McDonald’s Corporation (MCD): Proxy Access

McDonald'sI don’t own any McDonald’s stock, but the UAW Retiree Medical Benefits Trust is sponsoring the proxy access proposal that I recommend shareholders vote for at the upcoming annual meeting on May 21, 2015.

Vote For Proposal No. 6 at McDonald’s

We believe the case for proxy access is particularly compelling at McDonald’s, where poor performance and insufficient board accountability create significant risks for shareholders.

Proxy Access: A Fundamental Shareholder Right at McDonald’s

Shareholders overwhelmingly support proxy access as a basic right of ownership. Large institutional investors, such as BlackRock, T. Rowe Price, CalPERS, and TIAA-CREF have come out publicly in support of proxy access. Proxy access also is supported by major proxy voting advisory firms ISS and Glass Lewis. 

A steadily growing number of companies have adopted the “three & three” proxy access provisions put forward in Proposal No. 6. These “three & three” provisions allow a group of shareholders holding at least 3% of shares outstanding for a minimum of 3 years to nominate a limited number of directors. Companies that have voluntarily adopted similar proxy access provisions include Abercrombie & Fitch, Bank of America, Big Lots, First Merit General Electric, Kindred Healthcare, Prudential Financial, Splunk, Wendy’s, Whiting Petroleum, and YUM! Brands.

The CFA Institute has concluded that widespread adoption of proxy access would raise the value of U.S. corporations by as much as $140 billion, without costly disruption of the board or company operations.

Proxy access ensures that long-term shareholders can play a direct role in nominating director candidates without having to incur the expense associated with an independent proxy solicitation.

Proxy Access: a Strong Board & Future Profitability @ McDonald’s  

Proxy access is appropriate and timely at McDonald’s, where the Company’s performance has lagged competitors and the broader market. Over the past five years, McDonald’s share price has risen only half as much as the S&P 500, and has substantially lagged competitors such as Wendy’s, Burger King, and YUM! Brands. U.S. same-store sales growth has been persistently negative since early 2013, and over the past year global same-store sales growth has also turned negative. Customer satisfaction has fallen, and independent analysts have pointed to a concurrent decline in employee satisfaction.

The much-needed strategic turnaround at McDonald’s requires effective oversight from qualified, independent directors with diversity of employment and life experiences, and board refreshment is important to the survival of McDonald’s over the long-term. We believe long-term investors should be able to elect those individuals who we feel will best represent our interests.
The adoption of proxy access at McDonald’s is critical to ushering a new era of prosperity for the Company and its shareholders.

