Restaurant Brands Award to New Executive Chair Would Take Median Employee 2,441 Years to Earn

Annual meeting: May 23, 2023

Many corporate documents emphasize photos of happy workers. The Restaurant Brands proxy statement begins with a collage of eight close-up images of food:  Burger King burgers, Popeyes chicken sandwiches, donuts and coffee from Tim Horton’s, and two cups of soda from Firehouse Subs being met in a toast. Perhaps these disembodied figures make sense as it seems unlikely to have too many happy workers. In addition to low pay among front line employees, the restaurant company is in the midst of a number of executive transitions. In November 2022, the company brought on J. Patrick Doyle as Executive Chairman. Beginning March 1, 2023, COO Joshua Kobza became the CEO and Jose Cil became an advisor. Previous CEO, Jose Cil, received compensation of $17,051,342 for 2022.

The median employee at Restaurant Brands had compensation of $47,775 in 2022. SEC requires a calculated ratio between CEO pay & employee, with CEO pay of $17 million the ratio was 373:1.

The far more astounding and problematic number is for Executive Chairman J. Patrick Doyle who received a sign-on award of $116,662,500. If one uses this number to create a pay ratio, it would be 2,441:1. In other words, try this thought experiment, if an immortal being began working at Burger King in the year 0 and earned the rate disclosed through 2023 they would still need to work an additional 380 years to get the amount awarded to the executive chair in a single year.

Doyle’s award was made up of 750,000 performance share units, two million stock options, and 500,000 restricted stock units. Generally, sign-on packages are primarily made up of PSUs that requires significant share price increase to vest.

An award this size with a time-based component makes me wonder if the executive chair does not have faith in the company’s future stock price growth. In other words, is the number to mask the fact that there will still be a substantial award if the stock price goes down. Shareholders, of course, are not given the same option.

Finally, we should note that Kobza received a large PSU award as well but that will appear in next year’s summary compensation table.