The McDonald’s Corp. (NYSE: MCD) board of directors pushed out CEO Steve Easterbrook on November 1 of last year. He had an “inappropriate personal relationship” with another of the fast-food company’s workers. The relationship was not isolated, the board found out. The board has now, among other things, demanded that he return his cash severance and stock operations. It took an extraordinary eight months for the board to come to the conclusion it had been misled. McDonald’s has 12 directors. Investors have to wonder what they did over that period when they investigated the incident. For shareholders, the time was much too slow, and the decision much too late.
The McDonald’s board is made up of financial executives, large company executives and leaders of some nonprofits. Current CEO Chris Kempczinski can be left off the hook. Particular blame rests with the current board chair and chair emeritus, who must have particularly close relationships with management.
Non-Executive Chair Enrique Hernandez Jr. has held the position since May 2016. He also is board chair and chief executive officer of Inter-Con Security Systems, which provides security for government and companies in the private sector. Hernandez has been a McDonald’s director since 1996.
Miles D. White is the executive chair of health care company Abbott Laboratories. He held the positions of board chair and CEO of Abbott from 1999 to 2020. He has been a McDonald’s director since 2009.
Paul S. Walsh is chair of Compass Group, a food service company. He is also an operating partner at Bespoke Capital Partners, a modest-sized investment firm. Walsh has been a McDonald’s director since 2019.
John W. Rogers Jr. is board chair and co-chief executive officer of money manager Ariel Investments, which was started in 1983. He has been a McDonald’s director since 2003.
Sheila A. Penrose was non-executive chair of Jones Lang LaSalle, a real estate firm, from 2005 to 2020. She has been a McDonald’s director since 2006.
John J. Mulligan, executive vice president and chief operating officer of big-box retailer Target, also has been its chief financial officer. He has been a McDonald’s director since 2015.
Richard H. Lenny is non-executive chair of Conagra Brands, a food company. He was also the board chair, president and CEO of candy business Hershey. Lenny has been a McDonald’s director since 2005.
Margaret H. Georgiadis is president and CEO of Ancestry, which helps people can search for family members. She was also chief executive of toy company Mattel. She has been a McDonald’s director since 2015.
Catherine M. Engelbert is chair of the Women’s National Basketball Association. She also has been the CEO of accounting and consulting firm Deloitte. She has been a McDonald’s director since last year.
Robert A. Eckert is an operating partner of private equity firm Friedman, Fleischer & Lowe. He is a former non-executive chair of Mattel and has been a McDonald’s director since 2003.
Lloyd H. Dean is the CEO of nonprofit health system CommonSpirit Health. He has been a McDonald’s director since 2015.
Last year, Hernandez made just over $800,000. The other board members were paid approximately $300,000. They were, by any measure, overpaid.
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