David A. Pace
RED ROBIN GOURMET BURGERSAbout David A. Pace
David A. Pace, 66, was appointed President and CEO of Red Robin on April 24, 2025 and has served on the Board since August 2019; he was Board Chair until April 2025 before resigning committee roles upon becoming CEO . He has 35+ years of turnaround leadership across Jamba (CEO), Carrabba’s Italian Grill (President), Bloomin’ Brands (EVP), Starbucks, PepsiCo and Yum! Brands, and is currently independent Chair of Farmer Bros. Co . Company performance context: Red Robin’s 2022–2024 relative TSR was -67.4% with a 14th percentile rank vs peers and 0% PSU payout for that cycle, reinforcing a pay-for-performance stance entering Pace’s tenure . Initial outlook under Pace: the company guided Q1 2025 comps +~3% and expects Adjusted EBITDA above its $18–$19M range .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Jamba, Inc. | CEO; Director | 2016–2018; 2012–2018 | Delivered 8 consecutive quarters of comps growth, exited non-core units, merged with Focus Brands |
| Carrabba’s Italian Grill | President | 2014–2016 | Broad operational changes, margin improvement, accelerated profit growth |
| Bloomin’ Brands | EVP & Chief Resource Officer | 2010–2014 | Led real estate and human capital across ~1,500 restaurants and ~100,000 team members |
| Starbucks; PepsiCo; Yum! Brands | Various leadership roles | Prior years | Senior roles across food, beverage and retail operations |
External Roles
| Organization | Role | Years |
|---|---|---|
| Farmer Bros. Co | Independent Chair of the Board | 2023–present |
| Authentic Restaurant Brands | Director | 2022–present |
| Dallas Stars Ownership Advisory Board | Member | 2017–present |
| Tastemaker Acquisition Corp. | Co-CEO | 2020–2023 |
| Jamba, Inc. | Director | 2012–2018 |
Board governance and dual-role implications
- The Board explicitly separates Chair and CEO roles; Pace moved from Chair to CEO in April 2025 and Anthony Ackil was appointed independent Chair, preserving independent oversight .
- Pace resigned from Compensation and Nominating & Governance Committees upon CEO appointment; all committee members are independent in accordance with Nasdaq standards .
- Board independence is 88.9%; directors held 15 meetings in 2024 with >95% attendance and regular executive sessions without management .
- Anti-hedging and pledging policies apply to executives and directors, with pre-clearance required for trades under the Insider Trading Policy .
Fixed Compensation
| Component | Value | Notes |
|---|---|---|
| CEO Base Salary (2025) | $750,000 | Set in offer letter |
| Annual Bonus Target (2025) | 200% of base ($1,125,000 target) | Minimum payout $850,000 for FY2025 regardless of pro-ration |
| Director Cash Fees (2024) | $170,000 | As director/chair pre-CEO; 2024 director RSU grant value $110,965; total $280,965 |
| Director annual retainers | $75,000 standard; chair differentials | Chair $95,000; Committee chairs: Audit $25,000; Comp $17,500; NGC $12,500; Finance $12,500 |
Performance Compensation
Annual incentive design (company program context)
| Metric (2024 STI) | Weighting | Target mechanics | 2024 actual payout |
|---|---|---|---|
| Annual Adjusted EBITDA | 60% | 80% min → 25%; 100% → 100%; 120% → 200% | 0% of target (below threshold) |
| Quarterly Adjusted EBITDA (cumulative) | 25% (6.25% per quarter) | 80% min → 25%; 100% → 100% | Q1 90.29%; Q2–Q4 0% |
| Relative Guest Traffic | 15% | 25th → 25%; 50th → 100%; 75th → 200% | 60th percentile → 140% of target |
| Combined STI payout (2024) | — | — | 26.64% of target |
CEO equity awards (2025 grant structure)
| Award | Quantity | Vesting | Performance criteria |
|---|---|---|---|
| RSUs (2025 tranche) | 250,000 | Full vest on first anniversary of grant (April 24, 2026) | |
| RSUs (2026 tranche) | 500,000 | Vests 50% per year on each anniversary of 2026 grant | |
| PSUs (2025) | 900,000 target | Performance vesting per schedule; settlement timing varies by trigger | |
| PSU share-price hurdles | 350,000 at $10; 300,000 at $12.50; 250,000 at $15 | Achieved if 30-day avg closing price ≥ hurdle during performance period; vesting/settlement depends on timing and employment status | |
| PSU fallback metric | 350,000 earned at end of period if Relative TSR within 25th–75th percentile of defined peer group | No interpolation; peer set specified |
Equity Ownership & Alignment
| Item | Amount | Detail |
|---|---|---|
| Beneficially owned common shares (as of 4/11/2025) | 36,449 | Direct ownership; <1% of outstanding |
| Deferred RSUs (vested or vest within 60 days) | 35,249 | Vested but deferred per footnote |
| Outstanding director RSUs (May 2024 grant) | 16,415 | Vest on later of 50 weeks or next annual meeting |
| CEO RSUs (2025+2026) | 750,000 | 250k vests at 1 year; 500k vests 50% annually starting 2026 |
| CEO PSUs | 900,000 target | Share-price hurdles ($10 / $12.50 / $15) and relative TSR fallback |
| Executive stock ownership guideline | 5x base salary for CEO | Five-year compliance clock; RSUs/earned PSUs count; all NEOs in compliance or on track at measurement date |
| Hedging/pledging | Prohibited | Applies to executives and directors |
| Insider trading controls | Pre-clearance required | Insider Trading Policy prohibits margin accounts and pledging |
Employment Terms
| Provision | Terms |
|---|---|
| Term and location | Initial 3-year term from April 24, 2025; remote from Dallas, TX with travel to Englewood, CO HQ |
| Severance (without cause / good reason) | 2x base salary in installments over 24 months; pro-rata annual bonus based on actual; lump-sum COBRA cost for up to 18 months |
| Completion Bonus (succession) | If successor appointed after 2nd anniversary and employment terminates in connection: 1x base salary lump-sum plus pro-rata bonus; mutually exclusive with severance |
| Change-in-control (CIC) | Under Executive CIC Severance Plan: cash severance multiplier 2.0; benefits continuation 24 months; definitions aligned to offer letter |
| PSU CIC treatment | If CIC before period end: target PSUs earned, paid in cash at CIC value within 5 business days |
| Restrictive covenants | 24-month non-compete (defined burger-focused and casual dining concepts), non-solicit of employees/suppliers, confidentiality, non-disparagement |
| Arbitration and governing law | Arbitration in Denver, CO; governed by Colorado law; with injunctive relief available |
| Clawback | Nasdaq 5608-compliant clawback; recovery of erroneously awarded incentive comp |
Compensation peer group and governance practices
- 2024 compensation benchmarking peer group included 18 restaurant companies (e.g., BJ’s, Bloomin’ Brands, Brinker, Cheesecake Factory, Denny’s, Texas Roadhouse, Wendy’s), revised to 17 companies for 2025 .
