Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of

the Securities Exchange Act of 1934 (Amendment No. )

​

​

​

​

​

Table of Contents

​

​

​

​

​

​

​

​

Items of Business

Record Date  February 26, 2021

A Proxy Statement describing matters to be considered at the Annual Meeting is attached to this Notice. Only stockholders of record at the close of business on February 26, 2021 are entitled to receive notice of and to vote at the meeting or any adjournment or postponement thereof.

Stockholders are cordially invited to participate in the meeting virtually via our live webcast. Following the formal items of business to be brought before the meeting, we will discuss our 2020 results and answer your questions.

Thank you for your continued support of Papa John’s.

By Order of the Board of Directors,

​

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Stockholders to be held on April 27, 2021 — this Proxy Statement and the Papa John’s 2020 Annual Report are available at www.papajohns.com/investor.

​

​

​

Table of Contents

​

​

​

​

​

​

​

Table of Contents

​

​

Table of Contents

​

​

​

​

​

Table of Contents

​

​

​

​

Table of Contents

​

​

Table of Contents

TABLE OF CONTENTS

​

​

​

Table of Contents

​

​

​

​

​

Table of Contents

​

The Board of Directors (the “Board”) of Papa John’s International, Inc. (the “Company”) is soliciting proxies for use at the Annual Meeting of Stockholders (the “Annual Meeting”) to be held virtually at 11:00 a.m. Eastern Time on April 27, 2021, and at any adjournment or postponement of the meeting. We have adopted a virtual format for our Annual Meeting again this year to provide a consistent experience to all stockholders regardless of location, and to support the health and well-being of our employees and stockholders due to the ongoing public health impact of the coronavirus outbreak (COVID-19). We will provide a live webcast of the Annual Meeting at www.virtualshareholdermeeting.com/PZZA2021. An audio recording of the entire Annual Meeting will be available on the Papa John’s Investor Relations website after the meeting. This Proxy Statement and the enclosed proxy card are first being mailed or given to stockholders on or about March 23, 2021.

At the Annual Meeting, stockholders will be asked to vote on the matters outlined in the Notice of Annual Meeting of Stockholders. These include the election of nine directors to the Board; the ratification of the selection of Ernst & Young LLP (“EY”) as the Company’s independent auditors for 2021; and an advisory approval of the Company’s executive compensation.

​

The Annual Meeting will be conducted via live webcast. You are entitled to participate in the Annual Meeting only if you were a stockholder as of the close of business on February 26, 2021 or if you hold a valid proxy for the Annual Meeting.

You will be able to participate in the Annual Meeting online by visiting www.virtualshareholdermeeting.com/PZZA2021. You also will be able to vote your shares electronically at the annual meeting (other than shares held through the Papa John’s International, Inc. 401(k) Plan, which must be voted by April 21, 2021).

To participate in the Annual Meeting, you will need the 16-digit control number included on your proxy card or on the voter instruction form that accompanied your proxy materials.

The meeting webcast will begin promptly at 11:00 a.m. Eastern Time on April 27, 2021. Online access will begin at 10:45 a.m. Eastern Time, and we encourage you to access the meeting prior to the start time.

We will also make the Annual Meeting accessible to anyone who is interested, including team members and other constituents, by visiting the same link at www.virtualshareholdermeeting.com/PZZA2021. Non-stockholder guests will not be permitted to vote or submit questions at the Annual Meeting.

Submitting questions at the Annual Meeting

If you are a stockholder as of the close of business on February 26, 2021, and access the Annual Meeting using the 16-digit control number included on your proxy card or on the voter instruction form that accompanied your proxy materials, you can submit questions electronically at the Annual Meeting during the webcast. During the live Q&A session of the meeting, members of our executive leadership team and our Chair of the Board will answer questions as they come in, as time permits. To ensure the meeting is conducted in a manner that is fair to all stockholders, the Chair (or such other person designated by our Board) may exercise broad discretion in recognizing stockholders who wish to participate, the order in which questions are asked and the amount of time devoted to any one question. We reserve the right to edit or reject questions we deem profane or otherwise inappropriate. Detailed guidelines for submitting written questions during the meeting are available at www.virtualshareholdermeeting.com/PZZA2021.

If you have technical difficulties or trouble accessing the virtual meeting

We will have technicians ready to assist you with any technical difficulties you may have accessing the virtual meeting. If you encounter any difficulties accessing the virtual meeting or during the meeting time, please call:

844-976-0738 (toll-free)

303-562-9301 (international)

​

​

2021 Proxy Statement     1

Table of Contents

​

Principles of corporate governance that guide the Company are set forth in the Company’s Board committee charters, the Company’s Corporate Governance Guidelines and the Company’s Code of Ethics and Business Conduct, all of which are available on our website at www.papajohns.com by first clicking “Investor Relations” and then “Corporate Governance.” (The information on the Company’s website is not part of this Proxy Statement and is not soliciting material.) The principles set forth in those governance documents were adopted by the Board to ensure that the Board is independent from management, that the Board adequately oversees management, and to help ensure that the interests of the Board and management align with the interests of the stockholders. The Board annually reviews its corporate governance documents.

Majority Voting Standard for Director Elections

Our Amended and Restated By-laws (the “By-laws”) provide for a majority voting standard for uncontested director elections and a mechanism for consideration of the resignation of an incumbent director who does not receive a majority of the votes cast in an uncontested election. Under the majority voting standard, a majority of the votes cast means that the number of shares voted “FOR” a director nominee must exceed the number of votes cast “AGAINST” that director nominee. In contested elections where the number of nominees exceeds the number of directors to be elected, the vote standard will be a plurality of votes represented in person or by proxy and entitled to vote on the election of directors. In addition, if an incumbent director is nominated in an uncontested election, the director nominee is required, as a condition of the director’s nomination, to submit an irrevocable letter of resignation to the Chair of the Board. If an incumbent director nominee does not receive a majority of the votes cast, the Corporate Governance and Nominating Committee will make a recommendation to the Board on whether to accept or reject the resignation, or whether other action should be taken. The Board will act on the Committee’s recommendation and publicly disclose its decision and the rationale behind the decision within 90 days from the date of certification of the election results. The director whose resignation is being considered will not participate in the recommendation of the Committee or the Board’s decision.

Code of Ethics and Business Conduct

The Company’s Code of Ethics and Business Conduct, which is the Company’s code of ethics applicable to all directors, officers and team members worldwide, embodies the Company’s global principles and practices relating to the ethical conduct of the Company’s business and its longstanding commitment to honesty, fair dealing and full compliance with all laws affecting the Company’s business.

The Board has established procedures for any person, including a team member, to submit confidential and anonymous reports of suspected or actual violations of the Company’s Code of Ethics and Business Conduct relating, among other things, to:

The procedures for reporting issues and concerns may be found on our website at www.papajohns.com, by first clicking “Investor Relations” and then “Corporate Governance.”

