Rajesh Vennam
DARDEN RESTAURANTSAbout Rajesh Vennam
Senior Vice President and Chief Financial Officer of Darden Restaurants since December 2022; age 50; prior roles include SVP CFO & Treasurer (Jan 2021–Dec 2022), SVP Corporate Finance & Treasurer, and SVP Finance & Analytics after joining Darden in 2003, with earlier finance leadership at Red Lobster and The Fresh Market . Under Darden’s FY2025 performance, the company reported diluted EPS of $8.88, net earnings from continuing operations of $1.05B, net cash from operations of $1.7B, 2.0% same-restaurant sales growth (ex-Chuy’s and Ruth’s) and 11.3% TSR (defined as EPS growth plus dividend yield) . Darden also completed the acquisition of 103 Chuy’s restaurants in FY2025, broadening the portfolio and operating scale .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Darden Restaurants, Inc. | Senior Vice President, Chief Financial Officer | Dec 2022–present | Enterprise CFO; finance leadership (per title) |
| Darden Restaurants, Inc. | SVP, CFO & Treasurer | Jan 2021–Dec 2022 | Corporate finance, treasury oversight (per title) |
| Darden Restaurants, Inc. | SVP, Corporate Finance & Treasurer | Sep 2020–Jan 2021 | Corporate finance and treasury leadership (per title) |
| Darden Restaurants, Inc. | SVP, Finance & Analytics | May 2016–Sep 2020 | Enterprise finance and analytics leadership (per title) |
| Red Lobster Hospitality, LLC | SVP, FP&A & Treasury | 2013–2014 | Brand FP&A and treasury leadership (per title) |
| The Fresh Market, Inc. | VP, FP&A and Investor Relations | Nov 2014–May 2016 | FP&A and IR leadership (per title) |
| LongHorn Steakhouse (Darden) | Director, FP&A | 2010–2013 | Brand FP&A leadership (per title) |
| Darden Restaurants, Inc. | Various roles including Manager of Treasury | 2003–2010 | Finance and treasury (per title) |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| The Fresh Market, Inc. | VP, FP&A and Investor Relations | Nov 2014–May 2016 | Public company on NASDAQ during his tenure |
| Red Lobster Hospitality, LLC | SVP, FP&A & Treasury | 2013–2014 | Post-sale entity for the Red Lobster brand |
Fixed Compensation
Multi-year reported compensation (Summary Compensation Table):
| Metric (USD) | FY 2023 | FY 2024 | FY 2025 |
|---|---|---|---|
| Salary | 687,019 | 741,346 | 791,346 |
| Non-Equity Incentive Plan Compensation (AIP) | 619,004 | 720,589 | 712,212 |
| Stock Awards (grant-date fair value) | 1,445,747 | 1,724,663 | 2,277,870 |
| Option Awards (grant-date fair value) | 445,487 | 478,483 | 616,848 |
| All Other Compensation | 158,062 | 199,550 | 240,013 |
| Total | 3,355,329 | 3,864,631 | 4,638,289 |
Current targets:
| Item | FY 2025 (year-end) | FY 2026 Target |
|---|---|---|
| Base Salary | $800,000 | $800,000 |
| Target Annual Incentive | 90% of base | 90% of base |
| Target Long-Term Incentive Value | — | $2,750,000 |
Perquisites and other benefits: modest perqs (company car allowance, financial planning reimbursement, group liability insurance, executive physical), FlexComp defined contribution in lieu of 401(k), life and disability insurance; FY2025 “All Other Compensation” detail for Vennam: $20,898 perqs, $115,473 company FlexComp contribution, $6,883 insurance, $96,759 dividends/earnings on equity awards (paid only when/if awards vest) .
