McDonald’s CEO Earned Nearly Double in 2016
McDonald’s CEO Steve Easterbrook’s first full year on the job turned out to be a lucrative one. Easterbook, who was promoted to the position in January 2015 from his role as chief brand officer, saw his compensation nearly double to $15.4 million from $7.9 million the prior year, according to a Securities and Exchange Commission filing.
Easterbrook’s base salary increased 24 percent to $1.3 million. Stock and options were up 80 percent to $9 million, and his incentive pay was $4.6 million.
Additionally, Easterbrook earned $523,665 in perks, including use of the company aircraft for personal trips, contributions to a retirement plan, life insurance, and car allowance.
Easterbook drove McDonald’s facelift this past year. While some company executives have stated the chain lost around 500 million customer transactions in the U.S. since 2012, the company charted a path forward. McDonald’s revenue declined 3 percent last year and comparable sales were down 1.3 percent in the fourth quarter. However, operating income increased 8 percent in 2016, and earnings per share were up 13 percent. The stock rose 3 percent last year and has already lifted more than 9 percent in 2017.
The brand under Easterbrook introduced the popular all-day breakfast promotion, as well as several quality-driven initiatives. McDonald’s also plans to sell more company units to franchisees.
Included in the menu changes was the recent announcement that all Quarter Pounder burgers at the majority of restaurants will be made with fresh, not frozen beef by mid-2018.
In 2015, McDonald’s committed to sourcing cage-free eggs by 2025. Last year, it removed artificial preservatives from Chicken McNuggets, and eliminated high fructose corn syrup from the buns used on Big Macs, Quarter Pounders, hamburgers, cheeseburgers, Filet-O-Fish, and McChickens.
At the company’s investor day on March 1, McDonald’s unveiled its plan for the future—one that includes mobile ordering and pay in 20,000 restaurants by the end of 2017, as well as an accelerated emphasis on delivery.
McDonald’s outlined a goal to redesign around 650 units in 2017 to its “Experience of the Future” model, which contains kiosk orderings and table service. By 2020, McDonald’s said it hopes to have most of its U.S. free-standing restaurants updated.
Easterbook wasn’t the only executive rewarded. Chief financial officer Kevin Ozan more than doubled his earnings to $4.4 million from $2.1 million. Chief restaurant officer Douglas Goare saw an increase to $4.8 million from $3.3 million. Chief administrative officer Peter Bensen, who retired, earned a nearly 48 percent raise in his final year, making $5.9 million. Ozan, like Easterbook, served his first full year in the position after being hired in March 2015.
McDonald’s will have three new senior leaders on the books moving forward. Earlier in the month, the company announced the appointment Morgan Flatley as U.S. Chief Marketing Officer; Farhan Siddiqi as Head of U.S. Digital; and Linda VanGosen as new Head of U.S. Menu. Chris Kempczinski was also hired to head the U.S. market in January.