Restaurant & Retail Industry Pay – How Do Senior Level Executives Fair When It Comes To Compensation? - By David Mansbach
As compensation is a key component for attracting and retaining the high performers I thought it would be interesting to compare executive pay trends throughout the restaurant and retail industries.
Earlier this month it was announced that a long standing restaurant executive, Aylwin Lewis formerly of Yum Brands, was named Chief Executive and President of one of the largest retailers, Kmart Holding Corporation. This appointment is continued confirmation that restaurant and retail organizations believe that an executives' skill set is transferable throughout the two segments.
As compensation is a key component for attracting and retaining the high performers I thought it would be interesting to compare executive pay trends throughout the restaurant and retail industries. The data for this article was culled from HVS Executive Search's 2004 Restaurant Corporate Annual Report©1 and 2004 Retail Compensation Report©2. For the purpose of this article HVS has reviewed three positions; Chief Executive Officer, Chief Operating Officer/President and Chief Financial Officer. In an effort to make accurate comparisons, we categorized these executives based on company size.
Chief Executive Officer
In a review of the results for the Chief Executive Officer position, findings indicate that retail CEOs are receiving larger base salary and bonus rewards than their restaurant counterparts. The largest discrepancy is reflected in the Greater Than $750 Million data break where median total cash compensation for the retail CEO was $444,205 or 49% more than their restaurant brethren.
Chief Operating Officer/President
A similar trend exists in the COO/President category; retail CEO's received larger paychecks. While the $350-$750 Million data break illustrated a close relationship in pay (a twelve percent difference in median total cash compensation) the other two breaks, Greater Than $750 Million and Less Than $350 Million, indicated retail COO/President's receiving substantial more than their restaurant counterparts.
Chief Financial Officer
Chief Financial Officer results differed slightly to that of CEO and COO/President executives. While the retail CFOs received larger base salary payouts, in all three revenue breaks restaurant CFOs received more in the form of median bonus rewards.
While there are several other compensation components to consider when designing the "overall" compensation program (i.e. stock options, restricted stock awards, deferred compensation, sign on bonuses, etc...) it appears that restaurant compensation committees should take a closer look at their short-term cash programs if they want to attract executives from the retail industry and prevent high performing restaurant executives from leaving the segment for retail related opportunities.
1One hundred and twenty seven chain restaurant companies are included in the report representing all industry segments.
2Fifty three companies are included in the report representing companies engaged in the retail sale of men's, women's and/or children's clothing, shoes and accessories.
As compensation is a key component for attracting and retaining the high performers I thought it would be interesting to compare executive pay trends throughout the restaurant and retail industries. The data for this article was culled from HVS Executive Search's 2004 Restaurant Corporate Annual Report©1 and 2004 Retail Compensation Report©2. For the purpose of this article HVS has reviewed three positions; Chief Executive Officer, Chief Operating Officer/President and Chief Financial Officer. In an effort to make accurate comparisons, we categorized these executives based on company size.
Chief Executive Officer
In a review of the results for the Chief Executive Officer position, findings indicate that retail CEOs are receiving larger base salary and bonus rewards than their restaurant counterparts. The largest discrepancy is reflected in the Greater Than $750 Million data break where median total cash compensation for the retail CEO was $444,205 or 49% more than their restaurant brethren.
Chief Operating Officer/President
A similar trend exists in the COO/President category; retail CEO's received larger paychecks. While the $350-$750 Million data break illustrated a close relationship in pay (a twelve percent difference in median total cash compensation) the other two breaks, Greater Than $750 Million and Less Than $350 Million, indicated retail COO/President's receiving substantial more than their restaurant counterparts.
Chief Financial Officer
Chief Financial Officer results differed slightly to that of CEO and COO/President executives. While the retail CFOs received larger base salary payouts, in all three revenue breaks restaurant CFOs received more in the form of median bonus rewards.
While there are several other compensation components to consider when designing the "overall" compensation program (i.e. stock options, restricted stock awards, deferred compensation, sign on bonuses, etc...) it appears that restaurant compensation committees should take a closer look at their short-term cash programs if they want to attract executives from the retail industry and prevent high performing restaurant executives from leaving the segment for retail related opportunities.
1One hundred and twenty seven chain restaurant companies are included in the report representing all industry segments.
2Fifty three companies are included in the report representing companies engaged in the retail sale of men's, women's and/or children's clothing, shoes and accessories.
