Gerald L. Morgan
Texas RoadhouseAbout Gerald L. Morgan
Gerald L. Morgan is Chief Executive Officer (CEO) of Texas Roadhouse, appointed March 18, 2021, and a director since 2021; he is 64 and a 28-year veteran of the company with nearly 40 years of foodservice experience including Bennigan’s and Burger King . Under Morgan’s leadership, TXRH delivered 2024 revenue of over $5.3 billion (+16% y/y, including a 53rd week), 8.5% comp sales growth, 42.5% diluted EPS growth, 42.2% net income growth, and 45.9% growth in income from operations; it also paid $162.9 million in dividends and repurchased 461,662 shares ($79.8 million) . Company TSR rose 35.8% in 2023 and 46.5% in 2024; five-year TSR series is in the table below . Board leadership is separated (independent Chairman Gregory N. Moore) mitigating CEO/Chair dual-role concerns; Morgan is not independent due to his CEO role .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Texas Roadhouse | Managing Partner (Grand Prairie, TX, store #26; first in Texas) | 1997–2001 | Led early Texas expansion; named Managing Partner of the Year in 2001 |
| Texas Roadhouse | Market Partner | 2001–2015 | Oversaw and grew operations in TX and OK |
| Texas Roadhouse | Regional Market Partner | 2015–2020 | Expanded multi-region operations; Legends Award recipient (2014) |
| Texas Roadhouse | President | Dec 2020–Jan 2023 | Senior leadership during transition and growth |
| Texas Roadhouse | Chief Executive Officer | Mar 2021–Present | Delivered strong revenue/EPS growth and TSR outperformance |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Bennigan’s | Restaurant management | Not disclosed | Early industry experience; foundation for operating discipline |
| Burger King | Restaurant management | Not disclosed | Early industry experience; scaled foodservice exposure |
Fixed Compensation
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Base Salary ($) | $972,500 | $1,190,000 | $1,295,385 |
| Stock Awards – Grant Date Fair Value ($) | $2,201,368 | $2,599,856 | $2,602,600 |
| Non-Equity Incentive Plan Compensation ($) | $1,245,138 | $1,527,267 | $2,271,270 |
| All Other Compensation ($) | $2,983 | $30,404 | $16,754 |
| Total ($) | $4,421,989 | $5,347,527 | $6,186,009 |
| Metric | 2024 (Prior Agreements) | 2025 (New Employment Agreements) |
|---|---|---|
| Base Salary ($) | $1,300,000 (effective Jan 24, 2024) | $1,400,000 (starting Jan 8, 2025) |
| Target Annual Bonus ($) | $1,300,000 | $1,400,000 |
| Service RSU Grants | Grant Date | Shares | Vest Date | Grant Price |
|---|---|---|---|---|
| FY2024 Service RSUs | Jan 8, 2024 | 11,000 | Jan 8, 2025 | $118.30 |
| FY2025 Service RSUs | Jan 8, 2025 | 11,600 | Jan 8, 2026 | $181.27 |
Performance Compensation
| Component | Weighting | Target | Actual | Payout | Vesting / Settlement |
|---|---|---|---|---|---|
| FY2024 EPS Growth | 50% of performance RSUs and 50% of bonus tied to EPS | 10% EPS growth | 42.5% EPS growth | Included in total performance award payout of 174.7% of target | RSUs vested Jan 8, 2025 ; shares issued Feb 28, 2025 |
| FY2024 Pre-Tax Profit Pool | 50% of performance RSUs and 50% of bonus tied to profit | 1.75% of pre-tax profit pool | $513.7M pre-tax profit; $9.0M pool | Included in total performance award payout of 174.7% of target | RSUs vested Jan 8, 2025 ; shares issued Feb 28, 2025 |
| FY2024 Performance RSU Shares (Morgan) | N/A | Target 11,000 | Actual 19,218 | 174.7% payout overall | RSUs vested Jan 8, 2025; issued Feb 28, 2025 |
| FY2025–2027 EPS Targets (three-year award) | 50% of performance RSUs each tranche | 10% (2025), 21% (2026 vs 2024), 33% (2027 vs 2024) | N/A | 0–200% of target per tranche | One-third vests each Jan 8 from 2026–2028, subject to goals |
| FY2025–2027 Pre-Tax Profit (three-year award) | 50% of performance RSUs each tranche | Profit-based pool (committee determined) | N/A | 0–200% of target per tranche | One-third vests each Jan 8 from 2026–2028, subject to goals |
