Board Justification

The Company follows three long-standing principles in designing our executive compensation program: pay for performance, drive business results with a focus on creating long-term shareholder value, and pay competitively.

Board Justification

Each NEO received an annual cash award under the STIP. The 2024 STIP measured Company performance based on operating income growth (40%), Systemwide sales growth (30%), new restaurant openings (15%) and a strategic scorecard (15%). Target awards were established based on a percentage of salary. Achievement of targets results in a 100% payout. Actual payouts are based on achievement of the metrics and can range from 0% to 200% of target.

Board Justification

All other compensation” for 2024 includes the Company’s contributions to its 401(k) Plan and Amended & Restated Deferred Compensation Plan, website monitoring services (including for Mr. Kempczinski’s spouse); matching charitable donations; Company-paid life insurance (for U.S.-based NEOs); and for select NEOs, limited personal benefits for the NEO’s spouses in connection with the Company’s WorldWide Convention in Spain. This column also includes the cost of the personal use of the Company’s aircraft by the CEO, which include fuel, on-board catering, landing/handling fees, hourly maintenance costs and crew costs attributable to personal flights and excluding fixed costs, such as pilot salaries and the cost of the aircraft. In addition to personal flights with a cost of $400,000, Mr. Kempczinski used the Company’s aircraft to travel to outside Board meetings at a cost of $31,635 in 2024.

Board Justification

Driven by the execution of our Accelerating the Arches growth strategy and strong results in 2022 and 2023, the Company achieved well above-target performance for both our EPS growth and ROIC and our TSR was at the 57th percentile compared to the S&P 500 Index, resulting in the PRSUs vesting at 170.2% of the target amount in early 2025.