Christopher Pappas
Chefs' WarehouseAbout Christopher Pappas
Founder of The Chefs’ Warehouse (CHEF); Chief Executive Officer since 1985; Chairman and Director since the IPO. Age 65, B.A. in Business Administration from Adelphi University (1981). 2024 performance highlights underpin “pay-for-performance”: revenue rose ~10.5% to ~$3.8B YoY, Adjusted EBITDA was $219.0M (vs. $193.2M in 2023), and 5‑yr TSR index ended 2024 at 128 (base 100) . Governance posture includes CEO/Chair dual role with an independent Lead Director and 100% independent committees .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| The Chefs’ Warehouse, Inc. | Chief Executive Officer; President; Chairman; Director | CEO since 1985; President since 2009; Chairman/Director since IPO | Founder-operator overseeing procurement, sales, marketing, strategy, and operations; led geographic and category expansions . |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| International Foodservice Distributors Association | Director | Not disclosed | Industry advocacy and network in foodservice distribution . |
| Hudson National Golf Club | Director | Since Oct 20, 2018 | Relationship touchpoint; CHEF sold $292,994 of products to the club in 2024 . |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary (paid) | $1,020,889 | $1,020,532 | $1,120,621 |
| 2024 Base Salary Rate | — | — | $1,122,585 |
| All Other Compensation | $97,041 | $181,336 | $160,767 |
| Perquisites detail (2024): Aircraft | — | — | $109,436 |
| Perquisites detail (2024): Auto allowance | — | — | $30,000 |
Notes:
- 2024 base salaries for NEOs were increased 10% to align with market and retention goals .
- Perquisites include aircraft usage and auto allowance; tax reimbursements are limited to imputed income on group life insurance .
Performance Compensation
Annual Cash Incentive (2024)
| Item | Detail |
|---|---|
| Target bonus (% of base salary) | 100% |
| Performance metric | Adjusted EBITDA (AEBITDA) only |
| Threshold / Target / Max AEBITDA | <$190M = 0%; $215M = 100%; ≥$230M = 200% (linear) |
| Multiplier kicker | If AEBITDA ≥$220M, CEO and COO payout = 300% of target |
| Actual AEBITDA (2024 Plan) | $219M; below $220M kicker threshold |
| Payout (CEO) | $1,122,585 (100% of target) |
Long-Term Incentives (2024 grants; mix and metrics)
| LTI Element | Weight | Target Design | Vesting/Performance |
|---|---|---|---|
| Time-based RS (RSA) | 30% of LTI value | Service-based retention | Vests 1/3 on each of March 4, 2025/2026/2027 |
| Performance RS (PRSA) | 70% of LTI value | 3-year performance period (fiscal 2024–2026); metrics below | PRSA payout 0–200% based on metrics below |
PRSA Performance Curve and Weights:
| Metric | Weight | Threshold | Target | Max |
|---|---|---|---|---|
| AEBITDA | 70% | ≤$210M = 0% | $240M = 100% | ≥$260M = 200% |
| ROIC | 15% | ≤10% = 0% | 14% = 100% | ≥15% = 200% |
| Share Price (20-day avg) | 15% | ≤$30 = 0% | $40 = 100% | ≥$45 = 200% |
CEO 2024 Equity Grant Sizing and Shares (using $34.45 30-day avg):
| Component | Grant-date Value ($) | Shares at Target | Shares at Max (200%) |
|---|---|---|---|
| 2024 RSA | $1,010,040 | 29,319 | — |
| 2024 PRSA | $2,425,170 | 68,411 | 136,822 |
Change-in-control settlement for equity: double-trigger; PRSAs convert to time-based at target upon a CIC during performance period .
Special CIC PSUs (awarded Feb 25, 2025)
- CEO grant: 250,000 PSUs that vest only upon a Qualifying Change in Control within 4 years and upon achieving specified deal premium thresholds over a 180-day VWAP baseline; 0–100% vesting; settled in shares (or cash if insufficient plan shares) .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership (CEO) | 2,813,447 shares; 6.9% of outstanding |
| Shares outstanding (record date) | 40,988,475 |
| Includes | 95,908 options currently exercisable; 290,352 shares in a grantor retained annuity trust |
| Outstanding options | 95,908 at $20.23; expire 3/7/2026 |
| Unvested equity at FY-end 2024 | 154,048 time/perf-based shares (mix incl. earned PRSAs pending service) |
| Additional unearned PRSAs (max shares) | 136,822 (2024 grant); 131,682 (2023 grant) potential at max |
| Ownership guidelines (CEO) | 6x salary; CEO complies |
| Hedging/Pledging | Hedging prohibited; pledging generally prohibited subject to limited exceptions |
Vesting supply near-term:
- 2024 time-based RS: 1/3 tranches vesting March 4, 2025–2027 .
- Legacy time-based RS: tranches vesting Feb 24/28, 2025–2026 .
