The information in this presentation contains certain forward-looking statements that reflect management's expectations regarding future events and operating performance and speak only as of May 24, 2017. These forward-looking statements are not guarantees of performance and involve a number of risks and uncertainties. Except as required by law, we do not undertake to update these forward-looking statements. A list of the factors that could cause actual results to differ materially from those expressed in or underlying our forward-looking statements is detailed in the company's filings with the SEC, such as its annual and quarterly reports. Access our SEC filings by going to corporate.mcdonalds.com/mcd/investors. Our website also includes reconciliations of non-GAAP financial measures we mention in our presentation, if any, to their corresponding GAAP measures. Those reconciliations may be found at investor.mcdonalds.com.
Well, good morning.
Good morning.
It's a great day to be here with all of you, and I'm honored to serve as chairman of your board of directors. I welcome you to the McDonald's 2017 Annual Shareholders Meeting, and I hereby call this meeting to order. In addition to everyone here, we're joined by those of you listening on our webcast. For those of you here in the room, you have a copy of the agenda for our meeting today and information about our procedures. First I'd like to introduce the people with me here on the stage. To my immediate left is Steve Easterbrook, Chief Executive Officer. To his left also is Jerry Krulewicz, our General Counsel. Finally, to his left is Kevin Ozan, our Chief Financial Officer. I'm also pleased to introduce our 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 Mattel. Jeanne Jackson, President and Senior Strategic Advisor at Nike. Rick Lenny, Non-Executive Chairman of Information Resources. John Mulligan, Executive Vice President and COO at Target. Sheila Penrose, Non-Executive Chairman of Jones Lang LaSalle. John Rogers Jr., Founder, Chairman and CEO of Ariel Investments, and Miles White, Chairman and CEO of Abbott Laboratories. Also with us today is our Chairman Emeritus, Andy McKenna. I'd like all those directors and Andy to please stand and be recognized. Thank you. I think we're all fortunate to have this great board. We'll begin our business this morning with the presentation of the proxy proposals, and later you'll hear from Steve. I'll also offer a few comments later.
At this time, I'd like to turn to Jerry Krulewicz, our Corporate Secretary, to describe our procedures for the business of this meeting. Jerry?
Thank you, Rick. 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. For the benefit of all shareholders joining us today, we ask you to maintain a respectful and orderly environment throughout the meeting. For those of you that are invited to offer a comment or question, we would urge you to be courteous to your fellow shareholders, and please limit your remarks to the time provided. You may review the rules of order, which are printed in your programs. 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 that the expiration of the time has happened.
Following the presentation of all the proposals, the chairman will ask for a motion and a second on all 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 order are intended to provide more opportunities for shareholders to ask their questions during that portion of today's meeting. If you have a question and have not yet submitted it, please hand that to the usher now. 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 need not to vote by ballot. You've already voted. Broadridge Financial Solutions, the independent inspector of elections, receives and tallies all votes.
Preliminary voting results will be announced after Steve's remarks. With that, I will now turn the meeting back to our chairman for the presentation of the proposals.
Thank you very much, Jerry. Our first order of business is the election of Lloyd Dean, Steve Easterbrook, Robert Eckert, Margaret Georgiadis, Enrique Hernandez, me, Jeanne Jackson, Richard Lenny, John Mulligan, Sheila Penrose, John Rogers, and Miles White as directors. The second proposal is an advisory vote to approve executive compensation. The third proposal is an advisory vote on the frequency of future advisory votes to approve executive compensation. The fourth item is approval of the material terms of the performance goals for awards under the company's 2012 stock plan. The fifth item is an advisory vote to approve the appointment of Ernst & Young LLP as independent auditors for the year 2017. The remaining items of business are shareholder proposals.
As a reminder, I will call on the presenter of each proposal when it is his or her turn to speak to the respective proposal in 2 minutes or less. The sixth item is an advisory vote on a shareholder proposal requesting a change to the vote counting standard for shareholder proposals. At this time, I call on Sriram Madhusoodanan for proposal number six. Good morning.