Policy features: Double-trigger equity vesting upon termination without Cause or for Good Reason within 12 months post-change-of-control; committee may reduce payouts; clawback policy per Nasdaq Rule 10D-1 .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership (as of Mar 17, 2025) | 95,313 shares; <1% of shares outstanding |
| Unvested RSUs at 12/31/2024 | 11,000 service RSUs ($1,984,730 MV) and 11,000 performance RSUs ($1,984,730 MV) |
| Ownership Guidelines | CEO required to own at least 5x annual base salary; executives/directors expected to achieve within 5 years; all in-role ≥5 years compliant as of 2024 |
| Hedging/Pledging | Hedging prohibited; pledging strongly discouraged; as of proxy date, no NEOs or directors have pledged or hold in margin |
Vesting cadence and issuance: FY2024 service/performance RSUs granted Jan 8, 2024; vest Jan 8, 2025; performance RSU shares issued Feb 28, 2025 post-certification . Monitor Form 4 activity around late February following performance certification.
Employment Terms
| Term | CEO Economics |
|---|---|
| Agreement Effective/Term | Effective Jan 8, 2025; initial term to Jan 7, 2028; auto-renewal for successive one-year terms unless notice ≥60 days pre-expiration |
| Base Salary | $1,400,000 (2025) |
| Target Bonus | $1,400,000 (range 0–200% of target) |
| Equity Awards | Service RSUs ($2.1M value for 2025) and three-year performance RSUs ($6.3M target; each tranche 0–200%) |
| Severance – Termination Without Cause | 2x base salary + prorated target bonus + up to 18 months COBRA premiums |
| Severance – Good Reason within 12 months after Change of Control | 2x base salary + 2x target bonus + prorated target bonus + up to 18 months COBRA premiums; 280G excise tax cutback applies |
| Equity Accelerated Vesting | Double-trigger: unvested service/performance RSUs vest if terminated without Cause or for Good Reason within 12 months post-Change of Control |
| Non-Compete / Other Restrictions | 2-year non-compete post-termination; confidentiality, non-solicitation, non-disparagement; clawback applies per policy |
Board Governance
- Director since 2021; not independent; no committee membership due to executive status .
- Board structure: Independent Chairman (Gregory N. Moore); separation from CEO role post founder’s passing; Lead Independent Director responsibilities defined in corporate guidelines .
- Committees (2025): Audit (Chair: Donna Epps), Compensation (Chair: Michael Crawford), Nominating & Corporate Governance (Chair: Curtis Warfield); all independent .
- Meetings/attendance: 2024 – 8 Board meetings; executive sessions typically at each regular meeting; each incumbent director attended ≥75% of meetings .
Director Compensation
- Non-employee director compensation disclosed; employee directors (like CEO) are not listed in director compensation, indicating they do not receive non-employee director fees or RSUs. 2024 non-employee director RSU grants were $230,000 (Chair: $320,000); adjusted for 2025 to $225,000/$315,000 with increased cash components .
Compensation Peer Group and Shareholder Feedback
- Peer groups used: 2024 benchmarking included 14 restaurant peers (e.g., Darden, Chipotle, Cheesecake Factory, Wendy’s); 2025 group broadened (e.g., Domino’s, RBI, Wingstop) .
- 2024 Say-on-Pay approval was ~61% (vs ~94% average in prior four years); Board engaged with investors and implemented new 2025 employment agreements, shifted pay mix, extended performance periods for PSUs, and modified separation payments .
Performance & Track Record
| Metric | FY 2020 | FY 2021 | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|---|---|
| Total Shareholder Return (%) | +40.8 | +17.0 | +5.6 | +35.8 | +46.5 |
| Net Income ($mm) | $31.3 | $245.3 | $269.8 | $304.9 | $433.6 |
| Diluted EPS ($) | $0.45 | $3.50 | $3.97 | $4.54 | $6.47 |
- 2024 operations: Over $5.3B revenue (+16%), 8.5% comps, 45 new systemwide locations (31 company, 14 franchise), first international Jaggers franchise, and acquisition of 13 domestic franchise restaurants on first day of FY2025 .
