Michael Murphy
JACK IN THE BOXAbout Michael W. Murphy
Independent director since 2002 (age 67), Murphy is the retired President & CEO of Sharp HealthCare and a former Deloitte partner and Certified Public Accountant. He brings deep experience in accounting, finance, auditing, compensation, risk management, and large-scale organizational leadership; he currently chairs Jack in the Box’s Compensation Committee and is deemed an independent director under Nasdaq rules. During fiscal 2024 he attended more than 75% of Board/committee meetings; the Board met four times in FY24, and the Compensation Committee met five times.
Past Roles
| Organization | Role | Tenure (dates as disclosed) | Committees/Impact |
|---|---|---|---|
| Sharp HealthCare | President & CEO | Apr 1996–Feb 2019 | Led integrated system recognized with the Malcolm Baldrige National Quality Award; member of Sharp’s Board 2007–2019. |
| Sharp HealthCare | SVP, Business Development & Legal Affairs | Pre-CEO period (dates not separately specified) | Executive leadership spanning strategy and legal affairs. |
| Sharp HealthCare (Grossmont Hospital) | Chief Financial Officer | 1991 (entry to Sharp) to subsequent system roles | Oversaw financial accounting and reporting before system-wide VP role. |
| Deloitte | Partner (CPA) | Prior to joining Sharp | Public accounting, auditing, financial reporting expertise. |
External Roles
| Organization | Type | Role | Current/Former |
|---|---|---|---|
| Public company boards | Public | None | Current public company boards: —. |
| Sharp HealthCare | Non-profit health system | Board Member | Former; 2007–2019. |
Board Governance
- Independence: All directors except the CEO are independent; Murphy is independent.
- Committee roles: Chair, Compensation Committee; not designated as an “audit committee financial expert.” Compensation Committee met five times in FY24.
- Attendance: Each director attended >75% of Board and relevant committee meetings in FY24; Board held four meetings.
- Leadership: Independent Non‑Executive Chairman structure reaffirmed in Nov 2024; regular executive sessions of independent directors at each scheduled Board meeting.
- Governance practices: Prohibitions on hedging/pledging by directors; Nasdaq‑compliant clawback policy (companywide); annual Board/committee/self evaluations; director stock ownership requirements.
Fixed Compensation
Director pay structure (effective following Mar 1, 2024 meeting) and Murphy’s FY2024 reported compensation:
| Element | 2023 Program | 2024 Program | Michael W. Murphy – FY2024 Amount |
|---|---|---|---|
| Board cash retainer | $65,000 | $75,000 | $97,500 (fees earned/paid in cash) |
| Compensation Committee Chair retainer | $25,000 | $25,000 | Included in fees |
| Annual RSU grant value | $110,000 | $125,000 | $122,413 (grant date fair value) |
| All other compensation (dividend equivalents on deferred accounts/vested deferred RSUs) | — | — | $106,407 |
| Total | — | — | $326,320 |
Notes
- Directors may defer cash retainers into common stock equivalents and may defer RSU shares; dividend equivalents accrue only on deferred shares/units after vest.
- RSU vesting for directors: earlier of 12 months from grant or upon termination of Board service (unless deferred).
