Proxy access, the ability of shareholders to put their own board member candidates on the corporate ballot, has apparently won shareholder support at McDonald’s.
Andy McKenna, McDonald’s (MCD) non-executive chair, announced the preliminary vote at the annual meeting this morning. It was the only shareholder proposal that received a majority – and it did so with a 61% vote.
The advisory shareholder proposal calls for a proxy access bylaw to allow shareholders the ability to put their own candidates on the ballot if they have held their shares for at least three years and if they, collectively, hold at least 3% of shares outstanding. Cambria Allen, corporate governance director, at UAW Retiree Medical Benefits Trust, presented the proposal.
“I am very happy that shareholders have given the board a mandate,” Allen told me. She was pleased with the “overwhelming support” to provide this “fundamental shareholder right.” “I hope the board will respond and adopt proxy access,” she told me. She said that she doesn’t know if the vote will create momentum for change in McDonalds’ board composition, but she said that the board has been engaged in discussions so far regarding the proposal. “Just because we have the right does not mean shareholders will use it. It will hold the board more accountable. It’s a means of communication, a mechanism for long-term shareholders to encourage communication with the board,” she says.
Allen said that she is encouraged by recent actions McDonald’s has taken to raise the minimum wage at its corporate-controlled restaurants and with the fast-food giant’s initiatives to encourage workers and students to get their high school diplomas. It shows they recognize that “their workforce is their No. 1 asset,” she says.
“Steve [Easterbrook. McDonald’s CEO] did a really good job” in the meeting, “but we’ll see” what comes next, she told me.
Eleanor Bloxham, a corporate governance and valuation authority, is CEO of The Value Alliance and Corporate Governance Alliance (http://www.thevaluealliance.com). She has been a regular contributor to Fortune since April 2010 and is the author of two books on corporate governance and valuation.
