This is a summary only and does not contain all of the information that you should consider in connection with this Proxy Statement. Please read the entire Proxy Statement carefully before voting.
Annual Meeting of Shareholders
| • Time and Date | | | 8:30 a.m. P.S.T., March 1, 2024 |
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| • Place | | | Live webcast at http://www.virtualshareholdermeeting.com/JACK2024 |
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| • Record date | | | January 5, 2024 |
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| • Voting | | | Shareholders as of the record date are entitled to vote. Each share of common stock is entitled to one vote for each director nominee and one vote for each of the proposals |
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Voting Matters
Shareholders are being asked to vote on the following matters:
| · Items of Business · · · Our Board’s Recommendation · |
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| | 1. | | | Election of Directors (page 15) | | | FOR all Nominees | |
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| | 2. | | | Ratification of KPMG LLP as Independent Registered Public Accountants for FY2024 (page 33) | | | FOR | |
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| | 3. | | | Advisory Vote to Approve Executive Compensation (page 34) | | | FOR | |
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| | 4. | | | Shareholder Proposal Regarding Greenhouse Gas (“GHG”) Emissions Disclosures (page 73) | | | AGAINST | |
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Shareholders also will transact any other business that may properly come before the meeting.
How to Vote
You are entitled to vote at the 2024 Annual Meeting of Shareholders if you were a shareholder of record at the close of business on January 5, 2024, the record date for the meeting. On the record date, there were approximately 19,557,099 shares of the Company’s common stock outstanding and entitled to vote at the Annual Meeting. For more details on voting and the Annual Meeting logistics, refer to the “Questions and Answers” section of this Proxy Statement.
2 JACK IN THE BOX INC. | 2024 PROXY STATEMENT
Corporate Governance Highlights
Jack in the Box Inc. (“Jack in the Box” or the “Company”) is committed to good corporate governance, which we believe promotes the long-term interests of shareholders and strengthens Board and Management accountability. We believe good governance also fosters trust in the Company by all our stakeholders, including our guests, employees, franchisees, suppliers and the communities we serve. The “Corporate Governance” section of this Proxy Statement describes our governance framework, which includes the following features:
| • | Annual election of directors with majority voting |
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| • | Nine of our ten current directors are independent |
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| • | Independent Non-Executive Chairman of the Board |
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| • | Regular executive sessions of independent directors |
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| • | Annual evaluation of CEO and Non-Executive Chairman by independent directors |
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| • | Policy restricting directors to service on no more than three other public company boards |
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| • | No supermajority standards — shareholders may amend bylaws or charter by majority vote |
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| • | Shareholder right to act by written consent |
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| • | CEO and other members of Management regularly meet with the investment community, and the Board is informed of feedback through Investor Relations updates at each Board meeting |
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| • | Annual assessment of Board leadership structure |
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| • | Annual Board, committee, and individual director evaluations |
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| • | Policy requiring long-tenured directors (more than 12 years on the Board) to submit voluntary offer to resign and be reviewed by Nominating & Governance Committee with respect to continued effectiveness |
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| • | Risk oversight by full Board and designated committees |
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| • | Prohibition of hedging, pledging and short sales by Section 16 officers and by Company directors |
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| • | Formal ethics Code of Conduct, ethics hotline, and ethics training and communications to all employees to reinforce a culture of integrity |
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| • | NASDAQ compliant clawback policy |
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JACK IN THE BOX INC. | 2024 PROXY STATEMENT 3
Fiscal 2023 Review
Summary
Fiscal 2023 was a year where Jack in the Box met the challenge of an uncertain operating environment for the restaurant industry and continued to implement its strategy supported by the energy and passion of our restaurant operators, franchisees, and team members across both the Jack in the Box and Del Taco brands.
The fundamental strength and momentum of our two challenger brands has us ready to take the next steps toward becoming a growth-oriented company as we enter 2024.
The excitement around our future primarily relates to four key areas where we continue to manage through the external environment and deliver impressive results:
| • | First, the reliability and consistency of our top-line sales performance, supported by innovation and the execution of a sophisticated and dynamic marketing plan. |
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| • | Second, our growth strategies are beginning to take shape, highlighted by positive net unit growth and two high-performing new market openings in 2023. |
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| • | Third, we have now reached 12% digital sales for both brands, as we continue to become a formidable digital and e-commerce competitor within the restaurant industry. |
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| • | And lastly, 2023 was a big year of progress related to Jack in the Box operations and margins, with significant improvement on key metrics including speed of service and a 4.5% improvement in restaurant level margin vs. 2022. |
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Thank you for your interest and support of Jack in the Box, and we look forward to another landmark year of meaningful progress against our strategy in 2024.
