Chris Kempczinski, McDonald’s, speaks during a press conference in New York on November 17, 2016.
Shannon Stapleton | Reuters
McDonald’s CEO Chris Kempczinski received compensation of more than $ 10.8 million last year, even though the company failed to meet performance targets, a company said.
In April, the fast-food giant said its executives would take pay cuts while the coronavirus pandemic attacked the restaurant industry. Kempczinski’s base salary was halved, but was restored in October as the company’s sales recovered. Without the pay cut, his base salary would have been $ 1.25 million, but instead he received about $ 963,500.
Like most executives in head of listed companies, most of Kempczinski’s compensation does not come from a salary. The allotments of shares and shares added $ 9.5 million to their 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 any performance-based bonuses because the company did not meet the goals of operating revenue growth, system-wide sales and in-store sales. Kempczinski could have raised another $ 4.25 million. The total compensation of the CEO of the chain in 2019 ended up exceeding $ 18 million.
Kempczinski’s pay for 2020 is 1,189 times higher than that of the average McDonald’s employee, who earned $ 9,124 last year, according to company estimates. McDonald’s includes part-time and temporary workers in its wage ratio estimates. 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 make McDonald’s salary ratio much closer than in years past. In 2019, the average worker earned 1,939 times less than the CEO’s total compensation, resulting in approximately 20% of voting shareholders rejecting McDonald’s management’s compensation proposal last year. The standard is 10% or less.
McDonald’s isn’t the only company facing disagreement over shareholder executive compensation. Recently, Starbucks shareholders rejected the coffee chain’s compensation plan, even though the vote is not binding.