Performance Compensation
Annual Incentive Plan (AIP) design and FY2025 outcomes (CFO uses Darden Company Performance Rating):
| Metric | Weight | Target | Actual | Payout (% of target) | Resulting AIP |
|---|---|---|---|---|---|
| Adjusted Diluted Net EPS (FY2025) | 70% | $9.48 | $9.55 | 100% | |
| Same-Restaurant Sales (SRS) growth | 30% | 1.9% | 2.0% | 100% | |
| Total Company Performance Rating | 100% | — | — | 100% | |
| Rajesh Vennam actual AIP award | — | — | — | 100% | $712,212 |
Long-Term Incentive (LTI) structure and FY2025 grants (grant date 7/24/2024):
- Mix: 50% PSUs (relative TSR vs S&P 500), 25% RSUs, 25% stock options; options vest 50% on 3rd and 4th anniversaries; RSUs vest 100% on 3rd anniversary; PSUs have a 3-year performance period and then vest 50% on 3rd and 50% on 4th anniversaries; max payout 200% of target .
FY2025 LTI grant details (Rajesh Vennam):
| Component | Number | Grant-Date Fair Value (USD) |
|---|---|---|
| Stock Options (exercise price $139.43) | 13,772 | $616,848 |
| RSUs | 4,531 | $631,757 |
| PSUs (target) | 9,062 | $1,646,112 |
Prior PSU cycle payout (FY2023–FY2025 performance period):
| Measure | Percentile vs S&P 500 | Payout |
|---|---|---|
| 3-year Relative TSR (FY23–FY25) | 84th percentile | 200% of target |
Equity Ownership & Alignment
- Beneficial ownership: 17,152 common shares; less than 1% of outstanding; includes 6,817 options exercisable within 60 days as of May 25, 2025 .
- Stock ownership guidelines: CFO required to hold equity equal to 4x base salary; executives must hold 50% of net after-tax shares until compliant; all NEOs were in compliance as of May 25, 2025 .
- Hedging/pledging: Company policy prohibits short sales, options, derivative hedging, and pledging company securities or holding in margin accounts .
Outstanding awards at FY2025 year-end (May 25, 2025):
| Award type | Detail |
|---|---|
| Options (exercisable) | 3,182 @ $124.24 exp. 7/24/2029; 3,635 @ $148.20 exp. 7/28/2031 |
| Options (unexercisable) | 3,636 @ $148.20 exp. 7/28/2031; 12,306 @ $121.47 exp. 7/27/2032; 8,612 @ $169.02 exp. 7/26/2033; 13,772 @ $139.43 exp. 7/24/2034 |
| RSUs (unvested) | 11,032 units; $2,250,749 market value at $204.02 as of 5/23/2025; vest on 3rd anniversary |
| PSUs (unearned) | 24,782 units at target; $5,056,024 market/payout value; 50% vest on 3rd and 50% on 4th anniversaries post-performance |
Non-qualified deferred compensation (FlexComp):
| Item | Value |
|---|---|
| Executive contributions in last FY | $0 |
| Company contributions in last FY (paid July 2024) | $132,479 |
| Aggregate balance at FY2025-end | $806,619 |
Employment Terms
- Employment agreements: None; Darden does not maintain executive employment agreements with NEOs .
- Clawback: SEC-compliant policy requires recovery of incentive-based compensation upon a financial restatement; applies to AIP and PSUs; 3-year lookback .
- Change-in-Control (CIC) Agreements: Double-trigger; CFO receives 1.5x base salary + target bonus if terminated without cause or resigns for good reason within 24 months post-CIC; 18 months COBRA-equivalent health benefit; severance may be reduced to avoid excise tax unless net-after-tax “best pay” threshold is met .
Potential payments (Rajesh Vennam; as of May 25, 2025):
| Scenario | FY25 AIP ($) | FlexComp ($) | Cash Severance ($) | Accelerated/Continued Equity Vesting ($) | Misc. Benefits ($) |
|---|---|---|---|---|---|
| Voluntary Termination | 712,212 | 115,473 | — | — | 75,264 |
| Involuntary Not For Cause | 712,212 | 115,473 | 800,000 | 5,805,630 | 92,547 |
| For Cause | 712,212 | 115,473 | — | — | 75,264 |
| CIC + Qualifying Termination | 712,212 | 115,473 | 2,280,000 | 10,065,059 | 101,735 |
| Death | 712,212 | 115,473 | — | 10,065,059 | 1,500,000 (life insurance max) |
| Disability | 712,212 | 115,473 | 2,714,575 (disability benefits) | 7,767,040 | 124,928 |
Compensation Structure Analysis
- Pay mix and alignment: For FY2025, ~77% of non-CEO NEO target total direct compensation was performance-based; CFO target AIP was 90% of salary, with LTI split across PSUs (50%), RSUs (25%), and options (25%), tying pay to EPS, SRS, and multi-year TSR .
