Executive took 50% cut in base salary from April to September amid COVID-19 impact
Chris Kempczinski, president and CEO of McDonald’s Corp., received total compensation of $10.8 million in 2020, the company said in federal filings Thursday.
In response to the COVID-19 pandemic, Kempczinski, who was named CEO of the Chicago-based burger giant in November 2019, took a 50% reduction in his base salary between April 15 and Sept. 30, the company said in Securities and Exchange Commission filings.
McDonald’s said Kempczinski’s actual base pay was $963,506 for the year based on a pre-reduction base of $1.25 million. Stock awards in the year were near $4.75 million and option awards were $4.75 million. All other compensation totaled $383,386, bringing the total for the year to $10,847,032.
Kempczinski’s predecessor, Steve Easterbrook, received total compensation in 2018 of $15.9 million. In 2017, Easterbrook’s total compensation was $21.8 million.
By comparison, Chipotle Mexican Grill CEO Brian Niccol’s total compensation in 2020 was $38 million— up from $33.5 million in 2019 — with a base salary of $1.24 million up from $1.2 million in 2019, according to the Newport Beach, Calif.-based company’s SEC filings earlier this week.
Dublin, Ohio-based Wendy’s Co. in federal filings earlier this month said Todd Penegor, president and CEO, was awarded total compensation of $7.2 million in 2020.
Many restaurant executives took pay reductions during the COVID-19 downturn.
The McDonald’s reported ratio of CEO-to-median-employee pay — which is calculated based on various company formulas — was 1,189:1.
‘The company believes that this ratio is not indicative of a typical year, given reduced CEO pay resulting from the negative impacts of COVID-19,” McDonald’s said in its federal filing.
In addition to the voluntary salary reduction, Kempczinski’s compensation in the most recent year was impacted because the company did not achieve the minimum required performance thresholds for the 2020 short-term incentive plan, McDonald’s noted.
McDonald’s said the company’s compensation committee did not make any incentive-plan adjustments to account for the business impact of COVID-19.
“As a result, executive payouts under the 2020 STIP were $0, and our CEO’s 2020 total compensation of $10,847,032 was significantly lower than in prior years,” the company said.
In 2019, the company identified its median employee, for purposes of the pay ratio disclosure, by annualizing one month’s total gross wages for its employees (other than the CEO) located in markets across the globe who were employed on Oct. 1, 2019.
“Our median employee for 2020 is the same individual identified in 2019 (a part-time restaurant crew employee located in the United Kingdom) and had 2020 total compensation of $9,124,” the company said in footnotes.
As of Dec. 31, McDonald’s had about 39,000 locations in more than 100 countries. About 93% of McDonald’s restaurants worldwide are owned and operated by franchisees.
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