- Independent consultant Meridian advised the Compensation Committee; design emphasizes capped payouts, multi-year LTI, relative TSR, double trigger for CIC cash severance/equity vesting, no excise tax gross-ups, no repricing of underwater options without shareholder approval .
- 2024 say-on-pay received over 86% support; prior five years each above 90% support; annual frequency reaffirmed in 2023 at >95% support .
Performance & Track Record
- At Jamba, Pace led 8 consecutive quarters of comparable store sales growth, exited non-core assets, and executed a sale/merger to Focus Brands; at Carrabba’s he drove margin and profit acceleration .
- Red Robin’s 2022–2024 PSU cycle paid 0% due to relative TSR below the 25th percentile, highlighting performance gating of equity awards .
- Management’s April 2025 update under Pace guided Q1 comps +~3% and Adjusted EBITDA above prior $18–$19M range .
Director service history and compensation (prior to CEO role)
| Item | Details |
|---|---|
| Board tenure | Director since August 2019; Chair until April 2025; resigned committee roles (Compensation; Nominating & Governance) upon CEO appointment |
| Committee independence & attendance | All committees independent; Board met 15 times in 2024 with >95% attendance; regular executive sessions without management |
| 2024 Director compensation | Fees $170,000; RSU grant $110,965 (16,415 RSUs at $6.76 close on grant date, number based on $120k/30-day avg $7.31); total $280,965 |
| Director ownership guideline | Minimum cost basis = 5x cash retainer ($375,000); all directors compliant/on track; no RSU/award share sales during tenure |
Compensation structure analysis and potential trading signals
- Shift to equity-heavy CEO package: 1.65M total RSUs/PSUs grant over 2025–2026 with performance share triggers tightly linked to stock price and relative TSR, increasing pay-for-performance alignment and potentially magnifying equity supply at vest dates (notably April 2026 for 250k RSUs) .
- Annual bonus minimum in FY2025 ($850k) reduces downside cash volatility while a 200% target elevates at-risk pay tied to performance plan metrics; bonus specifics for FY2025 will be set by the Board/Comp Committee .
- Anti-hedging/pledging and pre-clearance requirements reduce problematic selling pressure risks; however, large single-year RSU vesting in 2026 and PSU settlements upon hurdle achievement are potential supply events to monitor around vesting windows .
Risk indicators and red flags
- CIC provision for PSUs pays target in cash at CIC, functioning as a single-trigger for PSU earning upon CIC (although severance remains double-trigger), which can be shareholder-sensitive; still, overall program includes double-trigger for cash severance/equity vesting and no excise tax gross-ups .
- 2022–2024 TSR underperformed peer medians (14th percentile), leading to 0% PSU payout; while not directly indicative of Pace’s CEO tenure, it underscores execution risk in the turnaround and the stringent nature of performance equity .
Equity ownership & pledging/hedging status
- Direct ownership 36,449 shares (<1% of 17,735,916 shares outstanding as of April 11, 2025); 35,249 vested/deferred RSUs; 16,415 director RSUs outstanding; hedging/pledging prohibited by policy .
Investment Implications
- Strong alignment: Pace’s equity program ties 900k PSUs to share-price hurdles and relative TSR; combined with 750k RSUs, vesting windows (April 2026 and subsequent anniversaries) are key dates for potential supply and management confidence signals depending on retention of net shares post-withholding .
- Execution focus: Early Q1 2025 outlook indicates comps and Adjusted EBITDA ahead of plan; monitoring STI metric evolution (Adjusted EBITDA and guest traffic) will inform bonus realization and near-term cash pay leverage .
- Governance mitigants: Independent Chair, double-trigger severance/equity vesting, clawback, and anti-hedging/pledging policies temper governance and alignment concerns, even with the CEO’s dual director role .
- Prior TSR underperformance raises bar for turnaround credibility; PSU fallback to relative TSR suggests direct linkage of Pace’s equity outcomes to market-relative performance; watch for communication on North Star execution and capital structure plans Pace flagged (deleveraging, operating flexibility) .