Larry Light, the chief architect of the McDonald's marketing platform, has made provisions for his exit from the Golden Arches, Advertising Age has learned.
The exec VP-chief global marketing officer has made an arrangement with the fast-food giant for a two-and-a-half-year period of "continued employment" after he "ceases to be the chief marketing officer," according to the company's annual 10-K filing with the Securities and Exchange Commission.
Mr. Light's tenure at McDonald's was never meant to be a long-term affair. But he has made a major mark in the role, completely changing the way McDonald's goes to market, and trying to leave a legacy to the industry-bequeathing, for example, his "brand journalism" solution to the fragmenting media market.
Speculation has swirled about the 63-year-old executive's plans to remain at the company since Charlie Bell, McDonald's former president-chief operating officer, died in January. Mr. Bell was the executive who brought in Mr. Light and championed the executive's sometimes-unorthodox practices such as jump-ball pitches.
According to the 10-K filing, Mr. Light will receive an annual salary of $50,000 for the 30 months after he ceases to be CMO, and his equity grants will keep vesting and be exercisable during that time.
Mr. Light's employment agreement has not been made public since he hasn't been among the company's five top-paid executives, but his employment agreement was about three years, according to executives close to McDonald's. Mr. Light, who will celebrate his three-year anniversary with McDonald's on Sept. 2, said his original agreement was for a minimum of three years.
"The spirit of the agreement was that I'd stay on for a minimum of three years and then we would discuss [my parting] toward the end of that period," said Mr. Light. "They're not pressuring me and we'll look at it over the summer."
"Disclosure of Larry Light's agreement in the 2005 proxy statement has nothing to do with his employment status," said a McDonald's spokeswoman. "Larry's doing a great job."
An outgoing take of $50,000 may seem outrageously low compared to the $610,392 salary and $840,000 bonus he drew in 2004, but having the ability to vest options is a easy trade-off, said one consultant.
"The $50,000 is more of a payoff to not work in the industry," said Dave Gallagher, president of executive-search firm Boyden. "This is more like retirement estate planning than protecting himself in terms of a severance agreement. He has a great opportunity to have his long-term options continue to vest."
contributing: Bradley Johnson