McDonald’s Investors Back Chairman, Rebuffing Ouster Calls

McDonald’s Corp. investors voted to approve Enrique Hernandez as chairman of the world’s biggest restaurant company, turning aside demands for his removal after the turbulent ouster of former Chief Executive Officer Steve Easterbrook.

Shareholders voted to keep Hernandez, who has served as chairman since 2016, and all of the company’s proposed directors during in the company’s annual meeting on Thursday, which was held virtually. The shares rose 1.3% at 11:38 a.m. in New York.

It was unclear how much support Hernandez would get following a period of internal turmoil at the giant chain that has included litigation against its former CEO. A minority group of investors late last year called for Hernandez’s resignation along with that of Compensation Committee Chair Richard Lenny, citing the board’s decision to pay Easterbrook severance that it’s now trying to claw back.

The company has stood by both Lenny and Hernandez and recommended shareholders approve their reelection. At the meeting, Hernandez said the board quickly took action when it learned of Easterbook’s behavior. Hernandez, 65, has been a member of the McDonald’s board since 1996.

Despite the ongoing twists and turns of the Easterbrook saga, investors may be focusing on how the chain’s restaurants have weathered the pandemic that’s upended much of the restaurant industry. McDonald’s has been able to leverage its drive-thru windows and take-out service to keep diners socially distanced.

Chief Executive Officer Chris Kempczinski said at the meeting that McDonald’s is focused on its core menu and is doubling down on digital ordering while speeding up the company’s signature drive-thrus.

In addition to the group organized by CtW Investment Group, Neuberger Berman said it would vote against the reelection of Lenny due to “concerns related to the nature of former CEO Steve Easterbrook’s termination and severance package.” Lenny also failed to enforce company policy and set a poor precedent for the future, Neuberger Berman said.

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