Lynette McKee
About Lynette McKee
Lynette (Lynnette) McKee is Senior Vice President, Franchising at Potbelly (PBPB), a role she has held since June 2023. She is age 68 per the 2025 proxy. Her background spans 25+ years leading franchise development at Burger King, Dunkin’ Brands, Checkers Drive‑In, and industry organizations, along with more than a decade as CEO of her own consulting firm. Potbelly’s operating performance during her tenure includes 2024 Adjusted EBITDA growth of 14.9% to $32.6M, 23 new shop openings, and franchise royalties/fees rent income up 79.3% to $7.3M; in 2023 the company delivered 12% same‑store sales growth and an 80% increase in Adjusted EBITDA to ~$28M, aided by a franchise‑focused growth strategy . McKee’s role is central to Potbelly’s unit growth agenda; she was appointed in June 2023 to oversee franchisee market planning, recruitment and sales, and has publicly championed Potbelly’s new 50/50 Large Area Developer incentive program to accelerate openings .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| McKeeCo Services, LLC | Owner, CEO & Managing Partner | Dec 2012 – May 2023 | Franchise consulting and development advisory |
| Front Burner Brands | Director (Board) | Aug 2021 – Apr 2023 | Governance/oversight at multi‑brand restaurant group |
| National Restaurant Association Educational Foundation | Executive Director | Jul 2011 – Nov 2012 | Industry workforce/education leadership |
| Checkers Drive‑In Restaurants, Inc. | Chief Development Officer | Sep 2009 – Apr 2011 | System development and franchising leadership |
| Dunkin’ Brands, Inc. | VP, Franchising | Jul 2005 – Sep 2009 | U.S. franchise expansion and market development |
| Burger King Corporation | VP, Franchising | Jan 2004 – Nov 2004 | U.S. franchising oversight |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Front Burner Brands | Director | Aug 2021 – Apr 2023 | Restaurant portfolio board service |
Fixed Compensation
- Not disclosed. McKee is not listed among Potbelly’s Named Executive Officers (NEOs) for whom individual base salary and cash incentive details are provided in the 2024 and 2025 proxies .
Performance Compensation
Potbelly ties executive annual incentives to enterprise metrics (applicable to all executive officers), with long‑term equity comprising RSUs and PSUs. While McKee’s individual target levels are not disclosed, the plan design and outcomes below indicate incentive structure and recent performance context.
- 2024 Annual Incentive Plan (AIP) metrics, weights, and outcomes (companywide plan “applicable to all executive officers”) :
| Metric | Weight | Threshold (50%) | Target (100%) | Stretch (150%) | Max (200%) | 2024 Actual | Achievement % | Payout % |
|---|---|---|---|---|---|---|---|---|
| Adjusted EBITDA ($M) | 60% | 28.8 | 32.1 | 34.6 | 37.3 | 31.865 | 92 | 58 |
| Same Store Sales (%) | 20% | 1.5 | 5.5 | 6.2 | 7.5 | (0.3) | 0 | 0 |
| New Shop Development (count) | 20% | 30 | 42 | 45 | 49 | 23 | 0 | 0 |
- 2023 Annual Incentive Plan (AIP) metrics, weights, and outcomes (companywide plan “applicable to all executive officers”) :
| Metric | Weight | Threshold (50%) | Target (100%) | Stretch (150%) | Max (200%) | 2023 Actual | Achievement % | Payout % |
|---|---|---|---|---|---|---|---|---|
| Adjusted EBITDA ($M) | 70% | 19.0 | 24.2 | 26.3 | 28.3 | 27.765 | 187% | 131% |
| Same Store Sales (%) | 30% | 4.9 | 9.1 | 10.5 | 12.6 | 12.0 | 187% | 56% |
Long‑Term Incentives (LTI) – 2024 design highlights:
- PSUs vest based on two performance conditions over Apr 5, 2024 – Apr 5, 2027: (i) stock price (90‑day VWAP vs target stock prices), and/or (ii) relative TSR vs Russell 3000 Travel & Leisure Index; vest at the higher of the two achievement paths, with cliff vesting on Apr 5, 2027 .
- RSUs vest in three equal annual installments beginning on the first anniversary of grant (standard time‑based vesting) .
- Minimum one‑year vesting standard under the 2019 LTIP (limited exceptions) .
2024 PSU pay‑for‑performance calibration (companywide plan table) :
| Performance Lever | Threshold (50%) | Target (100%) | 150% | Max (200%) |
|---|---|---|---|---|
| Target Stock Price (90‑day VWAP) | $13.78 | $16.77 | $20.97 | $29.95 |
| Relative TSR vs R3000 T&L | >40th pct | >55th pct | >75th pct | >90th pct |
Design update: For 2025, the Committee moved PSUs to relative TSR vs the Russell 3000 Restaurant Index and added an absolute TSR cap (limits upside if absolute TSR is negative) .
Equity Ownership & Alignment
- Anti‑hedging: Directors, officers, and employees are prohibited from hedging or monetization transactions (e.g., collars, options, swaps) that offset declines in Potbelly stock; this covers equity awards and derivatives tied to company stock .
