John Pappas
Chefs' WarehouseAbout John Pappas
Founder of The Chefs’ Warehouse; Vice Chairman since March 1, 2011 and Chief Operating Officer since February 24, 2022; age 61, with 35+ years leading logistics, facilities, and global procurement across CHEF’s distribution network . 2024 company performance under the Pappas leadership team: net sales rose 10.5% to ~$3.79B and adjusted EBITDA reached ~$219.0M; Q4 net sales topped $1.03B with adjusted EBITDA of $68.2M .
| Metric | FY 2023 | FY 2024 |
|---|---|---|
| Net Sales ($000s) | $3,433,763 | $3,794,212 |
| Operating Income ($000s) | $100,943 | $128,207 |
| Adjusted EBITDA ($000s) | $193,236 | $219,007 |
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| The Chefs’ Warehouse, Inc. | Chief Operating Officer | 1985–Mar 1, 2011 | Built and led logistics and facility operations; foundational role in specialty distribution scaling |
| The Chefs’ Warehouse, Inc. | Vice Chairman (Board Director) | Mar 1, 2011–Present | Governance and strategy development; oversight across North American distribution centers |
| The Chefs’ Warehouse, Inc. | Chief Operating Officer | Feb 24, 2022–Present | Oversees entire North American distribution network; execution focus on facility capacity and operational efficiency |
External Roles
None disclosed for John Pappas in the latest proxy materials .
Fixed Compensation
| Component | 2024 Value | Notes |
|---|---|---|
| Base Salary | $616,919 | Management-wide +10% base increase in 2024 to align with market and retention |
| Target Annual Bonus (% of Salary) | 100% | 2024 cash incentive based on AEBITDA; linear payout scale |
| Actual Annual Bonus Paid | $616,919 (paid Q1 2025) | 2024 AEBITDA achieved at 100% target; J. Pappas payout at target |
Perquisites (2024): monthly car allowance $24,000; imputed personal aircraft cost $127,059 (includes $11,696.08 spousal gross-up); medical/dental/vision premiums $8,868; life insurance premiums $446; tax reimbursement $1,980; STD premiums $216; 401(k) match $10,350 .
Performance Compensation
2024 Annual Cash Incentive (AEBITDA-focused)
| Metric | Weighting | Target | Actual | Payout | Vesting/Payment Timing |
|---|---|---|---|---|---|
| Adjusted EBITDA (AEBITDA) | 100% of cash plan | $215M target; $190M no payout; $230M max; linear interpolation | $219M (ex acquisitions) | 100% of target ($616,919) | Paid in Q1 2025 |
Additional term: If AEBITDA ≥ $220M, CEO and John Pappas would receive 300% of target; actual was $219M so 300% kicker did not apply .
2024 Long-Term Equity Incentives (RSAs/PRSAs)
Design mix: 70% PRSAs (performance-based restricted stock) and 30% RSAs (time-based) for John Pappas; three-year performance period; PRSA metrics weighted AEBITDA 70%, ROIC 15%, Share Price 15%, max payout 200% of target .
| Metric | Weighting | Threshold | Target | Max |
|---|---|---|---|---|
| AEBITDA | 70% | ≤$210M → 0% | $240M → 100% | ≥$260M → 200% |
| Share Price (20-day avg) | 15% | ≤$30 → 0% | $40 → 100% | ≥$45 → 200% |
| ROIC | 15% | ≤10% → 0% | 14% → 100% | ≥15% → 200% |
Grant sizing (using $34.45 30-day trailing avg price):
| Award | Grant Date | Value | Shares at Target | Shares at Max |
|---|---|---|---|---|
| 2024 RSAs | Mar 4, 2024 | $555,058 | 16,112 | N/A |
| 2024 PRSAs | Mar 4, 2024 | $1,261,843 | 35,595 | 75,190 |
RSA vesting schedule: one-third annually on the first through third anniversaries of Mar 4, 2024 (i.e., Mar 4, 2025/2026/2027) .
Special CIC PSUs granted Feb 25, 2025: 41,625 PSUs to John Pappas, vest only upon a qualifying change in control within 4 years with deal-premium thresholds over the 180-day VWAP; 0–100% vesting by linear interpolation; subject to double-trigger service exceptions; settlement in stock if plan capacity available or cash-equivalent otherwise .
