Michael A. Miles, Jr.
About Michael A. Miles, Jr.
Independent Chairman of the Board of Portillo’s Inc. since 2014; age 63; former COO/President of Staples (10 years), COO of Pizza Hut (3 years), and interim CEO of Portillo’s (2014–2015), with early career roles at Bain & Co. and PepsiCo . Under his board leadership, Portillo’s delivered 2024 revenue of $710.6M, Adjusted EBITDA of $104.8M, and Restaurant-Level Adjusted EBITDA of $168.1M, while same-restaurant sales declined 0.6%; the 2024 TSR of a $100 initial investment was $30.86 versus $100.21 for the peer index, highlighting a value-creation gap to close as the growth plan scales . The Board separates the Chair and CEO roles, with Miles designated independent and serving on the Compensation Committee and the Nominating & Corporate Governance Committee; board attendance averaged 96% in 2024 .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Staples, Inc. | COO & President | ~10 years | Restructured and streamlined operations at a $25B global retailer to drive efficiency and profitability . |
| Pizza Hut (YUM Brands) | COO | 3 years | Restaurant industry operating insights; multi-unit development and marketing experience . |
| Portillo’s Inc. | Interim CEO | 2014–2015 | Provided transitional leadership prior to IPO era; informed restaurant operations and strategy . |
| Bain & Co.; PepsiCo | Early career | — | Strategy and consumer/CPG foundations supporting multi-unit execution and brand development . |
External Roles
| Organization | Role | Committee/Position | Notes |
|---|---|---|---|
| Western Union (NYSE: WU) | Director | Chair, Compensation; Member, Governance & ESG | Public board service and compensation governance experience . |
| Berkshire Partners | Advisory Director | — | Private equity advisory; consumer and multi-unit portfolio expertise . |
Fixed Compensation (Director)
| Component | FY 2023 | FY 2024 | Notes |
|---|---|---|---|
| Cash fees | $175,000 | $0 | In 2024, elected to take fees in equity; directors may elect cash-in-equity . |
| Stock awards (RSUs) | $120,000 | $295,000 | FY2024 RSUs granted May 2, 2024 ($11.94 grant price), vested in full Dec 31, 2024 . |
| Total | $295,000 | $295,000 | Director program comprises cash retainer + annual RSUs + chair fees . |
Director compensation program parameters:
- Annual cash retainer: $80,000; Board Chair fee: $95,000; Committee Chair fees: Audit $25,000; Compensation $20,000; Nominating/Governance $15,000; Annual RSU retainer: $120,000; RSUs vest by year-end; cash fees may be elected in equity .
Performance Compensation (Company executive plan context under Miles’ Committee oversight)
| Metric | Weighting | Target | Actual | Payout | Vesting/Notes |
|---|---|---|---|---|---|
| Adjusted EBITDA (STI FY2024) | 75% | $110.7M (100% payout) | $104.8M | 70.5% | Cash STI payout curve 0–200%; corporate metric dominant . |
| Individual Objectives (STI FY2024) | 25% | Goal-based | Company-wide evaluation | 0–200% (CEO 70.5% in 2024 frame) | Strategic pillars-driven goals and leadership assessments . |
| Long-Term Incentives (NEOs FY2024) | Mix | PSU 3-year | Revenue & Adj. EBITDA growth | 50–200% of target per metric | PSUs (50%) with 3-year goals; RSUs (50%) time-based vest; CEO: 50% PSUs, 50% NQSOs (4-year cliff) . |
Notes:
- FY2024 STI structure emphasized shareholder-aligned profitability (Adjusted EBITDA) and strategic execution; payouts scaled down on a below-target year .
- LTI for executives reintroduced in 2024 with explicit 3-year revenue and Adjusted EBITDA dollar growth hurdles (threshold/target/high), linear interpolation between levels .