Director Independence

The Board has determined that eight of the Company’s ten current directors are “independent” as defined by applicable law and NASDAQ listing standards, as follows: Christopher L. Coleman, Michael R. Dubin, Olivia F. Kirtley, Laurette T. Koellner, Jocelyn C. Mangan, Sonya E. Medina, Anthony M. Sanfilippo and Jeffrey C. Smith. Each of our Audit, Compensation, and Corporate Governance and Nominating committees is comprised only of independent directors, as identified below under the heading “Committees of the Board of Directors.”

Robert M. Lynch is not independent because he serves as President and Chief Executive Officer of the Company. Shaquille O’Neal is not an independent director because he is a franchisee of the Company and a brand ambassador of the Company as described under “Transactions with Related Persons” below.

2     2021 Proxy Statement

Table of Contents

CORPORATE GOVERNANCE

Ms. Kirtley is a member of the board of directors of U.S. Bancorp. We have a banking relationship with U.S. Bancorp that predates Ms. Kirtley’s appointment to the U.S. Bancorp board of directors. Ms. Kirtley is also a member of the board of directors of Delta Dental, the Company’s dental insurance carrier. The Board reviewed these relationships and determined that they do not impact Ms. Kirtley’s independence or her business judgment.

Hedging and Pledging Policy

Pursuant to our Insider Trading Compliance Policy, we prohibit employees, officers and directors from pledging any Company securities as collateral for a loan, or from holding any Company securities in a margin account. This policy also prohibits employees, officers and directors from entering into hedging transactions involving Company securities, including purchasing financial instruments such as prepaid variable forwards, equity swaps, collars, exchange funds and similar transactions. Hedging transactions means any transaction that hedges or offsets, or is designed to hedge or offset, any decrease in the market value of Company securities. Notwithstanding this restriction, pursuant to the terms of the Securities Purchase Agreement dated as of February 3, 2019 (the “Securities Purchase Agreement”), by and among the Company and certain funds affiliated with, or managed by, Starboard Value LP (collectively, “Starboard”), Starboard is expressly permitted to pledge Company securities acquired under the Securities Purchase Agreement. As Chief Executive Officer of Starboard Value LP, our Chair, Jeffrey C. Smith, may be deemed to beneficially own the securities owned by Starboard. Mr. Smith expressly disclaims beneficial ownership of such securities except to the extent of his pecuniary interest therein.

Board Leadership Structure and Risk Management

Under our Corporate Governance Guidelines, our Board elects a Chair of the Board with the duties set forth in our By-laws. When the position of Chair of the Board is not held by an independent director, the independent directors will elect a Lead Independent Director. Jeffrey C. Smith, our current Chair, is independent; accordingly, we do not currently have a Lead Independent Director.

Our Board has a standing Audit Committee, Compensation Committee, and Corporate Governance and Nominating Committee. Each of these Board committees is comprised solely of independent directors, with each of the committees having a separate chair. See “Committees of the Board of Directors” below for a description of each of these Board committees and its members. The key responsibilities of the Board include developing the strategic direction for the Company and providing oversight for the execution of that strategy by management. The Board has an active role, as a whole and also at the committee level, in overseeing management of the Company’s risks. The Board regularly reviews information regarding the Company’s financial, strategic and operational issues, as well as the risks associated with each, and that oversight includes a thorough and comprehensive annual review of the Company’s strategic plan. One area of Board focus in 2020 relating to risk oversight concerned the risks that the COVID-19 pandemic presented to the Company’s employees, customers, franchisees and supply chain, and oversight of the steps taken by the Company to mitigate the impact of the pandemic.

At the committee level, risks are reviewed and addressed as follows:

2021 Proxy Statement     3

Table of Contents

CORPORATE GOVERNANCE

While each committee is responsible for evaluating and overseeing the management of such risks, the Board is regularly informed through committee reports about such risks. In addition, the Board and the committees receive regular reports from the President and Chief Executive Officer, Chief Financial Officer, Chief Legal and Risk Officer, and other Company officers with roles in managing risks.

Stockholder Engagement in 2020

Our Board of Directors and our management believe it is important to proactively engage with stockholders. In 2020, we had discussions with stockholders collectively holding more than a majority of our outstanding common stock. This engagement was conducted by senior decision-makers at the Company, including the Chair of the Board, the CEO, the CFO and other members of management.

Areas of particular focus in the engagement included: matters relating to the COVID-19 pandemic, including the Company’s performance during the pandemic, health and safety measures taken for the benefit of team members and customers, and supply chain integrity; Board composition; executive compensation; human capital and diversity initiatives; sustainability and corporate social responsibility; and business strategy and financial performance.

In response to stockholder feedback requesting more disclosure around sustainability and corporate responsibility, we published our first full Sustainability Report in 2020, which is available on our company website.  See “Sustainability, Environmental and Social” below.

Feedback from stockholders is shared with the Board and the applicable committees on a regular basis.

Independent Chair of the Board

Jeffrey C. Smith serves as our independent Chair of the Board. Our Board believes an independent Chair provides a strong leadership structure and sound governance in the best interests of the Company and its stockholders, working with the Board, the Company’s Chief Executive Officer and management to establish and further the Company’s strategic objectives. When the position of Chair of the Board is not held by an independent director, the independent directors will elect a Lead Independent Director, with the duties described in the Company’s Corporate Governance Guidelines.

Meetings of the Board of Directors

The Board held ten meetings in 2020. Each director attended at least 75% of the meetings of the Board and the Board committees on which he or she served during 2020.

Meetings of the Independent Directors

At meetings of both the Board and the Board committees, the Company’s independent directors meet in regular executive sessions in which members of management do not participate. These sessions typically occur in conjunction with regularly scheduled Board or committee meetings. The Chair of the Board currently chairs executive sessions of the Board. If the position of Chair is not held by an independent director, the Lead Independent Director will chair such executive sessions.

Annual Meetings of Stockholders

The Company does not have a policy regarding director attendance at the Annual Meeting, but we encourage each of our directors to attend each Annual Meeting of the Company’s stockholders whenever attendance does not unreasonably conflict with the director’s other business and personal commitments. All ten directors attended the 2020 Annual Meeting.

Committees of the Board of Directors

The Audit Committee, the Compensation Committee and the Corporate Governance and Nominating Committee facilitate and assist the Board in the execution of its responsibilities. In accordance with NASDAQ listing standards, each of these standing committees is comprised solely of independent directors. Charters for each of our standing committees are available on the Company’s website at www.papajohns.com by first clicking on “Investor Relations” and then “Corporate Governance.” The charter of each standing committee is also available in print to any stockholder who requests it.

4     2021 Proxy Statement

Table of Contents

CORPORATE GOVERNANCE

Audit Committee

Compensation Committee

​

​

2021 Proxy Statement     5

Table of Contents

CORPORATE GOVERNANCE

​

Corporate Governance and Nominating Committee

Sustainability, Environmental and Social

At Papa John’s, we believe that people are our most important ingredient, and we are dedicated stewards of our communities and the environment. As noted above, the Corporate Governance and Nominating Committee has been tasked with overseeing the Company’s commitment to corporate values of diversity, equity and inclusion and the Company’s initiatives on sustainability and environmental, social and governance matters. Our first full Sustainability Report was published in the second quarter of 2020 and is available on our company website. An interim report will be published in the second quarter of 2021.

