CompanyStats

McDonald’s
  • HQ: Oak Brook, IL
  • 2008 Revenues: $23.5 billion
  • Employees: 400,000
  • Global: 120 countries
  • Fortune 500: 107

CEOExtra

McDonald’s CEO Jim Skinner says compensation is just one tool the company uses to recognize and reward people for the work they do. In addition, he says the quick-service food giant provides comprehensive health benefits, a 401(k) program with a generous company match (a rapidly disappearing perk at many other companies), paid sabbatical leave and flexible work arrangements, to name a few. To help retain and motivate senior level executives, the company offers such niceties as financial counseling and extensive physical examinations. In the end, Skinner says executive compensation sends a message about a company’s culture and values, which can impact its relationship with employees, its brand reputation, and ultimately its shareholder value. “Today, it’s not enough to find the best employees,” he says. “You also have to keep them.” And given the mobility of today’s workforce, Skinner says achieving this goal requires more attention than ever.

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If you don’t have your most talented people in the right positions — earning rewards that reflect their contributions and the company’s performance — you’re at a distinct disadvantage,” insists Jim Skinner, CEO of McDonald’s Corp. (MCD). “As CEO, people are my highest priority and strongest passion.”

“Simply put, pay goes up with positive results and down when the business doesn’t fare as well.”

“In today’s economic environment, executive compensation is being closely examined and scrutinized,” Skinner acknowledges. “That’s why it’s important to maintain transparency.” To achieve that, McDonald’s, which had 2008 revenues of $23.5 billion and has 32,000 restaurants worldwide, uses a strict “pay for performance” model for executive compensation. “Simply put, pay goes up with positive results and down when the business doesn’t fare as well,” says Skinner. He adds that the McDonald’s board of directors’ compensation committee is “strong and engaged.”

With a 6.9 percent increase in global sales and a 17 percent rise in operating profits in 2008, Skinner’s salary increased 5.9 percent; President and COO Ralph Alvarez’s pay went up 4.8 percent; and Denis Hennequin, president of McDonald’s Europe, saw his salary increase 4.4 percent last year. “Make sure you have the best people to care for your company,” Skinner says, “and ensure that your company cares for its best people.”