Performance Compensation
Directors do not receive performance-based pay. As Compensation Committee Chair, Murphy oversees the executive incentive architecture and goal‑setting; FY2024 outcomes and metrics were:
Annual Incentive Plan (NEOs) – FY2024 Results
| Metric | Weight | Target Goal | FY2024 Actual | Payout vs Target |
|---|---|---|---|---|
| Consolidated Adjusted EBITDA | 50% | $333.7M | $322.3M | 83.8% |
| Jack in the Box System Same‑Store Sales | 24% | 2.99% | (1.3)% | 0.0% |
| Del Taco System Same‑Store Sales | 6% | 3.95% | (1.5)% | 0.0% |
| Jack Development & Growth | 10% | Various site/award/opening targets | Met target (e.g., 30 openings) | 100% |
| Del Taco Development & Growth | 10% | Various site/award/opening targets | Max attained (14 openings) | 200% |
| Total Weighted Payout | — | — | — | 71.9% |
PSU Design and FY2022–2024 Payout (certified Nov 2024)
| PSU Metric | Weight | Threshold | Target | Maximum | Actual (FY22–FY24) | Payout |
|---|---|---|---|---|---|---|
| Cumulative Adjusted EBITDA (ex‑Del Taco) | 50% | $917.7M | $948.3M | $978.9M | $948.3M | 100% |
| Cumulative Systemwide Sales (All Restaurants, ex‑Del Taco) | 50% | $12,232.0M | $12,709.0M | $13,185.0M | $15,427.0M | 150% |
| Overall PSU Payout | — | — | — | — | — | 125% of target |
Compensation governance
- Independent consultant (Meridian) advises the Committee; independence assessed with no conflicts; consultant attended all FY2024 meetings.
- Compensation risk oversight, capped awards, clawback policy, and prohibition on repricing without shareholder approval.
Other Directorships & Interlocks
| Category | Details |
|---|---|
| Current public company boards | None for Murphy. |
| Committee interlocks | No Compensation Committee interlocks or related insider participation requiring disclosure. |
Expertise & Qualifications
- CPA and former Deloitte partner; senior finance roles (CFO; VP Financial Accounting & Reporting) and CEO of a large, award‑winning integrated health system.
- Skills: accounting, finance, financial reporting, auditing, compensation, labor relations, risk assessment/management, strategic planning, and quality initiatives; chair of the Compensation Committee.
- Not designated as an “audit committee financial expert” at JACK (others are so designated).
Equity Ownership
Beneficial ownership (Record Date: Jan 3, 2025)
| Component | Shares/Units |
|---|---|
| Direct holdings | — |
| RSUs acquirable/options exercisable within 60 days | — |
| Deferred stock equivalents / units | 71,507 |
| Unvested RSUs (director) | 1,673 |
| Total beneficially owned | 73,180 (<1%) |
Ownership value and guideline status (FY-end 2024 valuation at $45.41)
| Measure | Value |
|---|---|
| Direct/Unvested RSUs (#) | 1,673 |
| Deferred Units / Common Stock Equivalents (#) | 70,851 |
| Total Value ($) | $3,293,315 |
| Stock ownership guideline | 5x annual Board cash retainer; directors must hold 50% of net shares until compliant. |
| Compliance | Each director meets the guideline except two newer directors; Murphy meets requirement. |
Policies and controls
- Prohibition on hedging, pledging, and margin accounts by directors and Section 16 officers.
- No related‑party transactions exceeding $120,000 in FY2024 involving directors/officers.
Insider trading activity
- The proxy discloses ownership and policies but does not list Form 4 transactions; no director hedging/pledging permitted under company policy.
Governance Assessment
Strengths
- Independent director with extensive finance/audit background; Compensation Committee Chair with robust governance practices (independent consultant, risk analysis, clawback).
- Consistent shareholder support on Say‑on‑Pay (94.1% approval in 2024; >92% every year since 2014), reflecting investor confidence in pay oversight.
- Strong ownership alignment: substantial deferred stock units and adherence to director ownership guidelines; hedging/pledging prohibited.
- No related‑party transactions or compensation interlocks; attendance >75%.
Watch items / potential red flags
- Very long tenure (director since 2002); company’s tenure review policy requires long‑tenured directors (>12 years) to submit a voluntary resignation offer for periodic review of continued effectiveness.
- FY2024 “All Other Compensation” driven by dividend equivalents on deferred accounts is sizable ($106,407), though formulaic and tied to prior deferrals, not discretionary cash.
Overall implication
- Murphy’s profile (CPA, former CEO, long service) and current role as Compensation Committee Chair support board effectiveness in pay governance and risk oversight; tenure warrants ongoing refresh evaluation per policy, but strong Say‑on‑Pay outcomes and ownership alignment bolster investor confidence.