies
The estimated cost of completing capital project commitments at December 31, 2024 and December 26, 2023 was
$243.6 million and $237.4 million, respectively.
As of December 31, 2024 and December 26, 2023, we are contingently liable for $9.4 million and $10.4 million,
respectively, for seven lease guarantees. These amounts represent the maximum potential liability of future payments
under the guarantees. In the event of default, the indemnity and default clauses in our assignment agreements govern our
ability to pursue and recover damages incurred. No liabilities have been recorded as of December 31, 2024 or
December 26, 2023, as the likelihood of default was deemed to be less than probable and the fair value of the guarantees
is not considered significant.
During the year ended December 31, 2024, we bought our beef primarily from four suppliers. Although there are a
limited number of beef suppliers, we believe that other suppliers could provide a similar product on comparable terms.
We have no material minimum purchase commitments with our vendors that extend beyond a year.
Occasionally, we are a defendant in litigation arising in the ordinary course of business, including “slip and fall”
accidents, employment related claims, dram shop statutes related to our service of alcohol, and claims from guests or
employees alleging illness, injury or food quality, health, or operational concerns. None of these types of litigation, most
of which are covered by insurance, has had a material effect on us and, as of the date of this report, we are not party to
any litigation that we believe could have a material adverse effect on our business.
(14) Share-based Compensation
On May 13, 2021, our shareholders approved the Texas Roadhouse, Inc. 2021 Long-Term Incentive Plan (the
“Plan”). The Plan provides for the granting of various forms of equity awards including options, stock appreciation
rights, full value awards, and performance-based awards.
The Company provides restricted stock units (“RSUs”) to employees as a form of share-based compensation. A
RSU is the conditional right to receive one share of common stock upon satisfaction of the vesting requirement. In
addition to RSUs, the Company provides performance stock units (“PSUs”) to certain members of management as a
form of share-based compensation. A PSU is the conditional right to receive one share of common stock upon meeting a
performance obligation along with the satisfaction of the vesting requirement.
The following table summarizes share-based compensation expense recorded in the accompanying consolidated
statements of income:
Fiscal Year Ended
December 31, December 26, December 27,
2024
2023
2022
Labor expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
16,277 $
11,470 $
10,656
General and administrative expense . . . . . . . . . . . . .
30,778
22,760
26,007
Total share-based compensation expense . . . . . . . . . $
47,055 $
34,230 $
36,663
We recognize expense for RSUs and PSUs over the vesting term based on the grant date fair value of the award.
We record forfeitures as they occur. Activity for our share-based compensation by type of grant for the fiscal year ended
December 31, 2024 is presented below.
Texas Roadhouse, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(Tabular amounts in thousands, except share and per share data)
F-23
Summary Details for RSUs
Weighted-Average
Weighted-Average
Grant Date Fair Remaining Contractual
Aggregate
Shares
Value
Term (years)
Intrinsic Value
Outstanding at December 26, 2023 . . . . . . . . . . . . . . . 442,327 $
98.41
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 306,099
158.64
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(22,733)
123.05
Vested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (314,803)
99.10
Outstanding at December 31, 2024 . . . . . . . . . . . . . . . 410,890 $
141.43
0.9
$
74,052
As of December 31, 2024, with respect to unvested RSUs, there was $25.1 million of unrecognized compensation
cost that is expected to be recognized over a weighted-average period of 0.9 years. The vesting terms of all RSUs range
from 1.0 to 5.0 years. The total intrinsic value of RSUs vested during the years ended December 31, 2024, December 26,
2023, and December 27, 2022 was $49.9 million, $37.8 million, and $37.1 million, respectively. The excess tax benefit
associated with vested RSUs for the years ended December 31, 2024, December 26, 2023, and December 27, 2022 was
$4.4 million, $1.7 million, and $0.4 million, respectively, which was recognized in the income tax provision.
Summary Details for PSUs
Weighted-Average
Weighted-Average
Grant Date Fair
Remaining Contractual
Aggregate
Shares
Value
Term (years)
Intrinsic Value
Outstanding at December 26, 2023 . . . . . . . . . . . . . . . 35,700 $
94.61
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28,600
118.30
Performance shares adjustment (1) . . . . . . . . . . . . . . .