Returns to Shareholders
In fiscal 2023, the Company returned approximately $90 million to shareholders through stock buybacks, as well as another $36 million in dividends. The Company continues to offer a viable long-term opportunity for shareholders seeking a value-oriented stock with a growth-focused strategy in place.
Financial and Operational Results (FY 2023)
| • | Systemwide sales increased 7.5% year-over-year for Jack in the Box and 1.8% for Del Taco. |
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| • | System same-store sales(1) increased 7.3% year-over-year for Jack in the Box, marking the thirteenth consecutive year of same-store sales growth, and increased 1.7% for Del Taco(2). |
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| • | Total revenues increased by $224.2 million, or 15.3%, year-over-year. |
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| • | Net earnings increased to $130.8 million, and diluted earnings per share (“EPS”) increased to $6.30. |
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| • | Restaurant level margin(3) increased to 20.9% for Jack in the Box and decreased to 16.5% for Del Taco. |
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| • | Franchise level margin(3) increased to 41.9% for Jack in the Box and decreased to 36.3% for Del Taco. |
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| (1) | System same-store sales represents changes in sales at company and franchise restaurants open for more than one year. Franchise sales represent sales at franchise restaurants and are revenues of our franchisees. We do not record franchise sales as revenues; however, our royalty revenues and percentage rent revenues are calculated based on a percentage of franchise sales. We believe system same-store sales information is useful to investors as it has a direct effect on the Company’s profitability. |
| (2) | Del Taco same-store sales on a two-year basis and all prior year comparisons are pro forma and based on the time period of Jack in the Box’s full two-year fiscal calendar. We believe Del Taco’s information on this time period is useful to investors as they have a direct effect on the company’s profitability. |
| (3) | Restaurant-Level Margin and Franchise-Level Margin are non-GAAP measures. These non-GAAP measures are reconciled to earnings from operations, the most comparable GAAP measure, in the attachment to this release. See “Appendix A - Reconciliation of Non-GAAP Measurements to GAAP Results.” |
4 JACK IN THE BOX INC. | 2024 PROXY STATEMENT
| • | Adjusted EBITDA(4) increased year-over-year to $339.2 million. |
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| • | Net units increased for both brands. Jack in the Box increased by 5 units year-over-year with 15 closures and 20 restaurant openings during the year. For Del Taco, net units increased by 1 unit year-over-year with 13 closures and 14 restaurant openings during the year. |
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Board Nominees(Proposal 1)
We understand the importance of having a Board comprised of talented people with the highest integrity and the necessary skills and qualifications to oversee our business. The following table provides summary information about our director nominees (all current Directors), who have a diverse and balanced skill set including extensive financial, technology, marketing, consumer brand, franchise, restaurant, and retail experience. We encourage you to review the qualifications, skills, and experience of each of our directors on pages 16.(5)
| · Name · · · Age · · · Director Since · · · Principal Occupation · · · Independent · · · Committee Memberships · · · Other Public Company Boards · |
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| · AC · · · CC · · · NG · · · FC · |
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| | Guillermo Diaz, Jr. | | | 58 | | | 2022 | | | CEO and Founder of Conectado Inc. Chairman, Hispanic IT Executive Council (HITEC) | | | Yes | | | x | | | | | | x | | | | | | — | |
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| | David L. Goebel (Non-Executive Chairman of the Board) | | | 73 | | | 2008 | | | Partner & Faculty Member, ExCo Leadership Group | | | Yes | | | | | | x | | | x | | | | | | • Murphy USA Inc. • Wingstop Inc. | |
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| | Darin S. Harris | | | 55 | | | 2020 | | | CEO Jack in the Box Inc. | | | No | | | | | | | | | | | | | | | — | |
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| | Sharon P. John | | | 60 | | | 2014 | | | President & CEO Build-A-Bear Workshop, Inc. | | | Yes | | | | | | x | | | x | | | | | | • Build-a-Bear Workshop, Inc. | |
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| | Madeleine A. Kleiner | | | 72 | | | 2011 | | | Director (Retired hotel & banking executive attorney) | | | Yes | | | x | | | | | | ✪ | | | | | | • Northrop Grumman Corp. | |
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| | Michael W. Murphy | | | 66 | | | 2002 | | | Director (Retired President & CEO Sharp HealthCare) | | | Yes | | | | | | ✪ | | | | | | x | | | — | |
