Restaurant Brands offers Chief Exec a $1m bonus

5 Sep


Restaurant Brands chief executive Russel Creedy

Restaurant Brands, the owner of the KFC, Pizza Hut, Starbucks and Carl’s Jr brands in NZ, is offering its chief executive Russel Creedy a $1million bonus if he meets certain targets.

The bonus will apply from the July 2015 financial year if he achieves a $4 share price over 40 consecutive days or there is a takeover offer at that price. the current price is $3.36 a share.

Unite Union doesn’t begrudge anyone a fair days pay for a fair days work we are not sure that this is value for money and wonder if simply increasing the share price is a measure of company success.

Often Chief Executives receive perverse motivations as a result of simplistic targets like this. Sometime a share price boost is achieved by buying back shares. Sometimes companies get forced to seek short term returns rather than long-term gain by get rich quick schemes. Sometimes those schemes can involve squeezing workers wages or pushing staffing levels down to intolerable levels.

We hope that is not Mr Creedy is not perversely motivated by the carrot of a $1 million bonus but it is hard not to see that as an inevitable outcome.

That means Unite will need to be very focused on protecting wages and hours of work in the next round of negotiations which begin in early 2015.

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