9,274
94.17
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
—
Vested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (43,274)
94.17
Outstanding at December 31, 2024 . . . . . . . . . . . . . . . 30,300 $
117.46
0.1
$
5,460
(1) Additional shares from the January 2023 PSU grant that vested in January 2024 due to exceeding the initial 100%
target.
We grant PSUs to certain members of management subject the achievement of certain earnings targets, which
determine the number of units to vest at the end of the vesting period. Share-based compensation expense is recognized
for the number of units expected to vest at the end of the period and is expensed beginning on the grant date and through
the performance period. For each grant, PSUs vest after meeting the performance and service conditions. The total
intrinsic value of PSUs vested during the years ended December 31, 2024, December 26, 2023, and December 27, 2022
was $6.4 million, $3.3 million, and $5.4 million, respectively.
On January 8, 2025, approximately 41,000 shares vested related to the January 2024 PSU grant and are expected to
be distributed in February 2025. As of December 31, 2024, with respect to unvested PSUs, there was $0.1 million of
unrecognized compensation cost that is expected to be recognized over a weighted-average period of 0.1 years. The
allowable excess tax benefit associated with vested PSUs for the years ended December 31, 2024, December 26, 2023,
and December 27, 2022 was not significant.
(15) Employee Benefit Plans
We have a defined contribution benefit plan (“401(k) Plan”) that is available to our Support Center employees and
managers in our restaurants who meet certain compensation and eligibility requirements. The 401(k) Plan allows
participating employees to defer the receipt of a portion of their compensation and contribute such amount to one or
more investment options and the Company matches a certain percentage of the employee contributions. For the year
ended December 31, 2024, company contributions totaling $8.4 million and $2.1 million were recorded in labor expense
Texas Roadhouse, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(Tabular amounts in thousands, except share and per share data)
F-24
and general and administrative expense, respectively, within the consolidated statements of income. For the year ended
December 26, 2023, company contributions totaling $7.1 million and $1.8 million were recorded in labor expense and
general and administrative expense, respectively, within the consolidated statements of income.
We also have a deferred compensation plan which allows highly compensated employees to defer a portion of their
compensation and contribute such amounts to one or more investment funds held in a rabbi trust. Beginning in 2023, we
implemented a company match of a certain percentage of the employee contributions to the deferred compensation plan.
For the years ended December 31, 2024 and December 26, 2023, company contributions totaling $1.6 million and
$1.5 million were recorded in labor expense and general and administrative expense, respectively, within the
consolidated statements of income. Refer to Note 16 for further discussion on the fair value measurement of the deferred
compensation plan assets and liabilities.
(16) Fair Value Measurement
At December 31, 2024 and December 26, 2023, the fair values of cash and cash equivalents, accounts receivable,
and accounts payable approximated their carrying values based on the short-term nature of these instruments. There were
no transfers among levels within the fair value hierarchy during the year ended December 31, 2024.
The following table presents the fair values for our financial assets and liabilities measured on a recurring basis:
Fair Value Measurements
Level December 31, 2024 December 26, 2023
Deferred compensation plan—assets . . . . . . . . . . . . . .
1 $
101,071 $
81,316
Deferred compensation plan—liabilities . . . . . . . . . . .
1 $
(101,071) $
(81,222)
We report the accounts of the deferred compensation plan in other assets and the corresponding liability in other
liabilities in our consolidated balance sheets. These investments are considered trading securities and are reported at fair
value based on quoted market prices. The realized and unrealized holding gains and losses related to these investments,
as well as the offsetting compensation expense, are recorded in general and administrative expense in the consolidated
statements of income.
(17) Impairment and Closure Costs
We recorded impairment and closure costs of $1.2 million, $0.3 million and $1.6 million for the years ended
December 31, 2024, December 26, 2023, and December 27, 2022, respectively.
Impairment and closure costs in 2024 included $0.8 million related to the impairment of a building at a previously
relocated store and $0.4 million related to ongoing closure costs for stores which have been relocated.
Impairment and closure costs in 2023 included $0.3 million related to ongoing closure costs for stores which have
been relocated.
