Eric Gatoff

About Eric Gatoff

Eric Gatoff (age 56) has served as Chief Executive Officer of Nathan’s Famous, Inc. since January 1, 2007 and director since 2005; he previously served as Vice President and Corporate Counsel from October 2003. He holds a B.B.A. in Finance from George Washington University and a J.D. from Fordham University School of Law and is a member of the New York State Bar Association . Company pay-versus-performance disclosure shows rising net income in FY2025 ($24.0M) vs FY2024 ($19.6M) and FY2023 ($19.6M), with total shareholder return (TSR) improving from 132.41 to 176.06 over FY2024–FY2025 . Revenues increased across FY2023–FY2025, and EBITDA rose in FY2025; see table below for details (S&P Global disclaimer on starred values).

Values with asterisk (*) retrieved from S&P Global.

Past Roles

External Roles

Fixed Compensation

All Other Compensation (FY2025 detail):

• 401(k) match: $2,287; Insurance premiums: $30,821; Mobile phone: $2,689; Auto allowance/expense: $33,419; Total: $69,216 .

Performance Compensation

Performance plan notes and metrics:

• FY2023: Cash awards tied to “modified controllable operating income” at 108.7% of criteria; resulted in PEO (Gatoff) non‑equity payout of $1.2M .
• FY2025: Discretionary cash bonus of $1,000,000 based on assessment vs financial, strategic, and operating objectives; no equity grants to NEOs in FY2025 .

Detailed incentive design (known data):

Compensation structure context:

• Compensation emphasizes fixed salary and discretionary cash bonuses; the committee states higher fixed pay helps mitigate excessive risk-taking .
• No equity awards granted to NEOs in FY2025; historically equity is infrequent and subjectively determined .

Equity Ownership & Alignment

Implications: With no unvested equity or options outstanding, there is minimal forced selling pressure from vesting events; alignment relies on direct share ownership and cash pay rather than ongoing equity vesting .

Employment Terms

Key terms (current agreement originally dated December 15, 2006; CEO effective January 1, 2007; auto-renews annually unless 180-day non‑renewal notice; no non‑renewal notice to date) .

• Severance/change-in-control economics (estimated as of March 30, 2025; $94.80 stock price assumption) : | Scenario | Cash Severance ($) | Accelerated Equity | Benefits Continuation | |---|---:|---:|---:| | Termination by Company without Cause or by NEO with Good Reason | 507,692 | — | — | | Death | 1,507,692 | — | — | | Disability | 1,507,692 | — | — | | For Cause or voluntary resignation without Good Reason | 38,942 (accrued vacation) | — | — | | Change in Control + termination within 1 year (Company without Cause or by executive for any reason) | 1,663,942 | — | — |

• Contract constructs: CEO bonus historically set by Compensation Committee after Executive Chairman recommendation vs financial/operating objectives; FY2025 bonus discretionary .

• Clawback/gross-ups: No executive clawback policy is disclosed; tax gross-up is referenced for Executive Chairman’s agreement, not for the CEO .

• Non-compete/non-solicit: Not specifically disclosed in the proxy sections reviewed.

Board Governance (including dual-role considerations)

• Roles and independence: CEO (Gatoff) and Executive Chairman roles are split; Lead Independent Director is A.F. Petrocelli; Board asserts separation lets CEO focus on management .
• Committees (independent membership): Audit (Chair Eide; Genson; Leistner), Compensation (Chair Eide; Genson; Leistner), Nominating (Chair Petrocelli; Genson; Eide; Levine; Raich); committees comprised entirely of independent directors under NASDAQ rules .
• Board service and attendance: Director since 2005; all directors attended at least 75% of meetings in FY2025; six Board meetings in FY2025 .
• Independence status: As CEO and management director, Gatoff is not independent; executive sessions of non‑management directors occur without management .
• Dual‑role implication: Split Chairman/CEO structure mitigates typical CEO‑Chair concentration concerns; independent committees and a lead independent director provide additional governance counterweights .

Director Compensation (context; for non‑employee directors)

• Employee directors (e.g., CEO) are not listed in the non‑employee director compensation table; non‑employee director fees are disclosed, but not applicable to Gatoff .

Performance & Track Record

• Pay-versus-performance correlation: Compensation Actually Paid to PEO was $1.69M in FY2025 vs SCT total $1.69M; company TSR rose to $176.06 (from a $100 base) with net income of $24.0M in FY2025; see table below .
  | Year | PEO SCT Total ($) | PEO Compensation Actually Paid ($) | Company TSR (Value of $100) | Net Income ($) | |---|---:|---:|---:|---:| | 2023 | 1,844,372 | 1,844,372 | 135.27 | 19,623,000 | | 2024 | 1,440,087 | 1,440,087 | 132.41 | 19,616,000 | | 2025 | 1,694,216 | 1,694,216 | 176.06 | 24,026,000 |

Compensation Committee Analysis

• Composition: Eide (Chair), Genson, Leistner — all independent .
• Consultant use: GK Partners engaged in 2007 and 2011 to review pay-for-performance alignment; subsequent CEO base salary increases (to $375k in 2014; $500k in 2016; $625k in 2022) were informed by this process and overall company performance .
• Risk review: Committee reviewed exec compensation for risk-taking; program emphasizes fixed pay; few employees receive material bonuses; no equity grants in FY2025 to NEOs .

Related Party Transactions (policy)

• The Board maintains a Related Person Transaction Policy requiring Audit Committee approval of covered transactions; no CEO-specific related-party transactions are disclosed in the sections reviewed .

Say-on-Pay & Shareholder Feedback

• Not specifically disclosed in the excerpts reviewed.

Expertise & Qualifications

• Education: B.B.A. Finance (George Washington University); J.D. (Fordham University School of Law); NY State Bar member .
• Tenure & experience: Corporate counsel (2003–2006), CEO since 2007; board member since 2005 .

Equity Ownership & Vesting Pressure Snapshot

Employment Economics – Change-of-Control Structure

• Payment if terminated within one year post-CoC by Company without Cause or by executive for any reason: lump sum equal to annual salary plus prior year bonus (single‑trigger‑like termination feature for the executive; not a strict double trigger requiring “good reason”) .

Investment Implications

• Alignment/mix: CEO compensation is predominantly cash with discretionary bonuses and no current unvested equity, which limits equity-based alignment and reduces forced selling pressure but can weaken long-term stock-price linkage absent ongoing equity grants .
• Retention/contract risk: Evergreen 1‑year auto‑renewal with relatively modest severance multiples and a CoC provision that pays salary+prior-year bonus if the executive departs for any reason within a year of a CoC; this is more permissive than strict double‑trigger structures and can create change-of-control payout optionality .
• Governance offsets: Split Chair/CEO roles, fully independent key committees, and a lead independent director mitigate dual-role risks; director attendance and independence criteria complied with in FY2025 .
• Performance lens: Net income improved in FY2025 with higher TSR; however, sustained pay-for-performance alignment would be strengthened by clearer, formulaic performance metrics (rather than discretionary bonuses) and periodic equity with performance conditions to reinforce multi‑year value creation .