Employment Terms
| Term | Detail |
|---|---|
| Employment agreement | 3-year term with automatic 1-year renewals unless either party gives 60 days’ notice |
| CEO severance (non-CIC) | 2x base salary + target bonus; lump-sum in lieu of benefits continuation and outplacement |
| CEO CIC severance | 3x base salary + 3x target bonus; pro-rata bonus; lump-sum benefits/outplacement; best-net cutback (no tax gross-up) |
| Equity treatment (CIC) | Double-trigger acceleration for assumed awards; PRSAs convert to time-based at target if CIC during performance period |
| Non-compete / non-solicit | 1 year post-termination |
Potential Payments (illustrative, as of 12/27/2024):
| Scenario | Total (CEO) |
|---|---|
| Involuntary, Not-for-Cause | $2,325,170 (cash severance) |
| Death/Disability | Equity acceleration value $22,309,557 |
| CIC (no termination) | Equity acceleration value $22,309,557 |
| CIC + Qualifying Termination | ~$28,078,509 total (equity plus cash) |
Performance & Track Record
Financial trajectory and TSR context:
| Metric | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| Company TSR Index ($100 base) | 63 | 86 | 88 | 78 | 128 |
| Net Income (GAAP, $000s) | (82,903) | (4,923) | 27,750 | 34,590 | 55,479 |
| Adjusted EBITDA (Company Selected Metric, $000s) | (42,880) | 61,297 | 157,868 | 193,236 | 219,007 |
Additional 2024 highlights:
- Revenue increased ~10.5% to ~$3.8B; investments in capacity (Richmond, CA processing and UAE distribution expansion) .
- 2024 AEBITDA used for incentives excluded acquisition effects; annual cash plan paid at target (100%) .
Board Governance
- Board service: CEO/Chair, Director since IPO; not independent .
- Dual-role implications: Board deliberately combines CEO/Chair citing continuity and industry expertise; mitigated by independent Lead Director (Steven F. Goldstone) and fully independent committees .
- Committee membership: CEO is not on committees; Audit (Owens, Brown, Walton‑Ruskin), Compensation & Human Capital (Lewis chair; Peretz; Walton‑Ruskin), Nominating/Governance (Lewis chair; Goldstone; Weinstein), ESG (Brown chair; Lewis; Weinstein chair effective at Annual Meeting) .
- Independence and good governance: 82% independent directors; 100% independent committees; executive sessions; clawback policy; stock ownership guidelines; anti-hedging; lead independent structure .
- Director compensation (structure): $180,000 retainer (cash/equity mix) plus committee/lead fees; CEO receives no additional director pay .
Compensation Structure Analysis
- 2024 changes:
- Removed revenue from annual bonus; AEBITDA-only to emphasize bottom-line performance; introduced 300% kicker for CEO/COO at ≥$220M AEBITDA (not achieved; actual $219M) .
- Increased AEBITDA weight within PRSAs (to 70%); maintained ROIC and share price goals for long-term alignment .
- Across-the-board 10% base salary increases to retain/motivate executives .
- Peer benchmarking: Primary peer group (18 companies across food, distribution, retail adjacencies) used for level setting; secondary group (Sysco, US Foods, PFGC, UNFI) used to inform design; compensation not strictly benchmarked to a specific percentile; Committee references 25th–75th percentiles and median .
- Say-on-Pay support: 2024 approval >93%—indicating investor support for program design .
- Clawback policy: Dodd‑Frank/Nasdaq compliant, adopted Aug 2023; applies to incentive-based comp post Oct 2, 2023; all 2019 plan awards also subject to clawback as permitted by law .
Director Compensation (for Board service context)
| Item | Amount |
|---|---|
| Annual retainer (non-employee directors) | $180,000 (cash + RSUs) |
| Committee/lead fees | Audit member $12,500; chair $25,000; Comp member $10,000; chair $20,000; N&G member $7,500; chair $15,000; ESG member $7,500; chair $15,000; Lead Director $15,000 |
| Director ownership guideline | 5x equity component of retainer; 3-year phase-in; holding requirements until met |
Related Party Transactions (governance red flags to monitor)
- Lease: One distribution facility leased from an entity owned 100% by Christopher and John Pappas; paid $673,575 in 2024 .
- Family employment: Brother-in-law (J. Pappas), son of J. Pappas, and CEO’s son-in-law employed; comp consistent with peers per disclosure .
- Vendor: $168,000 to Architexture Studios, owned by CEO’s sister-in-law, for design services (2024) .
- Customer overlap: $292,994 in sales to Hudson National Golf Club, where CEO is a director (2024) .
Policy: Related party transactions require Audit Committee pre-approval, must be on terms no less favorable than third-party equivalents .
