The relationship between CEO compensation and employee pay at public restaurant companies varies widely, according to data disclosed to the Securities and Exchange Commission.
Public companies are now required to disclose that gap, expressed as a ratio of CEO salary to median worker pay, for fiscal 2017 and beyond.
Of the 17 restaurant companies that have reported the figure this year, Chicago-based McDonald’s Corp., the nation’s largest restaurant brand, had the highest ratio at 3,101:1, according to Proxy Insight, which provides information on global shareholder voting.
McDonald’s CEO and president Steve Easterbrook’s earned $21.8 million last year. The median pay for a McDonald’s worker, including part-time workers, in 2017 was $7,017.
McDonald’s CEO-to-median-worker ratio is among the highest outside the restaurant industry as well. According to a 2017 survey by Equilar, which tracks executive compensation, McDonald’s CEO pay ratio ranked at No. 3, behind Weight Watchers, with a CEO-pay-to-median of 5,908:1, and Mattel with a ratio of 4,987:1.
Among restaurant companies, the lowest ratio was reported by Canton, Mass.-based Dunkin’ Brands Group Inc., parent to the Dunkin’ Donuts and Baskin-Robbins brands, at 48.4:1. CEO Nigel Travis’ 2017 compensation was $5.3 million, while the median employee pay during the same period was $110,471.
Allowable exemptions were used in calculating Dunkin’s ratio, the company said in SEC documents. For example, to identify its “median employee,” Dunkin said it annualized some employee compensation and excluded some non-U.S. employees, including a total of 38 from Canada, China, German, Spain, the United Arab Emirates and the United Kingdom.
As of Dec. 30, Dunkin' Brands employed 1,148 people of which 1,103 were included in the pay-ratio calculation.
The new pay-ratio measure, first required of companies for their fiscal 2017 years, was mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act. SEC rules were drafted to provide companies with flexibility in calculating the pay ratio, which is intended to inform shareholders when voting on “say on pay.”
A 2018 survey by Equilar, which examined the CEO pay ratios at 356 public companies across industries, found that the median ratio for all surveyed companies was 140:1.
The following table, created by Proxy Insight, offers a closer look at the wide range in CEO and worker compensation gaps for the 17 restaurant companies that have disclosed the data for their first fiscal years beginning on or after Jan. 1, 2017.
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