Chris Kempczinski, McDonald’s, speaks during 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’s lack of performance targets, according to a company file.
In April, the fast-food giant said its executives would receive pay cuts as the coronavirus pandemic hit the restaurant industry. Kempczinski’s base salary was halved, but was restored in October as the company’s sales rebounded. Without the pay cut, his base salary would have been $ 1.25 million, but he received about $ 963,500 in return.
Like most CEOs of listed companies, most of Kempczinski’s compensation does not come from a salary. The granting of shares and options added $ 9.5 million to its compensation, and other forms of compensation, such as the use of the company’s private jet, amounted to an additional $ 383,000.
McDonald’s executives did not receive performance-based bonuses because the company did not meet its operating revenue, system-level sales and in-store sales targets. Kempczinski could have earned another $ 4.25 million. The total compensation of the CEO of the chain in 2019 reached over 18 million dollars.
Kempczinski’s pay for 2020 is 1,189 times higher than that of McDonald’s median employee, who earned $ 9,124 last year, based on company estimates. McDonald’s includes part-time and seasonal workers in its estimates for the payroll ratio. Kempczinski told CNBC in November that the company is open to discussing the minimum wage.
Executive pay cuts and the lack of a performance-based bonus mean that McDonald’s salary ratio has actually been much closer than in previous years. In 2019, the average worker achieved 1,939 times less than the CEO’s total compensation, resulting in about 20% of voting shareholders rejecting McDonald’s proposal to compensate management last year. The norm is 10% or less.
McDonald’s is not the only company facing disagreement over executive payment from shareholders. Starbucks shareholders recently rejected the coffee chain compensation plan, although voting is not mandatory.