Equity Ownership & Director Alignment Details
| Item | Detail |
|---|---|
| CEO beneficial ownership | 2,813,447 shares (6.9%); includes exercisable options and trust-held shares |
| Board independence | 7 of 9 independent nominees; CEO and COO not independent |
| Executive hedging/pledging | Prohibited hedging and generally prohibits pledging for all employees and directors |
Say-on-Pay & Shareholder Feedback
- 2024 Say-on-Pay: >93% FOR; Committee read this as endorsement of pay-for-performance .
- Stockholder outreach: Management engaged holders of ~40% of voting shares in 2024 to refine governance and comp programs .
Risk Indicators & Red Flags
- Dual role CEO/Chair; mitigated by Lead Independent Director and fully independent committees .
- Related party lease and family transactions—monitored under policy but noteworthy for governance diligence .
- Special CIC PSUs (2025) signal heightened sale/strategic transaction alignment; vest only on successful change-in-control at premium thresholds .
- Aircraft personal use ($109,436) and auto allowance; modest perquisite footprint overall relative to total comp .
- Anti-hedging/pledging and clawback policies reduce alignment risk .
Compensation Committee Analysis
- Composition: Independent directors only; current members include Aylwin Lewis (chair), Richard Peretz, Debra Walton‑Ruskin (2024 roster) .
- Independent advisor: FW Cook; independence assessed and confirmed; advised on design, peer groups, and PVP disclosures .
Performance Compensation (CEO) – Detailed Table (2024)
| Component | Metric | Weight | Target | Actual/Status | Payout | Vesting/Notes |
|---|---|---|---|---|---|---|
| Annual Bonus | AEBITDA | 100% | $215M | $219M | 100% of target | Paid Q1’25 ($1,122,585) |
| PRSA | AEBITDA | 70% | $240M | In-cycle | 0–200% | Measures FY2024–2026 |
| PRSA | ROIC | 15% | 14% | In-cycle | 0–200% | Measures FY2024–2026 |
| PRSA | Share Price | 15% | $40 (20-day avg) | In-cycle | 0–200% | Highest 20-day average test to FY2026 |
| RSA | Service | — | — | Ongoing | — | Vests 1/3 annually 2025–2027 |
Multi-Year Compensation (CEO)
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary | $1,020,889 | $1,020,532 | $1,120,621 |
| Stock Awards (Grant-date FV) | $2,951,924 | $3,061,588 | $3,389,276 |
| Non-Equity Incentive | $1,020,532 | $765,399 | $1,122,585 |
| All Other Compensation | $97,041 | $181,336 | $160,767 |
| Total | $5,090,386 | $5,028,855 | $5,793,249 |
Compensation Peer Group (used for level-setting)
- Primary (18 companies): 1‑800‑FLOWERS.COM; The Andersons; B&G Foods; BlueLinx; Cal‑Maine Foods; Fresh Del Monte Produce; GMS; The Hain Celestial Group; Hub Group; J&J Snack Foods; Lancaster Colony; Pool; Reynolds Consumer Products; SiteOne Landscape Supply; SpartanNash; Sprouts Farmers Market; TreeHouse Foods; Werner Enterprises .
- Secondary (design reference): Sysco; US Foods; Performance Food Group; United Natural Foods .
Director Service History, Committees, Independence
- Director since IPO; Chairman of the Board; not independent as CEO .
- Lead Independent Director: Steven F. Goldstone; responsibilities include agenda-setting input, liaison role, and chairing executive sessions .
- Committee roles: Pappas is not on Audit, Compensation & Human Capital, Nominating/Governance, or ESG committees; all committees fully independent .
Employment & Contracts (additional details)
- Auto-renewing employment agreement (since Aug 2, 2011) with severance on termination without cause; non-compete and non-solicit for 1 year post-termination .
- Executive CIC Plan: double-trigger cash severance and equity treatment; best-net cutback for excise tax; no gross-ups .
Say‑on‑Pay & Shareholder Engagement
- 2024 SOP approval >93%; compensation philosophy and design validated through outreach with holders of ~40% of voting shares .
Investment Implications
- Alignment and upside leverage: High at-risk mix (AEBITDA/ROIC/price PRSAs) and CEO’s 6.9% ownership support shareholder alignment; strict anti-hedging/pledging and clawback further de-risk incentives .
- Retention vs. sale optionality: 2025 special CIC PSUs concentrate value realization in premium change‑of‑control outcomes—read as a potential strategic alternatives signal; monitor deal rumors and proxy amendments for follow-through .
- Execution and governance watchpoints: Related‑party lease and family transactions exist but are policy‑governed; CEO/Chair dual role mitigated by Lead Independent Director and independent committees—nonetheless, continue to monitor committee independence and say-on-pay trends for any slippage .
- Performance momentum: 2024 revenue growth (~10.5%) and AEBITDA expansion to $219M underwrite incentive payouts at target; sustaining ROIC and reaching share price hurdles are key to PRSA realization and long-only alignment; track AEBITDA, ROIC trajectory and vesting calendars for potential insider selling pressure around vest dates .