Between 2006 and 2007 the checks written to CEOs in every industry super-sized. The median compensation for leaders of S&P 500 companies rose 23.57 percent, according to a study by The Corporate Library, a corporate data research firm.
But now, as the cost of everything from beef to buns continues to rise while consumers hold a tighter grip on their wallets, QSR took a look at what kind of salaries the top quick-serves’ leaders are taking home and what they are doing to earn their generous keep. Average total cash compensation received in 2007 by the CEOs on our list topped $8.6 million. With stock options factored in, each made upward of $10 million. Is such compensation warranted? Read on and decide for yourself.
James A. Skinner
- Age: 63
- title: CEO/Vice Chairman/Director (CEO since 2004)
- company: McDonald’s Corp.
- hq: Oak Brook, Illinois
- 2007 Total Cash Compensation: $9,443,486
- 2007 Total Stock Options: $8,960,344
When Jim Skinner was elected as McDonald’s CEO in 2004, the Golden Arches were slumping. The CEO of the world’s No. 1 restaurant company has since returned the brand to its roots, concentrating on selling the staples at price points consumers expect from the fast-food leader. The brand’s Value Meal items keep bringing customers back, despite the slowing economy.
That new “old” strategy is paying off. McDonald’s ended 2007 with record-high sales of $22.8 billion—up 9 percent from the year before.
And shareholders are “lovin’ it,” enjoying a 25 percent, three-year compounded annual return that’s more than double the three-year return of the S&P 500 and the Dow Jones Industrials.
Skinner’s $9 million–plus salary for 2007 was 35 percent less than he was paid the year before. But that can be attributed to a hefty three-year performance bonus he received in 2006. Taking that out of consideration, Skinner’s pay increased 28 percent.
John W. Chidsey
- Age: 45
- title: CEO/Director (CEO since 2006)
- company: Burger King Holdings Inc.
- hq: Miami
- 2007 Cash Compensation: $4,147,081
- 2007 Total Stock Options: $12,924,346
Like Skinner, John Chidsey has masterminded a fast-food turnaround. Burger King, which was considered a floundering chain just a few years ago, announced its 2007 fiscal revenues were up 9 percent to a record $2.2 billion.
The jump in the company’s stock price last year was the real Whopper at 68 percent.
Chidsey is now focusing on the rest of the world. Burger King entered four new countries last year, opening 441 new stores globally. That’s a 26 percent increase from the year before. His menu strategy—introducing both upscale products like the new Steakhouse Burger as well as deals like the $1 Value Menu—appeal to the more cash-conscious consumer.
Kerrii B. Anderson
- Age: 50
- title: Former CEO/President/Director (CEO since 2006)
- company: Wendy’s International Inc.
- hq: Dublin, Ohio
- 2006 Total Cash Compensation: $4,174,313
- 2006 Total Stock Options: $6,000,325
Kerrii Anderson’s days at Wendy’s were numbered when, in April, the company agreed to a $2.3 billion merger with Arby’s parent company, Atlanta-based Triarc Co. Inc. Once the deal was approved, Triarc’s CEO Roland Smith (also on this list) took the reins. But Anderson didn’t walk away empty handed: Her payout was worth an estimated $15 million.
The merger created the third-largest quick-service restaurant holding company in the U.S., with $12.5 billion in annual sales and more than 10,000 units. Both Wendy’s and Arby’s restaurants will continue to operate as separate business units, but there will be a consolidated support center in Atlanta.
What does it all mean for shareholders? Wendy’s shareholders will receive 4.25 Triarc stocks for each share of Wendy’s stock they own.
- Age: 60
- Title: Co-Founder/President
- Company: Doctor’s Associates Incorporated
- HQ: Milford, Connecticut
- 2007 Total Cash Compensation: Not Available*
- 2007 Total Stock Options: Not Available*
* Privately Held Company
In 2007, Forbes magazine ranked DeLuca—Subway’s co-founder—No. 297 of the 400 richest Americans. Even though he has a net worth of $1.5 billion, DeLuca is rumored to have never purchased a new car and to only fly economy. It should be no surprise he also pays close attention to the company’s expenditures and is reportedly always looking for ways to decrease costs and increase profitability.
In 2006, DeLuca came under fire when Doctor’s Associates Inc. was sued twice, each time by a group of franchisees over control of advertising dollars. Despite the ongoing legal disputes, Subway was ranked No. 2 by Entrepreneur magazine in its 2008 list of the world’s best franchises.