Diversity, Equity and Inclusion

Our Papa John's family includes approximately 130,000 corporate and franchise team members around the globe, representing all walks of life. We are in communities large and small and are proud to serve customers from all backgrounds, reflecting our Company value of “Everyone Belongs.” Our commitment to diversity, equity and inclusion is rooted in our belief that having a Papa John's family that fully reflects and celebrates the global nature of our brand is the right way to do business.

We are building a culture of leaders who believe in inclusivity, diversity and winning. Our efforts, led by our Chief People and Diversity Officer, embed our culture in our day-to-day practices through performance, recognition, and innovation.

We are implementing initiatives to diversify our workforce and leadership pipeline, embed policies and practices that ensure fairness and instill and reward behaviors across the organization that foster belonging and increase employee engagement. Out of the 11 members of our Executive Leadership Team, four are female, one is Lesbian Gay Bisexual Transgender Queer or Questioning (“LGBTQ”) and two are Black. We have also initiated multiple corporate initiatives over the past several years to support diversity, equity and inclusion. Some examples are our affordable healthcare plans and free virtual healthcare visits available to all part-time and full-time team members; the launch of The Papa John’s Foundation for Building Community; our inaugural Day of Service with Boys and Girls Clubs of America; and the creation of eight employee resource affinity groups.

6     2021 Proxy Statement

Table of Contents

CORPORATE GOVERNANCE

Workplace Health and Safety

As part of the Company’s enterprise-wide safety management system, Papa John’s invests in training, technology and people to protect both our customers and team members. All Papa John’s team members, from those at our corporate office to those working in our warehouses and restaurants, receive annual safety training based on the requirements of their roles.  Both Quality Control Centers and restaurant operations undergo annual safety audits, as well as random safety checks by regional safety managers and field safety coordinators.

We have also taken steps to mitigate the impact of the COVID-19 pandemic on our team members and our customers by implementing extra health and safety measures across our business, including No Contact Delivery and enhanced cleaning and sanitization measures.

Human Rights

We strive for the highest standards of integrity and human rights in all of our business activities, including our supply chain. Our standard agreements with key suppliers mandate that each product sold to Papa John's will meet good manufacturing practices requirements applicable wherever the product is manufactured, produced, distributed, transported or stored. In addition to these requirements, which include supplier audits, and as part of our ongoing efforts to achieve and improve our standards of high quality and community responsibility throughout our business, we incorporate into our standard supply agreements specific prohibitions against suppliers' use of forced labor or facilitation of slavery and human trafficking, including certification, verification and audit procedures, and we strive to ensure Company representatives receive training to support those efforts. Our commitment to human rights is also demonstrated in our Code of Ethics.

Sustainability

Papa John’s is committed to being a good steward of the environment. We have undertaken numerous initiatives related to environmental sustainability, including in the areas of energy savings and recycling. Papa John’s invests in new technologies and processes to improve the efficiency of our restaurants and commercial operations in several ways. In doing so, we are also lowering our greenhouse gas emissions. Specifically, we have taken the following actions at our Quality Control Centers, restaurants, and corporate headquarters: we have made progress in saving energy throughout our operations, including installing LED lighting at our restaurants and corporate headquarters, outfitting power-saving technology in our pizza ovens, and reducing hot water and natural gas use in our Quality Control Centers. We transport our fresh pizza dough from our Quality Control Centers to our restaurants in reusable dough trays. When no longer fit for use, we grind and repurpose the trays, which otherwise would be disposed. In 2020, we repurposed nearly 79,000 trays, diverting roughly 237,000 pounds of waste from landfills.

Communications with the Board

Stockholders of the Company may communicate with the Board in writing addressed to:

Board of Directors
c/o Corporate Secretary
Papa John’s International, Inc.
P.O. Box 99900
Louisville, Kentucky 40269-0900

The Secretary will review each stockholder communication. The Secretary will forward to the entire Board (or to members of a Board committee, if the communication relates to a subject matter clearly within that committee’s area of responsibility) each communication that (a) relates to the Company’s business or governance, (b) is not offensive and is legible in form and reasonably understandable in content, and (c) does not merely relate to a personal grievance against the Company or a team member or further a personal interest not shared by the other stockholders generally.

Nominations for Directors

Identifying Qualified Candidates

The Corporate Governance and Nominating Committee assists the Board in identifying qualified persons to serve as directors of the Company. The Committee evaluates all proposed director nominees, evaluates incumbent directors before recommending renomination, and recommends all approved candidates to the Board for appointment or nomination to the Company’s stockholders.

2021 Proxy Statement     7

Table of Contents

CORPORATE GOVERNANCE

The Corporate Governance and Nominating Committee expects qualified candidates will have high personal and professional integrity and ability and will be able to contribute to the Board’s effectiveness in serving the interests of the Company’s stockholders. The Committee considers diversity in its nomination of directors to the Board, and in its assessment of the effectiveness of the Board and its committees. In considering diversity, the Corporate Governance and Nominating Committee looks at a range of different personal factors in light of the business, customers, suppliers and employees of the Company. The range of factors includes diversity of race, ethnicity, gender, age, cultural background and personal background. The Committee considers skills and experience, such as prior board service, financial expertise, international experience, industry experience, technology experience and leadership skills, including prior management experience. In addition, the Committee also considers qualifications that include evidence of: independence, judgment, integrity, the ability to commit sufficient time and attention to Board activities, and the absence of potential conflicts with the Company’s interests. The Committee considers these criteria in the context of the perceived needs of the Board as a whole and seeks to achieve and maintain the diversity of the Board. Although the Board does not establish specific goals with respect to diversity, the overall diversity of the Board is a significant consideration in the nomination process. Currently over half of our Board nominees are diverse based on gender, race, or ethnicity (two of whom are diverse by race/ethnicity and four by gender), and the Board’s collective experience covers a range of experience across different countries and industries. The Corporate Governance and Nominating Committee also considers the length of service of the Company’s Board members, balancing the value of long-standing Board service with the perspective of directors more recently joining the Board.

The charts below illustrate the composition of our nominees by gender and tenure:

​

​

The Corporate Governance and Nominating Committee reports regularly to the full Board on its assessment of the composition and functioning of the Board. The Company has focused on assembling a group of Board members who collectively possess the skills and experience necessary to oversee the business of the Company, structure and oversee implementation of the Company’s strategic plan, and maximize stockholder value in a highly competitive environment.

The Corporate Governance and Nominating Committee will consider candidates for election to the Board recommended by a stockholder in accordance with the Company’s Amended and Restated Certificate of Incorporation (the “Certificate of Incorporation”) and will do so in the same manner as the Committee evaluates any other properly recommended nominee. Any nomination by a stockholder of a person for election to the Board at an annual meeting of stockholders, or a special meeting of stockholders called by the Board for the purpose of electing directors, must be received at the Company’s principal offices not less than 60 days nor more than 90 days prior to the scheduled date of the meeting and must comply with certain other requirements set forth in the Company’s Certificate of Incorporation. However, if less than 70 days’ notice of the date of the annual meeting is given, notice by the stockholder must be received no later than 10 days following the earlier of (i) the day on which such notice of the date of the meeting was mailed or (ii) the day on which public disclosure of the date of the meeting was made by the Company.

