Well, good morning, everybody.
Good morning.
It's a great day to be here with all of you. I'm honored to serve as your chairman of the board of directors and welcome you to the McDonald's 2018 Annual Shareholders Meeting. I call this meeting to order. In addition to everyone here, we are joined by those of you listening on our webcast. For those in this room, you have a copy of the agenda for our meeting today and information about our procedures. With me on stage, our President and Chief Executive Officer, Steve Easterbrook, our General Counsel and Corporate Secretary, Jerry Krulewicz, and finally, on the far left, our Chief Financial Officer, Kevin Ozan. I'm pleased at this time to introduce the board of directors who are nominees for election at this meeting.
In addition to Steve Easterbrook, they are Lloyd Dean, President and CEO of Dignity Health; Bob Eckert, Operating Partner of Friedman, Fleischer & Lowe; Margo Georgiadis, CEO of Ancestry; Gene Jackson, CEO of MSP Capital; Rick Lenny, Non-Executive Chairman of Information Resources; John Mulligan, Executive Vice President and Chief Operating Officer at Target; Sheila Penrose, Non-Executive Chairman of Jones Lang LaSalle; John Rogers, Founder, Chairman, CEO of Ariel Investments; and Miles White, Chairman and CEO of Abbott Laboratories. Thank you, board. Also with us today is Chairman Emeritus, Andy McKenna. Andy. Thank you all. Well, we begin the presentation with the proxy and proposals. Later you'll hear from Steve, but I'd also like to offer a few comments. At this time, I'd like to turn to Jerry Krulowicz, our Corporate Secretary, to describe our procedures for the business of the meeting.
Thank you, Richard Lenny. I can advise that a quorum of the company's shares outstanding is present to conduct the meeting. The polls are open and will close following the presentation of the proposals. In consideration of all the shareholders joining us today, we ask you to maintain a respectful and orderly environment throughout this meeting. For those of you invited to offer a comment or a question, we would urge you to be courteous of your fellow shareholders. Please limit your remarks to the time provided. You can review the rules of order which are printed in your program. Here is the order of events. First, the chairman will introduce each proxy proposal and the presenter of each proposal. Each of the presenters will be allowed up to two minutes to present their proposal. A chime will indicate the expiration of that time.
Following the presentation of all of the proposals, the chairman will ask for a motion and a second on all of the proposals at one time. There will not be a comment period during the presentation of the proposals, but there will be a question and answer period following the CEO's remarks. Our rules of orders are intended to provide more opportunities for shareholders to ask their questions during the portion of today's meeting. If you have a question and you have not yet submitted one, please hand that to the usher now. Also, if you have not already voted your shares and need a ballot, please raise your hand and an usher will provide one to you. If you have already submitted your proxy, you do not need to vote by ballot. Broadridge Financial Solutions, the independent inspector of election, receives and tallies all votes.
Preliminary voting results will be announced after Steve Easterbrook's remarks. I will now turn the meeting back to our chairman for the presentation of the proposals.
Thank you very much. Thank you, Jerry Krulewicz. Our first order of business is the election of Lloyd Dean, Steve Easterbrook, Robert Eckert, Margaret Georgiadis, myself, Gene Jackson, Richard Lenny, John Mulligan, Sheila Penrose, John Rogers, and Miles White as directors. The second item is an advisory vote to approve executive compensation. The third item is an advisory vote to approve the appointment of Ernst & Young LLP as independent auditor for 2018. The remaining items of business are shareholder proposals. As a reminder, I'll call on the presenter of each proposal when it is his or her turn to speak to the respective proposal in two minutes or less. The fourth item is an advisory vote on a shareholder proposal requesting the ability for shareholders to act by written consent. At this time, I call upon Alexa Kaczmarski, who is here to present proposal number four. Ms. Kaczmarski.
Thank you. My name is Alexa Kaczmarski, presenting Proposal 4, Shareholder Right to Act by Written Consent on behalf of John Chevedden of California. Shareholders request that the board of directors take necessary steps to permit written consent by the shareholders entitled to cast the minimum number of votes that would be necessary to authorize an action at a meeting. This proposal topic won majority shareholder support at 13 major companies in a single year. Hundreds of major companies enable shareholder action by written consent. We need this to make up for the weakness in our shareholder right to call a special meeting. The current 25% stock ownership requirement to call a special meeting can mean that more than 50% of shareholders need to be contacted in a narrow window of time to exercise this important right.
This is almost impossible to accomplish without an enormous budget from the pockets of shareholders. Taking action by written consent in place of a meeting is a means shareholders can use to raise important matters outside of the normal annual meeting cycle. When shareholders have the right to act by written consent, management is more apt to recognize their concerns and take corresponding action. There are problems at McDonald's that may indicate deeper needs for change. For instance, McDonald's is losing relationships with key institutions and customers. In the last year, the International Olympic Committee cut ties with McDonald's, and the Los Angeles Unified School District and California Federation of Teachers demanded an end to McTeacher's Nights. Guest counts were down as of the corporation's last earnings call. Just two days ago, 10 workers filed sexual harassment claims at the corporation.