Equity Ownership & Alignment
Beneficial Ownership (as of Mar 17, 2025)
| Holder | Shares Beneficially Owned | % Outstanding | Notes |
|---|---|---|---|
| John Pappas | 1,313,758 | 3.2% | Includes 400,000 shares held by a single-member LLC whose sole member is a grantor retained annuity trust for which John Pappas is sole trustee and annuity beneficiary |
Hedging/Pledging: Company policy prohibits hedging and generally prohibits pledging of Company securities by employees/directors and affiliates (limited exceptions); clawback policy adopted Aug 2023 compliant with Nasdaq Listing Rule 5608 .
Outstanding Equity Awards at FY2024 Year-End (Dec 27, 2024)
| Category | Shares | Market/Payout Value |
|---|---|---|
| Unvested Restricted Stock | 84,658 | $4,121,151 (at $48.68) |
| Unvested Restricted Stock (additional series) | 15,525 | $755,757 (at $48.68) |
| Unearned PRSAs (2024 cycle max) | 75,190 | $3,660,249 (at $48.68) |
| Unearned PRSAs (additional series) | 72,366 | $3,522,777 (at $48.68) |
| Stock Options (exercisable/unexercisable) | None for John | N/A |
Footnote detail: 84,658 restricted shares include 16,112 RSAs granted in 2024 and 68,546 PRSAs earned for a prior three-year period that remain subject to service vesting; values at $48.68 close on Dec 27, 2024 .
FY2024 Stock Vested (realized)
| Date | Shares Vested | Value Realized |
|---|---|---|
| Feb 23, 2024 | 13,059 | $476,747 (at $36.51) |
| Feb 24, 2024 | 5,186 | $189,292 (at $36.51) |
| Feb 27, 2024 | 53,816 | $2,033,177 (at $37.78) |
| Feb 28, 2024 | 5,168 | $193,102 (at $37.35) |
| Total FY2024 | 77,229 | $2,892,318 |
Employment Terms
| Term | Details |
|---|---|
| Employment Agreement | Dated Jan 12, 2012; 3-year term with automatic 1-year renewals unless notice ≥60 days before term end; includes $2,000/month car allowance and eligibility for bonuses/equity plans |
| Non-Compete / Non-Solicit | Provision identical to CEO’s agreement; CEO’s covenant is 1 year post-termination (compete, solicit customers/suppliers/employees), implying the same duration for John Pappas |
| Severance (no CIC) | Amended & restated severance agreement provides lump-sum equal to 1.5x base salary + 1.5x target annual bonus, plus lump-sum in lieu of benefits continuation and outplacement; earned prior-year bonus paid if unpaid |
| Change-in-Control (CIC) | Executive CIC Plan (double-trigger): if terminated without cause or resigns for good reason within 2 years post-CIC, cash severance of 2x base salary + 2x target bonus; pro-rated bonus for year of termination; lump-sum in lieu of 2 years of benefits and outplacement; excise tax cutback (no gross-ups) |
Potential payments as of Dec 27, 2024 (illustrative table assumptions per proxy):
| Scenario | Cash Severance | Equity Acceleration | Total |
|---|---|---|---|
| Involuntary Not-For-Cause Termination | $992,878.50 | — | $992,878.50 |
| Termination without Cause/Good Reason within 2 Years Post-CIC | $2,155,090 | $12,257,851 | $14,412,941 |
Board Governance
- Board service: Director since IPO; Vice Chairman; not independent (employee-director) .
- Committee roles: Management directors (Christopher and John Pappas) are not committee members; all standing committees (Audit, Compensation & Human Capital, Nominating & Corporate Governance, ESG) consist of independent directors and are chaired by independents .
- Independence and oversight mitigants: 82% board independence; designated Lead Independent Director (Steven F. Goldstone) with responsibilities for agendas/information and chairing executive sessions; committees 100% independent; executive sessions held regularly .
- Attendance: All directors attended at least 73% of aggregate board/committee meetings in 2024; independent directors met in executive session after 4 board meetings .
- Dual-role implications: Combined CEO/Chair (Christopher Pappas) plus Vice Chairman/COO (John Pappas) concentrates leadership but is counterbalanced by Lead Director structure and fully independent committees .