Impairment and closure costs in 2022 included $1.7 million related to the impairment of the land, building, and
operating lease right-of-use assets at three restaurants, two of which were relocated and $0.6 million related to ongoing
closure costs. This was partially offset by a $0.7 million gain on the sale of land and building that was previously
classified as assets held for sale.
(18) Related Party Transactions
As of December 31, 2024, December 26, 2023 and December 27, 2022, we had four franchise restaurants and one
majority-owned company restaurant owned in part by a current officer of the Company. We recognized revenue of
$2.1 million, $2.0 million, and $1.8 million for the years ended December 31, 2024, December 26, 2023, and
December 27, 2022, respectively, related to the four franchise restaurants.
Texas Roadhouse, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(Tabular amounts in thousands, except share and per share data)
F-25
(19) Segment Information
Our CODM is the Chief Executive Officer. The CODM assesses the performance of the business and allocates
resources at the concept level and as a result we have identified Texas Roadhouse, Bubba’s 33, Jaggers, and our retail
initiatives as separate operating segments. Our reportable segments are Texas Roadhouse and Bubba’s 33. The Texas
Roadhouse reportable segment includes the results of our company and franchise Texas Roadhouse restaurants. The
Bubba’s 33 reportable segment includes the results of our company Bubba’s 33 restaurants. Our remaining operating
segments, which include the results of our company and franchise Jaggers restaurants and the results of our retail
initiatives, are included in Other. In addition, corporate-related assets, depreciation and amortization, and capital
expenditures are also included in Other.
The CODM uses restaurant margin as the primary financial measure for assessing the performance of our segments.
Restaurant margin represents restaurant and other sales less restaurant-level operating costs, including food and beverage
costs, labor, rent, and other operating costs. Restaurant margin is also used by our CODM to evaluate core restaurant-
level operating efficiency and performance, assist in the evaluation of operating trends over time, and in making capital
allocation decisions. Capital allocation decisions include approving new store openings and the refurbishment or
relocation of existing restaurants.
In calculating restaurant margin, we exclude certain non-restaurant-level costs that support operations, including
pre-opening and general and administrative expenses, but do not have a direct impact on restaurant-level operational
efficiency and performance. We exclude pre-opening expenses as they occur at irregular intervals and would impact
comparability to prior period results. We exclude depreciation and amortization expenses, substantially all of which
relate to restaurant-level assets, as it represents a non-cash charge for the investment in our restaurants. We exclude
impairment and closure expenses as we believe this provides a clearer perspective of the Company’s ongoing operating
performance and a more useful comparison to prior period results. Restaurant margin as presented may not be
comparable to other similarly titled measures of other companies in our industry.
Restaurant and other sales for all operating segments are derived primarily from food and beverage sales. We do not
rely on any major customer as a source of sales and the customers and assets of our reportable segments are located
predominantly in the United States. There are no material transactions between reportable segments.
Texas Roadhouse, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(Tabular amounts in thousands, except share and per share data)
F-26
The following tables reconcile our segment results to our consolidated results reported in accordance with GAAP:
Fiscal Year Ended December 31, 2024
Texas
Roadhouse
Bubba’s 33
Other
Total
Restaurant and other sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 5,012,707 $ 297,608 $ 31,538 $ 5,341,853
Restaurant operating costs (excluding depreciation and
amortization):
Food and Beverage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,691,302
83,701
10,116 1,785,119
Labor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,646,437 108,306
9,997 1,764,740
Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
72,060
7,677
823
80,560
Other Operating . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
737,909
51,502
6,246
795,657
Restaurant margin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 864,999 $ 46,422 $
4,356 $ 915,777
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . $ 149,934 $ 16,447 $ 11,776 $ 178,157
Segment assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,488,679 255,320 446,780 3,190,779
Capital expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
304,259
38,557
11,525
354,341
Fiscal Year Ended December 26, 2023
Texas
Roadhouse
Bubba’s 33
Other
Total
Restaurant and other sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
4,331,823 $ 247,195 $ 25,536 $ 4,604,554
Restaurant operating costs (excluding depreciation and
amortization):
Food and Beverage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,514,421
71,101
8,330 1,593,852
Labor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,438,802
92,241
8,081 1,539,124
Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
65,519
6,624
623
72,766
Other Operating . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
641,923
43,287
5,638
690,848
Restaurant margin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
671,158 $
33,942 $
2,864 $ 707,964
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . $
126,719 $
14,210 $ 12,273 $ 153,202
Segment assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,290,213
232,086 271,077 2,793,376
Capital expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
306,599
27,908 12,527
347,034
Fiscal Year Ended December 27, 2022
Texas
Roadhouse
Bubba’s 33
Other
Total
Restaurant and other sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,762,884 $ 211,690 $ 14,217 $ 3,988,791
Restaurant operating costs (excluding depreciation and
amortization):
Food and Beverage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,306,658
66,237
5,297 1,378,192
Labor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,239,257
76,178
4,524 1,319,959
Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
60,837
5,712
285
66,834
Other Operating . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
555,935
36,629
3,741
596,305
Restaurant margin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
600,197 $ 26,934 $
370 $
627,501
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . $
112,546 $ 13,012 $ 11,679 $
137,237
Capital expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
204,662
30,625 10,834
246,121
Texas Roadhouse, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(Tabular amounts in thousands, except share and per share data)
F-27
A reconciliation of restaurant margin to income from operations is presented below. We do not allocate interest
income (expense), net and equity income from investments in unconsolidated affiliates to reportable segments.