Nominations must be addressed to the Chair of the Corporate Governance and Nominating Committee in care of the Secretary of the Company at the Company’s headquarters address listed below and must be received on a timely basis in order to be considered for the next annual election of directors:

Chair of the Corporate Governance and Nominating Committee
c/o Corporate Secretary
Papa John’s International, Inc.
P.O. Box 99900
Louisville, Kentucky 40269-0900

8     2021 Proxy Statement

Table of Contents

CORPORATE GOVERNANCE

Contractual Rights of Starboard to Designate Nominees

In September 2018, the Company, led by a special committee of the Board, began a process to evaluate a wide range of strategic options with the goal of maximizing value for all stockholders and serving the best interests of the Company’s stakeholders. As a result of this strategic review, on February 3, 2019, the Company entered into the Securities Purchase Agreement with Starboard pursuant to which Starboard made a $250 million strategic investment in the Company’s newly designated Series B Convertible Preferred Stock (the “Series B Preferred Stock”).

As part of that investment, the Board granted to Starboard certain rights related to the Company’s corporate governance, including director designation rights. Pursuant to the Governance Agreement dated as of February 4, 2019 and amended on March 4, 2019, by and among the Company and Starboard (the “Governance Agreement”), so long as certain criteria are satisfied, including that Starboard satisfies a minimum ownership threshold, the Board has agreed to nominate, recommend, support and solicit proxies for two directors appointed by Starboard (currently Mr. Smith and Mr. Sanfilippo) for election at the Annual Meeting.

The Company also agreed to appoint Mr. Smith as Chair of the Board pursuant to the Governance Agreement, and agreed that Mr. Sanfilippo would be a member of the Compensation Committee and the Corporate Governance and Nominating Committee.

In addition, during the Standstill Period (as defined below), Starboard has agreed not to (i) nominate or recommend for nomination any person for election as a director at any stockholder meeting, (ii) submit any stockholder proposals for consideration at, or bring any business before, any stockholder meeting or (iii) initiate, encourage or participate in any “vote no,” “withhold” or similar campaign with respect to the Company’s common stock.

Starboard has agreed, from the date of the Governance Agreement until the earlier of (i) the date that is 15 days prior to the deadline for the submission of stockholder nominations for the 2022 annual meeting of stockholders pursuant to the Company’s organizational documents and (ii) the date that is 100 days prior to the anniversary of the Annual Meeting (the “Standstill Period”), to customary standstill restrictions. Such deadlines are the result of Starboard exercising its option in January 2021 to extend its Standstill Period under the Governance Agreement for another year.  If Mr. Smith is removed as Chair of the Board during the Standstill Period for any reason other than due to the occurrence of a resignation event (as defined in the Governance Agreement) or his resignation as Chair of the Board or as a director of the Company, Starboard will have the right to terminate the Standstill Period. The Governance Agreement terminates upon the expiration of the Standstill Period.

​

​

2021 Proxy Statement     9

Table of Contents

​

Our By-laws provide that the Board is authorized to fix from time to time the number of directors within the range of three to fifteen members, and currently the Board size is set at ten members.  Mr. Dubin is not standing for re-election to our Board at the Annual Meeting, and the Board has reduced the size of the Board to nine members effective immediately prior to the commencement of the Annual Meeting.  Directors are elected annually to one-year terms and each director nominee has consented to being named in this Proxy Statement and has agreed to serve if elected.

We believe the nominees set forth below possess an appropriate mix of skills, experience, and leadership designed to drive board performance and properly oversee the interests of the Company, including our long-term corporate strategy. Our nominees include seven independent directors (78%), four female directors (44%), and a broad range of professional experience. The nominees also reflect a balanced approach to tenure that will allow the Board to benefit from a mix of newer directors who bring fresh perspectives and seasoned directors who bring continuity and a deep understanding of our complex business.

THE BOARD RECOMMENDS THAT YOU VOTE “FOR” EACH OF THE NOMINEES FOR DIRECTOR.

Set forth below is information concerning the nominees for election, including their principal occupations, business experience, background, key skills and qualifications, and ages as of the date of this Proxy Statement. The key skills and qualifications are not intended to be an exhaustive list of each nominee’s skills or contributions to the Board, but rather the specific skills and qualifications that led to the conclusion that the person should serve as a director for the Company.

Nominees for Election to the Board

10     2021 Proxy Statement

Table of Contents

ITEM 1. ELECTION OF DIRECTORS

2021 Proxy Statement     11

Table of Contents

ITEM 1. ELECTION OF DIRECTORS

12     2021 Proxy Statement

Table of Contents

ITEM 1. ELECTION OF DIRECTORS

2021 Proxy Statement     13

Table of Contents

ITEM 1. ELECTION OF DIRECTORS

There are no family relationships among the Company’s directors and executive officers.

​

​

14     2021 Proxy Statement

Table of Contents

​

The following table sets forth certain information as of February 26, 2021 (except as noted otherwise), with respect to the beneficial ownership of our capital stock by (i) each of the named executive officers identified in the Summary Compensation Table in this Proxy Statement, (ii) each director or nominee for director of the Company, (iii) all directors and current executive officers as a group and (iv) each person known to the Company to be the beneficial owner of more than five percent of the outstanding common stock or Series B Preferred Stock. As of February 26, 2021, there were 32,940,678 shares of common stock and 252,530 shares of Series B Preferred Stock outstanding, respectively.

2021 Proxy Statement     15

Table of Contents

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

16     2021 Proxy Statement

Table of Contents

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Mr. Smith also holds units deemed invested in 3,801 shares of common stock through a deferred compensation plan provided by the Company, all of which are distributable in an equivalent number of shares of common stock within 60 days of termination of service on the Board and are included in the shares reported.

​

2021 Proxy Statement     17

Table of Contents

​

Introduction

This section describes the Company’s philosophy and program for compensating its executive officers as well as the compensation paid to its named executive officers (“NEOs”) for fiscal year 2020. The NEOs for fiscal year 2020 are:

​

​

¹ Mr. Coke served as the VP, Investor Relations and Interim Principal Financial and Accounting Officer for the Company from March 9, 2020 until October 5, 2020 and was promoted to SVP, Financial Operations, Accounting and Reporting on December 7, 2020.  

​

² Mr. Smith served as the Company’s Chief Financial Officer from April 26, 2018 until his departure on March 9, 2020.

Executive Summary

2020 was an unprecedented year for companies and citizens around the world, as we collectively navigated the COVID-19 pandemic. For Papa John’s, the pandemic presented enormous challenges to our operations, our team members, and our customers but also presented new opportunities for our business. Due to the strategic decision-making of our leadership team, and the incredible efforts of our team members, we were able to introduce No Contact Delivery early in the second quarter of 2020 to protect our team members and safely deliver our products to our customers.  

