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Jose Cil will no longer be CEO of Restaurant Brands International Inc., but he will be making a $200,000 salary in his new role as an adviser.LUCAS JACKSON/Reuters

The end of February marks the end of Jose Cil’s four-year tenure as chief executive officer of Restaurant Brands International Inc. QSR-T, the parent of Tim Hortons. It does not, however, mark the end of his multimillion-dollar paydays from the company, which is once again paying lavishly despite below-average performance.

Restaurant Brands, or RBI, said on Feb. 14 that Joshua Kobza would become CEO on March 1, with Mr. Cil becoming “an adviser” for a year, according to an RBI securities filing that announced the transition. Mr. Cil is to make a $200,000 salary in his new role and will not participate in the annual bonus program, RBI says.

It sounds like a modest arrangement, with no gratuitous severance package for Mr. Cil. After all, shareholders might think he deserves none: Since his debut as CEO in January, 2019, RBI stock has trailed most of its restaurant-industry peers. RBI’s nearly-flat profits since 2019 is the worst performance over that period among the seven members of the S&P 500 Restaurants Sub-Index.

However, a deeper dive into RBI’s disclosures reveals that, by staying an employee until March 1, 2024, Mr. Cil stands to receive about US$25-million in stock awards that he would have needed to forfeit had he departed on Feb. 14 of this year, the day RBI announced he’d leave the CEO role. That should bring his four-year take to about US$60-million, based on RBI’s disclosures and its stock price on Feb. 14.

Tim Hortons turfs key store owner amid battle with franchisees over profitability

Par for the course at RBI. Former CEO Daniel Schwartz has made $260-million in profits from his RBI stock options in just over 10 years – but at least, as RBI likes to point out, its return since 2012, when it went public as Burger King Worldwide, is excellent – up nearly 500 per cent.

Most of that outperformance is well in the past, however. Since the acquisition of Tim Hortons in late 2014, RBI shares trail five of the six other stocks in the S&P 500 restaurants group. The same can be said for Mr. Cil’s tenure, which saw a return of just under 20 per cent. Four restaurant stocks in the subindex returned between 45 per cent and 66 per cent in that period, with Chipotle Mexican Grill Inc. CMG-N, on the comeback trail from its own misadventures, racking up a gain of more than 186 per cent. (Figures through Friday, courtesy of S&P Global Market Intelligence.)

The underwhelming returns help explain RBI’s decision to chase the bright shiny object of Patrick Doyle, the former CEO of Domino’s Pizza Inc. DMZPY hired as its new executive chairman in November. RBI gave Mr. Doyle a compensation package with stock awards that could be worth nearly US$400-million if the shares appreciate by roughly 15 per cent a year over the next five years.

Most of RBI’s executive compensation in recent years has been in form of performance-based shares – but it’s worth questioning how much “performance” will play into the pay.

Mr. Cil benefits from RBI’s decision to lower the goalposts of its compensation program during the COVID-19 pandemic, when restaurants across the globe closed. Initially, executives including Mr. Cil were supposed to earn RBI’s 2019 and 2020 performance-based stock awards based on how much the company increased its profits over a three-year period.

Once the pandemic hit, however, and it was clear the three-year goals wouldn’t be met, the board decided to change the metrics to match the 2021 annual bonus plan. That plan was based on growth in earnings, sales and store openings from 2020 to 2021 – gains after exiting the depths of the pandemic. (To offset the lower hurdle, RBI trimmed the maximum possible award.)

RBI’s board determined the year-over-year gain in profits was big enough for the execs to earn 100 per cent of the potential stock awards.

RBI had a neat feature for those awards – even if they were earned, the executives couldn’t receive and sell the shares for another two years. But all of the “vesting” rules for those awards, as well as those from 2021 and 2022, change once an executive’s employment terminates. And this is where we see the benefit of Mr. Cil’s continued employment.

Mr. Cil would have received his 2019 shares, worth about US$21.1-million at recent prices, even if he’d left the company on Feb. 14, the day RBI announced the job change.

But to receive half of his 2020 awards, Mr. Cil needed to stay employed through Feb. 23 of this year.

To get his 2021 stock awards in full, the date is Feb. 19, 2024. And Mr. Cil can receive 67 per cent of his 2022 share awards if he is still employed as of Feb. 25, 2024.

Now you see why it’s great news for Mr. Cil that he gets to continue as an adviser, and employee, until March 1 of next year.

The half-portion of his 2020 awards are worth about US$9.3-million at RBI’s Feb. 14 share price on the New York Stock Exchange. The 2021 stock award is worth about US$7.2-million, and two-thirds of the 2022 award is worth about US$6.9-million. (Both the 2021 and 2022 awards could ultimately go up or down based on how RBI shares do versus S&P 500 peers through 2023 and 2024, respectively.)

You have to hand it to RBI: It’s like a severance package in disguise. Certainly, the truth is out there, as they used to say on The X-Files, but it takes a thorough read of past proxy circulars and the filings in Canada’s stock-trading disclosure system to come to a full understanding of Mr. Cil’s parting gift.

And gift – considering RBI’s lagging stock price and profits under Mr. Cil – is the appropriate term.