McDonald’s strong sales recovery and a healthy stock price performance earned its chief executive a hefty pay increase last year.
Chris Kempczinski received a pay package of just over $20 million in 2021, according to new SEC documents filed on Monday.
That was nearly double the $10.8 million he was paid during the pandemic-plagued 2020. It was also the largest pay package received by a McDonald’s CEO since 2017, when Kempczinski’s predecessor Steve Easterbrook received $21.8 million.
Like most executives, the bulk of Kempczinski’s pay package is in the form of stocks and options—in this case, about $14 million in total. He received a $1.3 million salary and another $4.4 million in incentives. He also received $356,706 in “all other compensation,” which includes use of the company’s aircraft, contributions to retirement plans and other compensation.
Among other McDonald’s executives: CFO Kevin Ozan received a pay package worth $10 million; Ian Borden, president of international, received $8.3 million, and McDonald’s USA President Joe Erlinger received $7.45 million.
Kempczinski’s pay increase came during a year in which the company’s sales were strong, as were franchisee profits, despite a host of challenges, notably a labor shortage that led to steep increases in wage rates and often left McDonald’s dining areas closed to customers.
The company’s stock price increased 25% in 2021, compared with just over 18% for the Dow Jones Industrial Average.
The company’s full-year same-store sales rose 13.8% and the chain’s sales recovery proved more quickly than many anticipated, as customers flocked to the chain’s drive-thrus. Systemwide sales for the chain globally topped $112 billion.
System sales topped $45 billion in the U.S. even as the chain continued to close units—the chain and its franchisees closed about 400 locations in 2021.
At the same time, McDonald’s is facing numerous lawsuits from Black current and former franchisees, as well as some employees and media companies, alleging discrimination. Kempczinski himself courted controversy when a text he sent to Chicago Mayor Lori Lightfoot appeared to blame shootings of a pair of children on the kids’ parents.
McDonald’s, for its part, took several steps to improve its record on diversity. One of those steps was to tie some of the bonus payouts to executives based on “human capital” metrics, including values and representation of women and underrepresented groups in promotion decisions.
The company’s top executives met two of those four metrics: One on values, and another on representation of women in senior director or above positions. But they didn’t meet expectations on representation of people from underrepresented groups in senior director and above positions, and they didn’t meet the company’s “Inclusion Index” score.
McDonald’s recently told employees that it was making progress on its diversity, equity and inclusion goals—reaching pay equality in its biggest markets and increasing the number of women in management positions.
But Chief People Officer Heidi Capozzi also said that the company has “more to do” to reach goals on promoting more employees from underrepresented groups into management. Thirty percent of senior directors and above are from underrepresented groups, up from 29% the year before.
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