AETHOS Consulting Group, a hospitality-focused human capital advisory, recently published The 2020 Chain Restaurant CFO Report, sharing current compensation information for Chief Financial Officers (CFOs) in the chain restaurant sector.
More than 150 data points were collected via a confidential survey and additional information was aggregated from publicly traded restaurant companies. The organizations represent quick-service, casual and fine dining. Any findings are shared as overall results and not individual information in order to retain confidentiality.
The study, conducted in partnership with Restaurant Finance Monitor reflects the following points:
- The median base salary of the respondents whose businesses generate $40 million – $100 million in annual revenues, is $212,500 with the median annual bonus at $28,020 (not including long-term equity incentives). Nearly 75% of the respondents have a combined total annual cash compensation of $286,250. And the median target annual cash bonus (as a percent of base salary) is 27.5%.
- Among the CFOs whose companies generate a revenue of $101 million – $300 million, nearly 75% earned a base salary of $311,250 with an annual bonus of $83,625, not including long-term/equity incentives. The median target annual cash bonus as a percent of base salary is 32% and 55% of the CFOs in this data set receive long-term/equity incentives.
- For the chain restaurant companies which generate $300-700 million in annual revenues, almost 75% of these CFOs earned a total annual cash compensation of just under $562,000. The median target annual cash bonus as a % of salary is 56% and nearly 74% receive long-term/equity incentives.
- Regarding the CFOs whose organizations generate more than $700 million in revenues annually, the median total annual cash compensation is approximately $1 million. This data set is entirely comprised of CFOs working for publicly traded companies and 100% of these individuals receive long-term/ equity incentives. The companies in this category include Brinker International, Starbucks Coffee Company, McDonald’s and Darden Restaurants.
Cautioning the CFOs themselves, Dave Mansbach, CCP, Managing Director at AETHOS Consulting Group and author of the 2020 Chain Restaurant CFO Compensation Report, says, “Because ownership structures differ wildly among groups -for example, Family offices, private equity firms, owner-operators, franchisors and franchisees — you have to take all these elements into account to determine if one is paid fairly or not.”
Mansbach also believes that smaller enterprises can in fact, afford to retain CFOs through well-structured, long-term incentive programs. “There are ways to create phantom equity programs tied to metrics that are not annual; they are tied to three- and five- year numbers. These scenarios keep people engaged while also driving the goals that are critical for ownership to have a line of sight into their executive team.”
