McDonald's Board of Directors Issues Statement in Response to Carl Icahn

Rhea-AI Summary

On February 20, 2022, McDonald's Corporation responded to Carl Icahn's nomination of Leslie Samuelrich and Maisie Ganzler for election at the 2022 Annual Meeting. The Board will assess these nominees per its selection process. Icahn's nomination focuses on McDonald's pork commitment, where the company leads with a pledge to source 85%-90% of U.S. pork volumes from group-housed sows by end of 2022 and aims for 100% compliance by 2024. Despite industry challenges, the Board is dedicated to shareholder value and sustainable practices, emphasizing its existing commitments to animal welfare.

Positive

• McDonald's leads the industry with pioneering pork sourcing commitments.
• Aims to source 85%-90% of U.S. pork from group-housed sows by end of 2022.

Negative

• Icahn's demands for 'crate-free' pork are deemed impractical given current supply conditions.
• Industry-wide challenges could affect meeting new commitments.

CHICAGO, Feb. 20, 2022 /PRNewswire/ -- McDonald's Corporation (NYSE: MCD) Board of Directors today issued the following statement in response to a director notification nomination from Carl Icahn: 

McDonald's can confirm that Carl Icahn has nominated Leslie Samuelrich and Maisie Ganzler to stand for election at the 2022 Annual Meeting. There is no shareholder action required at this time. The Board will evaluate the nominees as it would any other candidates proposed to it. The Board utilizes Director Selection Process guidelines to evaluate nominees, which were updated in 2020 to more closely align with the Company's values and the strategic drivers of its business strategy.

Mr. Icahn's stated focus in making this nomination relates to a narrow issue regarding the Company's pork commitment, which The Humane Society U.S. has already introduced through a shareholder proposal. This is an issue on which McDonald's has been a leader.

The Company sources only approximately 1% of U.S. pork production and does not own any sows, or produce or package pork in the United States. Nevertheless, in 2012 it became the first major brand to make a commitment to source from producers who do not use gestational crates for pregnant sows. Since making this commitment, McDonald's has led the industry, and today an estimated 30 – 35% of U.S. pork production has moved to group housing systems. McDonald's pioneering commitment was shaped with the industry and the American Association of Swine Veterinarians, and builds on the Company's decades-long commitment to animal health and welfare and its overall ESG strategy.

By the end of 2022, the Company expects to source 85% to 90% of its U.S. pork volumes from sows not housed in gestation crates during pregnancy. Despite industry-wide challenges for farmer and producers, such as the COVID-19 pandemic and global swine disease outbreaks, the Company expects 100% of its U.S. pork will come from sows housed in groups during pregnancy by the end of 2024. For more information on McDonald's commitments, please visit our Animal Health & Welfare page.

Mr. Icahn, who states that he holds 200 shares of McDonald's stock, is the majority owner of Viskase, a company that produces and supplies packaging for the pork and poultry industry. Mr. Icahn's ownership provides him with unique exposure to the industry-wide challenges and opportunities in migrating away from gestation crates. Thus, it's noteworthy that Mr. Icahn has not publicly called on Viskase to adopt commitments similar to those of McDonald's 2012 commitment.

Despite McDonald's progress, Mr. Icahn has instead asked for new commitments, including to require all of McDonald's U.S. pork suppliers to move to "crate free" pork, and set specific timeframes for doing so. While the Company looks forward to promoting further collaboration across the industry on this issue, the current pork supply in the U.S. would make this type of commitment impossible. Furthermore, it reflects a departure from the veterinary science used for large-scale production throughout the industry, and would harm the Company's shared pursuit of providing customers with high quality products at accessible prices.

McDonald's Board of Directors takes seriously its role to ensure sustainable value creation for shareholders while acting on some of the world's most pressing social and environmental challenges that are important to our stakeholders. The Board has long been committed to good corporate governance and has the right balance of skills, experiences, and perspectives to fulfill the Company's obligation to shareholders while providing strong oversight. Under the Director Selection Process guidelines, the Board considers criteria including a candidate's ability to represent the interests of all shareholders of the Company, their demonstrated knowledge of corporate governance matters applicable to U.S. based multi-national companies, and their ability and willingness to devote specific time to Board duties. The McDonald's Board looks forward to continuing to oversee long-term growth for the Company's shareholders and all stakeholders.

About McDonald's
McDonald's is the world's leading global foodservice retailer with more than 40,000 locations in over 100 countries. Approximately 93% of McDonald's restaurants worldwide are owned and operated by independent local business owners.

Forward-Looking Statements
This release contains certain forward-looking statements, which reflect management's expectations regarding future events and operating performance and speak only as of the date hereof. These forward-looking statements involve a number of risks and uncertainties. The factors that could cause actual results to differ materially from our expectations are detailed in the Company's filings with the Securities and Exchange Commission, such as its annual and quarterly reports and current reports on Form 8-K. The Company undertakes no obligation to update such forward-looking statements, except as may otherwise be required by law.

Proxy Solicitation
McDonald's intends to file a proxy statement and WHITE proxy card with the SEC in connection with its solicitation of proxies for its 2022 Annual Meeting. MCDONALD'S SHAREHOLDERS ARE ENCOURAGED TO READ ALL RELEVANT DOCUMENTS FILED WITH OR FURNISHED TO THE SEC, INCLUDING THE DEFINITIVE PROXY STATEMENT (AND ANY AMENDMENTS AND SUPPLEMENTS THERETO) AND ACCOMPANYING WHITE PROXY CARD WHEN THEY BECOME AVAILABLE AS THEY WILL CONTAIN IMPORTANT INFORMATION.

View original content:https://www.prnewswire.com/news-releases/mcdonalds-board-of-directors-issues-statement-in-response-to-carl-icahn-301486183.html

SOURCE McDonald's Corporation

FAQ

What is Carl Icahn's nomination regarding McDonald's stock (MCD)?

Carl Icahn has nominated Leslie Samuelrich and Maisie Ganzler for election at McDonald's 2022 Annual Meeting.

What is McDonald's current commitment to pork sourcing?

McDonald's commits to sourcing 85%-90% of its U.S. pork from group-housed sows by the end of 2022.

What are the concerns raised by Carl Icahn regarding McDonald's practices?

Icahn has raised concerns about McDonald's pork sourcing and has requested that all U.S. pork suppliers move to 'crate-free' practices.

How does McDonald's Board evaluate nominees for director positions?

The Board follows a Director Selection Process that considers candidates' ability to represent all shareholders and their corporate governance knowledge.