It's tone-deaf and wrong for the corporation to try to avoid accountability on these and other issues. Instead of addressing concerns from its shareholders and the public directly, McDonald's continues to sweep these issues under the rug. Please vote yes, shareholder right to act by written consent, Proposal 4.
Thank you, Ms. Kaczmarski. The fifth item is an advisory vote on a shareholder proposal requesting a report on plastic straws. At this time, I'd like to call upon Elaine Leung, who is here to present the Proposal 5. Good morning.
Morning. I'm Dr. Elaine Leung, a marine biologist and a member of SumOfUs. For my work in ocean conservation, I've worked in some of the most remote places in the world. Yet even these are covered in plastic garbage. It's a huge threat that people everywhere are waking up to. This is why I'm here today to present a shareholder proposal filed by a member of SumOfUs. SumOfUs is a global consumer advocacy group that represents 14 million people in 150 countries. Today, we are asking you to vote for proposal 5 that asks McDonald's to issue a report to shareholders about the business risk of using plastic straws and about McDonald's efforts to implement a substitute for them. We estimate that globally, 95 million single-use plastic straws are distributed by McDonald's every day. The problem with plastic is that it never really disappears.
It breaks into smaller and smaller pieces, and almost every marine organism, from microscopic plankton to the largest whales, have been known to eat plastic. This is a problem because more and more animals are washing up dead on beaches as a result of ingesting plastic. Although many of you may see plastic straws as a harmless little item, they soon add up, and their size means they pose a particular hazard. A growing global consumer movement sees this problem. A recent poll suggests that nine in 10 people would support a full or partial ban on plastic straws. Across the world, this is already happening, with bans enacted or proposed in seven towns and cities across three U.S. states, plus Vancouver, Canada, and nationally in Taiwan, Antigua and Barbuda, Kenya, Scotland, and England.
Thousands of restaurants, institutions, and venues are already voluntarily stopping using plastic straws, including McDonald's in the U.K. and the Queen of England. Over 480,000 people have signed a petition for McDonald's to stop using straws, with 130,000 saying they are McDonald's customers and 3,500 shareholders. In this context, we don't want McDonald's to be seen as a choice that harms our environment. We congratulate McDonald's on recently ending its use of Styrofoam and pledging that packaging would be made from sustainable sources by 2025 in response to consumer concerns. We believe continuing to use plastic straws could put our company at a competitive disadvantage relative to other available dining choices and that shareholder value would be enhanced if we developed plans to stop routinely using plastic straws. Thank you.
Thank you, Dr. Leung. The 6th item is an advisory vote on the shareholder proposal requesting report on charitable contributions. At this time, I call upon Carlana Kulseth, who is here to present proposal number 6. Good morning.
Good morning. My name is Carlana Kulseth, I'm an educator from our nation's fifth-largest school district in Las Vegas, Nevada. On behalf of Harrington Investments, I move shareholder proposal six on McDonald's charitable contributions. As an educator, I welcome funds that flow into my school through outside entities. As a former assistant manager to your company, I find it appalling that the practice of McTeacher's Nights are still being utilized in the name of charity, where employees' shift hours are taken away to be replaced by teachers and students. As a former assistant manager, one of the most heartbreaking duties I had was to take away shift hours from my employees to accommodate McTeacher's Night fundraisers. The tears, the screaming, the obscenities, even the food thrown at me came as outbursts from employees who depended on their hours to survive, to support their families.
In a world where the fight for $15 an hour is a reality across our nation to ensure all workers are earning a living wage and dignity on the job, the fact that this practice still exists is archaic at best. As an educator, it is disgusting that schools only get 10%-20% of the profits running McTeacher's Nights with teachers and students being utilized as free labor. This does not lend to McDonald's being the generous company it attempts to wear as a badge of honor in support of education. Combine the sparse earnings from these events with the free labor of teachers and students doing the work of runners, servers, and lobby cleaners, we now see a different side of McDonald's that often is hidden. I urge you to reevaluate the practice of McTeacher's Nights and other forms of fundraisers McDonald's promotes and utilizes.
If you truly do support education, I urge you to discontinue the use of earning high profits off free labor through our community schools. I urge shareholders to vote in favor of this proposal. Thank you.
Thank you, Ms. Kulseth. Is there a motion to move on all the proposals?
Moved.
Is there a second?
Second.
Thank you. Your board of directors recommends a vote in favor of the election of all the director nominees and in favor of the other two management proposals. The board recommends a vote against all of the shareholder proposals. The reasons for the board's recommendations are outlined in the proxy statement. If you're voting at the meeting here today, please complete and sign your ballot and let an usher know, and they'll come over and collect it from you. Don't see anybody doing that at the moment. If you've already submitted your proxy, you do not need to vote, as Jerry shared with us earlier. Not seeing anybody with votes. The polls are now closed. Preliminary voting results will be announced at the end of today's program. This concludes the formal portion of the business of the meeting, and the annual shareholders meeting is now adjourned.
