2024
Notice of Annual
Shareholders' Meeting
and Proxy Statement
CHAIRMAN'S LETTER
Dear McDonald's Shareholders, Colleagues, Crew Members, Franchisees and Customers,
When Fred Turner first spoke to me about joining the McDonald's Board of Directors, I was sold on the mission of creating clean and welcoming restaurants where families could enjoy a high-quality meal and a special time together. Nearly three decades later, as I write my last letter as Chairman of McDonald's Board of Directors, I can't help but be filled with immense pride for how much McDonald's has grown.
It's so inspiring to know that I'm part of one of the world's most recognizable and successful brands that has delivered a total shareholder return of more than 2,000% in my time as a Board member. We've also more than doubled our restaurant count and expanded to more than 100 markets - which has been no easy feat.
McDonald's Continues to be a Force for Good
And while it's been an honor to be a part of so much throughout my tenure, as I reflect on the past year, I do so with the acknowledgement of the major issues and challenges at the forefront of our society … and with confidence that the Company remains well-positioned as I approach retirement from the Board.
In 2023, we saw the humanitarian crisis caused by the war in Ukraine persist, while the war in the Middle East emerged. At the same time, the world saw natural disasters, periods of unrest and continued economic impacts from these events and more.
It is a testament to McDonald's stature as one of the world's leading brands that - through it all - McDonald's continues to stand in solidarity with all the communities it serves.
I feel immense pride in the entire McDonald's System - our outstanding franchisees, suppliers, restaurant teams and employees - for the positive impact we are making in the world. Putting people and values first is at the heart of who we are as a McDonald's family, and core to the success we've seen throughout the 28 years I've been part of the Board.
This past year, our customers and industry stakeholders took note of McDonald's and our impact as a global brand leader. Brand trust, the measure of whether customers can count on us to do what we say, has risen. In addition, McDonald's was recognized as one of the World's Most Admired Companies by Fortune, #2 on the list of Top 50 Most Innovative Companies of 2023 by Fast Company and #5 on Kantar BrandZ 2023 Rankings of the Most Valuable Global Brands.
The Three-Legged Stool is the Bedrock of the McDonald's System
It's the reason why, despite the unprecedented challenges the world has faced over the past several years, McDonald's continues to deliver.
It's easy to drive by a McDonald's restaurant and forget that what you're seeing is not a big, global corporation, but a small business at work. Of the more than 40,000 McDonald's restaurants around the world, approximately 95% of them are owned and operated by independent local franchisees.
McDonald's connection to franchising goes deeper than simply being a model for business operations: it's a relationship that has created tremendous opportunity and economic growth for thousands of small business owners worldwide. As we've all learned, when McDonald's franchisees succeed, communities succeed. Local suppliers succeed. Families succeed. And our economies benefit.
McDonald's partnerships with its suppliers have also never been stronger, with innovative initiatives underway that will keep McDonald's green, growing, and positioned to lead for the long-term. To protect and enhance critical supply chains, the Company is working with suppliers, farmers and scientific advisors to implement regenerative agriculture practices. By aligning long-term business and impact strategies, McDonald's is ensuring that its business and partners have the resilience not just to survive, but to thrive in the face of change to come.
2 2024 proxy statement
Chairman's Letter
The Future is Golden
Putting people and values first is at the heart of who we are as a McDonald's family, and core to the success we've seen throughout the 28 years I've been part of the Board. As the last individual on the Board of Directors who worked with and learned from Fred personally, it has been a privilege and honor to serve on our Board of Directors … and particularly serving the last eight years as Chairman. I also know the best is yet to come.
After careful deliberation about the best succession plan and governance structure to carry the Company forward, the Board determined this is the right moment for the Company to evolve the Board's structure, re-combining the Chairman and CEO roles under Chris Kempczinski. In doing so, we will be returning the Board's structure to a model that was in place for its first 40 years. Ray Kroc and Fred Turner recognized the complexity of our three-legged stool and understood the power of the combined role - a model in place at many of the world's largest and best companies.