Fiscal Year Ended
December 31,
2024
December 26,
2023
December 27,
2022
Restaurant margin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
915,777 $
707,964 $
627,501
Add:
Franchise royalties and fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
31,479
27,118
26,128
Less:
Pre-opening . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
28,090
29,234
21,883
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
178,157
153,202
137,237
Impairment and closure, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,226
275
1,600
General and administrative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
223,264
198,382
172,712
Income from operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
516,519 $
353,989 $
320,197
(20) Subsequent Events
On January 1, 2025, we completed the acquisition of 13 domestic franchise restaurants. Pursuant to the terms of the
acquisition agreements, we paid an aggregate purchase price of approximately $78 million. We expect to complete the
preliminary purchase price allocations relating to these transactions in the first quarter of fiscal year 2025.
On February 19, 2025, our Board approved a stock repurchase program for the repurchase of up to $500.0 million of
our common stock. This new stock repurchase program commenced on February 24, 2025 and any repurchases under
such plan will be made by the Company through open market transactions. This stock repurchase program has no
expiration date and replaces the previous stock repurchase program of $300 million which was approved on
March 17, 2022.
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It was another banner year for our
Corporate Sustainability program, and
we are proud of the advancements made
in 2024. Through a methodical approach,
we remain focused on making progress
on our sustainability mission of leaving
every community we are a part of better
than we found it.
As such, we continue to look for
opportunities that make “sense” and
“cents” for our operators and the
environment. We believe our Managing
Partner Model, which provides our
Managing Partners with 10% of their
restaurant profits, remains one of our
most important sustainability assets.
This ownership mentality is a built-in
incentive for our Managing Partners to
reduce waste, conserve energy, and run
efficient restaurants.
Listening and learning are critical in the
evolution of our program, which is why
we seek out continuous and proactive
engagement with our Roadies, guests,
vendors, and shareholders to understand
their various perspectives on corporate
sustainability. In 2024, we took this
focus to the next level with our first
materiality assessment of our Corporate
Sustainability program where over 100
internal and external stakeholders were
surveyed and interviewed. The results
of our materiality assessment were
consistent with what we expected and
showed that we maintain significant
alignment across all our stakeholders
on our key principles of Legendary Food
(food safety), Legendary Service (guest
experience), and People-First (human
capital management). We will continue
to use the materiality assessment as a
resource to help prioritize the evaluation
of risks identified as most impactful by
our internal and external stakeholders.
We also measured our Scope 3
greenhouse gas (GHG) emissions for
the first time based on a 2023 base year.
The assessment followed the GHG
Protocol Corporate Standard, inclusive
of Purchased Goods & Services, in line
with both the science-based targets
initiative and the California Senate Bill
253 requirements. For our 2023 fiscal
year, Scope 3 GHG emissions
represented 91.3% of our total
emissions with the remaining 8.7%
being collectively represented by our
Scopes 1 and 2 GHG emissions.