Before I leave the podium, however, and turn it over to Steve, I'd like to make a few comments. Let me start by expressing our appreciation from McDonald's and from the board and from everyone here to the entire Oak Brook community. This beautiful campus has been a tremendous home for our headquarters and Hamburger University for more than four decades. We're proud to have been here, and we've appreciated the great relationship we've enjoyed with local leaders and those who live here. We as a company have prospered, and we hope the community has prospered as well. With us today are two daughters of Fred Turner. As many of you who are fortunate enough to know Fred over the years know that he was the visionary who helped design and build out this beautiful campus office building, et cetera.
I'd just like to thank Patty Sue, Fred's daughter, and also Paula, Fred's daughter, for being here with us today. I think it's somewhat of a sentimental moment for all of us as we depart this truly amazing campus. We're moving to Chicago, a new headquarters. As we make this transition, we want the members of the Oak Brook community to know that you will always have our sincere appreciation. Thank you for being so welcoming and supportive of McDonald's over these many, many years. Over the past three years, all of us on the board have been fortunate to support a dynamic management team driving a truly impressive business turnaround. This company, our leadership team, and the amazing people all around the world are moving with a great sense of urgency, resiliency, and agility.
It speaks to McDonald's strong commitment to doing what it takes to meet rising customer expectations in 2018. The strength of McDonald's over the years, and really since its founding, has been its ability to meet customers on the customer's terms. We're confident that this company will continue to evolve so it remains as relevant today as it was when it was founded more than 60 years ago. Today, we're also operating in an environment requiring companies to do much more than run a good business. Customers and other stakeholders expect great products and service, but they're also looking for more. They expect modern businesses to step up as leaders, driving positive change in their industry and society as a whole. We at McDonald's accept this. We embrace it.
We recognize that the world is grappling with complex environmental and societal changes, and that this company, McDonald's, is in an unmatched position to make a difference. We are one of the largest restaurant companies in the world. We are committed to using our Scale for Good in a way that supports our growth strategy, as well as helping our people, the communities we serve, and the environment. We're proud of all that McDonald's is accomplishing, and I'm pleased to share highlights of our progress in 2017. Comparable sales continued improving, along with increased operating income and earnings per share. Last year, we returned $7.7 billion to shareholders, and we intend to return another $16 billion to our shareholders in the next two years. Without a doubt, this is an exciting time to be part of the McDonald's family and the McDonald's story.
This company is well-positioned for the future and has the confidence of the entire board. We also believe we have the best leader, Steve, and the best leadership team are sitting here. We benefit from an effective working relationship between the board, our CEO, and the senior leadership. We are a team. All of us share strongly held commitments to delivering results. We as a team are holding ourselves accountable, and I can assure you that each member of the board and senior leadership team is fully engaged. We're committed to a culture where everyone is treated respectfully. We want McDonald's to be an organization where each member of the team has rich opportunities to contribute, to grow, and to thrive. We discussed the Velocity Growth Plan at each board meeting. Last fall, the leadership team joined the board in London for our annual deep dive into strategy.
With 12 years of steady growth, the U.K. market is one of the leaders in the McDonald's system. We were able to visit several restaurants, allowing us to experience firsthand the many initiatives at the heart of the plan, making a difference for our customers and our business. We also engaged in robust discussions as we assessed both the opportunities and the challenges and set the course intended to drive the long-term sustainable growth for this business. Our board, the McDonald's board, is composed of a diverse group of highly qualified individuals who care deeply about McDonald's. Our directors bring skills and experiences from many different industries, from retail, technology, healthcare, manufacturing, just to name a few. Together, we monitor the company's strategy, company's leadership, the company's operations in light of an ever-changing business environment. As our business evolves, so will our board.
We remain committed to ensuring that we have the right directors in place to oversee the company's business and serve the interests of McDonald's shareholders well into the future. We all know that winning is contagious. Today, the people of McDonald's sense it. Too do our owner-operators and our suppliers, all three legs of the stool. Most importantly, the millions of customers who visit a McDonald's restaurant today undoubtedly feel it also. With the leadership team we have in place and the strategy they are executing, I am confident that it is sustainable for many, many years to come. Thank you for taking the time to be with us here today, and thank you for your support of McDonald's. Let's hear from our President and CEO, Steve Easterbrook. Steve.
Good morning. Thank you, Rick. We've made significant progress in building a better McDonald's because of the strong partnership we have with yourself and with our entire board of directors. We appreciate your leadership, your counsel, and your support. I'd also like to recognize the senior management team, many of whom are here today. These leaders have been instrumental in shaping the vision for where we're going and are passionate about working with our employees, our franchisees, and our supplier partners to bring that vision to life.
In addition to Jerry and Kevin, they are Ian Borden, who's President of the Foundational Markets, Lucy Brady, Chief Strategy Officer, Francesca DeBiase, Chief Global Supply Chain and Sustainability Officer, Joe Erlinger, President of the High Growth Markets, David Fairhurst, our Chief People Officer, Robert Gibbs, Chief Communications Officer, Doug Goare, President of the International Lead Markets and Chief Restaurant Officer, Daniel Henry, Chief Information Officer, Chris Kempczinski, President of McDonald's USA, Silvia Lagnado, Chief Marketing Officer, and Mason Smoot, our Chief Alignment Officer. As a team, please stand and be recognized. I want to express my appreciation to all of you, our shareholders. Thank you for your investment and for joining us today, both in person and on the webcast.
