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McDonald’s links leaders’ pay to diversity targets
26/02/2021
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McDonald's

Fast-food giant McDonald’s is tying 15% of its executive vice presidents’ bonuses to meeting diversity and inclusion targets and plans to publicly release demographic details of its workforce.

In addition to the company’s financial performance, executives will be measured on their ability to champion core values, improve representation within leadership roles for both women and historically underrepresented groups, and create a strong culture of inclusion within the business.

Data from 2020 shows underrepresented groups at McDonald’s make up 29% of US-based leadership roles. Within five years, the global restaurant chain expects to increase such representation in its senior director roles and above to 35%.

Additionally, by 2025, the business expects to increase representation of women in leadership roles globally, currently at 37%, to 45%. McDonald’s has an overall goal to reach gender parity in leadership roles by the end of 2030.

“We’re serious about holding ourselves and our leaders accountable to these foundational commitments, and doing so with respect to local regulations and employment laws around the world,” said president and CEO Chris Kempczinski in a blog post.

“That’s why we are adding annual targets designed to meet these five-year goals to our annual compensation incentive metrics for executive vice presidents. These targets are endorsed by our board of directors and extend to our most senior leaders – including me.”

McDonald’s has the opportunity to create more positive impact, and be a leading voice in the DEI landscape

McDonald’s is the latest multinational corporation to link executive performance to diversity and inclusion targets following controversy.

The Chicago-based company, which has approximately 205,000 employees worldwide, terminated the contract of its former CEO, Steve Easterbrook, in 2019. The board determined a consensual relationship between Easterbrook and an employee violated company policy.

In June 2020, Sundar Pichai, CEO of Google and Alphabet, announced a target of 30% more leaders from black, indigenous, and people of colour (BIPOC) groups. As of last year, 96% of Google’s US leaders were white or Asian and 73% globally were male.

Earlier this month, the search engine revealed it planned to evaluate the performance of its senior leaders on team diversity and inclusion metrics.

The move followed the controversial dismissal of Timnit Gebru, co-leader of Google's ethical artificial intelligence research team. Gebru alleged she was fired after criticising the technology company’s diversity efforts.

Last October, Starbucks announced it will link executive pay to achieving a target of employing 30% Black, indigenous, and people of colour (BIPOC) employees at the corporate level and 40% in retail and manufacturing by 2025.

Workplace diversity statistics released by the coffee giant show its current US workforce is composed of 69% women and 47% BIPOC.

The move followed Starbucks initially banning its employees from wearing pro-Black Lives Matter apparel, stating such items would violate its dress code policy. The decision was reversed following an online backlash.

In January 2021, Kirsten Jones, former principal of Goldberg Kohn’s employment and labour team, joined McDonald’s as senior counsel and director of legal diversity, equity, and inclusion (DEI).

“By leveraging our scale in the legal space and other fields, McDonald’s has the opportunity to create more positive impact, and be a leading voice in the DEI landscape,” she said.

“Belonging and inclusion are the heart of DEI, so it speaks volumes when leaders take time to champion and value it. 

“Visible commitment and action by leaders to reward and acknowledge those on their team who are doing likewise is the key to integrating the DEI principles into the fabric of our company.”