James Leddy

About James Leddy

James “Jim” Leddy, age 61, is Chief Financial Officer and Assistant Corporate Secretary of The Chefs’ Warehouse (CHEF) since November 11, 2017; prior roles include interim CFO and SVP Treasurer at JetBlue, SVP Treasury & Cash Management at NBCUniversal, and Senior Technical Advisor at GE; he holds an MBA (UConn) and BA in Economics (Fordham) . CHEF’s FY2024 performance under his finance leadership: revenue rose ~10.5% to ~$3.8B, Adjusted EBITDA reached ~$219M, GAAP net income was ~$55M, and TSR since 2019 reached 128 vs 100 base, reflecting strong top-line and margin progression .

Past Roles

External Roles

Fixed Compensation

Multi-year compensation (NEO summary table):

2024 base salary increased 10% to $514,098 (programmatic increase for all NEOs); actual salary paid reflects payroll timing . 2024 perquisites for Leddy included medical/dental/vision premiums ($4,551), life insurance premium ($446), tax reimbursement ($1,980), short-term disability ($216); no auto/aircraft allowances .

Performance Compensation

Annual cash incentive (2024 Plan):

• Target bonus: 75% of base salary ($385,574); payout at 100% of target ($385,574) based on AEBITDA achievement .
• Corporate metric and scale: AEBITDA thresholds—0% below $190M; 100% at $215M; 200% at ≥$230M; CFO payout linearly interpolated; FY2024 AEBITDA determined under plan was $219M (CEO/COO would have had 300% at ≥$220M, not reached) .

Long-term equity (2024 grants; mix emphasizes pay-for-performance):

• Time-based Restricted Stock (RSAs): Target value $431,112; 11,189 shares vesting 1/3 annually on March 4, 2025/2026/2027 .
• Performance RSAs (PRSAs): Target value $396,650; 11,189 target shares; 22,378 at max (200%); performance period FY2024–FY2026 .

Performance plan details and weights:

Vesting/Change-in-Control terms:

• RSAs vest 1/3 annually (March 4, 2025–2027) ; PRSAs earned over FY2024–FY2026 and then service-vest; on double-trigger CIC, performance awards convert at target and accelerate upon qualifying termination .

2024 stock vested (liquidity/pressure indicator):

Equity Ownership & Alignment

Beneficial ownership as of March 17, 2025:

• James Leddy: 195,162 shares (<1%), includes performance shares with voting rights pursuant to PRSA agreements (58,146 shares counted at maximum achievement) .
• Company-wide executive alignment features: Stock ownership guidelines for executives (policy in place), anti-hedging policy (no hedging), and general prohibition on pledging with limited exceptions; CEO guideline explicitly 6x salary (CEO compliant) .

Unvested and unearned awards (as of FY2024 year-end):

Policy alignment:

• Clawback: Board adopted in Aug 2023 (NASDAQ Rule 5608/Dodd‑Frank); applies to incentive compensation and equity awards; recovery upon accounting restatement .
• Insider Trading Policy: prohibits hedging and short sales; pledging generally prohibited subject to limited exceptions .

Employment Terms

Employment/Severance:

• Offer letter (Oct 17, 2017; effective Nov 11, 2017): annual salary initially $375,000; eligible for annual bonus and equity; severance equal to one year of base salary if terminated without cause (or until new role ≥80% of salary), subject to CIC plan terms .
• Severance agreement (amended & restated): Not in CIC—lump sum of 1.5x base salary + target bonus, plus benefits/outplacement cash; earned but unpaid prior-year bonus paid .
• Executive Change-in-Control Plan (double trigger): 2x base salary + 2x target bonus; pro-rated bonus; benefits/outplacement cash; equity accelerates per plan terms; excise tax cut (“best net”)—no gross-ups .

Modeled payouts (as of Dec 27, 2024):

Special CIC PSUs (Retention/transaction-linked):

• Granted Feb 25, 2025: 41,625 PSUs to Leddy; 4-year term; vest only upon qualifying change-in-control with pre-set deal premium thresholds vs 180-day VWAP; linear interpolation; continuous service required with limited pre‑CIC exceptions; settles in shares subject to plan capacity or cash .

Restrictive covenants:

• Non-compete/non-solicit provisions specified for founders; CFO governed by severance/CIC plan terms and company policies; standard confidentiality and insider trading policy apply .

Compensation Structure Analysis

• Cash vs equity mix shift: 2024 program increased base salaries by 10% across NEOs; LTI maintained significant performance weighting (50% PRSAs for CFO) to balance retention and pay-for-performance .
• Metrics focus: Removal of revenue from annual plan in 2024, sharpened emphasis on bottom-line AEBITDA; PRSA weighting further increased toward AEBITDA (70%), with ROIC and stock price components to balance profitability and market valuation .
• Governance signals: Clawback adopted, no hedging/pledging, independent comp advisor (FW Cook), double-trigger CIC across equity and severance—shareholder-friendly features; 2024 say-on-pay approval >93% supports program credibility .
• Red flags: Special CIC PSUs could incentivize transaction pursuit; however, vesting requires significant deal premiums, aligning payouts with shareholder value creation in a sale scenario .

Compensation Peer Group (Benchmarking)

Primary peer group (18 companies, updated Nov 2023) spans food-related distributors/marketers (e.g., Cal-Maine, Fresh Del Monte, Sprouts, TreeHouse, Reynolds); CHEF’s revenues and market cap were between 25th percentile and median at selection; Committee references 25th/75th percentile ranges and median, but does not directly “target” a specific percentile for each component . Secondary peer group used to inform design: Sysco, US Foods, PFG, UNFI .

Say-on-Pay & Shareholder Feedback

• 2024 say-on-pay approval: >93% FOR; ongoing investor outreach influenced 2024 comp program refinements .
• Cooperation Agreement (Mar 2024) with Legion Partners introduced three new independent directors and an Operational & Financial Performance Task Force focused on margin improvement; standstill extensions tied to AEBITDA margin thresholds (≥5.7% FY2024; ≥6.2% FY2025 guidance mid-point) .

Investment Implications

• Alignment: CFO’s pay design ties annual cash to AEBITDA and long-term equity to AEBITDA/ROIC/share price—multi-dimensional performance linkage that should support margin expansion and capital discipline; clawback and no-hedge/pledge policies strengthen alignment .
• Retention vs supply overhang: Significant unvested/uneaned equity (time-based and PRSAs) plus special CIC PSUs incentivize tenure and performance; 2024 vesting ($1.83M realized) indicates ongoing equity monetization cadence, but vest schedules spread through 2026–2027, moderating near-term insider selling pressure .
• Transaction optionality: CIC PSUs reward only if a high-premium change-in-control occurs, aligning with shareholders in a sale scenario—but introduce event-driven optionality into executive incentives .
• Execution risk: Elevated leverage and margin sensitivity in a low-margin distribution model necessitate rigorous AEBITDA and ROIC improvements; the Task Force and added independent directors provide oversight; FY2024 revenue growth (10.5%) and AEBITDA ($219M) suggest traction, but AEBITDA targets for PRSAs are steeper, keeping payouts at risk until FY2026 measurement .