When we met at our shareholders' meeting a year ago, we'd only just launched the Velocity Growth Plan, since then, we have been executing with speed and purpose. I'm pleased to report that our Velocity strategy is working. 2017 was a very strong year for the McDonald's system. We made great progress in showing customers how committed we are to becoming a better McDonald's for them. We continue to elevate their experience with delicious food, compelling value, and ever greater convenience. With strong business performance, we completed the transition from turnaround to growth, we began building momentum. We grew comparable sales by 5.3% in 2017. That's the best we've seen in six years. Importantly, comp sales were positive across each of our operating segments, a demonstration of the broad-based success. Our strategy is working globally across the business.
We've maintained momentum at the start of 2018 with our 11th consecutive quarter of positive comp sales. Customer traffic is a key signal about the vitality of a business, at McDonald's, more customers are visiting more often. Last year was our best guest count performance since 2012. We grew guest count in each quarter in 2017 and ended the year with 1.9% growth. We extended that run to five consecutive quarters of growth with positive global guest counts again in the first quarter of this year. We continue to take actions that strengthen our company. Our business is fit for purpose. As we began our turnaround, we simplified our global structures so the best ideas could travel more quickly from one market to another. We removed layers, now we're faster and more decisive. Our owner-operators are one of our greatest competitive advantages.
They bring an entrepreneurial spirit along with a deep involvement and rich insights into the communities that we serve. They help McDonald's connect with the daily lives of our customers. Last year, we completed an important series of refranchising transactions and reached our target of refranchising 4,000 restaurants a year ahead of schedule. As you can see, we have many reasons to be proud of our progress. We're becoming a better McDonald's, we're not content. We have a great ambition and continue to strive for more. Our Velocity Growth Plan is a reliable roadmap for accelerating our long-term sustainable growth. Running great restaurants is the foundation of our strategy, we have the best operators with committed and engaged crew and managers doing just that. They're serving our customers hot, delicious burgers quickly and with a smile.
This is helping us retain customers who visit regularly, regain others who haven't been visiting as often, convert more casual customers into regulars. In addition to rewarding us with their business, our customers are telling us we're getting noticeably better with fast and friendly service and great-tasting food. We improved customer satisfaction scores last year, with a strong start in 2018, we intend to keep that trend going. Taste is the number one reason customers choose McDonald's over our competitors. We are reclaiming our leadership with our delicious burgers through innovation and by elevating the iconic sandwiches at the core of the McDonald's menu. Our U.S. customers are enjoying hotter and juicier Quarter Pounders. This month was the national launch in the U.S. of fresh beef cooked right when ordered in our Quarter Pound burgers. These sandwiches taste great, our customers are highly enthusiastic.
More than 90% of those trying them in our pilot markets of Dallas and Tulsa said they'd buy them again. This year, many markets are celebrating our customers who love another iconic McDonald's burger, the Big Mac. Fans around the world remain passionate about the Big Mac, even 50 years after Jim Delligatti, a McDonald's owner-operator in Pennsylvania, created this delicious sandwich. As our Global Chief Marketing Officer, Silvia Lagnado, has said, few brands have the credibility to show customers arguing over the authenticity of their product like we do in these commercials. Take a look.
Please stand by. We're watching a commercial in the meeting room.
Fun, isn't it? We're re-energizing the brand as we celebrate the burger's 50th anniversary this year. Many markets are seeing a tremendous response with a limited time selection of the Mac Jr., Classic Big Mac, and Grand Big Mac. In the U.K., they drove growth in the first quarter with a very popular campaign, and the Grand Big Mac became the most successful promotional burger ever launched in the market. I hope you'll have an opportunity to enjoy a Big Mac soon with the Be Our Guest card that you would have received on the way in. Continuing to offer customers good value for their money is another foundational element of our growth strategy. Relevant and compelling value platforms, along with high-impact deals, are proven drivers for bringing guests to our restaurants. France is a great example.
During the first quarter, McDonald's France reached an all-time high for share of the informal eating out market. With P'tits Plaisirs and complete lunch meals for under EUR 5, France is satisfying customers with delicious food at an affordable price. In the U.S. this year, we introduced the One, Two, Three Dollar Menu. This is the most significant value platform launch we've had in at least a decade, and we're encouraged by the response of our customers. The menu gives our customers great choice and flexibility. They're able to create their own meal with food from the One, Two, Three Dollar Menu or add items to their order. Customer satisfaction is high, and it's helped drive higher average checks. While our business is performing well, this momentum alone is not enough to satisfy us.
With the addition of our Experience of the Future, delivery, and digital accelerators to our growth plan, we're differentiating the McDonald's experience and meeting the rising expectations of today's customers. We're making their lives a little easier as we expand the choices so customers can order how they like, order what they like, pay the way that suits them, and then be served in a manner that suits them. Experience of the Future already has brought modernized decor, digital menu boards, and self-order kiosks to more than one-third of the restaurants in the McDonald's system. When we pair this technology and a refreshed look with the enhanced hospitality offered by our guest experience leaders, customers visit more often, leave more satisfied, and sales grow. We're demonstrating how McDonald's has become much more agile as we continue to roll out new projects at an aggressive pace.