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| | James M. Myers | | | 66 | | | 2010 | | | Director (Retired retail CEO and Board Chair) | | | Yes | | | x | | | | | | | | | ✪ | | | — | |
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| | Enrique Ramirez | | | 52 | | | 2024 | | | President Buff City Soap | | | Yes | | | | | | | | | | | | | | | • Six Flags Entertainment Corporation | |
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| | Vivien M. Yeung | | | 51 | | | 2017 | | | Strategic Advisor Bain & Company | | | Yes | | | x | | | | | | | | | x | | | — | |
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| ✪ Chair | | | AC Audit Committee | | | FC Finance Committee |
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| x Member | | | CC Compensation Committee | | | |
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| | | NG Nominating and Governance Committee | | | |
| (4) | Adjusted EBITDA represents net earnings on a GAAP basis excluding income taxes, interest expense, net, gains or losses on the sale of company-operated restaurants, other operating expenses (income), net, depreciation and amortization, amortization of cloud computing costs, amortization of favorable and unfavorable leases and subleases, net, amortization of franchise tenant improvement allowances and incentives, COLI losses (gains), net, and pension and post-retirement benefit costs. See “Appendix A - Reconciliation of Non-GAAP Measurements to GAAP Results.” |
| (5) | Director David Tehle, the current Audit Committee Chair, will not be standing for re-election at the Annual Meeting and will be departing as a director immediately following the meeting. Mr. Tehle’s departure is in no way due to any disagreement with the Company nor is it the result of a removal “for cause.” Prior to the Annual Meeting, it is anticipated that the Board will elect to reduce the number of Board seats from ten to nine. Following the Annual Meeting, it is expected that the Company will have no open director seats. |
JACK IN THE BOX INC. | 2024 PROXY STATEMENT 5
Director Attendance— During the time each director nominee served on the Board in fiscal 2023, each attended more than 75% of the meetings of the Board and committees on which he or she served.
Board Composition — The charts below show Board makeup by various characteristics. The average tenure of the Board of Directors is 11 years while the average age is 62 years. For more information on our philosophy regarding the recruitment and diversity of Board members and our Board refreshment policies, please see pages 25.
| · Age and Tenure (As of January 29, 2024) · |
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| · · · # Of Directors · |
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| · Age · |
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| | 44-59 | | | 4 | |
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| | 60-65 | | | 1 | |
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| | 66+ | | | 5 | |
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| | Tenure | | |
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| | 0-4 Years | | | 3 | |
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| | 5-10 Years | | | 2 | |
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| | 10+ Years | | | 5 | |
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| · Board Diversity Matrix (As of January 29, 2024) · |
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| | Total Number of Directors | | | 10 | | |
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| | | | | Female | | | Male | | | Non-Binary | | | Did Not Disclose Gender | |
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| | Part I: Gender Identity | | |
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| | Directors | | | 3 | | | 7 | | | 0 | | | 0 | |
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| | Part II: Demographic Background | | |
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| | African American or Black | | | 0 | | | 0 | | | 0 | | | 0 | |
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| | Alaskan Native or Native American | | | 0 | | | 0 | | | 0 | | | 0 | |
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| | Asian | | | 1 | | | 0 | | | 0 | | | 0 | |
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| | Hispanic or Latinx | | | 0 | | | 2 | | | 0 | | | 0 | |
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| | Native Hawaiian or Pacific Islander | | | 0 | | | 0 | | | 0 | | | 0 | |
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| | White | | | 2 | | | 5 | | | 0 | | | 0 | |
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| | Two or More Races or Ethnicities | | | 0 | | | 0 | | | 0 | | | 0 | |
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| | LGBTQ+ | | | 0 | | |
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| | Did Not Disclose Demographic Background | | | 0 | | |
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Auditors(Proposal 2)
We are asking our shareholders to ratify the selection of KPMG LLP as our independent registered public accountants for fiscal 2024. Although shareholder ratification of the appointment is not required, the Audit Committee believes it is appropriate to seek such ratification. Additional information is provided on page 33.