Thank you. Before commencing, if members of the press would like to ask questions or follow up on anything presented on this proposal, an email address is team@investorvoice.net. Ladies and gentlemen, I'm Sriram Madhusoodanan, and I stand on behalf of Investor Voice of Seattle to move proposal number six, which requests a simple majority vote on shareholder-sponsored items. A simple majority voting standard only counts votes cast for or against an item. In doing so, it provides the most democratic, clear, and accurate picture of the intent of those stockholders who are both informed and decided. This standard only counts votes that are affirmatively cast for or against an item and excludes the abstained votes of those who have formally declined to express an opinion.
A simple majority standard does not arbitrarily ascribe negative intent to those who purposefully abstain, nor does it allow McDonald's to pick winners and losers by calculating shareholder items differently from how it tallies its own director election. In summary, counting abstentions artificially depresses the appearance of support for shareholder concerns relative to the director election. Counting abstentions is unnecessary since shareholder items are typically non-binding, and counting abstentions is confusing and inconsistent because it treats management's director votes more favorably than all shareholder items. In closing, the simple majority standard proposed by item 6 provides shareholders with better information about vote outcomes, allows more accurate communication between stockholders and the board, and eliminates the second-class treatment of shareholder items relative to management's director election. Therefore, ask McDonald's to adopt simple majority voting for shareholder proposals. Please vote for item number 6.
That email again, for anyone wishing to follow up is team@investorvoice.net. Thank you.
Mr. Madhusoodanan. I'm sorry I'm having difficulty with your name, thank you very much. Appreciate that. The 7th item is an advisory vote on a shareholder proposal regarding the threshold to call shareholder meetings. At this time, I call upon Alexa Kaczmarski, who's here to present proposal number 7.
Thank you. My name is Alexa Kaczmarski, representing John Chevedden, who sponsored proposal 7. Resolved, share owners ask our board to take the steps necessary, unilaterally if possible, to amend our bylaws and each appropriate governing document to give shareholders in the aggregate of 15% of our outstanding common stock the power to call a special share owners meeting. This proposal does not impact our board's current power to call a special meeting. Dozens of Fortune 500 companies allow 10% of shares to call a special meeting, This proposal is only asking that 15% of our shares be enabled to call a special meeting. Special meetings allow share owners to vote on important matters, such as electing new directors, that can arise between annual meetings.
Share owner input on the timing of share owner meetings is especially important when events unfold quickly and issues may become moot by the next annual meeting. This is important because there could be 15 months or more between annual meetings. Please vote to enhance shareholder value for proposal seven.
Thank you very much, Ms. Kaczmarski. The eighth item is also an advisory vote on a shareholder proposal to issue a class of preferred stock with the right to elect its own director. At this time, I call upon Patrick McDowell, who is here to present proposal number eight. Good morning.
Good morning, members of the board and fellow shareholders. I'm Patrick McDowell. I'm here on behalf of the Marco Consulting Group Trust to move item number eight on the proxy statement. As many of you know, our company has set a goal of 95% of its restaurants be franchisee-owned, up from the current 85%. In our view, this continuing strategy requires a well-diversified board representation, and that includes a director who has a thorough appreciation of both the opportunities and challenges faced by today's franchise operators. Over time, our franchisees have increasingly served as a critical source of capital to McDonald's through their investments in both the company brand and real estate. Despite these investments, franchisees do not currently have a voice on the board where corporate strategy is vetted and decided.
Proposal number eight would provide direct McDonald's board representation for one individual who would be nominated and voted on by other franchisees through the creation of a new class of stock issued exclusively to franchisees. It's important to note that the stock would offer no economic rights such as dividends or liquidation preferences, but it would allow for franchisees to have a legitimate voice and representation at the board level. In closing, over recent years, McDonald's has increasingly relied upon franchise operators while the company itself has largely stepped away from being an operator. That raises significant concerns for long-term shareholders because these steps serve to only further distance McDonald's from its customer base. Which is why there needs to be greater communication between the board and its frontline operators, such as franchisees. We therefore urge you to vote for proposal number eight.
Thank you all very much for your time this morning.