We intend to bring these improvements to nearly 4,000 additional restaurants in the U.S. this year, reaching about half of our locations in the market. Delivery was one of our great success stories of 2017, as we started with a small pilot in Florida and expanded to more than 7,000 additional restaurants by the end of the year. We continued to grow, and now more than 11,500 McDonald's restaurants offer delivery. When customers have a McDonald's meal delivered to their home, office, or college dorm, they're satisfied with the experience and many order again soon. Delivery already is a meaningful sales contributor in most of our major markets, and we're confident it will gain traction as we raise awareness with more customers. More and more digitally savvy customers also expect to engage with brands through their mobile phones.
In the U.S. alone, we now have over 23 million registered users of the McDonald's mobile app. We're well-positioned to capitalize on that user base here in America and in other markets across the McDonald's system. We rolled out mobile order and pay to 20,000 restaurants around the world last year. While we have work to do to encourage more customers to use the app, today's customer expects this type of convenience and choice. Our teams will continue to make it better. Our restaurants are offering more deals available only through the app, and more customers are appreciating the added convenience of curbside pickup with mobile order and pay. Technology offers powerful new opportunities to connect with our customers. As we're doing with the other accelerators, we will continue moving fast and make great progress. Expectations of companies like ours continue to grow.
We provide a great experience for our customers and serve delicious food, but that's not enough. As Rick mentioned earlier, with Scale for Good, McDonald's is embracing the challenge. We've elevated a select set of global priorities where we believe we can make the greatest difference to address major social and environmental issues. With Scale for Good, we did not create a separate corporate responsibility initiative. This is embedded in our growth strategy. We're building trust with our customers, owner-operators, suppliers, employees, and other stakeholders, the very people who are essential to the health of our business in the long term. We've set goals to reduce packaging and increase recycling, take bold actions relating to kids' nutrition, and support producers in developing more sustainable approaches to raising beef.
Working with the Science Based Targets initiative, McDonald's became the first global restaurant company to address climate change through a target to significantly reduce our greenhouse gas emissions. McDonald's has demonstrated a longtime commitment to restaurant crew and managers. We know it's our people who make the difference for our customers. Recently, we announced that we will increase our investment up to $150 million over five years to our global Archways to Opportunity education program. Far too many young people around the world are at a great disadvantage. Without the skills and educational opportunities they need to find a job, many of those between the ages of 15 and 24 are at real risk of being left behind. We'll have more to say about what we're doing about this in the months ahead, just take a look.
Please stand by. We're watching a commercial in the meeting room.
With Archways to Opportunity and new initiatives, McDonald's will continue to be a leader in education, training, and developing workplace skills. We're doing what is right for so many young people, for our communities, and for our business. From beef sustainability to climate change, to our commitment to families, to supporting youth, McDonald's is using our Scale for Good. Many people and organizations have the desire to do positive things, but few are in a position to actually do so in the way that McDonald's can because of our size, our scale, our convening power, and our will to make a difference. This month, our teams have been moving into the new McDonald's headquarters in the West Loop of Chicago. Our campus here in Oak Brook, as Rick has said, has served us well over the past four decades, and we leave with fond memories.
We're excited about our new home. We believe a beautiful new building will provide a contemporary space where the best talent will want to work. It will place us closer to our customers in one of the world's great cities. With Scale for Good and our Velocity Growth Plan, the McDonald's system is aligned and energized about our future. Last month, I talked with hundreds of our owner operators, crew, suppliers, and McDonald's leaders among the nearly 15,000 people who came together in Orlando for our worldwide convention. It was a valued opportunity to share ideas and learn. We are proud to be stewards of one of the world's most powerful brands. We're committed to making it even stronger as we become a better McDonald's. Thank you again for your investment and for your support of McDonald's.
Now I'll ask Rick to share the preliminary voting results. Thank you.
Thank you, Steve. Now we've received the preliminary voting results from the independent inspector of election. The final results will be posted on the McDonald's website after all the votes have been tallied and certified. I'll share with you now the preliminary results. Shareholders have elected each of the director nominees with the average support of at least 96.26% of the shares voted. Shareholders have approved the management proposal relating to an advisory vote on executive compensation with support of 93.36% of the shares voted. Shareholders have approved Ernst & Young as the company's independent auditor for 2018 with the support of 96.97% of the shares voted. The advisory shareholder proposal requesting the ability for shareholders to act by written consent was not approved, receiving the support of 41.96% of the shares voted.
The advisory shareholder proposal requesting a report on plastic straws was not approved, receiving the support of 7.65% of the shares voted. The advisory shareholder proposal requesting a report on charitable contributions was not approved, receiving the support of 3.13% of the shares voted. Now, with those results in, we'd like to begin the question and answer period. Earlier, Jerry Krulewicz reviewed the rules of order for today's meeting. As a reminder, they're printed in your program, and we urge everyone to follow those rules, extending a courtesy and respect to each other shareholder asking a question today. At this point, we'd like to turn to Steve to lead the question and answer period. Steve?