Risk Indicators & Red Flags
- Say-on-Pay softness (61% in 2024) suggests continued investor scrutiny of separation benefits and performance period design; Board responded with structural changes for 2025 .
- Strong anti-hedging/anti-pledging controls; none pledged as of proxy date .
- Double-trigger equity vesting and 280G cutback limit parachute risk .
- Clawback policy aligned to Nasdaq 10D-1 for restatements .
Equity Ownership & Vesting Schedule Detail (Morgan)
| Grant Type | Grant Date | Target/Granted | Actual Earned | Vest Date | Notes |
|---|---|---|---|---|---|
| 2024 Service RSUs | Jan 8, 2024 | 11,000 | N/A | Jan 8, 2025 | $118.30 grant price |
| 2024 Performance RSUs | Jan 8, 2024 | 11,000 target | 19,218 shares (174.7% payout) | Jan 8, 2025 | Issued Feb 28, 2025 after certification |
| 2025 Service RSUs | Jan 8, 2025 | 11,600 | N/A | Jan 8, 2026 | $181.27 grant price |
| 2025–2027 Performance RSUs | Jan 8, 2025 | $6.3M target (0–2x) | N/A | Jan 8 annually 2026–2028 (1/3 each) | EPS targets: 10%, 21%, 33%; profit-based 50% |
Board Service History and Dual-Role Implications
- Board service: Director since 2021; serves as CEO; not independent (executive director) .
- Committees: N/A (executive) .
- Independence: Board has seven independent directors (post-2025 AGM) and an independent Chairman (Gregory N. Moore), which mitigates CEO-chair concentration; executive sessions held without management .
Employment Contracts, Severance, and Change-of-Control Economics
- Contract length: Effective Jan 8, 2025 to Jan 7, 2028; auto-renewal annually unless notice .
- Severance (no-Cause termination): 2x base + prorated target bonus + up to 18 months COBRA .
- CoC Good Reason (double-trigger within 12 months): 2x base + 2x target bonus + prorated target bonus + up to 18 months COBRA; 280G cutback .
- Equity acceleration: Double-trigger vesting under RSU award agreements for no-Cause or Good Reason within 12 months post-CoC; death/disability pro-rata vesting .
- Non-compete: 2 years; confidentiality/non-solicit/non-disparagement; clawback applies .
Compensation Structure Analysis
- Shift to multi-year PSUs: 2025 adds three-year EPS targets (10%, 21%, 33%) alongside profit pool, increasing long-term alignment vs prior single-year PSUs .
- Pay mix: Increased base and target bonus for 2025; service RSUs and PSUs sized at fixed dollar amounts, with payout variability tied to performance .
- Governance enhancements: Clawback policy, double-trigger vesting, hedging/pledging restrictions, and independent compensation consultant (FW Cook) engagement .
Say-on-Pay and Shareholder Feedback
- 2024 approval ~61%; primary concerns around one-time separation in 2023 and PSU performance period length; Board re-engaged FW Cook, adjusted agreements/structure for 2025 .
Expertise & Qualifications
- Deep operations pedigree at TXRH across store leadership and multi-region management; executive leadership as President and CEO .
- Industry tenure: 28 years at TXRH; ~39 years in restaurant management .
Investment Implications
- High alignment: Significant at-risk pay via PSUs tied to EPS growth and pre-tax profit; equity ownership guidelines and anti-pledging reduce misalignment risk .
- Watch vesting cadence: Annual vest/issuance around early Q1 (Jan 8 vest; late-Feb issuance post certification) can create episodic insider activity; monitor Form 4 filings around these dates .
- Governance mitigants: Independent Chair, double-trigger vesting, 280G cutback, and clawback policy lower change-of-control windfall risk .
- Performance momentum: Strong multi-year TSR, EPS and net income growth under Morgan supports pay-for-performance; continued scrutiny following 2024 Say-on-Pay drives disciplined comp design .