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 missing performance targets, according to a company filing.
In April, the fast-food giant said that its executives would take pay cuts as the coronavirus pandemic battered the restaurant industry. Kempczinski’s base salary was cut in half but reinstated in October as the company’s sales recovered. Without the pay cut, his base salary would have been $1.25 million, but he received about $963,500 instead.
Like most chief executives of publicly traded companies, the bulk of Kempczinski’s compensation does not come from a salary. Stock and option awards added $9.5 million to his compensation, and other forms of compensation, like use of the company’s private plane, accounted for an additional $383,000.
McDonald’s executives did not receive any performance-based bonuses because the company fell short of goals for growth in operating income, systemwide sales and same-store sales. Kempczinski could have netted an another $4.25 million. The chain’s total CEO compensation in 2019 ended up topping $18 million.
Kempczinski’s 2020 pay is 1,189 times higher than that of the median McDonald’s employee, who made $9,124 last year, based on company estimates. McDonald’s includes part-time and seasonal workers in its estimates for the pay 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 pay ratio was actually much closer than that of years past. In 2019, the median worker made 1,939 times less than the total CEO compensation, resulting in about 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 to face disagreement on executive pay from shareholders. Starbucks shareholders recently rejected the coffee chain’s compensation plan, although the vote is non-binding.