September 29, 2022

Chris Kempczinski, McDonald’s, speaks during a press conference in New York on November 17, 2016.

Shannon Stapleton | Reuters

Based on preliminary results, McDonald’s shareholders approved the re-election of all board members for the company during the annual meeting.

McDonald’s stock rose more than 1% on Thursday.

The fast food giant has been criticized by some investors for handling the dismissal of former CEO Steve Easterbrook in November 2019. The CtW Investment Group, which works with union-sponsored pension funds, and New York Comptroller Scott Stringer campaigned against the re-election of the board chairman and chairman of its compensation committee. (Stringer, who campaigns for the New York City Mayor, has been charged with sexual assault and harassment, which he has denied.)

The campaign was supported by a number of major 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 to support the campaign. Neuberger Berman said Wednesday that he would speak out against Lenny’s re-election but did not share how he would vote on Hernandez’s re-election.

Franchisees who also hold shares in McDonald’s appeared to be looking for advice on how to vote. The National Owner’s Association, an independent franchisee group, did not weigh in with their own proposed voting recommendations, according to an email sent by NOA board members to owners viewed by CNBC. However, it shared the Glass Lewis report.

A source familiar with franchisee leadership said the reporting of the report was “unprecedented”. There comes a time when there is tension with corporate governance due to ongoing disagreements over technology fees, work challenges, and more.

A recent poll of Kalinowski Equity Research franchisees identified the strained relationships. Respondents rated the current relationship between franchisees and companies on a scale of 1 to 5 at an average of 1.76, with 1 being poor and 5 being excellent. This was an improvement over the average response three months ago of 1.41, although it doesn’t quite go back to the average response of 1.89 six months ago.

“We’re all accountable, we just think it should be about hiring Steve Easterbrook first and foremost. McDonald’s deserves better guidance,” the NOA email read.

A year and a half ago, the McDonald’s board of directors fired Easterbrook for no reason for a relationship with an employee, allowing him to receive a severance package currently valued at $ 56 million. In August, McDonald’s filed a lawsuit against Easterbrook to reclaim that package, claiming it lied about having additional relationships with employees. The lawsuit opened McDonald’s to questions and criticism of the board’s original investigation into Easterbrook.

McDonald’s recommended that shareholders re-elect the entire board.

“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 of Directors believes that there should be a balance between institutional knowledge and new perspectives among its Directors and remains committed to the continual renewal of the Board of Directors.”

Despite ongoing tensions, McDonald’s shares have soared nearly 9% this year, increasing their market value to $ 179.88 billion.