Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

McDonald's shareholders to weigh director-nomination rules

Published 05/21/2015, 01:09 AM
Updated 05/21/2015, 01:09 AM
© Reuters. A McDonald's logo is seen at one of the chain's restaurants in San Francisco

© Reuters. A McDonald's logo is seen at one of the chain's restaurants in San Francisco

By Lisa Baertlein and Ross Kerber

LOS ANGELES/BOSTON (Reuters) - McDonald's Corp (N:MCD) shareholders will vote Thursday on a proposal that would make it easier to nominate directors to the board of the fast-food chain, which is in turnaround mode after losing customers and sales to competition and after internal missteps.

Investor support for such new director nomination rules, referred to as "proxy access," is growing.

The California Public Employees' Retirement System (Calpers) and the New York City Pension Funds have urged shareholders to vote for proxy access at McDonald's, and influential proxy advisory firms Institutional Investor Services and Glass Lewis & Co have recommended that their clients support it.

Vanguard Group and BlackRock Inc (NYSE:BLK), major investors that hold significant stakes in McDonald's, have publicly backed proxy access.

McDonald's opposes the proposal, which was filed by the UAW Retiree Medical Benefits Trust.

"We believe that making McDonald's leadership at the board level more accountable to shareholders ensures that the board is the strongest it can be to usher in a new chapter of prosperity for the benefit of the company, its employees, and shareholders," said Meredith Miller, chief corporate governance officer, UAW Retiree Medical Benefits Trust.

New York City Comptroller Scott Stringer and three other officials who are fiduciaries to public pension funds with a total of $860 billion in assets are challenging McDonald's and other companies on stock buybacks.

Stringer called proxy access at McDonald's "the perfect antidote for a board whose turnaround plan prioritizes share buybacks over long-term value creation."

The proxy access thresholds proposed at McDonald's would allow groups of shareholders holding at least three percent of company stock for at least three years to be able to list director candidates on company proxy materials. That would give longer-term shareholders with limited resources more power to hold directors accountable, Miller said.

McDonald's encouraged shareholders to reject the proposal, which it said is "unnecessary and potentially harmful to the company at this time."

McDonald's said it has robust corporate governance practices that provide shareholders with the ability to effectively voice their views with the board and vote on critical matters.

The vote on the proposal comes shortly after activist hedge fund investors such as Jana Partners LLC and Corvex Management LP disclosed new stakes in McDonald's.

© Reuters. A McDonald's logo is seen at one of the chain's restaurants in San Francisco

Among other things, experts said activists are unlikely to benefit from the proposal because they tend to be short-term investors.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.