At McDonald’s, ownership of company stock by our McDonald’s Executives is very important. It shows the investing public, the financial press and the rest of our employees whom we lead that we believe in the company. That is why we have minimum stock ownership requirements for our executives.
We express our requirements as a multiple of salary. The Compensation Committee can modify these requirements in the event of dramatic and unexpected changes in the market value of McDonald’s shares. Our minimum stock ownership requirements by level are as follow:
Level/Band
Minimum Ownership Requirements
Multiple of Base Salary
Vice Chairman & CEO
6X
President & COO
5X
President U.S./APMEA/Europe
4X
Executive Management (EVP)
4X
Senior Leadership (SVP) – U.S.-paid
3X
Senior Leadership (SVP) – non-U.S.-paid
2X
All newly-promoted executives who are subject to the above stock ownership requirements will have five years from the time they are promoted to reach the minimum ownership requirements for the level/band into which they are promoted.
In calculating share ownership, the following sources may be included:
Shares purchased on the open market
Shares held in individual brokerage accounts
Shares owned jointly with, or separately, by spouse and/or children
Shares held through the Profit Sharing and Savings Plan
Shares held through the Excess Benefit and Deferred Bonus Plan
Shares held through the Supplemental Profit Sharing and Savings Plan
Shares obtained through stock option exercise
Net after tax proceeds (using a 34% tax rate) of unvested restricted stock units (RSUs). This cannot represent more than 50% of the requirement total.
Failure to meet or, in unique circumstances, to show sustained progress toward meeting the above ownership requirements may result in a reduction in future long-term incentive equity grants, and/or payment of future annual and/or long-term cash incentive payouts in the form of stock.
Executives who are subject to the stock ownership requirements will be notified each year as to their status against the requirements. McDonald’s Global Compensation department will compile ownership totals for applicable executives from the sources listed above. Since McDonald’s does not have access to information about shares held in street name, in individual brokerage accounts, or owned by a spouse and/or child(ren), executives will be asked to provide that information.