At the same time as we took action to support our team members, customers and communities during the pandemic, we continued implementing the turnaround strategy that began in late 2019. We executed on critical components of our strategic plan, which included the successful launch of innovative new products such as our Papadias and the Shaq-a-Roni pizza. We also added millions of new customers to our digital channels and rewards program.

Furthering our commitment to building a diverse and inclusive culture that is focused on winning, we added talented and diverse leaders to our leadership team in 2020, including two new NEOs:

Alongside our many other accomplishments this year, we delivered outstanding financial and operating results, including increases in North America and International comparable sales of 17.6% and 12.6%, respectively, over 2019 and

18     2021 Proxy Statement

Table of Contents

EXECUTIVE COMPENSATION — COMPENSATION DISCUSSION AND ANALYSIS

$90.3 million of operating income in fiscal 2020, or an increase of 267.9%, over 2019. Our fiscal 2020 performance highlights are shown below.

​

​

​

¹ See Annex A to this Proxy Statement for a reconciliation of non-GAAP financial measures to our results as reported under GAAP.

As a result of the Company’s strong performance on key operating and financial metrics in 2020, payout under our annual cash incentive plan, which we refer to as our Management Incentive Plan (“MIP”) for our NEOs in fiscal 2020, was at the maximum level.

The Compensation Committee provides target pay opportunities to our NEOs that are competitive given the Company’s business and size, and earned compensation for 2020 was aligned with Company performance, consistent with our pay-for-performance philosophy. Total cash compensation paid was dependent on the achievement of specific performance goals, discussed in detail below. The ultimate value of long-term equity awards will depend on future stock performance, and in the case of performance-based units, the achievement of performance goals.

​

2021 Proxy Statement     19

Table of Contents

EXECUTIVE COMPENSATION — COMPENSATION DISCUSSION AND ANALYSIS

Our Executive Compensation Process

Peer Group Companies and Benchmarking

Market pay levels and practices, including those of a relevant peer group, are among many factors the Compensation Committee considers in making compensation decisions. The market review is intended to provide an external framework for the range and reasonableness of compensation and to ensure we can provide competitive compensation needed to attract and retain the caliber of leadership critical to success. The Compensation Committee reviews market data for all pay elements but does not target NEO compensation with respect to a specific benchmark, such as “median” or “50^th percentile.” The Compensation Committee believes that dependence solely on benchmark data can detract from the focus on the performance of the individual NEO and his or her contribution to Company performance.

The Compensation Committee in consultation with FW Cook, its independent compensation consultant, typically reviews the peer group on an annual basis. For competitive comparisons used to inform 2020 compensation decisions, the peer group included the companies in the following table. The Committee believes the companies in the peer group share many characteristics with the Company, including a common industry, similar market capitalization and other financial criteria, and are an appropriate group of comparable companies with which we compete for executive talent.

In 2020, we removed Sonic Corp. from the peer group after it became a private company.

Role of Compensation Consultants in the Executive Compensation Process

The Compensation Committee retained FW Cook as its independent compensation consultant for 2020. FW Cook reports directly to the Compensation Committee and does not provide any other services to the Company. The Compensation Committee regularly reviews and assesses FW Cook’s independence pursuant to SEC and NASDAQ rules and has determined that the firm is independent and has no conflicts of interest with the Company. The Committee seeks input from FW Cook on compensation trends, appropriate peer group companies and market survey data, and specific compensation decisions as discussed in this Compensation Discussion and Analysis.

Role of Management in the Executive Compensation Process

In making 2020 compensation decisions, the Compensation Committee requested input from the CEO, who reviewed the performance of the NEOs and other executives (other than himself), provided recommendations to the Committee on NEO and other executives’ compensation, and provided perspective on the performance of the management team (other than himself). The Committee reviews and discusses pay decisions related to the CEO in executive session without the CEO present, and in accordance with NASDAQ rules, Mr. Lynch was not present when his compensation was being discussed or approved.

The Committee’s determination of each NEO’s compensation was based on a qualitative and quantitative review and assessment of many factors, including the individual’s performance, experience, scope of responsibilities, leadership and leadership development, and the importance of the NEO to the successful execution of our strategies.

Stockholder Input/Say-on-Pay Vote

The Company considers input from stockholders, including the results of the annual advisory vote on executive compensation (“say-on-pay proposal”), in determining compensation for our NEOs. At our 2020 annual meeting of stockholders, approximately 82% of the votes cast on the say-on-pay proposal were in favor. Stockholders’ support of our executive compensation program and business strategy was one of many factors the Committee considered in determining compensation for our NEOs. The Compensation Committee considered the say-on-pay proposal results and the conversations conducted during our stockholder engagement in making 2020 compensation decisions, and we will continue to consider stockholder input when making future compensation decisions for the NEOs.

Engagement with our stockholders over the past year covered a range of topics, such as the challenges facing our business from the pandemic, executive compensation, governance matters, corporate social responsibility, human capital and our diversity, equity and inclusion initiatives, and board composition. We also engaged with proxy advisory firms and conducted several investor virtual roadshows and presentations. We are committed to continuing to seek feedback from stockholders.

20     2021 Proxy Statement

Table of Contents

EXECUTIVE COMPENSATION — COMPENSATION DISCUSSION AND ANALYSIS

Compensation Policy Highlights

Consistent with stockholder interests and market best practices, our executive compensation program includes the following sound governance features:

Updated Compensation Plan Design for Fiscal 2020

Both our cash-based MIP and our equity-based long-term incentive plan (“LTIP”) compensation programs were redesigned for fiscal 2020 to ensure continued alignment to the Company’s ongoing turnaround strategy and our Better Ingredients. Better Pizza.^® brand promise, while aligning with market and evolving best practices, including:

2021 Proxy Statement     21

Table of Contents

EXECUTIVE COMPENSATION — COMPENSATION DISCUSSION AND ANALYSIS

Fiscal 2020 Executive Compensation Overview

In 2020, the Compensation Committee continued its practice of providing to its NEOs the following components of executive compensation:

Tying Pay to Performance

The Compensation Committee aligns the majority of NEO compensation to short- and long-term performance objectives.  While salary is a fixed element of compensation, increases in salary are not guaranteed, and all other elements of compensation above are tied to Papa John’s overall performance. In 2020, the Committee applied our pay-for-performance philosophy by:

Consistent with our pay-for-performance compensation philosophy, executives with the greatest potential to impact the Company’s success by achieving the Company’s strategic and performance objectives receive a greater proportion of “at-risk” or variable compensation. For 2020, 83% of Mr. Lynch’s compensation at target and 64% of our other current NEOs’

22     2021 Proxy Statement

Table of Contents

EXECUTIVE COMPENSATION — COMPENSATION DISCUSSION AND ANALYSIS

compensation (without consideration of sign-on awards) was tied to specific performance objectives or our total shareholder return.

