Business Context and Reporting Period
This Form 8-K Current Report from Texas Roadhouse, Inc. (TXRH) is dated December 30, 2025. The filing details the Compensation Committee's decision to adjust the 2026 fiscal year compensation packages for the company's Named Executive Officers (NEOs), effective January 8, 2026. The adjustments align executive pay with the company's annual review process for support center employees.
Key Financial Metrics and Compensation Details
The filing does not report operational financial metrics such as revenue, profit, cash flow, or debt. Instead, it discloses specific compensation figures for the 2026 fiscal year:
- Base Salary Adjustments: Effective January 8, 2026, CEO Jerry Morgan's base salary is set at $1,475,000. Other executives (Gina Tobin, Chris Colson, Travis Doster, Hernan Mujica, Paul Marshall) have base salaries ranging from $662,000 to $762,000.
- Short-Term Incentives: Target cash bonuses are established based on pre-tax profits, comparable restaurant traffic growth, and store week growth. Jerry Morgan's target bonus is $1,475,000 (range: $0 to $2,950,000).
- Equity Grants:
- Service-Based RSUs: Granted on January 8, 2026, vesting January 8, 2027. Jerry Morgan received a grant valued at $2,200,000.
- Performance-Based RSUs: Granted on January 8, 2026, vesting January 8, 2029. Targets include 33% EPS growth versus 2025 and pre-tax profits. Jerry Morgan's target value is $2,200,000 (range: $0 to $4,400,000).
- Long-Term Service RSUs: Jerry Morgan received a grant valued at $11,000,000, vesting January 8, 2031. Other executives received grants ranging from $1,700,000 to $2,000,000, vesting January 8, 2028.
Material Changes Versus Prior Period
The filing represents a material change in executive compensation structure for the 2026 fiscal year compared to prior arrangements. The Compensation Committee exercised its discretion to adjust base salaries and establish new incentive targets. The filing notes that compensation for Mike Lenihan and Keith Humpich remains as previously disclosed in a December 1, 2025, Form 8-K.
Guidance, Outlook, and Risks
Performance Targets: The performance-based restricted stock units are tied to specific goals: (i) earnings per share (EPS) growth of 33% compared to the 2025 fiscal year, and (ii) pre-tax profits. Achievement of these goals determines whether the payout is reduced to zero or increased to a maximum of two times the target amount.
Management Commentary: The Compensation Committee reserves the right to apply minimum or maximum caps to the entirety of the bonus or to each metric individually. The adjustments reflect alignment with target percentage parameters used for support center employees.
Risks and Contingencies: Equity grants are contingent upon continued employment through the vesting dates. Long-term service units for non-CEO executives include a one-year post-vesting restriction on sales.
Investor Verification Checklist
- Verify the actual share count for RSU grants, which depends on the closing stock price on the trading day immediately preceding January 8, 2026.
- Confirm the 2025 fiscal year EPS baseline to assess the feasibility of the 33% growth target for performance-based RSUs.
- Review the December 1, 2025, Form 8-K for the specific compensation details of Mike Lenihan and Keith Humpich, which were not updated in this filing.
- Monitor future filings for the actual achievement of pre-tax profit and traffic growth metrics to determine final bonus payouts.