- Clawback: Updated in Oct 2023 to comply with SEC/Nasdaq rules; requires recovery of incentive‑based pay granted/earned/vested on financial measures if the company must restate due to material noncompliance .
- Change‑in‑Control and vesting: The 2019 LTIP provides double‑trigger vesting—if terminated without cause (or good‑reason resignation criteria) within 24 months post‑CIC, options/SARs become exercisable and other awards fully vest; performance awards vest at the higher of target (pro‑rated) or actual achievement at CIC; also no single‑trigger vesting and no 280G tax gross‑ups under the plan .
- Executive stock ownership guidelines: The company highlights “robust director and executive stock ownership guidelines,” though specific officer multiples/thresholds are not disclosed in the proxies reviewed .
Note: Individual beneficial ownership for McKee is not presented in the 2024/2025 “Directors and Named Executive Officers” ownership tables (she is not an NEO), so ownership levels, pledged shares, and vested/unvested breakdowns are not disclosed for her in those tables .
Employment Terms
- Individual employment agreement terms for McKee are not disclosed. For context, NEO agreements generally provide 12 months base‑salary severance (and subsidized COBRA) for qualifying terminations, with additional change‑in‑control protections per agreement; LTIP equity follows the 2019 LTIP double‑trigger mechanics noted above. Terms vary by executive and year (CEO/CFO/COO/CMO/CLO examples disclosed); these NEO terms should not be presumed for McKee .
Performance & Track Record
- 2024 outcomes (companywide): Adjusted EBITDA +14.9% to $32.6M; 23 new shop openings; Average Weekly Sales +0.5% to $25,120; franchise royalties/fees/rent +79.3% to $7.3M; digital reached 40% of shop sales in Q4’24 .
- 2023 outcomes (companywide): Same‑store sales +12%; Adjusted EBITDA +80% to ~$28M vs $15.7M in 2022; AUV reached $1.3M target; expanded franchise pipeline and refranchising activity supporting long‑term unit growth goals .
- Role‑specific context: Appointed in June 2023 to lead “all aspects of franchisee market planning, franchise recruitment and sales,” with management citing early progress refining recruiting and selection criteria and advancing deals shortly after arrival . In Mar 2025, Potbelly launched the “50/50 Large Area Developer” incentive to accelerate openings; McKee emphasized the program’s financial benefits to partners who beat timelines, aligning with Potbelly’s multi‑year franchise‑led growth strategy .
Governance, Policies, and Say‑on‑Pay Context
- Governance highlights include independent Board leadership, 100% independent committees, anti‑hedging, rigorous goal‑setting, and clawback policies; compensation tied to share‑price performance and pay‑for‑performance philosophy .
- Annual Say‑on‑Pay is on the ballot each year; the proxies recommend “FOR,” but specific historical approval percentages are not provided in the excerpts reviewed .
Compensation Structure Analysis
- Shift toward equity and multi‑year alignment: Executive LTI mix is 50% PSUs and 50% RSUs, with PSU design increasingly focused on relative TSR and explicit price/TSR hurdles—supporting alignment with long‑term shareholder returns .
- Annual incentives tightly linked to operations: New Shop Development (20% weight in 2024 AIP) paid 0% due to 23 openings vs 42 target, while Adjusted EBITDA (60% weight) paid below target (58%)—a structure that should directly influence franchising priorities in 2025+ .
- Governance safeguards: Minimum 1‑year vesting, no evergreen, no liberal share recycling, no single‑trigger CIC, and no option/SAR repricing without shareholder approval reduce pay‑design risk .
Risk Indicators & Red Flags
- Hedging prohibited; clawback policy in place. No disclosures indicate pledging by McKee; individual ownership/pledging data not available in NEO/Director tables for her. No tax gross‑ups in the LTIP and no single‑trigger CIC vesting (plan‑level) .
- Section 16 compliance note in 2024 proxy cites certain late filings for other individuals; no indication regarding McKee in the excerpts reviewed .
Investment Implications
- Incentive alignment: McKee’s remit (franchise growth) aligns with AIP metrics—particularly New Shop Development (20% weight in 2024)—and PSU hurdles (multi‑year price/TSR), suggesting a strong link between her success and shareholder value creation via accelerated, capital‑efficient unit growth .
- 2024 comp pressure points: With 0% payout on SSS and Development metrics in 2024, the plan design sharpened focus on execution against openings and demand drivers; the March 2025 “50/50” developer incentive indicates management is actively addressing timeline friction to improve AIP outcomes and long‑term PSU realizability .
- Retention and overhang: Standard 3‑year RSU vesting and 3‑year PSU performance windows are retentive; double‑trigger CIC mitigates windfalls while protecting executives if displaced. Lack of disclosed personal ownership data for McKee is a diligence gap for assessing near‑term selling pressure; Form 4 monitoring is recommended (our attempt to fetch Form 4s encountered an access error) .
Sources: 2025 and 2024 Potbelly DEF 14A proxies; Q2’23 earnings call; Mar 4, 2025 franchise incentive press release .