Business

McDonald's faces worker pressure as shareholders meet

protest

Fast food giant McDonald's is facing pressure from both workers and investors, who are increasingly unhappy with the firm's business strategy.

Hundreds of fast food workers and supporters converged in front of McDonald's corporate headquarters on Thursday morning before the company's annual shareholder meeting.

They demanded the fast food giant raise wages to $15 per hour, from $9.

Separately, investors voted to change how board members are elected.

They are unhappy with the firm's slumping sales.

McDonald's - the once invincible-seeming US corporate food giant whose arches are seen across the globe - is struggling, as health-conscious consumers eschew its food in the US and workers stage day-long protests against the company.

That has made this shareholder meeting - the first since British-born chief executive Steve Easterbrook took over the firm in January - a crucial focus of both worker angst and investor frustration.

McDonald's banned media from attending the event, and has sought to dismiss both worker complaints and investor efforts to change the management of the firm.

Supersize wages

On a chilly morning outside the company's headquarters in Oak Brook, Illinois, hundreds of protestors chanted slogans such as "supersize my wages" as shareholders arrived at the meeting.

A dozen police prevented the protestors from interacting with the attendees, who were required to show their shareholder ballots emblazoned with a large red 2015 stamp to a security guard before being allowed in.

Some protestors carried oversize checks with the weekly wages of "actual McDonald's workers" - $62.18 and $34.07.

Many had travelled from across the country - New York City, Tampa, and Philadelphia - to hand in a petition of a million signatures demanding McDonald's raise the minimum wage it pays workers.

They said they were energised by the Los Angeles' city council's announcement on Tuesday that it had voted to increase the minimum wage in the city to $15 per hour by 2020.

Since 2012, the group - known as the Fast for 15 coalition - has been putting pressure on corporations to increase wages from the current US federal minimum wage of $7.25 per hour to a "living wage" of $15.

Many experts have said that the group has been successful in exerting pressure on firms such as Walmart, Target, and others to raise wages.

"Part of the [wage increases] are due to the fact that as the economy has improved, [corporations] need to do something to hold on to workers - Walmart was having trouble keeping goods stocked in their stores," Professor Ken Jacobs, head of the University of California-Berkeley's Labor Center, told the BBC.

"But I don't think McDonald's, without all the protests, would have acted.

"I think the workers [who], really quite courageously, went out on strike have really inspired and moved something that's very big and will have long-term repercussions."


Lawrence Yancy, a lifelong Chicagoan, has worked in fast food since he graduated high school in 1989, after which he got a job at Wendy's.

He is just one of many workers here who are frustrated with the gap between how much McDonald's executives are paid versus the restaurant employees.

"I'm tired of struggling all the time," he told the BBC during a break from the protests at his small and slightly run-down one bedroom apartment in the Kimball neighbourhood. The area is close to Hyde Park, near where US President Barack Obama lives.

He has worked as a grill cook at a Chicago McDonald's since January 2003 and says he was inspired to join the movement after labour organisers visited his store last year as part of an effort by the Service Employees International Union to get fast food workers to join a union.

He says he is frustrated that his wages have barely budged from the $5.50 per hour he started making when he first joined the company, to the $8.40 he makes now.

"I just want to be able to save - and maybe buy some new clothes," he said.


Long-term value

McDonald's has dismissed the protests as not being indicative of workers at the firm and its franchises more generally.

This "is the latest instance in an $80m publicity campaign organized and paid for by the Service Employees International Union and its members," said the company in a statement.

"As has been the case in earlier protests, very few McDonald's or independent franchisee employees are participating."

But many shareholders took pictures of the protests as they headed into the meeting - which could further add to investor concerns, as well as influencing voting at the meeting.

Late on Wednesday, large institutional investors released a letter calling for McDonald's and other firms to amend the way investors can decide who sits on the company's board through a move known as "proxy access".

The investors include the California Public Employees' Retirement System (Calpers) and the New York City Pension Funds - who control a combined $860bn in assets.

The heads of pension funds in New York City, Chicago, and California wrote in a letter that the move was an effort to challenge the company's decision to buy back shares to please investors, at the expense of long-term growth.

"McDonalds is facing serious performance challenges. But despite a recently announced and much needed turnaround plan, the company continues to direct capital towards an aggressive share buyback programme," they wrote in a letter.

They said that these buybacks should instead be directed at increasing worker wages, in addition to being reinvested in the company.

McDonald's urged shareholders to vote against the move. Despite the opposition, 61% of voting shareholders approved the proxy access bylaw.

"We'll be evaluating the advisory vote, and the board will consider it to determine what's appropriate," McDonald's said in a statement.

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