CHICAGO – McDonald’s former CEO Don Thompson’s compensation fell by more than 20 percent in his final full year at the helm, a year in which the company’s performance “fell significantly short of expectations,” McDonald’s board said Friday.
In its letter to shareholders, McDonald’s board acknowledged that shareholders have been looking for more transparency into what the board does, especially when it comes to “driving improved operating performance.”
Last year, McDonald’s net profit plunged 15 percent and revenue fell 2 percent. The company, based in suburban Chicago, faced a variety of issues including heightened competition from nimble competitors and a supplier safety issue in Asia.
The board named Steve Easterbrook to succeed Thompson as CEO this year. Thompson’s total compensation fell to about $7.3 million in 2014 from about $9.5 million in 2013, which was also sharply lower than 2012’s total compensation of almost $13.8 million.
Pete Bensen, who was McDonald’s chief financial officer last year, also saw his total compensation fall from 2012 to 2013 and from 2013 to 2014. Bensen was named chief administrative officer earlier this year.
Easterbrook returned to McDonald’s as global chief brand officer in June 2013. His total compensation in that role in 2014 was nearly $1.7 million, including a salary of $633,333. Easterbrook started as McDonald’s CEO on March 1.
The board, led by Chairman Andrew McKenna, outlined in its letter to shareholders some of the work it has done, starting with naming a new CEO after the company’s string of disappointing results.
The board said it is gathering shareholder feedback more consistently. It also pointed out that half of its current directors are minorities or women and that it hired a search firm to help it identify prospective candidates from a diverse pool.
McKenna, 85, has been the chairman of McDonald’s since 2004 and has been on the board since 1991.
McDonald’s said Cary McMillan, who has been on the board since 2003, will retire from the board as of its annual meeting May 21. McMillan has been CEO of True Partners Consulting since 2005 and previously worked at Sara Lee.
McMillan’s departure reduces the number of McDonald’s board members to 13 from 14.
In February, CtW Investment Group, which advises a small portion of McDonald’s shareholders, sent a letter to the board saying the group needed a makeover, including having a board succession plan.
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