Thank you, Rick. I have the question cards that many of you have filled out earlier. We batched the subjects together so we can able to address as many of the most popular topics on your minds today. When I call your name, please go to one of the two microphones on either side of the room. Please limit your questions to one topic and your discussion to one minute or less. To start off with, let's start with Ralph Carbonell, who has got a question on fresh beef. And perhaps if Sibylle Sonnenberg could get ready on the other microphone, we can have a question around the Oak Brook campus.
Good morning. I was just wondering if we're going to have the 10 to one patties eventually as fresh as well.
That's a great question. Just to make sure everyone understands the backdrop to that, as I mentioned in my comments, we've recently just converted to using fresh beef on the Quarter Pounder, which is obviously the Quarter Pounder with cheese burger. It also is the patty we use in our premium range, our signature range. Part of our thought behind that was how can we still use our skill and our ability to continue to improve our core burger range as best we can. We started with the Quarter Pounder patty because it's a larger patty, and therefore, the hotter, juicier impact of the fresh beef is so much greater.
There is also a pretty significant amount of work that has to go into being able to deliver that all the way through from our suppliers and the way they handle the raw products as they prepare it for us all the way through the supply chain into the restaurant. At the moment, we're going to really give the Quarter Pounder a go. Customers are responding very encouragingly. We're running a little ahead of where we thought we'd be. The restaurants have undertaken significant training programs to help our crew and managers deal with a different operational procedure. We don't have any plans yet on the 10 to one, but we're also working on other ways where we can actually help bring the major benefit, which is hotter and juicier.
We're working on plans of how we can help make the Big Mac, the hamburgers, the cheeseburgers, the double cheeseburgers have almost the same impact of the hotter, juicier. Maybe in a way that's a little more straightforward operationally for us to deliver. Thank you for your question. For anyone who hasn't had a chance, do try a Quarter Pounder. It does taste great. Thank you, Ralph. Question. Sibylle Sonnenberg.
Hi, my name is Sibylle Sonnenberg. Let me start with saying thank you to you because culturally, McDonald's has done so much in other countries where I was in Russia, in China. The culture that they brought, the friendliness and everything, I enjoyed that greatly. I also live in the area here. I enjoyed this campus like you wouldn't believe.
The hotel, the health club, the walks we can do in this beautiful area. Now, when you're moving, I'm worried that this beautiful area will be neglected. I know it's so expensive to keep up everything with the flowers and the trees and everything, that I'm really worried. What's going to happen to this beautiful place?
Yeah, no, that's a fair question. Again, to reiterate, on behalf of all of us at McDonald's, we have had a wonderful four decades and above here. Not just from a corporation appreciation, but I think for many of us personally, we've got a lot of memories with this. Certainly my very first trip ever to the U.S., I landed in O'Hare Airport, got a taxi, I was dropped off outside the lodge for my first course at Hamburger University. It was my very first experience in the U.S. was actually here as well. We all have fond memories. What we're looking to do, we own a number of properties around the area, both the Plaza building up on 22nd, there's a building at 711 Jorie Boulevard, clearly here is the main campus.
We're just looking to find the right and the appropriate people to take those buildings and those properties off our hands. We're not quite sure who will be attracted to this location. It's beautiful. The layout could be wonderful for educational establishments or for residential homes or assisted living homes perhaps. There are permitting restrictions here which helps to protect the beauty of the site. I would imagine that anyone who wants to acquire this site will do so because they absolutely just love the facility and all the beauty that it has. I'm optimistic that you'll be able to continue to enjoy the facilities in whichever way. As to whether the hotel continues in its current format, that won't be my decision, that'll be that of the purchaser. I'm sure people appreciate it for what it is. Thank you for your comments.
Thank you.
Thank you. I'd now like to invite Sister Mary Ann O'Ryan up as well to share with us a prepared statement. Thank you, Sister.
Good morning.
Morning.
I'm Sister Mary Ann O'Ryan, a Benedictine sister representing the Benedictine Sisters of Boerne, Texas, who filed a shareholder resolution asking McDonald's to set global sourcing targets for pork and beef raised without the routine use of medically important antibiotics. We entered into dialogue with McDonald's on this topic and withdrew the resolution. In the withdrawal letter to the Securities and Exchange Commission, McDonald's agreed to publicly announce an antibiotic use policy for beef purchased by its U.S. restaurants by the end of 2018. We applaud McDonald's for its engagement with shareholders and for its commitment to tackling corporate responsibility challenges. We urge McDonald's to take a leadership role in the industry by adopting the recommendations of the World Health Organization and phasing out the routine use of medically important antibiotics in healthy animals.
Thank you. Perfectly timed as well. Thank you very much. We would like to acknowledge as well just the constructive engagement we have. It's a great example of how just our open engagement on important topics that are important to society, have been conducted in such a meaningful and constructive way. Thank you very much indeed. We're delighted to be joined by Jesse Jackson. Jesse Jackson, lovely to see you again and perhaps offer the opportunity to share some thoughts or comments.
Good morning.
Good morning.