Operational Initiatives
In November 2024, we opened our
first “green store” in Greeneville, TN
to pressure test several materials
and equipment. For this location, we
procured sustainable building materials,
rooftop solar panels, energy efficient
equipment, and implemented water-
saving measures. For a more in-depth
look at the sustainable features we
are testing in this location, see our
full Corporate Sustainability Report at
texasroadhouse.com/sustainability.
Another initiative we were excited to
test was a comprehensive food waste
audit. We engaged a third-party vendor
to measure the contents of our food
waste stream at our Danbury, CT
location over a 48-hour collection
period in December. The audit
confirmed that food waste consisted
primarily of unavoidable scraps and
uneaten customer plate waste, with no
evidence of wasteful practices, reflecting
strong operational discipline. We plan
to explore tests in other locations to
continue learning and exploring
potential operational opportunities.
We are also proud of our employee-
facing sustainable uniform shirt
initiative. In 2024, we kept nearly
1.8 million 20oz plastic bottles out
of landfills and oceans. Over 165,000
sustainable uniform items were
purchased and, as interest grows each
year, we plan to roll out sustainable
shift wear to all our brands. Based on
feedback we have received, Roadies
love the softness of the shirt, that it
wrinkles less, and washes well. This
initiative is a win-win!
We are also happy to announce that
our third-party gift cards for Texas
Roadhouse, Bubba’s 33, and Jaggers
are now paper. We have been working
on phasing out plastic gift cards to
offer a more sustainable alternative to
our guests. The paper gift cards offer
the same durability, print quality, and
functionality as traditional gift cards.
In 2024, we signed a partnership
between Bubba’s 33 and the American
Eagle Foundation (AEF), which is a
501(c)(3) organization dedicated to
inspiring the global community to
guard and protect the Bald Eagle and
all birds of prey. This partnership aims
to foster educational programs for
children and focuses on the importance
of raptor conservation. Bubba’s 33
will also raise awareness and funds in
our restaurants across the country to
sponsor an American Bald Eagle named
after our mascot, Ace the Eagle.
Through these initiatives and countless
others throughout our company, our
Roadies and guests can experience our
Corporate Sustainability program first-
hand as ambassadors of our initiatives.
to our SHAREHOLDERS,
298,093
trees saved
108.7M
waTER saved
GALLONS
25.9M
ELECTRICITY
SAVED
kW-HR
MT CO2E
55,972
GHG EMMISSIONS
saved
Recycling
Recycling
Preserving
Resources
Through
Source: Waste Management
(cont.)
Opened our first “green store” in Greeneville, TN
constructed with sustainable materials and equipment,
which will be benchmarked against other nearby stores
to inform future restaurant builds.
Recycled over 925,000 gallons of used cooking oil across
all three of our brands. The oil is converted into airline
fuel, used to feed livestock, and used to manufacture
other products.
165,000 sustainable uniform items were purchased,
keeping landfills and oceans free of 1.8 million 20oz
plastic bottles.
Measured our Scope 3 greenhouse gas (GHG) emissions
for the first time based on a 2023 base year,
which represented 91.3% of our total emissions.
Completed our first materiality assessment of our Corporate
Sustainability program. The assessment shows alignment
across all our stakeholders on our key principles of food safety,
guest experience, and human capital management.
Engaged a third-party vendor to measure the contents of
our food waste stream at our Danbury, CT location over a
48-hour collection period in December. The audit confirmed
that food waste consisted primarily of unavoidable scraps
and uneaten customer plate waste, with no evidence of
wasteful practices.
$34.9 million in food and monetary donations
given to local non-profits, schools, and
organizations in the communities we served.
Hosted our first African American Leadership
Summit in July with leaders from each of our
five Regions and the Support Center.
Travis Doster
Chief Communications Officer
(cont. from previous page)
2025 and Beyond
As we head into 2025, we are excited
about the momentum and clarity
we have in place to help guide our
Corporate Sustainability strategy.
We remain focused on making data-
informed decisions and our Greeneville,
TN store is a true testament to
our methodical approach. We will
evaluate the impact of the sustainable
equipment and building materials at
this location to assess what features
could make “sense” and “cents” to
include in future restaurants. We
plan to share the findings in our 2025
Corporate Sustainability Report after
we have completed a full year of testing
and monitoring.
