Patrick Walsh
About Patrick Walsh
Patrick Walsh, age 42, is Senior Vice President and Chief People Officer (CPO) of Potbelly Corporation, appointed in April 2023. He previously held senior HR leadership roles at Oil-Dri Corporation of America and PepsiCo/Frito-Lay, with a focus on talent management, culture, diversity, and large-scale sales and operations support . Company performance during his tenure includes Adjusted EBITDA rising 14.9% to $32.6 million in 2024, expansion to 23 new shop openings, AWS of $25,120, franchise royalties/fees/rent up 79.3% to $7.3 million, and digital reaching 40% of Q4 shop sales . Potbelly’s TSR held at $215.56 per $100 initial investment in both 2023 and 2024, while net income increased to $40.3 million in 2024 .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Oil-Dri Corporation of America | Vice President & Head of Human Resources | Mar 2022 – Apr 2023 | Led HR; supported corporate transformation and talent strategy |
| PepsiCo – North America Beverages | Senior Director HR – Talent Mgmt, Culture & Diversity | Feb 2020 – Mar 2022 | Drove talent, culture, DEI initiatives across large beverage footprint |
| Frito-Lay North America (PepsiCo) | Senior Director HR – Midwest Region Sales & Operations | Feb 2016 – Feb 2020 | Supported multi-region sales/ops, workforce planning and performance |
External Roles
No public company board or external governance roles disclosed for Walsh .
Fixed Compensation
- Base salary and target bonus for Walsh are not individually disclosed in the proxy. The Company’s executive pay framework includes base salary plus annual incentive (AIP) tied to Adjusted EBITDA, same-store sales, and new shop openings .
- Benefits eligibility includes the safe harbor 401(k) (match up to 4% of eligible comp, with service requirement) and access to the non-qualified deferred compensation plan for highly compensated employees .
Performance Compensation
- Long-term incentives for executive officers are delivered 50% as performance stock units (PSUs) and 50% as restricted stock units (RSUs), under the 2019 LTIP. 2024 PSUs vest based on absolute stock price targets or relative TSR vs the Russell 3000 Travel & Leisure Index over a 3-year period; 2025 PSUs pivot to relative TSR vs the Russell 3000 Restaurant Index with an absolute TSR cap if negative .
- Walsh’s specific grant sizes are not disclosed. Design and vesting schedules below apply to executive officers generally.
Company Annual Incentive Plan (AIP) – 2024 Metrics, Weights, Targets and Results
| Metric | Threshold (50%) | Target (100%) | Stretch (150%) | Max (200%) | 2024 Actual | Achievement % | Weight | Payout % |
|---|---|---|---|---|---|---|---|---|
| Adjusted EBITDA ($mm) | $28.8 | $32.1 | $34.6 | $37.3 | $31.865 | 92% | 60% | 58% |
| Same-Store Sales (YoY) | 1.5% | 5.5% | 6.2% | 7.5% | (0.3)% | 0% | 20% | 0% |
| New Shop Development (#) | 30 | 42 | 45 | 49 | 23 | 0% | 20% | 0% |
Notes: A discretionary negative adjustment of $0.685m reduced Adjusted EBITDA for bonus calculus; without it, AEBITDA was $32.5m .
Long-Term Incentive Design – PSU Targets (Grant 2024)
| Criterion | Threshold (50%) | Target (100%) | Target (150%) | Max (200%) |
|---|---|---|---|---|
| Target Stock Price | $13.78 | $16.77 | $20.97 | $29.95 |
| Relative TSR vs Russell 3000 Travel & Leisure | >40th pct | >55th pct | >75th pct | >90th pct |
RSUs: Annual grants vest in 3 equal installments beginning on the first anniversary of grant .
2025 PSU design update: Relative TSR measured vs Russell 3000 Restaurant Index with an absolute TSR cap limiting upside if absolute TSR is negative over the measurement period .
Equity Ownership & Alignment
- Executive stock ownership guidelines are characterized as robust, though specific executive multiples are not disclosed in the proxy (director guidelines are 4x annual retainer) .
- Anti-hedging policy prohibits directors, officers, and employees from hedging or monetization transactions (e.g., prepaid forwards, options, swaps, collars) that offset declines in Potbelly stock .
- Clawback policy updated in Oct 2023 to comply with SEC Rule 10D-1 and NASDAQ: recovery of incentive-based compensation tied to financial reporting measures in the event of a restatement due to material noncompliance .
- Pledging: No explicit disclosure; insider trading policy prohibits certain transactions but does not specify pledging restrictions in the proxy .
Employment Terms
- Start date and tenure: Walsh became SVP & CPO in April 2023 .
- Employment agreement details (term, non-compete, non-solicit, severance) for Walsh are not individually disclosed. Named agreements are provided for CEO, CFO, COO, CMO, and CLO .
- Change-of-control economics (2019 LTIP): Double-trigger vesting—upon termination without cause within 24 months post-Change in Control or plan termination without award assumption, options/SARs become exercisable and other awards fully vest; performance awards vest at higher of pro-rated target or actual achievement to date .
Performance & Track Record
Company Performance Context During Walsh’s Tenure
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Net Income (Loss, $000s) | $4,345 | $5,119 | $40,294 |
| TSR Value of $100 Investment | $129.10 | $215.56 | $215.56 |
| Adjusted EBITDA ($mm, year narrative) | — | $28.3 | $32.6 |
| New Shop Openings (#) | — | — | 23 |
| AWS ($) | — | — | $25,120 |
| Franchise Royalties/Fees/Rent ($mm) | — | — | $7.3 |
| Digital Mix (Q4) | — | — | 40% |
Walsh’s role includes partnering with the CEO to present compensation and performance goal recommendations to the Compensation Committee, indicating direct involvement in incentive design and goal-setting processes .
Compensation Peer Group (Benchmarking Reference)
| Segment | Companies |
|---|---|
| Casual Dining | Ark Restaurants; BJ’s Restaurants; Chuy’s; Denny’s; Dine Brands; First Watch; Red Robin |
| Fine Dining | The ONE Group |
| Quick Casual | FAT Brands; Fiesta Restaurant; Noodles & Company; Portillo’s; Shake Shack; Sweetgreen; Wingstop |
| Quick Service | Dutch Bros; El Pollo Loco; Jack in the Box |
Risk Indicators & Red Flags
- Clawback policy and anti-hedging mitigate incentive risk and misalignment .
- Double-trigger vesting avoids single-trigger windfalls on change-in-control .
- No 280G excise tax gross-ups under the 2019 LTIP; repricing of options/SARs prohibited without stockholder approval .
Investment Implications
- Alignment: Executive LTI design ties half of pay to PSUs with absolute price hurdles or relative TSR, plus an absolute TSR cap introduced for 2025—supportive of pay-for-performance and downside protection on negative TSR .
- Retention: RSU tranches and multi-year PSU measurement (to April 2027) suggest moderate retention hooks; Walsh’s 2023 start implies overlapping vesting cycles through 2026–2027 .
- Selling pressure: Annual RSU vesting can create periodic supply; absence of disclosed pledging limits visibility on collateral risk; anti-hedging reduces adverse trading signals .
- Execution risk: AIP underpaid on SSS and new unit targets in 2024, with payout driven solely by Adjusted EBITDA; reinforces discipline in incentive design as unit growth and comps remain key levers .