​

Elements of Fiscal 2020 Executive Compensation

Base Salary

Annual base salary increases are typically considered each year and upon organizational changes that may occur throughout the year. No executive officer has a guaranteed salary increase. The analysis for adjustments to base salary compensation considers all of the factors described under “Our Executive Compensation Process” above. Adjustments to base salary typically occur during the first quarter each year. The base salary for Mr. Norberg was adjusted from $425,000 to $442,000 in 2020 to align closer to market. Mr. Coke also received salary increases in 2020 prior to his appointment as Interim Principal Financial and Accounting Officer for the Company from March 9, 2020 until October 5, 2020 and upon his promotion to SVP, Financial Operations, Accounting and Reporting on December 7, 2020. Base salaries for Ms. Gugino and Ms. Clark were set by the Compensation Committee, with the input of FW Cook, when they joined Papa John’s in 2020. The base salary of our CEO did not increase and there were no other current NEO salary adjustments in 2020.

Short-Term Cash Incentive Compensation

In 2020, our short-term cash incentive program under the MIP was designed to reward achievement of annual performance objectives. Fifty percent of the MIP performance goal was based on the operating income metric, and achievement of threshold operating income was also required for any cash payout, even if non-income metrics were achieved. The remaining fifty percent of the MIP performance goal was based on comparable sales and net development metrics, equally weighted. If a non-income metric, which were net unit development (North America and International) and comparable sales (North America) (in each case, as defined and calculated in the table below) exceeded the target goals, then the plan would provide for payout on that metric at the greater of 100% or the same payout percentage as the operating income metric.  The Company believes the plan design with built-in limits prevents paying excessive awards when our post-MIP operating income does not meet our objectives for the full year and is an important element in mitigating risk of focusing on short-term performance.

For 2020, post-MIP operating income (as defined in the table below) significantly exceeded target resulting in performance of 354% on that particular metric. Likewise, our comparable sales for North America also significantly exceeded target resulting in performance of 354% on that particular metric. Finally, since our net development did not meet the threshold for a payout, there was no payout for that metric. Overall payout under the 2020 MIP would have been 265% but overall payouts were reduced due to the maximum overall payout being set at 200% of annual target, a decrease from the 300% of base salary cap in 2019.

2021 Proxy Statement     23

Table of Contents

EXECUTIVE COMPENSATION — COMPENSATION DISCUSSION AND ANALYSIS

In 2020, performance metrics and the target and actual results of the MIP included:

Performance targets for each performance metric were set by the Committee with consideration of stockholder value creation as well as the Company’s targets contained in the annual budget and operating plan. The performance targets to achieve target payout were set in conjunction with the Company’s 2020 budget.

In 2020, the MIP awards (expressed as a percentage of base salary and an actual dollar amount) for each current NEO were as follows:

Each NEO’s actual annual incentive award payment in the table above was determined by formula based on the Company’s achievement of the pre-established performance targets that were derived from the Board-approved annual budget and operating plan. By tying the targets to the budget and operating plan, we believe that the plan rewards performance, and payments will generally correlate to our operating results in a given year. Actual 2020 results for all metrics produced an aggregate performance of 265% of target, which resulted in the maximum possible MIP plan payout of 200%.

Long-Term Incentive Compensation

Our LTIP for executive officers consists of time-based restricted stock and performance-based units. In 2020, we  discontinued granting stock options and more heavily weighted performance-based units for NEOs as a component of their equity compensation.

Time-Based Restricted Stock. We awarded restricted stock in 2020 to provide long-term compensation to our NEOs, helping to build a culture of ownership. We believe restricted stock awards are a strong executive retention tool and align the interests of our executives with the interests of stockholders. The time-based restricted stock awards in 2020 have a three-year graded vesting schedule (i.e., one-third vests per year).

The determination of the annual grant values is a function of a number of factors considered by the Compensation Committee, including market competitiveness, level of position within the organization, significance of the individual to the Company’s strategy and success, and the level of “total direct compensation” deemed to be appropriate for the NEO.

24     2021 Proxy Statement

Table of Contents

EXECUTIVE COMPENSATION — COMPENSATION DISCUSSION AND ANALYSIS

In February 2020, our Compensation Committee approved the annual grant of time-based restricted stock to each NEO then employed by the Company in accordance with our equity grant practices policy, with the effective date of grant on February 28, 2020, two days after the release of our fourth quarter and full-year 2019 earnings.

Total Shareholder Return Plan and Awards. Since February 2019, the Compensation Committee has granted performance-based restricted stock units (“performance-based units”) under the Total Shareholder Return Plan (“TSRP”).  We believe this plan best supports our long-term strategic and financial priorities.

Description of TSRP

The TSRP measures the TSR (which is generally the change in the trading price of a share of common stock plus dividends paid) on our common stock relative to the TSR of a group of publicly traded companies deemed comparable by the Compensation Committee (the “TSR Peer Group”) over a three-year performance period starting on the grant date (the “Performance Period”).  The Performance Period for the 2020 TSRP is February 28, 2020 to January 31, 2023.  

As of the beginning of the Performance Period, participants are awarded performance-based units denominated in the number of shares earned if target performance is achieved (“Target TSR Shares”). The number of Target TSR Shares granted to the NEOs in 2020 were as follows: Mr. Lynch, 34,577 shares, Mr. Wetzel, 4,831 shares, Mr. Norberg, 4,577 shares, Ms. Clark, 3,560 shares, and Mr. Coke, 463 shares. Ms. Gugino did not receive any Target TSR Shares in 2020 due to the timing of the commencement of her employment with the Company. If an executive is terminated without cause prior to the end of the Performance Period, the executive receives a pro rata payout based upon achievement of the award’s performance element, provided at least twelve months of service have been provided during the Performance Period. No dividends paid by the Company on its common stock during the Performance Period will be paid to holders of Target TSR Shares during the Performance Period. Instead, dividends paid during the Performance Period will be deemed reinvested in additional share units on the ex-dividend date, and will be delivered only and to the extent the underlying TSR Shares are earned.

Target TSR Shares will vest and be converted into shares of our common stock at the end of the Performance Period if the TSR of our common stock is equal to the 55th percentile of the TSR of the TSR Peer Group. If the TSR of our common stock is less than the 25th percentile of the TSR of the TSR Peer Group, all Target TSR Shares will be forfeited. If the TSR of our common stock is equal to or greater than the 80th percentile of the TSR Peer Group, 150% of the Target TSR Shares will be earned. No more than 150% of the Target TSR Shares will be earned even if the TSR on our common stock exceeds the 80th percentile of the TSR of the TSR Peer Group. If the relative TSR of our common stock is between the 25th and 80th percentiles, the number of shares of common stock earned will be determined using straight-line interpolation.  Notwithstanding the above, if the Company’s TSR for the Performance Period is negative, the maximum payout is capped at 100% of the Target TSR Shares.

Individuals who are awarded Target TSR Shares are subject to the Company’s clawback provisions as well as certain restrictive covenants that survive the Performance Period.

