Breaking News Bar
updated: 4/12/2013 3:57 PM

McDonald's gives former and new CEOs pay bumps

hello
Success - Article sent! close
  • Customers queue to place their orders last week at a service window outside a McDonald's food restaurant in Moscow, Russia.

      Customers queue to place their orders last week at a service window outside a McDonald's food restaurant in Moscow, Russia.
    Bloomberg News

 
Associated Press

NEW YORK -- McDonald's Corp. more than tripled the pay packages last year for its new CEO Don Thompson and the man he replaced, Jim Skinner.

The pay increases came at a challenging time for the world's biggest hamburger chain. McDonald's is facing intensifying competition, a trend toward healthier eating and weak economic conditions in many countries where it operates.

Order Reprint Print Article
 
Interested in reusing this article?
Custom reprints are a powerful and strategic way to share your article with customers, employees and prospects.
The YGS Group provides digital and printed reprint services for Daily Herald. Complete the form to the right and a reprint consultant will contact you to discuss how you can reuse this article.
Need more information about reprints? Visit our Reprints Section for more details.

Contact information ( * required )

Success - request sent close

McDonald's, based in Oak Brook, gave Thompson a package worth $13.8 million, up from the $4.1 million he received in 2011, according to a regulatory filing made Friday.

Skinner's pay meanwhile rose to $27.7 million from $8.8 million the year before, reflecting a $10.2 million payment as part of his retirement under his contract agreement.

Thompson, who has been with the company for more than 20 years, had been serving as chief operating officer before he took over for Skinner in July. The 50-year-old inherited the top post at a sensitive time for McDonald's.

Late last year, a monthly sales figure dropped for the first time in nearly a decade as McDonald's came under pressure from new menu launches by Burger King, Wendy's and Taco Bell, which is owned by Yum Brands Inc. Soon after the drop, McDonald's fired the head of its U.S. business. It has renewed its emphasis on its Dollar Menu.

Thompson has also noted that McDonald's will introduce more new offerings this year.

The troubles come after a period of strong growth for McDonald's, which managed to grow even through the recession and was a standout in the industry. The success was largely credited to the company's "Plan to Win," which was rolled out in 2003. Under the plan, McDonald's scaled back on new stores openings, got rid of unprofitable businesses and expanded its menu items.

Skinner, who had been CEO since 2004, was among the group of executives that designed the plan.

For 2012, Skinner's pay included a base salary of $753,333, stock awards of $1.7 million and option awards of $3 million, according to a filing with the Securities and Exchange Commission. His incentive pay came to $11.6 million.

All other compensation came to $10.6 million, reflecting the $10.2 million he was given as part of his retirement, contributions to retirement plans and use of a company plane. The company noted that Skinner will also get "secretarial services" for two years after his retirement.

As for Thompson, his pay included a base salary of $979,167 and stock awards of $660,129. His pay increase came mostly from his option awards, which rose to $3.2 million from $785,902, and his incentive pay, which rose to $8.6 million from $1.5 million.

All other compensation came to $324,816 and also included perks such as use of a company plane and retirement plan contributions.

The Associated Press formula for compensation takes into account an executive's base salary, bonuses, perks, above-market interest the company pays on deferred compensation and the estimated value of stock and stock options awarded during the year.

The value that a company assigned to an executive's stock and option awards for 2012 was the present value of what the company expected the awards to be worth over time.

Share this page
Comments ()
Guidelines: Keep it civil and on topic; no profanity, vulgarity, slurs or personal attacks. People who harass others or joke about tragedies will be blocked. If a comment violates these standards or our terms of service, click the X in the upper right corner of the comment box. To find our more, read our FAQ.