Keith Carango
CHEESECAKE FACTORYAbout Keith Carango
Keith T. Carango is President of The Cheesecake Factory Bakery Incorporated and a Named Executive Officer of The Cheesecake Factory Incorporated . His annual incentive is uniquely tied 50% to company adjusted EBITDAR, 25% to bakery division adjusted Gross Contribution, and 25% to bakery division strategic objectives, with 2024 actual bonus paid at 88.4% of target ($295,703 vs. target $334,600) reflecting underperformance on bakery Gross Contribution relative to targets . Company-level performance context: 2024 cumulative TSR index 134.32, net income $157 million, and adjusted EBITDAR $575 million; 2023 TSR 94.62, net income $101 million, adjusted EBITDAR $498 million; 2022 TSR 86.27, net income $43 million, adjusted EBITDAR $418 million .
Past Roles
Not disclosed in the latest proxy .
External Roles
Not disclosed in the latest proxy .
Fixed Compensation
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Salary ($) | $441,827 | $458,798 | $492,808 |
Additional disclosed base salary setting: Fiscal 2024 annualized base salary was $478,000 (+3.4% YoY) .
Performance Compensation
Annual Cash Incentive – Design and Outcomes
| Element | FY 2023 | FY 2024 |
|---|---|---|
| Target bonus as % of salary | 65% | 70% (target increased by 5% for NEOs other than CEO) |
| Bonus structure weights | 50% Company adjusted EBITDAR; 25% Bakery adjusted Gross Contribution; 25% Bakery strategic objectives | 50% Company adjusted EBITDAR; 25% Bakery adjusted Gross Contribution; 25% Bakery strategic objectives |
| Threshold/Target/Max mechanics | Financial: 25%-150% of target based on achievement; Strategic capped at 100% | Financial: 25%-150% of target based on achievement; Strategic capped at 100% |
| Target Award ($) | $300,625 | $334,600 |
| Actual Payout ($) | $223,890 (74.48% of target) | $295,703 (88.4% of target) |
FY 2024 performance component details:
| FY 2024 Objective | Threshold/Target/Max (millions) | Actual (millions) | Payout vs Target |
|---|---|---|---|
| Company Adjusted EBITDAR H1 (37.5% weight) | $210.8 / $281.1 / $323.3 | $287.2 | 103% payout |
| Company Adjusted EBITDAR H2 (37.5% weight) | $204.2 / $272.2 / $313.0 | $287.3 | 112% payout |
| Bakery Adjusted Gross Contribution H1 (12.5% weight) | $12.4 / $16.5 / $19.0 | $14.6 | 74% payout |
| Bakery Adjusted Gross Contribution H2 (12.5% weight) | $12.1 / $16.1 / $18.5 | $12.4 | 33% payout |
| Bakery Strategic Objectives (25% weight) | Specified initiatives | 85% payout |
Long-Term Equity Incentives – Grants and Vesting
| Grant Year | Grant Date | PSAs (#) | Time-based RS (#) | Options (#) | Grant Date Fair Value ($) |
|---|---|---|---|---|---|
| 2024 | 02/15/2024 | 7,380 | 7,380 | — | $515,272 |
| 2023 | 02/16/2023 | 6,380 | 6,380 | — | $257,880 + $257,880 = $515,760 (reported SCT $515,759) |
Vesting schedules: RS/PSA awards generally vest 60% at 3rd anniversary of grant, 20% at 4th, and 20% at 5th anniversary (PSAs subject to performance attainment); stock options vest 20% per year over five years .
Performance share attainment (2012–2024 cycle conclusion): PSAs granted in 2022 for the 2022–2024 period were earned at 78% of target based on three equally weighted goals: total annual revenue growth, adjusted average sales per productive square foot, and adjusted annual controllable profit; earned shares then vest 60% at year 3 and 20% at years 4 and 5 .