Let me express to you our thanks for the relationship we've had with McDonald's across the years with Don Thompson, Pat Harris, and John Rogers and Mr. Dean. Now, of course, you, Steve, and Wendy Lewis, just a great choice, and Mr. Gibbs. Our concern is in the area of racial justice and gender equality and the worker security. Profits are going up on the inside, discontent rising on the outside. These issues of workers' wages and sex harassment are not going away. There must be some arbitration plan to resolve these. They will metastasize, and they will grow rapidly. I'm concerned today. Half of all Americans have more month than money. The profits are going up, cost of living going up, wages not keeping up. We need to have, I think, a plan. Lastly, an EEO-1 report of some sort now that you're expanding so rapidly.
We're having equity. There's a global women's initiative. There must be a global Black and brown initiative in terms of ownership of stores and procurement and legal services. Thank you, sir.
Reverend Jackson, thank you very much. You touch upon a number of critical issues of which we're wholeheartedly in agreement with. With regards any of the commentary around sexual harassment, just let me be clear to everyone, there is absolutely no place for any harassment or any discrimination of any kind in McDonald's. We do have policies which clearly outline that. Whilst we as a company adhere to that very strictly, we're also very confident our independent franchisees, who operate around 90% of our restaurants, certainly here in the U.S., are also like-minded as well. We're working hard to continue to improve the employment opportunities for our people, whether it's through the fundamentals of pay, because we want to be competitive. We're in the service industry, so therefore, we want to be able to hire the best people because it's competitive out there.
One of the ways we can differentiate ourselves is through the talent of our people, motivated people, engaged workforce who feel respected and sense dignity. Also, we feel we can help them beyond the single element of pay, which is around other opportunities to develop and advance themselves, whether that's with McDonald's or beyond. That's why we're so committed to the Archways to Opportunity program. With some of the benefit we had from the tax reform breaks recently, we've been able to triple the assistance that we can offer our crew, double the assistance that we can offer our managers, whether it's to finish high school diplomas, whether it's to get college tuition or get other sorts of educational advice for them and their families. We're certainly working hard on this, and you can expect to see more of it.
I wish we'd have some arbitration of sorts because the growth in profits and taste are expanding, but the crisis around workers is also expanding. 55% of African Americans make less than $15 an hour.
We know working poor people, they cannot afford to be a part of the growth. You have a number of dealers, franchises expanding inequitably. We need to look at an EEO1 report and procurement to make sure we are growing.
Yeah.
50 years ago, you began. 50 years ago, Dr. King was killed.
Yeah.
We've grown together in 50 years.
Yeah.
Let us continue to grow together. I wish we could have a meeting of sorts with you and the appropriate people to have a session on where we are now on the EEO1 report, sir.
Well, I should say, actually, I was honored and privileged to have the opportunity to meet you about a year ago in our downtown office, actually. For someone for myself who comes not from the U.S. to be able to spend time with you and just having recognized the difference you have made to communities. To society as a whole. To hear it firsthand from you was a great education for me. I appreciate the time we spent, and I'm sure we'll continue to have a constructive dialogue. Thank you very much indeed.
You really should not put on weddings over there.
Thank you for joining us. Pleasure to have you here. I would now like to invite Janice Novak or Novak to the microphone. After Janice, perhaps Mel Gregory would like to join us and offer a question around beverages, I believe. I'm looking for Janice. Hi, Janice. Are you able to make it to the microphone there so we can all hear you? That'd be great. Thank you.
Well, good morning. This was unexpected. Summer is here. We need exercise, energy, protein, and light fare. I always enjoyed your chicken wraps. Will you return them this year?
That was an impassioned plea. Thank you. Without getting into too much detail about the nuts and bolts operations of a restaurant, we continually strive to find the right balance between having enough range and variation across our menu without it being too complex for our teams to be able to deliver the customer experience that customers come to expect. Wraps are a little more of a complicated food item for us to prepare. Just the way that teams work in the restaurants, a little more complex. We have had success with them, either as permanent items, either large wraps or the Snack Wraps, the little, the smaller bite-sized ones. Some are on certain menus around the world on a permanent basis. Others we bring back as a returning favorite and then just come back as a seasonality.
I certainly won't commit to the U.S. doing Snack Wraps anytime soon. Once you start to have value platforms like the $1 $2 $3 Dollar Menu, for example, or the McPick, that gives an opportunity just to rotate some of the familiar favorites back onto our menu or else to try new food innovation. I appreciate your love of those, there is going to be, hopefully, you'll find plenty of other things on our menu you can enjoy. I don't know if anyone's had the opportunity to visit the new McDonald's restaurant, which is a public restaurant at the new headquarters. We've introduced a number of international items onto the menu in that one restaurant. You can get a spicy chicken burger from Hong Kong. You get some great-tasting salads from France, desserts from Latin America.
You can get loaded fries, which is kind of melted cheese and bacon bits on fries. We've tried that in Japan. If anyone can ever get themselves downtown, there's some mouth-watering options for you there as well. Thank you for your business and thank you for your investment as well.
Well, it was a disappointing response. However, thank you for taking that into consideration.
I don't think our teams in the restaurants will be so disappointed. I appreciate it. Thank you very much. Mel Gregory.
Good morning.
Morning.
