Posted on February 22, 2021

McDonald’s Ties Executive Pay to Diversity, Releases Data

Crayton Harrison and Anne Riley Moffat, Bloomberg, February 18, 2021

McDonald’s Corp. said it is tying 15% of executives’ bonuses to meeting targets including diversity and inclusion and began disclosing data on the racial makeup of its workforce, major steps by one of the largest U.S. companies to better reflect the population.

Among the information McDonald’s is releasing for the first time is a full breakdown of U.S. employees by race, ethnicity and gender, a victory for transparency advocates and investors increasingly pressing companies to do more to address the country’s deeply rooted social inequality.

In addition to publicly releasing its worker demographics — contained on a form known as EEO-1 that corporations are required to give to the U.S. government — the fast-food giant laid out a plan to increase the number of people of color in its U.S. management ranks and to achieve gender parity worldwide, according to a filing Thursday.


As part of its new metrics, McDonald’s is targeting 35% of U.S. senior management to be from underrepresented groups by 2025, up from 29% currently. It also aims for 45% women in senior roles worldwide by the same year and 50% by 2030, compared with 37% now.

{snip} It has won praise for championing Black business ownership, but some Black franchisees recently filed suit, saying they were steered toward crime-ridden neighborhoods and set up to fail. McDonald’s disputes that characterization and says it has supported the franchisees.


McDonald’s has a slightly higher proportion of Black and Hispanic executives and senior managers than the food services and drinking places sector but lags the industry for those employee groups among first and mid-level managers, according to the company’s data. Black and Hispanic workers make up a larger share of professional employees compared with peers. {snip}


Pressure has been mounting for the chain to release its workforce data. New York City Comptroller Scott Stringer and investors including the New York City Employees’ Retirement System in December warned McDonald’s and about two dozen other major corporations that shareholders would be asked to vote on nonbinding proposals requiring the release of the EEO-1 forms at their next annual meetings if they didn’t release them on their own.


Under McDonald’s new plan, executives will be measured in four different categories related to the company’s values, goals for racial and gender diversity, and creating a culture of inclusion. Those metrics will determine 15% of incentive pay, with the rest coming from operating income growth and sales growth, according to the filing.