Option Awards and Exercises/Vesting
| Item | Details |
|---|---|
| Options exercised in 2024 | None |
| Restricted shares vested in 2024 | 7,572 shares; value realized $268,222 |
| Outstanding options (select excerpts) | 5,200 @ $61.59 exp. 03/02/2025; 8,300 @ $47.06 exp. 02/15/2026; 3,000 @ $51.74 exp. 04/05/2026; 9,200 @ $46.03 exp. 02/13/2027; 24,000 (6,000 unexercisable) @ $40.16 exp. 02/18/2030 |
Equity Ownership & Alignment
| Ownership and Alignment | Data |
|---|---|
| Beneficial ownership | 96,400 shares; less than 1% of outstanding |
| Stock ownership guidelines | Presidents (including bakery president) required to own stock equal to 2x base salary |
| Hedging/pledging | Company prohibits hedging and pledging by employees and directors |
| Clawback | Comprehensive clawback policy covering bonus and equity; mandatory recovery on restatements and discretionary recovery for fraud/intentional misconduct over prior 3 years |
| Equity outstanding under Stock Plan through 3/24/2025 | Stock options: 50,500; Restricted shares: 44,423 (Carango) |
| Current unvested awards and market value (as of 12/31/2024) | RS/PSA unvested: 6,380 (PSA) and 6,380 (RS) from 02/16/2023; 7,380 (PSA) and 7,380 (RS) from 02/15/2024; each set carrying market value $302,667 and $350,107, respectively, at year-end |
Note: RS/PSAs vest per schedule above; no automatic single-trigger vesting solely upon change in control—acceleration requires awards not being assumed or a qualifying termination (“double trigger”) per plan/award agreements .
Employment Terms
| Provision | Key Terms |
|---|---|
| Agreement term | NEO Employment Agreements have initial ~1-year terms with automatic annual renewals unless notice is given |
| Severance (without cause / constructive termination / death/disability) | 12 months of base salary; pro-rata annual bonus based on actual performance; 12 months of health & welfare benefits; equity installments scheduled to vest within 24 months accelerate (performance-based awards subject to attainment) |
| Change-in-control treatment | No single-trigger acceleration; if awards are not assumed, time-based awards vest and performance awards vest at greater of pro-rated target or actual; if assumed, full vesting upon qualifying termination within 12–18 months depending on grant cohorts; performance vesting only upon achievement |
| Restrictive covenants | Confidentiality, non-compete, and non-solicit provisions apply |
| Definitions | Constructive Termination and Termination With Cause definitions set out in NEO agreements |
| 280G/409A | “Best net” 280G (no excise tax gross-ups); specified 409A make-whole for taxes related solely to prior agreement timing |
| Perquisites | Auto program and life insurance; 2024 amounts: Automobile Program $27,574; Life Insurance $3,397; Total other comp $30,971 |
| Deferred comp | No contributions or balances for Carango in 2024 |
Potential payments table (as of 12/31/2024 assumptions):
| Scenario | Cash Severance ($) | Pro-Rata Bonus ($) | Equity Acceleration ($) | Benefits ($) | Total ($) |
|---|---|---|---|---|---|
| Change in Control – awards assumed/continued | — | — | — | — | — |
| Change in Control – awards not assumed (single trigger for non-assumed awards per plan) | — | — | $2,075,251 | — | $2,075,251 |
| Qualifying termination within 18 months after Change in Control | $478,000 | $295,703 | $2,075,251 | $21,963 | $2,870,917 |
| Termination without Change in Control / disability / death | $478,000 | $295,703 | $2,075,251 | $21,963 | $2,870,917 |
| Termination with Cause or voluntary (incl. retirement) | — | — | $1,081,240 | — | $1,876,906 |
Investment Implications
- Alignment and pay-for-performance: Carango’s incentive structure adds bakery-specific financial accountability (Gross Contribution) to corporate EBITDAR, improving divisional line-of-sight. 2024 bonus at 88.4% of target reflects underperformance in bakery Gross Contribution despite company EBITDAR outperformance, indicating incentive sensitivity to divisional execution .
- Equity mix and vesting: Recent awards are exclusively RS/PSAs (no new options), with multi-year cliff-heavy vesting (60% at year 3). Upcoming potential vesting dates create defined windows for share delivery and possible selling pressure: 2024 grants vest March 2027/2028/2029; 2023 grants vest February 2026/2027/2028 .
- Retention risk and severance economics: Severance at 1x salary plus pro-rata bonus and double-trigger equity acceleration post-CIC is moderate; absence of excise gross-ups and single-trigger acceleration (if awards assumed) reduces pay inflation and transactional risk, while non-compete and non-solicit terms support retention .
- Ownership and governance: Beneficial ownership of 96,400 shares (<1%) with 2x salary ownership guideline for presidents, formal clawback, and prohibition on pledging/hedging mitigate misalignment and governance risk; directors’ say-on-pay support historically strong (98% approval in 2024) .
- Trading signals: Option expirations in 2026–2027 and 2030 at strikes $46–$62 may be less economically relevant given recent RS/PSA emphasis; watch scheduled vesting events and annual bonus outcomes tied to bakery Gross Contribution for potential insider selling windows and short-term sentiment impacts .