Hopefully, my response can be a little bit more positive. McDonald's has gone a long way as far as updating the restaurant experience, the units themselves, how you're catering to the millennial, just the whole experience, the cafe. The one thing that seems to be missing, and there seems to be technology out there, is the soft beverage end of the business. I think there's something called Freestyle, where you choose to have multiple choices. You have vitaminwater, items like that.
Yeah.
I actually will go out with younger folks, and they say, "We want to go to this restaurant because they have that particular variety." That's something that I have not seen yet at McDonald's, and I wonder if that's on the radar screen.
It is. I'm not necessarily saying. I don't want to disappoint you here.
Very
We actually have Freestyle equipment in a number of our New York restaurants, I think I'm right in saying, actually. As you say, the way it works is it's all digital touch screen, and you can start to blend drinks together. If you want to have Sprite with Dr Pepper, you can. If you want to have a Diet Coke with some other, you can really create one of a number of combinations. The reality is most customers still want a pretty straightforward drink, there's a little bit of fun, a bit of modernity to it. One thing we will commit to is as we modernize our restaurants, one area that we think we could still got more opportunity to is kind of the whole beverage area. It still looks a little old-fashioned and a little messy.
We're continuing to work, and we've got great supplier partners like with Coca-Cola, for example. Of course, they're innovating on this as well. I will commit to a more modern beverage area. As to whether it's the precise machine that you're asking for, I can't necessarily guarantee that. I think there's work to do in the way that we. As I say, we're trying to modernize the entire customer experience and for customers collecting their drinks, that's something we've still got some work to do. Your observation is valid. Thank you.
It's very good to hear that you're looking at it. Thank you.
For sure. Thank you. Thank you, Mel. We've probably got time for one, maybe two more. Maybe if Geralyn Semak would like to join us, has got a question on the value menu. Perhaps we wrap up the final question, I'm mindful of time for everyone, is Mary Carmen Muñoz as well. Is Geralyn with us?
Thank you very much. We have been stockholders for many, many, many years. I was delighted with the pick two options that you had, pick two for $3
pick two for $5, I wondered why that went away. The new One, Two, Three option is a good one, it only offers a discount on a sandwich
rather than making an entire meal.
Yeah. Our experience around the world, to start with, is that every market that has sustained success has a very strong entry-level value platform. Whether it was Dollar Menu in the olden days, or Pound Saver, or Euro Saver, or 100 Yen Menu. We didn't feel we had a strong enough entry-level value platform here in the U.S., and that's where Dollar 1, 2, 3 came. The reason we like that is, it offers customers a lot more flexibility because they can start to blend purchases from that menu together to create a meal, or just buy individual items, or buy an individual item as an add-on to something else. We sense the customers are getting flexibility and choice. We can also, going back to the Snack Wrap question, we can rotate different items in and out of that menu.
There's always going to be a sense of variety. Every three or four months, we can bring something in just to freshen it up.
What we'll also do, recently, for example, we do have a two for $4 deal here on breakfast products, for example, because we thought we wanted to have a more compelling value offer at breakfast. I think the team will continue to look at different value platforms, but our stated foundational value platform right now is the Dollar 1, 2, 3. You will see, and perhaps if you download the app as well, there'll be different offers available to-
McDonald's customers through the app, and maybe only available to our more loyal, regular app-using customers. Maybe take a look at that as well.
Okay. Thank you.
Okay. Thank you very much. Maybe to wrap up, Mary Carmen Muñoz, please.
[Foreign language] Mary Carmen Muñoz from the Comeback City of Detroit, Michigan.
Yeah.
Thank you very much for allowing me to speak. I represent Latin Americans for Social and Economic Development, LA SED, and SER Metro-Detroit Jobs for Detroit. Over the past few years, we have seen a significant, positive change in McDonald's community responsibility and involvement. Marcos Casado has come into the Southeastern Michigan area, has really pumped up his team to lead the way and show the importance of involvement of McDonald's. He has gotten support of franchisees and owner operators such as Bill Pickard and Vasant Chapatwala in our Southwest Detroit community. They have made a significant impact on our programs that benefit our children, that show that the investment must be made in our youth, and provide them services in order for them to achieve the American dream. [Foreign language] Thank you.
Well, buenos dias to you as well. Thank you for your comments. Actually, Chris Kempczinski and I were down in Detroit towards the end of last year actually. We've been very conscious to go into the areas within the U.S. that have faced challenges and just seeing what sort of contribution that McDonald's is and can be making. I'm delighted to hear that you're recognizing the changes, it really does embody the very best of what we are, which is we are a large global business, but really we're 37,000 individual businesses operating in communities all around the world, obviously. If everyone is recognizing the experience that hopefully you've, as you laid out, then I feel very proud of our teams. Because running restaurants is hard work, and that alone is a full-time job.
Actually, there's a values and ethos within McDonald's which goes back to Ray and Fred's days initially, which is always put back into the communities in which you serve, and that will always serve you well. You have our commitment to continue on that journey. Thank you very much. Well, that's all the time we have today for questions. For those of you who indicated you'd like a response and you didn't get a chance, we'll get back to you if you didn't get that chance today. All I want to say is thank you for joining us again, and safe journeys. Enjoy the beautiful day outside. Thank you very much.