| · FY 2023 Auditor Fees · |
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| | Audit Fees | | | $2,222,000 | |
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| | Securitization Related Audit Fees | | | $115,000 | |
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| | All Other Fees | | | $30,000 | |
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| | KPMG Total Fees | | | $2,367,000 | |
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6 JACK IN THE BOX INC. | 2024 PROXY STATEMENT
Executive Compensation(Proposal 3)
The Company seeks a non-binding advisory vote from its shareholders to approve the compensation of our NEOs for fiscal 2023 (“Say on Pay”). The Board values shareholders’ opinions, and the Compensation Committee will consider the outcome of the advisory vote when considering future executive compensation decisions.
| • | Our Compensation Discussion and Analysis, starting at page 36, describes the compensation decision-making process, details our programs and policies, and includes an illustration of our compensation framework and key fiscal 2023 performance measures and pay actions. |
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| • | Our executive compensation programs are built on the following principles and objectives: |
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| • | Competitive target pay structure, including base salary, annual incentive, and long-term performance-based incentives that enable us to attract and retain talented, experienced executives who can deliver successful business performance and drive long- term shareholder value. |
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| • | Pay for performance alignment, with the largest proportion of executive pay in the form of performance-based annual and long-term incentives that directly tie payouts, if any, to the achievement of corporate goals, strategies, and stock price performance. |
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| • | Comprehensive goal setting, with financial, operational, and strategic performance metrics that drive long-term shareholder value. |
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| • | Executive alignment with shareholders, through stock ownership and holding requirements that build and maintain an executive’s equity investment in the company. |
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| • | Incentivizing balanced short-term and long- term executive decision-making, through variable compensation components (cash and stock) using varying timeframes. |
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| • | Sound governance practices and principles in plan design and pay decisions, with the Compensation Committee considering both what and how performance is achieved. |
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| • | Management of compensation risk, by establishing incentive goals that avoid placing too much emphasis on any one metric or performance time horizon, thereby discouraging excessive or unwise risk-taking. |
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| • | Our shareholders approved each of the prior four years’ Say on Pay proposals by over 92% of votes cast. |
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JACK IN THE BOX INC. | 2024 PROXY STATEMENT 7
Compensation Governance Practices
The company has several governance practices that we believe support the soundness and efficacy of our compensation programs. In short:
| ☑ What We Do |
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| ☑ | | | Compensation Committee composed entirely of independent directors, who meet regularly in executive session without Management present. Pages 56. |
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| ☑ | | | Independent compensation consultant who works exclusively for the Compensation Committee (performs no other work for the Company). Page 44 |
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| ☑ | | | Robust stock ownership and holding requirements. Page 51. |
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| ☑ | | | Compensation Risk Committee that analyzes compensation plans, programs, policies and practices. Page 57. |
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| ☑ | | | Compensation Committee discretion to reduce payouts under incentive plans. Page 57. |
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| ☑ | | | Clawback policy providing ability to recover incentive cash compensation and performance-based equity awards based on financial results that were subsequently restated. Page 57. |
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| ☑ | | | Annual incentive and long-term incentive compensation based on rigorous performance goals that are key metrics for business success and include maximum payout caps. Page 57. |
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| ☒ What We Don’t Do |
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| ☒ | | | Section 16 officers and directors are prohibited from hedging, pledging, or holding Company stock in margin accounts. Pages 35. |
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| ☒ | | | No dividends or dividend equivalents are paid on unvested restricted stock units (RSUs) or performance shares. Page 43. |
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| ☒ | | | No repricing of equity is permitted without shareholder approval. Page 35. |
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| ☒ | | | No tax gross-ups except in the case of qualified relocation expenses (which requires Compensation Committee approval in the case of executive officers). Page 58. |
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| ☒ | | | No RSU or option awards provide for vesting upon a change in control without a “double trigger” (termination and consummation of the change in control) unless the award is not assumed or substituted for by the acquirer. Pages 64. |
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Shareholder Proposal Regarding Greenhouse Gas (“GHG”) Emissions Disclosures(Proposal 4)
The Company received a shareholder proposal from The Accountability Board (the “Accountability Board Proposal”). Additional information regarding the Accountability Board Proposal is provided on pages 73.
Additional Information
Please see the “Questions and Answers” section that immediately follows for important information about the proxy materials, voting, the Annual Meeting, Company documents, communications, and the deadlines to submit shareholder proposals for the 2025 Annual Meeting of Shareholders.
8 JACK IN THE BOX INC. | 2024 PROXY STATEMENT
| | | | QUESTIONS AND ANSWERS | |
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9357 Spectrum Center Blvd
San Diego, California 92123
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
March 1, 2024