The TSR Peer Group

The TSR Peer Group is comprised of 23 companies, listed below, and includes all of the companies listed in the S&P 1500 Restaurants Sub-Industry GICS code. The composition of the TSR Peer Group was unchanged for 2020. The TSR Peer Group represents a broader group outside our immediate peer group with which we compete for business and investment capital as well as executive talent:

(1)  Dunkin Brands Group, Inc. became a private company in December 2020 and will be removed from the peer group for 2021 since it is no longer publicly traded.

2018 Performance-based Units.  Prior to the 2019 equity grant, we utilized performance-based units based on differing performance criteria to encourage focus on the Company’s long-term strategic goals, motivate and retain our executives and align interests with the Company’s stockholders. The 2018 plan was weighted as follows: Domestic comparable sales (30%), International comparable sales (20%) and number of Global Units (50%). A compounded annual EPS growth rate

2021 Proxy Statement     25

Table of Contents

EXECUTIVE COMPENSATION — COMPENSATION DISCUSSION AND ANALYSIS

of 4% was required over the applicable three-year period and a threshold level with respect to achievement of each other performance goal must be attained for the performance-based units to vest. For the three-year period ending at the 2020 fiscal year end, our performance-based units were forfeited due to a failure to achieve the minimum threshold for the three-year EPS.

Compensation of Chief Executive Officer

Chief Executive Officer

The Compensation Committee structured Mr. Lynch’s compensation to create alignment between our strategic goals and stockholder interests. In connection with his appointment as Chief Executive Officer, the Company entered into an employment agreement with Mr. Lynch on August 26, 2019 (the “Employment Agreement”). The Employment Agreement has a three-year term and 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 180 days prior to expiration.

Performance-based compensation.  In 2020, most of Mr. Lynch’s total direct compensation package was performance-based, tied to specific performance objectives or the value of our stock price.  Mr. Lynch’s annual base salary of $900,000 remained unchanged in 2020 along with his annual short-term cash incentive opportunity, with a target set at 110% of base salary. During the term of his Employment Agreement, base salary increases, and the amount, performance criteria and terms of bonus awards and equity awards are at the discretion of the Compensation Committee. As provided in his Employment Agreement, Mr. Lynch was awarded an annual LTIP award in fiscal year 2020 under the Company’s LTIP program at a target grant-date fair value of $3.4 million, made in the same allocation of grant types as awarded to other executive officers of the Company. For 2020, Mr. Lynch’s equity awards consisted of 60% performance-based units and 40% time-based restricted stock.

Other Benefits.  In 2020, the Compensation Committee approved reimbursements in the amount of $34,347 to Mr. Lynch for his out-of-pocket travel and lodging expenses to commute to the Company’s Louisville, Kentucky headquarters from his personal residence for the period from his first date of employment through July 31, 2020. From and after July 31, 2020, Mr. Lynch’s principal office location was designated as the Company’s new Atlanta headquarters, and thereafter Mr. Lynch no longer received commuting benefits from the Company. The Company also incurred incremental costs of $63,746 for Mr. Lynch to commute by private aircraft during this period for reasons of safety and security, including safety concerns driven by the COVID-19 pandemic. See the footnote to “All Other Compensation” in the Summary Compensation Table in this Proxy Statement for additional detail.

Changes for 2021.  In recognition of his leadership and the Company’s strong financial performance, the Compensation Committee approved an increase in Mr. Lynch’s compensation on February 17, 2021, for fiscal 2021 as follows: Mr. Lynch’s annual short-term cash incentive opportunity target increased to 130% of base salary. Mr. Lynch was also awarded an annual long-term incentive plan award in fiscal year 2021 under the Company’s long-term incentive program at a target grant-date fair value of $4 million, which consists of 60% performance-based units and 40% time-based restricted stock.

Compensation of Other NEOs

As described below, the Compensation Committee set the salaries of Ms. Gugino and Ms. Clark who joined the Company in 2020.

New Executive Leadership

On February 17, 2020, the Company appointed Ms. Clark to serve as its Chief Development Officer. The Compensation Committee approved an annual base salary of $420,000 for Ms. Clark, an annual cash incentive target under the MIP of 75% of base salary, and the value of her annual LTIP award of $350,000 commencing with the Company’s 2020 long term incentive program grant. In addition, Ms. Clark was granted sign-on compensation intended to partially replace the value of her equity awards and other compensation forfeited from her prior employer, consisting of (i) a $200,000 sign-on cash bonus, paid on February 28, 2020, which is subject to clawback provisions, and (ii) restricted stock with a grant-date fair value of $600,000, granted on Ms. Clark’s first day of employment on February 17, 2020, one-third of which will vest on the first anniversary of the grant date, and two-thirds of which will vest on the second anniversary of the grant date. Ms. Clark also received $77,857 in relocation benefits in 2020 consistent with Company policy for executive officers.

On October 5, 2020, the Company appointed Ms. Gugino to serve as its Chief Financial Officer. The Compensation Committee approved an annual base salary of $550,000 for Ms. Gugino, an annual cash incentive target under the MIP of 75% of base salary, and the value of her annual LTIP award of $740,000 commencing with the Company’s 2021 long term incentive program grant. In addition, Ms. Gugino was granted sign-on compensation intended to partially replace the value of her equity awards and other compensation forfeited from her prior employer, consisting of (i) a $475,000 sign-on cash

26     2021 Proxy Statement

Table of Contents

EXECUTIVE COMPENSATION — COMPENSATION DISCUSSION AND ANALYSIS

bonus, paid on October 16, 2020, which is subject to clawback provisions, and (ii) restricted stock with a grant-date fair value of $1,300,000, granted on Ms. Gugino’s first day of employment on October 5, 2020, which will vest in three equal annual installments beginning one year from the grant date. Ms. Gugino is also eligible for an initial $20,000 relocation lump sum and relocation benefit consistent with Company policy for executive officers.

Management Transitions and Separation Arrangements

See the Summary Compensation Table for the compensation paid to (1) Joseph H. Smith, former Chief Financial Officer, whose last day of employment with the Company was March 9, 2020, and (2) Steven R. Coke, who served as the Interim Principal Financial and Accounting Officer of the Company from Mr. Smith’s departure from the Company until Ms. Gugino’s appointment. Mr. Coke continues to serve as SVP, Financial Operations, Accounting and Reporting.

Clawback Policy

Under the terms of the Company’s 2018 Omnibus Incentive Plan (the “Omnibus Plan”), the MIP plan and other agreements, the NEOs’ incentive compensation is subject to “clawback” if the Company is required to prepare an accounting restatement due to the material noncompliance by the Company, as a result of misconduct by the NEO, with any financial reporting requirement under the federal securities laws. In such circumstances, the NEO will be required to reimburse the Company the amount of any award earned or accrued during the period of twelve months following the first public issuance or filing of the financial document that contained information affected by such material noncompliance. In addition, if the Company is required to prepare an accounting restatement, then grantees under the Omnibus Plan will be required to forfeit any awards based on the achievement of pre-established performance goals to the extent that the restatement indicates that the performance goals were not achieved.  