Your Board has supreme confidence in Chris' ability to bring together the Chairman and CEO roles to herald in this new era. Now well into his fifth year as McDonald's CEO, Chris has led the Brand through moments of intense change and challenge, including the global pandemic and McDonald's exit from Russia. He is the architect of our Accelerating the Arches strategy and has been instrumental in delivering strong performance while refreshing our values and purpose and further embedding them into the fabric of the McDonald's System.
The Board believes this change will accelerate and enhance its ability to exercise oversight and evolve strategy while remaining nimble and connected to today's ever-changing business and social landscape. We are operating from a position of strength, and in this combined role, Chris will be uniquely placed to ensure McDonald's advances in lockstep with today's dynamic environment.
During my time at McDonald's, I've been lucky to work with eight McDonald's CEOs, and most recently, it has been an honor to work alongside Chris. As Chris steps into the combined Chairman and CEO role following our Annual Shareholders' Meeting, Miles White will assume the role of Lead Independent Director. Importantly, the Board's decision highlights its sustained commitment to strong governance.
Rest assured, the Board will maintain its commitment to ongoing refreshment, producing an appropriate balance of continuity and institutional knowledge, with fresh perspectives among our Directors. I am very pleased to welcome Mike Hsu as a nominee to the Board of Directors. A 30+ year veteran of the consumer products industry, Mike is Chairman of the Board and Chief Executive Officer for Kimberly-Clark Corporation. We look forward to leveraging Mike's deep experience and expertise to help steer the Company toward continued growth and build on the strength of the Brand.
I could not be more confident that McDonald's leadership team, guided by our talented and committed Board of Directors, unified by Chris at the helm as the new Chairman, and working together with the best franchisees and suppliers in our industry, will keep McDonald's green and growing, while driving long-term value for the company's shareholders and to the benefit of all our stakeholders and communities that we serve.
McDonald's is not just the leading restaurant brand in the world, it is one of the leading consumer brands in the world.
I will be cheering for McDonald's success for all my years to come.
Sincerely,
Enrique Hernandez, Jr.
Chairman of the Board
corporate.mcdonalds.com 3
NOTICE OF 2024 ANNUAL SHAREHOLDERS' MEETING
McDONALD'S CORPORATION
110 North Carpenter Street, Chicago, Illinois 60607
Meeting Information
May 22, 2024
9:00 a.m. Central Time
We will have a virtual meeting at www.cesonlineservices.com/mcd24_vm
April 8, 2024
To McDonald's Corporation Shareholders:
We will provide this Notice, the accompanying Proxy Statement, our 2023 Annual Report on Form 10-K and the form of proxy card, or the Notice of Internet Availability of Proxy Materials, beginning on or about April 8, 2024 to shareholders of record as of March 25, 2024.
At our 2024 Annual Shareholders' Meeting, you will be asked to vote upon the following proposals:
Proposal | Board's Recommendation | ||||
Election of 12 Directors to Serve Until our 2025 Annual Shareholders' | |||||
1 | FOR | each of our | |||
Meeting and Until Their Successors Have Been Elected and Qualified | Board's Director nominees | ||||
2 | Advisory Vote to Approve Executive Compensation | ||||
FOR | |||||
3 | Vote to Approve an Amendment to the Company's Restated Certificate of | ||||
FOR | |||||
Incorporation to Limit Liability of Officers as Permitted by Law | |||||
4 | Vote to Approve Amendments to the Company's Restated Certificate of | ||||
FOR | |||||
Incorporation to Implement Miscellaneous Changes | |||||
5 | Advisory Vote to Ratify the Appointment of Ernst & Young LLP as | ||||
FOR | |||||
Independent Auditor for 2024 | |||||
Advisory Vote on Six Shareholder Proposals, Each Only If Properly | |||||
6-11 | AGAINST | each | |||
Presented. | shareholder proposal | ||||
In addition, we will transact any other business properly presented at the meeting, including any adjournment or postponement thereof, by or at the direction of our Board.
Important Voting Information:
YOUR VOTE IS IMPORTANT.
Carefully review the proxy materials and vote your shares as promptly as possible, even if you plan to attend the virtual meeting.
Follow the instructions to the right to ensure your vote is received by 10:59 p.m. Central Time on May 21, 2024.
