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Chris Kempczinski of McDonald’s speaks at a press conference in New York City, November 17, 2016.
Shannon Stapleton | Reuters
McDonald’s shareholders, based on the preliminary results, approved the re-election of all members of the company’s board of directors at its annual meeting.
McDonald’s stock recently rose more than 1% on Thursday.
The fast food giant was being criticized by some investors for its handling of the dismissal of former CEO Steve Easterbrook in November 2019. CtW Investment Group, which works with pension funds sponsored by union affiliates, and the supervisor of the New York City Scott Stringer was campaigning against the re-election of the chairman of the board and the chairman of its compensation committee. (Stringer, who campaigns for mayor of New York City, has been charged with sexual assault and harassment, which he denied.)
The campaign has garnered the support of some important players. Proxy advisory firm Glass Lewis recommended voting against the re-election of Enrique Hernandez and Richard Lenny, citing concerns similar to those of CtW Investment Group and Stringer.
Eaton Vance, the Florida State Board of Administration, the California Public Employees’ Retirement System and Norges Bank Investment Management voted in favor of the campaign. Neuberger Berman said on Wednesday he would oppose Lenny’s re-election but did not explain how he would vote on Hernandez’s re-election.
Franchisees who also own McDonald’s shares also appeared to be seeking advice on how to vote. The National Owner’s Association, an independent franchise group, has not weighed in on its own proposed voting recommendations, according to an email from members of the NOA board of directors to owners seen by CNBC. However, he shared the Glass Lewis report.
A source familiar with franchise management said the sharing of the report was “unprecedented.” It comes at a time when tensions exist with business leaders due to lingering disagreements over tech fees, job challenges and more.
A recent survey of franchisees from Kalinowski Equity Research noted the strained relationships. Respondents quantified the current relationship between franchisees and businesses as an average of 1.76 on a scale of 1 to 5, with 1 being poor and 5 being excellent. This is an improvement over the average response received three months ago of 1.41, but not quite back to the average response of 1.89 six months ago.
“We’re all in favor of accountability, we just think it should be about hiring Steve Easterbrook first. McDonald’s deserves better leadership,” the email from NOA said.
A year and a half ago, McDonald’s board of directors fired Easterbrook without cause for having a relationship with an employee, allowing him to walk away with severance pay currently valued at $ 56 million. In August, McDonald’s sued Easterbrook to retrieve the package, alleging he lied about having additional relationships with employees. The lawsuit opened McDonald’s to questions and criticism of the board’s initial investigation into Easterbrook.
McDonald’s recommended that shareholders re-elect its entire board of directors.
“The board of directors maintains an active and engaged dialogue with our shareholders and other stakeholders,” McDonald’s said in a statement to CNBC on Wednesday. “The board believes that there should be a balance between institutional knowledge and new perspectives among its directors and remains committed to updating the board on an ongoing basis.”
Despite lingering tensions, McDonald’s stock has gained nearly 9% this year, bringing its market value to $ 179.88 billion.
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