McDonald's addresses pressures over wages, marketing

Facing pressure from consumer and worker advocates inside its annual shareholder meeting and outside its Oak Brook, Ill., headquarters, McDonald’s Corp. presented itself to stockholders as a company with growth potential around the world and a responsible marketer and corporate citizen.

Protesters calling for McDonald’s and other quick-service companies to pay hourly workers a wage of at least $15 per hour gathered outside the chain’s campus yesterday and Thursday morning. A group of 101 McDonald’s employees and 38 social-justice organizers reportedly crossed a police barricade yesterday and were arrested.

“We’ve had people outside, and we respect that they want to challenge us relative to wages,” chief executive Don Thompson said during the meeting. “We pay competitive wages, provide opportunities and training for people entering the workforce. … McDonald’s has a great story, and it’s a story of diversity.”

During his prepared remarks, Thompson said McDonald’s had evolved the framework of its Plan to Win strategy to “lead with the customer” to provide consumers’ favorite food and beverages, memorable experiences and convenience, as well as to be a trusted brand.

The last point was where the operator or franchisor of 35,000 restaurants worldwide received pushback from some attending shareholders, once again around questions related to McDonald’s marketing practices to children, the sustainability of its supply chain, and its wage scale for employees.

The wage issue was top of mind at Thursday’s meeting because of the protesters outside and several questions about pay and career advancement.

Thompson responded that McDonald’s remains committed to providing competitive wages, as well as support and education through platforms like Hamburger University and the English Under the Arches language-training program. The chain also is part of the Joining Forces Coalition to recruit and hire military veterans. But most important is the brand’s commitment to providing opportunity and the chance at genuine career advancement, he said.

“There is no better testament to McDonald’s commitment to its employees that 50 percent of our general managers started as crew members,” Thompson said. “So did 60 percent of our owner-operators. We’re consistently recognized as one of the best places to work around the world.”

Thompson added that a job at McDonald’s is often the first entry into the workforce for many people, as one-third of its crew members are between the ages of 16 and 29, and nearly 60 percent of those employees are 24 or younger. Seventy percent of hourly employees work part time, he said.

“This isn’t a starter job, and I’m not a teenager,” 22-year-old McDonald’s employee Ashona Osborne said in a statement released to the press following the meeting.

“This is my career, and I’m struggling to raise a family and provide for my son,” said Osborne, who works at a Pittsburgh McDonald’s unit. “That’s not possible on $7.25 [per hour]. McDonald’s needs to recognize that its workforce has changed. McDonald’s should offer real opportunity, for workers and our families, and they should start by raising wages to $15 per hour.”

Criticism continues to mount

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As it does every year at the shareholder meeting, McDonald’s fielded questions about when it would stop using the Ronald McDonald character in its marketing. Several shareholders also accused the chain of predatory marketing to children and of contributing to childhood obesity.

“Every last one of the folks you see here on the senior-leadership team, and the head of our menu team, we’re parents as well,” Thompson responded. “It would violate our values set to do anything that would hurt children; it would be against everything we do in our business. … We’re not predatory.”

He reiterated that Ronald McDonald’s function is a positive one, serving as the face of Ronald McDonald House Charities. Thompson also touted McDonald’s new commitments to increase the availability of fruits and vegetables on the menu, including a new low-fat Go-Gurt option for Happy Meals.

Other pre-screened questions McDonald’s took dealt with less controversial topics, such as whether the company’s stock would split, whether a biscuit and gravy menu item would ever expand beyond the South, and why one Chicago-area McDonald’s unit discontinued its weekly bingo game popular among the senior-citizen customer base there.

Advocacy groups expressed dissatisfaction with many of McDonald’s answers to their concerns raised in the meeting, as well as the altering of the question-and-answer portion of the meeting.

The corporation limited the Q-and-A session to pre-selected questions to allow as many different groups to be heard in the time allotted, McDonald’s officials said.

Boston-based Corporate Accountability International was one of several groups present at the shareholder meeting to raise concerns over McDonald’s Corp.’s marketing and employee compensation practices. Spokeswoman Kara Kaufman, in an interview with Nation’s Restaurant News after the shareholder meeting concluded, said Corporate Accountability prepared nine speakers to ask questions of Thompson during the meeting. Four of those speakers were selected from the entire group of pre-screened questions that McDonald’s heard during the meeting.

“The biggest takeaway here is that … McDonald’s is really feeling the heat,” Kaufman said from just outside Hamburger University on the company’s corporate campus. “The way they responded was to tighten up control of the entire meeting and the process of who was able to deliver questions. Instead of hearing about concerns about public health, workers’ rights and wages, we heard about biscuits and gravy or bingo.

“This really was in essence a powerful statement by the corporation that they’re not really willing to hear the concerns of the communities most affected by their marketing and their food,” she added.

Before Thompson addressed shareholder questions on behalf of the board of directors, the corporation announced that shareholders voted to approve the board’s nominated directors, terms of executives’ compensation agreements and the appointment of Ernst & Young as McDonald’s lead auditor. A shareholder proposal to give shareholders the right to act by written consent was defeated.

McDonald’s has more than 14,000 locations in the United States, of which about 90 percent are franchised.

Contact Mark Brandau at [email protected].
Follow him on Twitter: @Mark_from_NRN