Internet:
Visit the website shown on your proxy card
Telephone:
Dial (800) 690-6903(toll-free, 24/7)
Mail:
If you received a proxy card or voting instruction form by mail, mark, date, sign and return it in the postage-paid envelope furnished for that purpose
4 2024 proxy statement
Notice of 2024 Annual Shareholders' Meeting
You should carefully review the accompanying Proxy Statement, which provides detailed information about the matters to be considered at the meeting. We encourage you to vote as promptly as possible, even if you plan to attend the virtual meeting.
Registered shareholders (who hold shares through our transfer agent, Computershare) and beneficial owners (who hold shares through a bank or brokerage account) may vote using one of the options noted above.
If you have questions or require assistance with voting, contact our proxy solicitation firm at:
KINGSDALE ADVISORS
745 5TH AVENUE, SUITE 500 NEW YORK, NEW YORK 10151
- 683-3113(TOLL-FREE IN NORTH AMERICA)
- 867-2272(OUTSIDE OF NORTH AMERICA) CONTACTUS@KINGSDALEADVISORS.COM
How to Attend Our Virtual 2024 Annual Shareholders' Meeting:
Shareholders must register in advance to ask questions or vote at the meeting by using the control number located on their Notice of Internet Availability of Proxy Materials, proxy card, voting instruction form or other communication. See "Meeting Logistics" on page 119. Only shareholders of record as of March 25, 2024 may attend the virtual meeting.
By order of our Board of Directors,
Desiree A. Ralls-Morrison
Executive Vice President, Global Chief Legal Officer And Secretary
Important Notice
Regarding the Availability of Proxy Materials for the Shareholders' Meeting to be held on May 22, 2024. This notice, the accompanying Proxy Statement and our 2023 Annual Report on Form 10-K are available free of charge at www.proxyvote.com.
corporate.mcdonalds.com 5
TABLE OF CONTENTS
Chairman's Letter
Notice of 2024 Annual Shareholders' Meeting
Proxy Summary
About McDonald's
Governance Highlights
Our Purpose & Impact Overview
Executive Compensation Highlights
Voting Matters & Recommendations
Forward-Looking Statements & Website Links
2 PROPOSAL 2: Advisory Vote to Approve Executive Compensation
4 | Compensation Committee Report |
7 | Compensation Discussion & Analysis |
7 | Compensation Tables |
9 | Additional Compensation Matters |
- PROPOSAL 3: Vote to Approve an Amendment to the
- Company's Restated Certificate of Incorporation to Limit Liability of Officers as Permitted by Law
- PROPOSAL 4: Vote to Approve Amendments to the
- Company's Restated Certificate of Incorporation to
52
53
53
69
76
80
PROPOSAL 1: Election of Directors
18
Implement Miscellaneous Changes PROPOSAL 5: Advisory Vote to Ratify the
81
Director Qualifications
Other Information
Biographical Information
Board & Governance Matters
Board Leadership
Board Composition & Refreshment
Director Independence
Board Diversity
New Director Candidate Selection Process Board Committees
Board Self-Evaluation
Board Oversight
Our Purpose & Impact
Shareholder Engagement
Board's Response to Shareholder Proposals Other Governance Policies & Principles Communications With Our Board Director Compensation
18 Appointment of Ernst & Young LLP as Independent
20 Auditor for 2024
20 | Audit & Finance Committee Report |
Audit & Finance Committee Matters | |
32 | |
32 PROPOSALS 6-11: Shareholder Proposals
34 | Proposal 6: Advisory Vote on Adoption of |
Antibiotics Policy | |
- Proposal 7: Advisory Vote on Worldwide Switch
- to Cage-Free Eggs
35 | Proposal 8: Advisory Vote on Poultry Welfare |
Disclosure | |
36 | Proposal 9: Advisory Vote on Congruency |
- Analysis on Human Rights
Proposal 10: Advisory Vote on Corporate Giving - Disclosure
42 | Proposal 11: Advisory Vote on Annual Report on |
47 | Global Political Influence |
47 Stock Ownership
- 2025 Annual Shareholders' Meeting
- Transactions with Related Persons
50 Q&A: Proxy Materials & Voting Information Meeting Logistics
Exhibit A: Proposed Amendments to Restated Certificate of Incorporation
83
84
84
86
87
92
95
99
102
106
110
112
113
114
119
121
6 2024 proxy statement
PROXY SUMMARY
This summary highlights important information about McDonald's Corporation (the "Company"), as well as other matters discussed elsewhere in this Proxy Statement. You should carefully review this entire Proxy Statement. We encourage you to vote as promptly as possible to ensure that your views are reflected, even if you plan to attend our virtual 2024 Annual Shareholders' Meeting.
