Chris Kempczinski, McDonald’s, speaks at a press conference in New York, November 17, 2016.
Shannon Stapleton | Reuters
McDonald’s CEO Chris Kempczinski received more than $ 10.8 million in compensation last year, despite the company missing performance targets, a company filing said.
In April, the fast-food giant said its executives would receive pay cuts as the coronavirus pandemic ravaged the restaurant industry. Kempczinski’s base salary was cut in half, but was restored in October when the company’s sales rebounded. Without the pay cut, his base salary would have been $ 1.25 million, but instead he received about $ 963,500.
Like most CEOs of listed companies, most of Kempczinski’s compensation does not come from a salary. Stock and option rewards added $ 9.5 million to his compensation, and other forms of compensation, such as using the company’s private jet, added an additional $ 383,000.
McDonald’s executives did not receive performance-related bonuses because the company failed to meet its operating profit growth, system-wide sales and in-store sales targets. Kempczinski could have raised an additional $ 4.25 million. The chain’s total CEO compensation in 2019 ended up being $ 18 million.
Kempczinski’s 2020 salary is 1,189 times higher than that of the average McDonald’s employee, who earned $ 9,124 last year, based on company estimates. McDonald’s includes part-time and seasonal workers in its wage ratio estimates. Kempczinski told CNBC in November that the company is open to discussions about the minimum wage.
Executive pay and the lack of a performance-related bonus mean that McDonald’s pay ratio was actually much closer than it has been in years past. In 2019, the average employee earned 1,939 times less than the total CEO compensation, leading to approximately 20% of voting shareholders rejecting McDonald’s proposal for management compensation last year. The norm is 10% or less.
McDonald’s isn’t the only company facing disagreements over executive compensation. Starbucks shareholders recently rejected the coffee chain’s compensation plan, although the vote is not binding.