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Log In / Register | Jun 25, 2017

Large McDonald's Shareholder Proposes Franchisee Seat on Board, Gets Corporate Cold Shoulder

Segal Marcos Advisors, the sponsor of a trust that owns approximately 5,100 shares of McDonald's, has proposed that there be a permanent franchisee seat on the company's board. The franchisor is against the change.

Segal Marco Advisors, a financial and investment consulting firm, is recommending that franchisees get a new kind of preferred stock that lets them elect their own board member. The shareholder proposal argues that restaurant operators, who own 85 percent of McDonald’s stores globally, pay company royalties and create value for the chain. — Leslie Patton, Bloomberg

Corporate has taken action to nip the proposal in the bud:

In January, McDonald’s sent a letter to the U.S. Securities and Exchange Commission asking to omit Segal Marco’s proposal from its proxy materials this year. That request is pending, said Terri Hickey, a McDonald’s spokeswoman. — Patton, Bloomberg

According to Bloomberg, McDonald's franchisees have had strained relations with their franchisor for years over remodeling, steeply discounted food and the rent amount McDonald's extracts from them.

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