- FY2025 outcomes: Company performance delivered 100% of AIP target and a 200% payout for the FY2023–2025 PSU cycle, amplifying equity value and retention via multi-year vesting (third and fourth anniversaries) .
- Governance features: No employment agreements, no tax gross-ups, no option repricing, mandatory stock ownership (4x salary for CFO) with hold-until-met, and strict prohibition on hedging/pledging—supporting alignment and mitigating risk .
Compensation Peer Group (benchmarking context)
FY2025 peer group (selected examples): Advance Auto Parts, AutoZone, Bath & Body Works, Burlington Stores, Chipotle, Domino’s, Hilton, Marriott, O’Reilly Auto, RBI, Ross, Royal Caribbean, Tractor Supply, Ulta Beauty, Yum! Brands (18 companies total; median market cap ~$30.7B; revenue ~$12.4B as of Nov 2024) .
Say-on-Pay & Shareholder Feedback
At the 2024 Annual Meeting, 95.17% of votes cast supported Darden’s executive compensation program; the Compensation Committee continues regular investor engagement on pay design and objectives .
Risk Indicators & Red Flags
- Related party transactions: None required to be reported under Item 404 of Regulation S-K in the 2025 proxy .
- Hedging/pledging: Prohibited for officers and directors (mitigates misalignment and downside-protected selling) .
- Clawback: Implemented and filed; restatement-triggered recoupment of incentive compensation .
- Compensation risk assessment: Committee determined plans balance risk/reward with capped payouts, diversified metrics, multi-year vesting, and ownership guidelines .
Equity Ownership & Option Detail (Vesting/Selling Pressure Indicators)
- Near-term vesting cadence: RSUs vest on 3rd anniversary of grant (e.g., FY2025 RSUs granted 7/24/2024 vest 7/24/2027); stock options vest 50% on 3rd and 50% on 4th anniversaries; PSUs vest 50% on 3rd and 50% on 4th anniversaries after the 3-year performance period—creating periodic windows of potential liquidity needs/tax withholding but hedging/pledging is prohibited .
- Outstanding in-the-period: As of 5/25/2025, Vennam had 11,032 unvested RSUs (market value $2.25M) and 24,782 target PSUs (market/payout value $5.06M), plus multiple unexerced option tranches with expirations through 2034 .
Employment Terms (CIC/Severance & Restrictive Covenants)
- Double-trigger CIC with 1.5x cash multiple and 18 months COBRA-equivalent benefits for CFO; equity accelerated per plan; non-compete, non-solicit, confidentiality and other covenants required to receive benefits .
- No fixed-term employment contract; severance for involuntary not for cause guided by company practice (up to 12 months’ base salary, plus benefits) .
Investment Implications
- Strong pay-for-performance linkage with AIP tied to EPS and SRS (100% payout in FY2025) and PSUs tied to relative TSR (200% payout over FY2023–2025), suggesting incentives support earnings quality and shareholder returns; multi-year vesting enhances retention but can cluster equity settlements around vest dates .
- Alignment safeguards—4x salary ownership guideline (in compliance), no hedging/pledging, and an enforceable clawback—reduce agency risk and speculative behavior, supportive for long-term holders .
- Moderate CIC economics (1.5x cash multiple) and absence of employment contracts mitigate entrenchment/governance risk, while equity acceleration on CIC maintains management continuity incentives in strategic scenarios .
- FY2025 operational delivery (EPS $8.88; 2.0% SRS; $1.7B cash from ops; 11.3% TSR) and portfolio expansion (Chuy’s acquisition) underpin credibility of financial leadership under Vennam; sustained execution against AIP targets and TSR benchmarks remains the key determinant for future payouts and insider liquidity from vesting schedules .