Chris Kempczinski of McDonald’s speaks at a press conference in New York City, November 17, 2016.
Shannon Stapleton | Reuters
McDonald’s CEO Chris Kempczinski received more than $ 10.8 million in compensation last year, despite the company falling short of its performance targets, according to a company file.
In April, the fast food giant said its executives would agree to pay cuts as the coronavirus pandemic hit the restaurant industry. Kempczinski’s base salary was cut in half, but restored in October as the company’s sales picked up. Without the pay cut, his base salary would have been $ 1.25 million, but he received about $ 963,500 instead.
Like most executives of publicly traded companies, the bulk of Kempczinski’s compensation does not come from a salary. Stock 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, added an additional $ 383,000.
McDonald’s executives did not receive any performance-based bonuses because the company failed to meet its targets for growth in operating income, system-wide sales and same-store sales. Kempczinski could have brought in an additional $ 4.25 million. Total compensation for the chain’s CEO in 2019 ended up reaching $ 18 million.
Kempczinski’s 2020 salary is 1,189 times that of the median McDonald’s employee, who earned $ 9,124 last year, according to company estimates. McDonald’s includes part-time and seasonal workers in its wage ratio estimates. Kempczinski told TBEN in November that the company was ready to discuss minimum wage.
Executive pay cuts and the lack of a performance-based bonus meant that McDonald’s pay ratio was actually much closer than in years past. In 2019, the median worker earned 1,939 times less than the CEO’s total compensation, leading about 20% of voting shareholders to reject McDonald’s executive compensation proposal last year. The norm is 10% or less.
McDonald’s isn’t the only company facing a disagreement over executive compensation for shareholders. Starbucks shareholders recently rejected the coffee chain’s compensation plan, although the vote was not binding.