In addition, we have committed
to joining the U.S. Roundtable for
Sustainable Beef (USRSB). The USRSB
is a multi-stakeholder initiative
developed to advance, support, and
communicate continuous improvement
in sustainability of the U.S. beef value
chain. As a member of the USRSB, we
will directly support their vision of the
U.S. beef value chain as the trusted
global leader in environmentally sound,
socially responsible, and economically
viable beef.
A key focus of our overall Corporate
Sustainability strategy is compliance
with all laws and regulations relating to
corporate sustainability topics. To this
end, in 2025, we engaged a consultant
to assist us in preparing our first
climate-related financial risk report,
in accordance with the disclosure
framework recommended and
published by the Task Force on Climate-
Related Financial Disclosures (TCFD)
and requirements of the California
Climate-Related Financial Risk Act
(SB 261). This information will provide
another resource for our program as
we evaluate risks and opportunities.
While the sustainability landscape
continues to evolve, we are consistent
in our commitment to aligning our
initiatives to our four sustainability
pillars – food, community, employees,
and conservation. Together, we are
focused on continual progress to leave
every community we are a part of better
than we found it.
Our achievements from 2024 and
ongoing initiatives in each pillar are
detailed in our Corporate Sustainability
Report, which can be found at
texasroadhouse.com/sustainability.
2024
Corporate
Sustainability
at a Glance
Restaurant
Locations
Locations
as of December 31, 2024
as of December 31, 2024
Domestic
664
International
57
Domestic
13
International
1
Domestic
49
BOARD OF
Directors
GREGORY N. MOORE
Chairman of the Board, Texas Roadhouse, Inc.
Former Senior Vice President and Controller
Yum! Brands, Inc.
Gerald l. Morgan
CEO
Texas Roadhouse, Inc.
Jane Grote Abell
Executive Chairwoman and Chief Purpose Officer
Donatos Pizza
Michael A. Crawford
Chairman, President, and CEO
Hall of Fame Resort & Entertainment Co.
DONNA E. Epps
Former Partner
Deloitte LLP
Wayne L. Jones
Former CEO
Anthony’s Coal Fired Pizza
CURTIS A. WARFIELD
President and CEO
Windham Advisors LLC
KATHLEEN M. WIDMER
President and CEO
PRPL Skincare
JAMES R. ZARLEY
Former Chairman and CEO
Conversant, Inc.
Shareholder
Information
SUPPORT CENTER (Corporate Office)
6040 Dutchmans Lane, Louisville, KY 40205
(800) TEX-ROAD or (800) 839-7623
ANNUAL MEETING
Thursday, May 15, 2025– 9:00 am EDT
Texas Roadhouse Support Center
6040 Dutchmans Lane, Louisville, KY 40205
TRANSFER AGENT
Computershare
P.O. Box 43078, Providence RI 02940-3078
Phone (877) 581-5548
FINANCIAL INQUIRIES
For additional financial documents and information,
please visit our website at texasroadhouse.com. Please
contact us by phone at (502) 426-9984 or by sending us
an email to investment@texasroadhouse.com
INDEPENDENT AUDITORS
KPMG LLP
400 W. Market Street, Suite 2400, Louisville, KY 40202
Phone (502) 587-0535
MEDIA INQUIRIES
For all media requests, please call (502) 638-5457
STOCK LISTING
Texas Roadhouse, Inc. Common Stock is listed on the
NASDAQ Stock Exchange under the symbol TXRH
All pages in this Annual Report are recyclable.
Please place in a recycling bin after use.
Casey Cohen
Casey Cohen
Texas Roadhouse - Turnersville, NJ
Managing Partner of the Year
Benito Galindo
Benito Galindo
Covington, LA
Meat Cutter of the Year
Vanessa Blanco-Quezada
Vanessa Blanco-Quezada
Bubba’s 33 - Albuquerque, NM
Managing Partner of the Year
Freddy vigueras Mendez
Freddy vigueras Mendez
Wyomissing, PA
Kitchen Manager of the Year
frank hernandez
frank hernandez
Support Center - IT
Roadie of the Year
BRIANNA Carter
BRIANNA Carter
Fort Wright, KY
Service Manager of the Year