McDonald’s ties executive pay to diversity

The US fast-food retailer is targeting 35% of US senior management to be from underrepresented groups by 2025

McDonald's is releasing a full breakdown of US employees by race, ethnicity and gender. Reuters

McDonald’s said it is tying 15 per cent 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 US companies to better reflect the population.

Among the information McDonald’s is releasing for the first time is a full breakdown of US 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 US government - the fast-food giant laid out a plan to increase the number of people of colour in its US management ranks and to achieve gender parity worldwide, according to a filing this week.

“We cannot be complacent in our pursuit to better ourselves and our communities. Few brands in the world have our size and reach,” McDonald’s chief executive Chris Kempczinski wrote in a memo to employees.

“Our customers, franchisees, employees, suppliers, and shareholders expect us to make a difference.”

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

Like other big American companies, McDonald’s has a complicated history when it comes to diversity. It has won praise for championing black business ownership, but some black franchisees recently filed suit, saying they were steered toward crime-ridden neighbourhoods and set up to fail. McDonald’s disputes that characterisation and says it has supported the franchisees.

The Chicago-based company has also contended for years with accusations that it overlooks workplace harassment and abuse, culminating in the very public dismissal of its former chief executive in late 2019.

Women’s share among McDonald’s leadership and professional positions were in line with or slightly better than the industry, according to the company’s data.

The fast-food retailer had 205,000 workers worldwide at the end of 2019, including corporate employees and workers in the restaurants it owns directly.