We therefore urge you to VOTE FOR Proposal No. 6 at McDonald’s

Below are the Votes Recorded by ProxyDemocracy for McDonald’s

#PROPOSAL TEXTMGMTCALVERT TRILLIUMDOMINI
1aElect Director Susan E. ArnoldForForAgainstFor
Calvert Social Index Fund: There is both gender and racial diversity on the board.
Trillium Asset Management: Research A shareholder proposal received at least 20% shareholder support in the last year (shares outstanding).There is both gender and racial diversity on the board.There is at least 30 percent diversity.
1bElect Director Stephen J. EasterbrookForForAgainstFor
Calvert Social Index Fund: There is both gender and racial diversity on the board.
Trillium Asset Management: Research A shareholder proposal received at least 20% shareholder support in the last year (shares outstanding).There is both gender and racial diversity on the board.There is at least 30 percent diversity.
1cElect Director Robert A. EckertForAgainstAgainstFor
Calvert Social Index Fund: There is both gender and racial diversity on the board.The nominee is an incumbent member of the nominating committee; average board tenure is 12 years or greater; and the company exhibits a record of poor performance.
Trillium Asset Management: Research A shareholder proposal received at least 20% shareholder support in the last year (shares outstanding).There is both gender and racial diversity on the board.There is at least 30 percent diversity.
1dElect Director Margaret (Margo) H. GeorgiadisForForAgainstFor
Calvert Social Index Fund: There is both gender and racial diversity on the board.
Trillium Asset Management: Research A shareholder proposal received at least 20% shareholder support in the last year (shares outstanding).There is both gender and racial diversity on the board.There is at least 30 percent diversity.
1eElect Director Enrique Hernandez, Jr.ForAgainstAgainstFor
Calvert Social Index Fund: There is both gender and racial diversity on the board.The nominee is an incumbent member of the nominating committee; average board tenure is 12 years or greater; and the company exhibits a record of poor performance.
Trillium Asset Management: Research A shareholder proposal received at least 20% shareholder support in the last year (shares outstanding).There is both gender and racial diversity on the board.There is at least 30 percent diversity.
1fElect Director Jeanne P. JacksonForAgainstAgainstFor
Calvert Social Index Fund: There is both gender and racial diversity on the board.The nominee is an incumbent member of the nominating committee; average board tenure is 12 years or greater; and the company exhibits a record of poor performance.
Trillium Asset Management: Research A shareholder proposal received at least 20% shareholder support in the last year (shares outstanding).There is both gender and racial diversity on the board.There is at least 30 percent diversity.
1gElect Director Richard H. LennyForForAgainstFor
Calvert Social Index Fund: There is both gender and racial diversity on the board.
Trillium Asset Management: Research A shareholder proposal received at least 20% shareholder support in the last year (shares outstanding).There is both gender and racial diversity on the board.There is at least 30 percent diversity.
1hElect Director Walter E. MasseyForForAgainstFor
Calvert Social Index Fund: There is both gender and racial diversity on the board.
Trillium Asset Management: Research A shareholder proposal received at least 20% shareholder support in the last year (shares outstanding).There is both gender and racial diversity on the board.There is at least 30 percent diversity.
1iElect Director Andrew J. McKennaForAgainstAgainstFor
Calvert Social Index Fund: There is both gender and racial diversity on the board.The nominee is an incumbent member of the nominating committee; average board tenure is 12 years or greater; and the company exhibits a record of poor performance.
Trillium Asset Management: Research A shareholder proposal received at least 20% shareholder support in the last year (shares outstanding).There is both gender and racial diversity on the board.There is at least 30 percent diversity.
1jElect Director Sheila A. PenroseForForAgainstFor
Calvert Social Index Fund: There is both gender and racial diversity on the board.
Trillium Asset Management: Research A shareholder proposal received at least 20% shareholder support in the last year (shares outstanding).There is both gender and racial diversity on the board.There is at least 30 percent diversity.
1kElect Director John W. Rogers, Jr.ForForAgainstFor
Calvert Social Index Fund: There is both gender and racial diversity on the board.
Trillium Asset Management: Research A shareholder proposal received at least 20% shareholder support in the last year (shares outstanding).There is both gender and racial diversity on the board.There is at least 30 percent diversity.
1lElect Director Roger W. StoneForAgainstAgainstFor
Calvert Social Index Fund: There is both gender and racial diversity on the board.The nominee is an incumbent member of the nominating committee; average board tenure is 12 years or greater; and the company exhibits a record of poor performance.
Trillium Asset Management: Research A shareholder proposal received at least 20% shareholder support in the last year (shares outstanding).There is both gender and racial diversity on the board.There is at least 30 percent diversity.
1mElect Director Miles D. WhiteForAgainstAgainstAgainst
Calvert Social Index Fund: There is both gender and racial diversity on the board.The nominee is an incumbent member of the nominating committee; average board tenure is 12 years or greater; and the company exhibits a record of poor performance.
Trillium Asset Management: Research A shareholder proposal received at least 20% shareholder support in the last year (shares outstanding).The nominee is a CEO and sits on more than 2 public company boards.There is both gender and racial diversity on the board.There is at least 30 percent diversity.
2Advisory Vote to Ratify Named Executive Officers’ CompensationForForAgainstAgainst
Calvert Social Index Fund: A vote FOR this proposal is warranted. After a review of the company’s compensation program and practices, CEO pay appears reasonably aligned with performance at this time.
Trillium Asset Management: Research Total CEO compensation exceeds 7 million dollars. Total compensation to outside directors exceeds 100,000 dollars.
3Ratify Ernst & Young LLP as AuditorsForForForFor
Calvert Social Index Fund: Less than 25 percent of total audit fees paid to the auditor were attributable to non-audit work.
Trillium Asset Management: Research Less than 25 percent of total audit fees paid are attributable to non-audit work.
4Pro-rata Vesting of Equity AwardsAgainstForForFor
Calvert Social Index Fund: A vote FOR this proposal is warranted. While the company has adopted a “double-trigger” vesting approach, the request for pro rata vesting of equity awards up to the time of an executive’s termination will further align the interests of executives with shareholders.
Trillium Asset Management: Research A vote FOR this proposal is warranted. While the company has adopted a “double-trigger” vesting approach, the request for pro rata vesting of equity awards up to the time of an executive’s termination will further align the interests of executives with shareholders.
5Provide Right to Act by Written ConsentAgainstForForFor
Calvert Social Index Fund: A vote FOR this proposal is warranted given that the ability to act by written consent would enhance shareholder rights.
Trillium Asset Management: Research A vote FOR this proposal is warranted given that the ability to act by written consent would enhance shareholder rights.
6Proxy AccessAgainstForForFor
Calvert Social Index Fund: A vote FOR this non-binding proposal is warranted as adoption of proxy access will enhance shareholder rights while providing necessary safeguards to the nomination process.
Trillium Asset Management: Research A vote FOR this non-binding proposal is warranted as adoption of proxy access will enhance shareholder rights while providing necessary safeguards to the nomination process.
7Report on Consistency Between Corporate Values and Political ContributionsAgainstForForFor
Calvert Social Index Fund: A vote FOR this resolution is warranted for the following reasons:* Given the potential that payments to outside organizations may end up supporting political activity that does not comport with the company’s stated positions and policy objectives, shareholders would benefit from additional information ensuring a greater alignment of such activity with the company’s expressed priorities and interests; and* Given that McDonalds already discloses some information regarding its policies and approval procedures for direct political contributions and the oversight role of the Corporate Responsibility Committee, it should not be unduly burdensome or competitively disadvantageous for the firm to conduct the assessment requested and report on its findings to shareholders.
Trillium Asset Management: Research Trillium will vote FOR this proposal.
8Educate Public About GMO BenefitsAgainstAgainstAgainstAgainst
Calvert Social Index Fund: A vote AGAINST this resolution is warranted, as the proposal addresses an issue that would be better undertaken by regulators and the scientific community.
Trillium Asset Management: Research Trillium will vote CASE-BY-CASE on this proposal.
9Report on Practices to Mitigate Palm Oil Sourcing ImpactsAgainstForForFor
Calvert Social Index Fund: Support for the shareholder proposal on palm oil impact mitigation is warranted as further disclosure could alleviate potential reputational risks related to the use of palm oil, especially in light of the increasing international attention paid to issues associated with palm oil production.
Trillium Asset Management: Research We support resolutions on environmental impacts on the community.

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