Christopher Tomasso

About Christopher Tomasso

Christopher A. Tomasso is President, Chief Executive Officer, and Director of First Watch Restaurant Group (FWRG). He has served as President and CEO since August 2017 and December 2019, respectively, and as a director since December 2019. Age: 54. Prior roles include Chief Marketing Officer at First Watch Restaurants, Inc. (2006–2015). The proxy highlights his management, marketing, corporate strategy credentials, and board service as a Class III director with current term expiring at the 2027 annual meeting .

• Note: The proxy does not disclose TSR, revenue growth, or EBITDA growth figures for his tenure, and as an EGC the company does not provide a CD&A or say‑on‑pay .

Past Roles

External Roles

• No external public company directorships or committee roles for Mr. Tomasso are disclosed in the proxy .

Fixed Compensation

Notes: “All other compensation” detail for 2024 includes life insurance premiums ($1,287), 401(k) match ($8,135), long‑term disability ($3,721), health insurance premiums ($9,407), executive physical ($4,500), and a post‑closing payment ($1,452) .

Performance Compensation

• Annual Cash Incentive Plan structure (FY2024):
  • Metric: Adjusted EBITDA for company performance; 70% weight of target bonus; individual objectives at 30% weight. Funding thresholds: >85% of target to fund; 100% of target funds at 100%; ≥125.7% funds at 200% .
  • Reported Adjusted EBITDA used for plan: $113.8 million (company calculation) .

FY2024 CEO Bonus Detail:

• Target bonus: 100% of base salary ($905,625) .
• Company component: $717,023 (70% weight × 113.1% payout) .
• Individual component: $271,688 (30% weight × 100%) .
• Total non‑equity incentive paid (matches Summary Comp Table): $988,711 .

Equity Incentives (structure and trend):

• Shift from stock options (2022 grant) to time‑based RSUs (2023–2024) for CEO; grant date fair value increased from $2.5m (2023) to $3.0m (2024), indicating higher equity weighting and lower cash incentive YoY .
• Committee intends long‑term equity award values to approximate peer median (peer list not disclosed) .

Equity Ownership & Alignment

• Beneficial Ownership (Record Date: Mar 24, 2025):
  • Total shares beneficially owned: 1,480,385 (2.4% of outstanding) .
  • Includes 1,224,425 options currently exercisable or exercisable within 60 days; also 500 shares held indirectly by his daughter .
  • Shares outstanding at record date: 60,968,674 .

Outstanding Equity Awards (as of Dec 29, 2024):

Vesting Schedules:

• Pre‑IPO options: equal annual installments over 5 years for some tranches; others tied to IPO anniversaries as described in proxy .
• Post‑IPO options/RSUs: time‑based vesting in equal installments on each of the first three anniversaries of the grant date, subject to continued service .

Ownership Guidelines, Pledging/Hedging:

• Corporate Governance Guidelines include stock ownership guidelines (specific multiples not disclosed in proxy) .
• Insider Trading Policy prohibits pledging, hedging, margin accounts, and short sales; 10b5‑1 plans permitted if properly established; standing/limit orders restricted except within a brief pre‑clearance window .

Potential Insider Selling Pressure Signals:

• Upcoming RSU vesting on 3‑year schedules for 2023 and 2024 grants may create periodic liquidity events; legacy 2017 options expire 08/31/2027; 2022 options expire 03/25/2032 .

Employment Terms

Employment Agreement (03/09/2022; automatically renewing 1‑year terms):

• Termination without cause or for “good cause”: 12 months base salary continuation, pro‑rated annual bonus, accrued obligations and unused vacation (release required) .
• Death/Disability: 6 months base salary continuation, pro‑rated bonus, accrued obligations and unused vacation .
• “Good cause” includes material reduction in salary/bonus %, material diminution in responsibilities, or HQ relocation >20 miles, subject to notice/cure .
• “Cause” includes specified misconduct (e.g., felony, fraud, gross misconduct, policy violations, failure to perform) .
• Includes confidentiality, non‑compete, and mutual non‑disparagement provisions .