About McDonald's
2023 Performance
~9% | Global Comparable Sales | The Company's Accelerating the Arches strategy continued to drive |
significant growth in 2023 despite ongoing macroeconomic | ||
Growth in 2023 | ||
pressures. The Company's strong multi-year performance is evidence | ||
~30% | that the Company's M-C-D strategic growth pillars have enabled the | |
Global Comparable Sales | Company to continue to meet the evolving needs of our customers | |
Growth since 2019 | around the world. | |
Despite strong, multi-year performance, we continue to focus on ways to improve. That is why, in late 2023, we detailed an evolution of Accelerating the Arches, which is described in more detail below. We believe this evolved strategy will allow us to continue to deliver sustained, long-term profitable growth for our System and stakeholders.
Company Values
We are guided by the five core values depicted below, which were defined as part of our Accelerating the Arches growth strategy with input from employees, franchisees, suppliers, and customers on what makes them proud to be part of our McFamily. We believe our people all around the world set us apart and bring these values to life on a daily basis. Our philosophy of "doing the right thing," which is enshrined in our core values, guides not only the way we conduct our business, but also how we fulfil our broader role in the communities we serve.
Serve
We put our customers and people first
Inclusion | Integrity | Community | Family |
We open our doors to | We do the right thing | We are good | We get better |
everyone | neighbors | together |
corporate.mcdonalds.com 7
Proxy Summary
Accelerating the Arches
In late 2023, we detailed an evolution of our successful Accelerating the Arches growth strategy, which continues to build on our inherent competitive advantages of size, scale, agility, and the power of our brand. It also focuses on the imperative that we deliver across five critical areas: our purpose to feed and foster communities; our mission to create delicious feel- good moments for everyone; our core values described under "Company Values" above; our MCD growth pillars depicted below; and our newly established platforms, which, along with the foundations of running great restaurants, empowering our people and modernizing our ways of working, will extend our leadership position and unlock new growth opportunities and efficiencies for our business over the long-term.
Accelerating the Arches
Strategic Plan
Our Purpose | Our Mission |
Feed and foster | Making delicious feel-good |
communities | moments easy for everyone |
Our Values
Serve:
We put our customers and people first
Inclusion:
We open our doors to everyone
Integrity:
We do the right thing
Community:
We are good neighbors
Family:
We get better together
Our
Growth
Pillars
M | aximize | C | ommit | D | ouble Down | |||||
our Marketing | to the Core | on the 4Ds | ||||||||
• Brand | • Burger | • Delivery | ||||||||
• Affordability | • Chicken | • Digital | ||||||||
• Coffee | • Drive Thru | |||||||||
• Development | ||||||||||
Consumer: One of the world's largest consumer platforms to fuel engagement
Our
Platforms Restaurant: Easiest and most efficient restaurant operating platform Company: Modern company platform that unlocks speed and innovation
In order to build on our competitive advantages and continue to appeal to the next generation of customers, we announced that we will develop three new platforms: one of the world's largest consumer platforms to bring together the best of our brand and utilize our physical and digital competitive advantages; the easiest and most efficient restaurant operating platform to utilize the latest technology to enable franchisees to more efficiently run restaurants and deliver exceptional customer service; and a modern company platform to unlock speed and innovation throughout the organization.
We believe Accelerating the Arches will continue to build on our historic strengths, while investing in innovations to enhance the customer experience and deliver long-term growth.
More information on Accelerating the Arches and our purpose, mission and values can be found in our 2023 Annual Report on Form 10-K, as well as on the "Our Mission & Values" section of our website at https://corporate.mcdonalds.com/corpmcd/our-company/who-we-are/our-values.html.
