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’s lack of performance targets, according to a company submission.
In April, the fast-food giant said it would cut back on management because the coronavirus pandemic plagued the restaurant industry. Kempczinski’s base salary was halved, but reinstated in October when the company’s sales recovered. Without the pay cut, his base salary would have been $ 1.25 million, but he would have received about $ 963,500 instead.
Like most executives of listed companies, most of Kempczinski’s remuneration does not come from a salary. Share and option grants added $ 9.5 million to his 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 have the targets for operating revenue growth, system-wide sales, and same-store sales. Kempczinski could earn another $ 4.25 million. The chain’s total compensation for CEO in 2019 will eventually be $ 18 million.
Kempczinski’s 2020 salary is 1,189 times higher than that of McDonald’s median, who earned $ 9,124 last year, based on company estimates. McDonald’s includes part-time and seasonal workers in the payroll estimates. Kempczinski told CNBC in November that the company was open to discussing the minimum wage.
Executive pay cuts and the lack of a performance-based bonus mean that McDonald’s pay ratio was actually much closer than in previous years. In 2019, the median made 1939 times less than the CEO’s total remuneration, resulting in about 20% of the voting shareholders rejecting McDonald’s proposal for management remuneration last year. The norm is 10% or less.
McDonald’s is not the only company that has disagreements over the executive salaries of shareholders. Starbucks shareholders recently rejected the coffee chain’s compensation plan, though the vote is not binding.