McDonald’s execs take pay cuts amid outbreak

CHICAGO — McDonald’s president and CEO Chris Kempczinski will cut his base salary by half as restaurant sales plunged last month due to COVID-19, the fast-food giant said this week in a regulatory filing.

Sales declined significantly starting midMarch as many governments instituted stay-at-home orders and banned restaurants from dine-in service. While 99% of McDonald’s restaurants in the U.S. remain open for delivery, drive-thru and pickup, globally only 75% remain open in some capacity as a result of complete closures in markets like France, Italy and Spain.

Sales at U.S. restaurants open at least a year dropped 13.4% in March compared with a year earlier, after rising 8% during the first two months of the year. Globally, sales were down 22.2% in March, the company said.

Kempczinski, who took the helm of the chain in November and has an annual base salary of $1.25 million, said in a note on the company’s website that he volunteered for the 50% pay cut because “this was the right thing to do.”

Other executives, including Chief Financial Officer Kevin Ozan, McDonald’s USA President Joe Ehrlinger, McDonald’s International President Ian Borden and General Counsel and Secretary Jerry Krulewitch, agreed to reduce their base salaries by 25%, Kempczinski said.

The pay cuts will last through at least

Sept. 30.

Executives at numerous large companies have announced pay cuts during the coronavirus crisis as many of their workers face layoffs, with airline and hotel executives among the first to take those steps. Yum Brands last week announced that CEO David Gibbs won’t take his $900,000 base salary this year and will use those funds to pay out $1,000 bonuses to general managers at company-operated Taco Bell, Pizza Hut and KFC restaurants. Columbia Sportswear president and CEO Tim Boyle reduced his salary to $10,000 so all 3,500 of the company’s employees can continue to receive their regular paychecks.

Base salary is often the smallest part of executives’ total compensation, which also includes stock options.