Increases in CEO pay packages at publicly traded restaurant companies cooled considerably in 2017.
Of the 25 public-company CEOs in Nation’s Restaurant News’ Top 200 who held their positions for the full 2017 calendar year, those who saw their compensation packages decline outnumbered those with increases by a three-to-two ratio.
The survey found 10 restaurant brand CEOs saw increases in 2017 compensation from 2016 and 15 compensation packages declined.
The top spot for total pay was held by Steve Easterbrook, CEO and president of Chicago-based McDonald’s Corp., whose compensation package rose to $21.8 million in 2017, up 41.7 percent from his total pay of $15.4 million in 2016, according to proxy documents filed with the Securities and Exchange Commission.
Easterbrook also was the only executive in the group to log a spot on the annual New York Times May listing of highest paid U.S. company CEOs, a roster created with Equilar, an executive compensation consulting firm.
Compensation packages include salaries, which for restaurant industry CEOs generally range from $900,000 a year to $1.5 million, as well as other benefits, such as stock awards and options; bonuses; and other perks such as car allowances, security, life insurance, financial planning, matching charitable contributions and use of company transportation, such as aircraft, for personal trips.
Easterbrook’s $21.8 million compensation in 2017 matched that of 2016’s highest paid CEO, Howard Schultz, who retired as the top executive of Seattle, Wash.-based Starbucks Corp. He reached that level in his final year in the position.
Analysts point out that compensation packages include stock options, which can be part of long-term incentive plans where the stock vests only if the company’s share price hits defined targets. Thus, actual annual compensation packages can vary — both higher and lower — from the proxy statements.
Equilar noted that in 2017, the median pay for the 200 highest-paid CEOS across all industry segments was $17.5 million, and they received an average raise of 14 percent, compared with 9 percent in 2016 and 5 percent in the preceding year.
Proxy statements also now require many companies to include a ratio of CEO pay compared to the median for workers in the entire company.
The gap has provided fuel for the advocates of minimum-wage increases. McDonald’s, the only restaurant company in the Equilar Top 200, ranked McDonald’s CEO pay ratio at No. 3, at 3,101:1 in the 2017 compensation survey.
McDonald’s was behind Weight Watchers’ CEO Mindy Grossman’s annual compensation of $33.4 million, which topped the list with a CEO-pay-to-median of 5,908:1, Mattel CEO Margaret Georgiadis’ annual package of $31.3 million, putting the ratio at No. 2 with 4,987:1.
NRN’s analysis looked at companies that are focused on the restaurant sector, so it does not include executive compensation at companies like Omaha, Neb.-based Berkshire Hathaway Inc., which owns the Dairy Queen brand, or San Antonio, Texas-based Biglari Holdings Inc.
Sardar Biglari, CEO and chairman, in 2017 received a compensation package totaling $8.3 million. But as Biglari Holdings says in its proxy statement, it “is not a conventional company. Our compensation system is idiosyncratic to Biglari Holdings,” which while owning restaurant companies Steak n Shake Inc. and Western Sizzlin Corp. also owns First Guard Insurance Co. and the Maxim Inc. publishing business.
NRN’s analysis excludes CEOs who served for only part of 2017, including:
- Stephen Joyce, CEO of Dine Brands Global Inc., with total pay in 2017 of $7 million. Joyce became Dine Brands CEO on Sept. 12, 2017, and the 2017 compensation figure includes a $750,000 sign-on bonus.
- Weldon Spangler, CEO of Papa Murphy’s Holdings Inc., who was appointed effective July 17, 2017. His total pay for 2017 was $693,224.
- John Cappasola Jr., CEO of Del Taco Restaurants Inc., who succeeded Paul Murphy in July 2017. His total pay in 2017 was $1.7 million.
- Dave Boennighausen, who became CEO of Noodles & Co. on Sept. 13, 2017, after serving in the interim post. His total pay for 2017 rose to $931,895 from $726,579 in 2016.
- Alan Johnson, who was named CEO of Potbelly Corp. in 2017. He had total compensation in 2017 of $2 million.
Contact Ron Ruggless at [email protected]
Follow him on Twitter: @RonRuggless