Executive Severance Plan (adopted March 2025; supersedes other severance entitlements for participating executives):

• Qualifying termination without cause or for good reason (no CIC): CEO receives lump sum 2x base salary, plus 1x target annual bonus, plus COBRA premiums multiplied by the severance multiple .
• CIC + qualifying termination within 2 years: CEO receives 2.5x base salary, target bonus multiplied by the same multiple (2.5x), COBRA premiums multiplied by the same multiple, and full vesting of unvested equity under the 2021 Plan .
• Equity award agreements also provide partial acceleration in certain termination scenarios on or prior to first anniversary of a CIC (lower of remaining unvested or 50% of grant for CEO) unless superseded by the Severance Plan provisions within two years post‑CIC .

Clawback:

• Nasdaq‑compliant Clawback Policy applies to incentive compensation tied to financial reporting measures in the event of restatement due to material noncompliance .

Board Governance

• Board/Committee Structure: 10 directors; only CEO (Tomasso) is non‑independent; all committees comprise independent directors .
• Board leadership separated: independent Chair (Ralph Alvarez) and CEO roles split; Lead Independent Director provision exists when Chair is not independent .
• Committees:
  • Audit (Chair: Charles Jemley; members: Jemley, Alvarez, Solheim; all meet heightened independence; all are financial experts) .
  • Compensation (Chair: Stephanie Lilak; members: Lilak, Alvarez, Fleisher, Glynn; all independent) .
  • Nominating & Governance (Chair: Irene Chang Britt; members: Britt, Alvarez, Paresky, Kussell) .
• Board activity: 5 meetings; all directors attended ≥75% of board/committee meetings in FY2024 .
• Mr. Tomasso is a Class III director (term expires 2027); no committee roles disclosed .

Director Compensation (context for dual roles):

• Non‑employee director cash retainers increased for FY2025; equity RSUs increased effective July 2024. CEO is not paid as a director; non‑employee schedule summarized in proxy .

Compensation Structure Analysis

• Plan metrics remained performance‑based (Adjusted EBITDA) with clearly defined threshold/target/max and weighted 70% company/30% individual, reducing discretion risk; EGC status limits disclosure but peer‑median LTI targeting noted .
• Clawback and hedging/pledging prohibitions support alignment and risk mitigation .

Risk Indicators & Red Flags

• Internal Controls: Previously identified material weaknesses (ITGCs, income tax accounting) were remediated as of FY2023 and FY2024, respectively; remediation continues for remaining weaknesses with detailed measures implemented .
• Related Party Transactions: None exceeding $120,000 reported since prior fiscal year; formal related‑party policy and review process in place .
• Hedging/Pledging: Prohibited under Insider Trading Policy (reduces misalignment risk) .
• Say‑on‑Pay: Not applicable while EGC (limits shareholder feedback channel) .

Equity Ownership & Beneficial Ownership Detail (as of Mar 24, 2025)

Employment & Contracts (Key Terms Summary)

Board Service and Governance Considerations for Dual Roles

• Board service history: Director since Dec 2019; Class III; term expires 2027 .
• Committee roles: None disclosed for CEO (committees are fully independent) .
• Independence: CEO is the sole non‑independent director; Board otherwise independent; Chair and CEO roles are separated, mitigating CEO/Chair concentration concerns .

Investment Implications

• Pay‑for‑performance alignment: 70% of annual bonus tied to Adjusted EBITDA with transparent thresholds and a 200% max; 2024 payouts reflect above‑target company performance (113.1% company factor) and full achievement of individual objectives, while equity weight increased via larger RSU grants—supporting long‑term alignment and retention, further reinforced by a Nasdaq‑compliant clawback and anti‑hedging/pledging policy .
• Potential selling pressure: Significant time‑vested RSUs granted in 2023 and 2024 vest over three years and large 2017 options expire in 2027; these dates may concentrate liquidity events and incremental supply absent 10b5‑1 planning .
• Retention and change‑of‑control economics: Newly adopted Severance Plan raises certainty of outcomes (2.0x base + 1.0x target bonus; CIC 2.5x/2.5x plus full vesting), lowering voluntary departure risk but increasing potential CIC costs and dilution from accelerated vesting—important in scenario analyses for strategic interest and M&A optionality .
• Governance: Independent Chair, fully independent committees, and remediation of prior control weaknesses reduce governance risk; absence of material related‑party transactions and strong insider trading restrictions further mitigate alignment concerns .
• Ownership: CEO’s meaningful in‑the‑money option position and unvested RSUs provide sustained performance linkage; he beneficially owns 2.4% of common (including options exercisable within 60 days) supporting skin‑in‑the‑game, though the proxy does not disclose specific stock ownership guideline multiples or compliance status .