Equity Ownership & Alignment
| Measure | Value | As-of | Notes |
|---|---|---|---|
| Beneficial ownership (Class A) | 883,930 shares; 1.37% | Record date Apr 11, 2025 | Calculated per SEC rules; includes options exercisable within 60 days . |
| Unexercised stock options | 553,555 | FY2024 year-end | Director outstanding options disclosure for independent directors . |
| Shares pledged | None permitted | Policy | Hedging and pledging of Company securities are prohibited for directors/officers . |
| Director ownership guideline | 4× annual cash Board retainer | Policy | Compliance assessed; all directors on track or satisfied by end FY2024 . |
Employment Terms
- Status: Independent Chairman of the Board; not an executive officer or NEO; Board has formally determined independence under Nasdaq rules .
- Committee roles: Compensation Committee member; Nominating & Corporate Governance Committee member; not a committee chair in FY2024; governance separation of Chair and CEO maintained .
- Rule 16b-3 nuance: Neither Miles nor Lutzker qualifies as “non-employee director” under Rule 16b-3; therefore, the full Board approves equity awards to directors/officers while they serve on the Compensation Committee (procedural safeguard) .
- Trading restrictions: Prohibition on hedging and pledging; Company adopted an Incentive-Based Compensation Recovery (clawback) policy in Oct 2023; no applications to date .
Board Governance
- Board service history: Director since 2014; Chairman; committees—Compensation; Nominating & Corporate Governance; independence affirmed .
- Leadership structure: Chair and CEO roles separated; Chair duties include presiding at Board/shareholder meetings, setting agendas with CEO, and calling special meetings; Board designates Lead Independent Director only if Chair is not independent .
- Attendance: Eight Board meetings held in 2024; average Board attendance 96%, Committees 99%; Directors met regularly in executive session without management .
- Activism/cooperation: April 28, 2025 Engaged Capital Cooperation Agreement to jointly identify a new restaurant-operator director; standstill, voting commitments, and reimbursement capped at $300,000; termination provisions include appointment timing .
Compensation Structure Analysis (Signals)
- Increased equity mix: Miles elected to take director cash fees in equity in 2024 (all stock awards; $295,000), versus cash + equity in 2023 ($175,000 cash; $120,000 equity)—supportive of alignment with shareholders .
- Program design: Independent director RSUs vest within the fiscal year (fully vested by Dec 31); absence of director performance-linked equity limits short-term gaming risk; compensation levels benchmarked by an independent consultant .
- Executive pay oversight: As Compensation Committee member, oversight emphasized Adjusted EBITDA and multi-year value creation via 3-year PSUs tied to revenue and Adjusted EBITDA growth—clear pay-for-performance linkage .
Related Party Considerations
- Berkshire Partners relationships: Berkshire-managed funds are a significant shareholder (18.73%); registration rights and secondary offering mechanics disclosed; Miles is Advisory Director at Berkshire, and Lutzker (Berkshire MD) serves on the Board—Board independence affirmed under Nasdaq, but equity award approvals routed through full Board due to Rule 16b-3 status .
- Olo transactions: Board member Noah Glass is CEO of Olo; 2024 Olo-related costs were ~$2.47M with $0.4M payable at year-end—reviewed under related party policy and Audit Committee oversight .
Investment Implications
- Alignment: Large personal stake (883,930 shares) and prohibition on pledging/hedging indicate clean alignment; shift to equity-heavy director pay reinforces long-term orientation .
- Option overhang: 553,555 unexercised options represent potential future supply; not necessarily near-term pressure given vesting/price dynamics but relevant for liquidity modeling .
- Governance quality: Independent Chair with strong compensation/governance credentials; separation of Chair/CEO; robust ownership guidelines and clawback policy; full Board approval of equity awards adds process rigor given Rule 16b-3 nuance .
- Performance lens: 2024 below-target Adjusted EBITDA (70.5% payout) and lagging TSR versus peers underscore the importance of execution against the 3-year PSU growth hurdles; oversight continuity plus cooperation with an activist may catalyze operator-focused board refresh and operational improvements .