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By Lisa Baertlein and Ross Kerber
LOS ANGELES/BOSTON May 20 The next big showdown
in the running battle over U.S. executive pay is shaping up to
be the annual meeting of McDonald's Corp on Thursday,
but critics may have a tough time replicating their victory last
week at Chipotle Mexican Grill.
McDonald's is a main target of protesters and labor groups,
who criticize the world's biggest fast-food chain for paying
millions of dollars to its chief executive while many front-line
restaurant workers are scraping by at or near minimum wage.
"For too many CEOs, it's heads I win, tails I win," said New
York City Comptroller Scott Stringer in an interview on Tuesday.
CEOs often get well paid no matter how a company performs,
Stringer said his office would vote the 2.6 million shares
of McDonald's held in the city's pension funds against an
advisory measure on executive pay, and that some investors worry
income inequalities could threaten profit.
"You can't grow the economy the way we need to if low-wage
workers don't have the money to spend on goods and services," he
Stringer's funds also voted against the pay at Chipotle,
whose co-CEOs Steve Ells and Monty Moran received total 2013
compensation of $25.1 million and $24.4 million, respectively.
McDonald's Chief Executive Don Thompson made $9.5 million in
2013, down from $13.8 million in 2012.
Chipotle shareholders offered a scant 23 percent support for
a similar advisory pay proposal at the popular burrito seller on
May 15, which has earned praise for eye-popping stock gains and
scorn for supersizing compensation for its co-CEOs.
But at least two big public pension fund managers that
opposed Chipotle's pay proposal said they would support pay for
McDonald's executives, including Thompson. The managers were the
California State Teachers' Retirement System (CalSTRS) and the
Florida State Board of Administration.
Aeisha Mastagni, a CalSTRS Investment Officer, said the pay
contests are quite different and noted how McDonald's market
capitalization of $100 billion is more than six times that of
Chipotle's. "The compensation at McDonald's, in the grand scheme
of things, it's quite reasonable," she said.
She also noted how Thompson must cope with different
challenges including a turn to healthier diets and having many
more stores. McDonald's, she said, "is a very different company
than the growth story that's going on at Chipotle."
In addition, the influential proxy adviser Institutional
Shareholder Services has recommended investors approve the pay
at McDonald's, in contrast to its recommendation to vote against
the Chipotle pay.
Pay consultants view results below 70 percent support for
executive pay as a sign that boards should revamp compensation,
so even a close vote could pressure on McDonald's to make
McDonald's, in a proxy filing, asked shareholders to vote in
favor of the pay proposal at its annual meeting, which will be
closed to the media for the first time because of poor
attendance. The vote comes as the chain battles market share
losses to U.S. rivals and profit-squeezing spikes in beef costs.
Shares in Chipotle have vastly outperformed McDonald's since
2010, rising 469 percent versus a 64 percent gain for the Golden
(Reporting by Lisa Baertlein in LOS ANGELES and Ross Kerber in
BOSTON; Editing by Christopher Cushing)