McDonald’s
The board composition of McDonald’s is incomparable to its competitors in a number of ways. Being a large and leading corporation, McDonald’s is comprised of a number of leaders (McDonald’s, 2014). The company’s President is known as Jeff Stratton. The Corporation’s Non-Executive Chairman is Andrew J. McKenna. McKenna is the founded Metropolis Strategies, and has been a director since 1991 (McDonald’s, 2014). He has held this post since April 2004. In addition, he has held a similar position in Schwarz Supply Source that prints, converts, produces, and distributes promotional and packaging materials. His leadership skills in various organizations are fit for him being the chairman at McDonald’s. He is also a director at Skyline Corporation and Ryan Specialty Group. During his leadership roles and years, he has served various community, philanthropic, and civic boards (McDonald’s, 2014).
Other board members include Susan Arnold, Robert A. Eckert, Jeanne Jackson, Enrique Hernandez, Jr., Walter Massey, Richard Lenny, Cary McMillan, John Rogers, Jr., Sheila Penrose, Roger Stone, Donald Thompson (CEO), and Miles White (McDonald’s, 2014). All these people are highly trained and qualified and have been leaders in large organizations. The board of directors of McDonald’s has played a crucial role in the Corporation’s success since its establishment in 1948. The main competitors of McDonald’s in the U.S. are Taco Bell, Burger King, Wendy’s and Subway (Harris, 2009). For this case, comparison will be made with Wendy’s. The board composition of Wendy’s is similar to that of McDonald’s. It is comprised of the same number of members including as McDonald’s. The members include Nelson Peltz (Chairman), Peter May (Vice Chairman), Emil Brolick (President and CEO), Clive Chajet, Janet Hill, Edward Garden, Joseph Levato, Peter Rothschild, Randolph Lewis, Roland Smith, David Schwab, Jack Wasserman, and Raymond Troubh (The Wendy’s Company, 2014).
The Corporation increased the pay packages of its CEO (Don Thompson and Jim Skinner whom he replaced) by more than three times. The rise in pay packages from the globe’s largest hamburger chain came in a challenging period, in the industry. The package given to the CEO was worth 13.8 million dollars from the initial 4.1 million dollars earned in 2011. Thompson took over from Skinner in July 2012, when the company was facing increased competition at the domestic level and hard economic situations around the globe. During late 2012, the company’s sales figure declined for the first time in almost a decade (Bloomberg Businessweek, 2014). Such difficult situations came after an intensified expansion of the corporation that managed to expand even during the recession and stood out powerfully in the industry. The achievement was highly credited to the company’s 2003 “Plan to Win” that focused on increasing the number of stores and increase of menu items and the elimination of unprofitable business operations. Skinner had taken part in the designing of the plan. Compensation takes into consideration the CEO’s bonuses, base salary, perks, and projected stock value awarded in the year. In 2011, Wendy’s gave its two CEO’s packages valued at 21 million dollars. Roland Smith, who retired in 2011, received 16.5 million dollars (The Wendy’s Company, 2014).
The CEO’s compensation structure is helpful in aligning his goal with the company’s shareholders. Leaders must ensure that business operations are in line with the company’s mission, vision, and values, and should ensure that the interests of shareholders of the company are taken into consideration (Ross, Westerfield & Jaffe, 2010). The corporation is focused on continually improving their operations and promoting their customers’ experience. The company puts the customer experience at the core of all it does and is committed to all the company’s stakeholders. The company operates ethically meaning that it promotes integrity, accountability, fairness, and honesty. The company’s shareholders are highly compensated, and this means that the compensation structure of the CEO is in aligns with the shareholders of the company. In addition, it is among the company’s values to give back to the community through undertaking certain responsibilities and charitable services to help in making the world a better place. This helps in improving the productivity and profitability of the company. McDonald’s continually strives to grow (Harris, 2009). Although the compensation package of its competitor is also high, McDonald’s remains the leading corporation in the industry.
The McDonald’s case demonstrates that effective leadership eventually results in improved productivity and profitability. This is among what has given McDonald’s a competitive advantage against its competitors in the industry. Both the company’s leaders and employees are focused on promoting the interests of their customers, but also those of the entire community through various programs and services. Their high compensation package for its employees is a strategy used by the company in order to promote honesty and accountability within the organization. Although McDonald’s faces a number of challenges in its operations, it has still maintained its leading position in the industry. This is because the strengths and opportunities of McDonald’s in the industry outweigh its weaknesses and threats.
References
Ross, S. A., Westerfield, R., & Jaffe, J. F. (2010). Corporate finance. New York: McGraw-Hill/Irwin.
Harris, Patricia Sowell. (2009). None of Us Is As Good As All of Us: How Mcdonald’s Prospers by Embracing Inclusion and Diversity, Epub Edition. John Wiley & Sons Inc.
Love, John F. (2008). Mcdonald’s: Behind the Arches. Paw Prints.
The Wendy’s Company. (2014, January 7). Board of Directors. Home. Retrieved January 27, 2014, from http://www.aboutwendys.com/Our-Company/Board-of-Directors/
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