Compensation Peer Group (benchmarking and design references)
Primary peer group (used for pay level setting) – 18 companies (updated Nov 2023): 1-800-FLOWERS.COM; The Andersons; B&G Foods; BlueLinx Holdings; Cal-Maine Foods; Fresh Del Monte Produce; GMS; The Hain Celestial Group; Hub Group; Lancaster Colony; Pool Corp; Reynolds Consumer Products; SiteOne Landscape Supply; SpartanNash; Sprouts Farmers Market; TreeHouse Foods; Werner Enterprises . Secondary peer group (design/performance metric reference): US Foods; Performance Food Group; United Natural Foods; Sysco .
Say‑on‑Pay & Shareholder Feedback
- 2024 advisory say‑on‑pay approved with over 93% support; committee concluded investors supported pay‑for‑performance approach; continued engagement program in 2024 .
Compensation Committee Analysis
- Committee comprised solely of independent directors; chartered authority to retain independent advisors; FW Cook provided input on incentive design, peer groups, and pay-versus-performance disclosure; FW Cook reviewed for independence and no conflicts .
Related Party Transactions and Risk Indicators
- Facility lease: Company leases one distribution facility from an entity 100% owned by Christopher and John Pappas; paid $673,575 in FY2024 .
- Employment of family members: Company employs Constantine Papataros (John Pappas’ brother‑in‑law) and Aristotle Pappas (John Pappas’ son); compensation consistent with peers at same level .
- Customers linked to directors: Sales to Hudson National Golf Club ($292,994) where Christopher Pappas is a board member; sales to Playground Global ($684,569) where director Richard Peretz is Venture Partner .
- Governance mitigants: Formal related party transaction policy requires Audit Committee pre‑approval and arm’s‑length terms; clawback policy in place; anti‑hedging/pledging policy; no excise tax gross‑ups under CIC plan .
Multi‑Year Compensation (John Pappas)
| Year | Salary ($) | Stock Awards ($) | Non‑Equity Incentive ($) | All Other Comp ($) | Total ($) |
|---|---|---|---|---|---|
| 2024 | 615,842 | 1,862,560 | 616,919 | 172,919 | 3,268,240 |
| 2023 | 560,836 | 1,682,510 | 420,626 | 146,807 | 2,810,779 |
| 2022 | 561,030 | 1,622,264 | 560,835 | 71,773 | 2,815,902 |
Equity Ownership & Director Service (Summary)
| Item | Detail |
|---|---|
| Beneficial Ownership (Mar 17, 2025) | 1,313,758 shares; 3.2% of outstanding |
| Board Tenure | Director since IPO; Vice Chairman since 2011; not independent |
| Committee Memberships | None (management directors); all committees independent |
Employment & Change‑in‑Control Economics (Key Levers)
- Severance (no CIC): 1.5x base + target bonus lump‑sum, plus benefits/outplacement cash equivalents; prior employment agreement provided continued base salary for 1 year if terminated without cause (superseded by severance agreement for amounts and structure) .
- Executive CIC Plan (double‑trigger): 2x base + 2x target bonus; pro‑rated bonus; 2‑year benefits equivalent lump‑sum; outplacement lump‑sum; excise tax cutback (no gross‑ups) .
- Illustrative FY2024 termination values for John Pappas: $992,878.50 (involuntary not‑for‑cause) and $14,412,941 (CIC + termination, including equity acceleration) .
Investment Implications
- Alignment: High insider ownership (3.2%) and substantial outstanding performance equity (two PRSA tranches plus 2024 RSAs) tie outcomes to AEBITDA, ROIC, and share price; anti‑hedging/pledging and clawback policies strengthen alignment .
- Retention and trading signals: RSA vest dates on Mar 4, 2025/2026/2027 and ongoing PRSA performance windows can create periodic sell‑down pressure; FY2024 vesting volumes were significant ($2.89M value realized) . The Feb 2025 special CIC PSUs (41,625 for John) create incentives tied to premium change‑in‑control outcomes, potentially increasing receptivity to strategic transactions at attractive deal premiums over the 180‑day VWAP .
- Pay‑for‑performance: 2024 cash incentive was purely AEBITDA‑based and paid at target ($219M achieved vs $215M target; below the 300% kicker threshold), while LTI design places 70% weight on bottom‑line growth—supporting sustained margin/cash flow focus .
- Governance watch‑items: Related party facility lease and family employment relationships warrant monitoring; mitigated by formal RPT policy and fully independent board committees; strong say‑on‑pay approval (93%) indicates investor acceptance of program design .