Steve Easterbrook presided over his first annual meeting as CEO of McDonald’s Corp. Thursday, and defended the company’s recent employee pay increase amid protests by thousands of labor activists outside its Oak Brook, Ill., headquarters.
Easterbrook said he was proud that McDonald’s stated earlier this year that it would raise hourly pay at its company-owned U.S. locations to $1 above the local minimum wage.
“We voluntarily took a leadership position,” Easterbrook said. “We voluntarily committed to pay $1 above the minimum wage at company restaurants. That’s all we have responsibility for. And it wasn’t just around pay. It was around paid personal time off. Nobody gives paid personal time off. It was much appreciated by staff.”
The meeting was held during one of the most tumultuous periods in McDonald’s history. Sales have been weak worldwide, and have been deteriorating in its home U.S. market for the past 18 months amid intense competition.
Additionally, labor activists have been protesting for McDonald’s, and the restaurant industry overall, to raise hourly minimum wages to $15 an hour.
Protesters congregated half a mile away from McDonald’s headquarters on Wednesday and made their way to the corporate campus in a pre-meeting demonstration. Many of the protesters had been bussed in from other areas.
Police estimated that 2,000 protesters took part in the rally. Organizers, however, said that 5,000 people would participate.
The protests came along direct challenges to McDonald’s business model. The National Labor Relations Board has labeled McDonald’s a “joint employer” of its franchisees’ employees. The Service Employees International Union, which sponsored Wednesday’s protests, has asked federal regulators to investigate franchising.
Inside the meeting, activists pushed the company to end its relationship with the National Restaurant Association, which was criticized for lobbying against the minimum wage.
Some activists urged the chain to retire its Ronald McDonald mascot. And the Chicago Teachers Union, along with some parents, asked the company to end McTeacher’s Night, a fundraising program in which teachers, students and parents raise money by working in a local McDonald’s for an evening.
“McDonald’s promotions in schools are not only unethical and exploitative, they’re making kids sick,” Jesse Sharkey, vice president of the Chicago Teachers Union, said in a statement. “We have an obligation as educators to stand up for our students and put a stop to this practice.”
Easterbrook defended the program.
“We put back into the communities in which we do business,” he said. “That has stayed strong for 60 years, and will continue to be going forward. It’s entirely appropriate that an owner-operator will support teachers in helping kids. It’s what a responsible business does, and it’s what McDonald’s will continue to do.”
He also dismissed suggestions that Ronald McDonald retire.
“Ronald is here to stay,” Easterbrook said to applause. “And with his new look, he’s feeling trendier and more confident. Ronald stands for fun. It’s about fun, about putting smiles on people’s faces.”
Easterbrook said the company’s efforts for children have been strong. He noted that the company has served apple slices to 1.3 billion children through its Happy Meals. And in five months, the company has served 37 million Cuties Mandarin Oranges in the U.S.
“I think that’s the kind of business we want to be: using our influence and our responsibility and accountability not just to have fun, but to be a change agent for good,” he said.
Shareholders defeated several proposals, including one to analyze political contributions, and another to promote the health and benefits of genetically modified organisms. But they did approve one proposal the company had opposed, which would enable long-term shareholders with more than 3 percent of company shares to nominate as many as 25 percent of company directors. Overall, 61 percent of shareholders approved the proxy access rules.
The change was proposed by a pension fund and supported by other pension funds as a way to hold company directors more accountable. Proxy advisory firms Institutional Shareholder Services and Glass Lewis recommended that shareholders approve the initiative.
The Wendy’s Co. and Yum Brands Inc. have voluntarily agreed to similar proxy access rules.
Contact Jonathan Maze at [email protected].
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