Deferred Compensation and Retirement Benefits

The Company maintains retirement and savings benefits for its executives. The NEOs are not eligible to participate in the Company’s 401(k) Retirement Plan but the Company maintains a Nonqualified Deferred Compensation Plan (the “NQDCP”) for the NEOs and other highly compensated executives. The NQDCP provides eligible executives an opportunity to defer all or part of their base salary and/or bonus compensation to a future date and to receive the same matching contributions as provided by the Company’s 401(k) Retirement Plan.

Under the NQDCP, participants are able to choose from various investment crediting options similar to those offered under the Company’s 401(k) Retirement Plan. There are currently 29 investment crediting options available under the NQDCP, including Company stock, that may be used to determine the rate of return to be credited on participant deferrals.

Allowances and Other Benefits

The NEOs are also eligible for disability and life insurance benefits under the plans available to salaried Company employees. The Company may also contract for the use of private aircraft to allow NEOs to travel for business purposes, particularly for reasons of safety and security and efficient use of travel time, subject to the approval by the President and Chief Executive Officer.

Severance and Change of Control Benefits

The Compensation Committee believes that providing severance benefits to NEOs upon certain termination events or upon qualifying terminations following a change of control of the Company supports the following goals: (1) recruiting and retaining qualified executives; (2) clarifying terms of employment and reducing the risk of employment disputes; and (3) ensuring that post-employment obligations are met. The change of control benefits are structured to protect the interests of stockholders by including a “double-trigger” mechanism that results in a severance payout only when a change of control is consummated and the executive is terminated by the Company without cause or by the executive for good reason within twenty-four months following the change of control.

Severance Pay Plan

On December 1, 2020, the Compensation Committee approved Amendment No. 2 to the Company’s existing Severance Pay Plan, to be effective January 1, 2021. The Severance Pay Plan was amended by the Compensation Committee to better align the Company’s severance benefits with market following review and analysis of peer company data. The Severance Pay Plan covers the severance benefits payable to the Company’s employees (including the NEOs) in connection with a qualifying termination (other than the Chief Executive Officer, whose severance benefits are set forth in a separate employment agreement with the Company). Under the Severance Pay Plan, as revised, the NEOs and employees with the title of Senior Vice President or higher who are members of the Company’s Executive Leadership Team will receive a severance benefit in the event of termination without cause equivalent to twelve months of base salary, a pro- rata portion

2021 Proxy Statement     27

Table of Contents

EXECUTIVE COMPENSATION — COMPENSATION DISCUSSION AND ANALYSIS

of MIP bonus based on period of service, twelve months of COBRA coverage continuation benefits, and six months outplacement services.

Change of Control Severance Benefits

On October 29, 2020, the Compensation Committee approved an Amended and Restated Change of Control Severance Plan, effective November 1, 2020 (the “Amended Plan”). The Amended Plan enhanced the severance benefits payable to the Company’s NEOs and other key executives in connection with a qualifying termination following a change of control of the Company (other than the Chief Executive Officer, whose change-of-control severance benefits are set forth in his separate employment agreement with the Company). The Compensation Committee determined that enhancing the severance benefits payable in connection with a qualifying termination following a change of control was appropriate to align with market following review and analysis of peer company data.

Please see the “Change of Control and Termination Payments” section for a summary of the severance benefits payable to the NEOs under the applicable plans.

Continued Focus on our Long-Term Success

Stock ownership by our executive officers is a key consideration of our executive compensation philosophy. We believe that executive ownership of our stock demonstrates to investors that our executives have a significant stake in the Company and its future and mitigates risks associated with equity compensation programs.

The ownership guidelines for our current NEOs are:

NEOs have five years after becoming subject to the ownership requirement to achieve the ownership level. Our NEOs are subject to an additional equity holding requirement that applies when ownership requirements have not been met, in which case all equity acquired upon vesting of awards, net of taxes, must be held until the executive achieves the applicable ownership level.

Ownership levels at any particular time are calculated based on the purchase price of shares owned or the actual price on the measurement date, whichever is higher. Sources of ownership for measurement purposes include:

The Compensation Committee reviews the Stock Ownership Guidelines on an annual basis. As of December 27, 2020, all current NEOs were in compliance with the equity holding requirement of the guidelines, although not every NEO has reached the ownership level due to their limited time in position.

Tax and Accounting Policies

Deductibility of compensation expense under Code Section 162(m) of the Internal Revenue Code has not been a material consideration for our Compensation Committee based on the levels and types of compensation we pay. Code Section 162(m) limits the U.S. federal income tax deduction for compensation paid to our NEOs. Commencing with our 2018 fiscal year, the maximum U.S. federal income tax deduction that we may receive for annual compensation paid to any officer covered by Code Section 162(m) is $1,000,000 per officer. For years prior to 2018, we also were permitted to receive a tax deduction for “performance-based” compensation as defined under Code Section 162(m) without regard to the $1,000,000 limitation. However, U.S. tax legislation enacted in December 2017 eliminated the performance-based exception. These new rules became effective starting in 2018 for us, except that certain equity awards (such as stock options) that we granted in 2017 and earlier may still be able to qualify as performance-based compensation. To the extent that in 2018 or any later year, the aggregate amount of any covered officer’s salary, bonus, and amount realized from option exercises and vesting of restricted stock, performance based units or other equity awards, and certain other compensation

28     2021 Proxy Statement

Table of Contents

EXECUTIVE COMPENSATION — COMPENSATION DISCUSSION AND ANALYSIS

amounts that are recognized as taxable income by the officer exceeds $1,000,000 in any year, we will not be entitled to a U.S. federal income tax deduction for the amount over $1,000,000 in that year. The Committee will continue to consider tax implications in making compensation decisions and, when believed to be in the best long-term interests of our stockholders, we may provide compensation that is not fully deductible.

We expense the cost of employee stock-based compensation in accordance with the fair value method contained in the Financial Accounting Standards Board Accounting Standards Codification “Compensation — Stock Compensation” (which we refer to as the ASC Stock Compensation Topic). We recorded stock-based compensation expense of $16.3 million in 2020, $15.3 million in 2019, and $9.9 million in 2018. As a result, the expense related to equity compensation has been and will continue to be a material consideration in our overall compensation program design.

Compensation Committee Report

The Compensation Committee of the Board has reviewed and discussed with management the Compensation Discussion and Analysis included in this Proxy Statement. In reliance on the review and discussions referred to above, the Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in the Company’s Annual Report on Form 10K for the year ended December 27, 2020 and in this Proxy Statement.

COMPENSATION COMMITTEE

Anthony M. Sanfilippo, Chair

Christopher L. Coleman

Sonya E. Medina

This report shall not be deemed to be incorporated by reference by any general statement incorporating by reference this Proxy Statement into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, and shall not otherwise be deemed filed under such acts.

​

​

2021 Proxy Statement     29

Table of Contents

EXECUTIVE COMPENSATION

Summary Compensation Table

The table below summarizes the total compensation paid or earned by the NEOs for each of the last three fiscal years during which the officer was a named executive officer.

​

30     2021 Proxy Statement

Table of Contents

EXECUTIVE COMPENSATION