8 2024 proxy statement
Proxy Summary
Governance Highlights
Board & Governance Practices
Our Board's commitment to strong corporate governance is highlighted by the following practices:
- All Director nominees except the CEO are independent(1)
- All standing Committees are independent (except Executive Committee, chaired by our CEO)
- Regular executive sessions of independent Directors
- Annual election of all Directors
- Majority voting standard for uncontested Director elections
- Ongoing Board assessment and refreshment led by our Governance Committee, with more than half of our Director nominees joining our Board within the last five years(1)
- Demonstrated commitment to diversity, with more than half of our Board comprised of gender and racially/ethnically diverse Directors(1)
- Regular succession planning at the CEO and executive management levels and effective leadership transitions, as appropriate
- No supermajority voting provisions
- No "poison pill" (shareholder rights plan)
- Board access to independent advisors
- Meaningful limitations on Directors' service on other boards
- Proxy access for Director candidates nominated by shareholders reflecting standard market practices
- Annual Board self-evaluation
- Ability for shareholders to call special meetings
- Robust Director stock ownership requirements
- No Director hedging/pledging of Company stock
- Public disclosure of corporate political contributions and certain trade association memberships
- Significant shareholder outreach and engagement program
- Reflects the recent changes summarized under "Board Composition & Refreshment" on page 11.
Shareholder Engagement
We understand the importance of engaging with our shareholders and are committed to regularly discussing their perspectives on significant issues. Our Board and management team have developed a robust shareholder engagement program that helps us better understand shareholder priorities and perspectives, gives us an opportunity to elaborate on our initiatives and fosters constructive dialogue. Since last year's Annual Shareholders' Meeting, we have conducted outreach to shareholders representing approximately 44% of our outstanding shares of common stock. Members of management and our independent Directors participate in our engagements.
Shareholder feedback received through direct discussions and prior shareholder votes, as well as engagement with proxy and other investor advisory firms that represent the interests of a wide array of shareholders, is reported to our Governance Committee and other relevant Committees periodically throughout the year. We also review our practices against guidelines published by shareholders and proxy advisory firms.
Areas of focus for our 2023-2024 shareholder engagement program included:
- Board oversight, governance, composition, tenure and refreshment
- Company values and culture
- Executive compensation
- Business strategy and initiatives
- Our environmental and sustainability initiatives, including those relating to climate change and animal health and welfare
- Our human capital management initiatives, including those relating to diversity, equity, and inclusion ("DEI"), as well as safe and respectful workplaces
- Our third-party civil rights audit
corporate.mcdonalds.com 9
Proxy Summary
Board Leadership
Our Board believes it is important to retain flexibility to determine its optimal leadership structure in light of a variety of factors at any given time, including the particular composition of the Board as well as the specific needs and opportunities of the Company. With any leadership structure, it is critically important to have a strong relationship between the independent Directors and management.
After nearly 28 years of dedicated service on our Board, including eight years as our independent Chairman, Enrique Hernandez, Jr. has decided to retire from the Board at the 2024 Annual Shareholders' Meeting. Following Mr. Hernandez's retirement, the Board has determined that a combined Chairman/Chief Executive Officer structure is in the best interests of the Company and its shareholders at this time. Therefore, Christopher Kempczinski will assume the role of Chairman of the Board following the 2024 Annual Shareholders' Meeting.
This leadership transition is the result of robust succession planning and thoughtful deliberation by the full Board. In appointing Mr. Kempczinski as Chairman, the Board considered his development and leadership of our successful Accelerating the Arches strategy; his commitment to our employees, franchisees, suppliers, and shareholders; his demonstrated track record of successfully navigating through multiple complex issues; and the Board's confidence in his ability to guide McDonald's through the next stage of growth.
The Board recognizes that with a combined Chairman and Chief Executive Officer structure, it is imperative to have a strong Lead Independent Director with a clearly defined set of responsibilities. Following the 2024 Annual Shareholders' Meeting, Miles White, Chairman of the Board's Governance Committee, will serve as the Lead Independent Director. Mr. White's extensive experience leading global and complex organizations and comprehensive knowledge of our business make him well-positioned to guide the Board in its oversight of the Company and to foster open dialogue among our independent Directors and management.
Please refer to "Board Leadership" on page 32 for more information on the Board's process and rationale for these changes to the Board's leadership structure.
10 2024 proxy statement
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McDonald's Corporation published this content on 08 April 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 29 April 2024 15:29:27 UTC.