NEW YORK (AP) — Wendy's gave its new CEO a pay package worth $4.6 million for the last four months of 2011.
Emil Brolick was hired last September after Wendy's ended its failed marriage with fellow fast-food chain Arby's. The 63-year-old Brolick has been on a mission to reinvent Wendy's as a higher-end burger chain by focusing on quality ingredients, top-tier employees and remodeled restaurants.
Brolick's compensation for the final quarter of the year included salary of $338,462, a bonus of $500,000, an incentive-based bonus of $533,026 and stock and option awards worth $3.2 million, according to a filing Friday with the Securities and Exchange Commission.
He also received about $55,000 primarily to cover legal expenses related to the negotiation of his contract.
The previous CEO of Wendy's Co., Roland Smith, received a pay package worth $16.5 million for the first part of 2011, including $11.3 million in severance pay. The year before, Smith was given a total pay package worth $4.9 million.
Like many fast food companies, Wendy's has struggled to keep up with changing tastes and to adapt to the economic downturn. That has led to major shifts in the industry. In 2006 the top three fast food companies were all hamburger chains — McDonald's, Burger King and Wendy's. But health concerns and changing lifestyles have paved the way for companies like Subway to claim the No. 2 spot and put Starbucks at No. 3.
McDonald's Corp. has managed to keep a firm hold on its No.1 spot, in large part by continually rolling out popular new menu items like fruit smoothies and snack wraps.
Brolick, a former executive with Yum! Brands Inc., has called Wendy's troubles "self-inflicted wounds" and laid out plans to turn the company around. Last fall, for example, Wendy's introduced its new "W'' cheeseburger line and Dave's Hot 'N Juicy burger. The Dublin, Ohio-based company also plans to test a breakfast menu in select markets later this year.
Among hamburger chains, Wendy's last year edged out Burger King in terms of U.S. sales for the first time since it opened in 1969, according to food industry research firm Technomic Inc.
That realignment had as much to do with Burger King's failure to adapt over the years. But now the Miami-based chain is looking to revive its brand as well and this week unveiled its biggest-ever menu revamping. The company also introduced new employee uniforms and food packaging, as well as plans to update its aging restaurants.
3G Capital, the private equity firm that owns Burger King, has said it plans to take the chain public through a complex deal with Justice Holdings, a London-based shell set up specifically to invest in the company, within the next three months.
The AP formula calculates an executive's total compensation by adding salary, bonuses, perks, above-market interest the company pays on deferred compensation and the estimated value of stock and option awards.
The formula does not count changes in the present value of pension benefits, which makes the AP total slightly different in most cases from the total reported by companies to the Securities and Exchange Commission.
The value that a company assigned to an executive's stock and option awards for 2011 was the present value of what the company expected the awards to be worth to the executive over time.
That number is just an estimate and what an executive ultimately receives will depend on the performance of the company's stock.