Thank you, Mr. McDowell. Now we'll turn to the ninth item, which is also an advisory vote on a shareholder proposal requesting that the board make all lawful efforts to implement and/or increase activity on the Holy Land Principles. This time, I call upon James Kilkenny, who is here to present proposal number nine. Good morning.
Good morning. Mr. Chairman and all here, I rise to move the resolution on the Holy Land Principles. My name is James Kilkenny. The Holy Land Principles are pro-Jewish, pro-Palestinian, and pro-company. The principles do not call for quotas, reverse discrimination, divestment, disinvestment, or boycotts. The principles do not take any position on solutions to the Israeli-Palestine issue. The principles do not try to tell the Palestinians or the Israelis what to do. The Holy Land Principles only call for fair employment by American companies in Palestine, Israel. Let me repeat that. The Holy Land Principles only call for fair employment by McDonald's and the other American companies doing business in the Holy Land. Irrespective of what Americans think about the Palestinian-Israeli issue, one thing is certain: Americans expect American companies in the Holy Land to practice fair employment.
Incredibly, before the Holy Land Principles were launched in 2012, this issue had never been brought before any of the 542 American companies doing business in Israel-Palestine. Our resolution calls on McDonald's to set the standard by signing and implementing the Holy Land Principles, which are based on the very effective MacBride Principles for Northern Ireland. Initially, American companies resisted the MacBride Principles, but now 116 companies, including McDonald's, to its credit, have signed the MacBride Principles. Why would McDonald's or any other American company refuse to sign the Holy Land Principles? In 2015, GE, Corning, and Intel tried to get the SEC to exclude the Holy Land Principles resolutions from their 2015 proxy materials I'm going to go over. Fair employment by the company is not only morally right but makes a good economic sense.
Good for the company enhancing its reputation and making it more profitable for its investors. Signing the Holy Land Principles will send out a very strong message that McDonald's is, in principle and practice, committed to American fairness in its operation in the Holy Land. Who could be opposed to that? Please vote for the Holy Land Principles. It's the American way. Thank you. Start the going once.
Thank you, Mr. Kilkenny. We'll now move to the 10th item, which is also an advisory vote and a shareholder proposal requesting the board update the company's policy regarding the use of antibiotics by its meat suppliers. This time, I call upon Sister Mary Anne Ryan, who's here to present proposal number 10. Good morning, Sister.
Good morning. My name is Sister Mary Anne Ryan, a Benedictine sister of Chicago. Resolution number 10 asks McDonald's to set global sourcing targets with timelines for pork and beef raised without the non-therapeutic use of medically important antibiotics. McDonald's showed leadership by phasing out medically important antibiotics in its poultry supply chains in the U.S. in 2016. Now, setting sourcing targets for pork and beef presents another opportunity to show leadership on this issue. The non-therapeutic use of antibiotics in livestock is under increasing regulatory scrutiny in the United States, in the European Union, and in other markets. This threat of increased regulation creates material risk that can and should be proactively addressed. Investors are increasingly concerned about the risk of inaction on antibiotics in farm animal production. In April 2016, investors worth $1.4 trillion called on several companies, including McDonald's, to prohibit use of medically important antibiotics.
The company has substantial supply chain influence. A recent Chicago Tribune article determined McDonald's to be the largest beef buyer in the U.S., and the company's existing commitments to sustainable beef indicates that it does in fact have influence on meat suppliers. McDonald's may lose market share because of not keeping up with consumer preferences. In a 2015 survey from Crain's Chicago Business, 34% of fast food restaurant customers said they would visit McDonald's more often if it served meat raised without hormones or antibiotics. Antibiotic resistance could kill more people than cancer by 2050, and 80% of these drugs are currently used in livestock. Shareholders are seeking detailed, comprehensive disclosure about how McDonald's plans to expand its policy on chicken to pork and beef in the U.S. and worldwide, particularly given growing health concerns and industry trends. Thank you. We ask you to vote for resolution number 10.
Thank you, Sister Mary Anne. We'll move to our 11th item, also an advisory vote and a shareholder proposal requesting a report assessing the environmental impact of polystyrene foam beverage cups. I'd like to call Amanda Hanley, who I guess is already ready to present proposal number 11. Good morning.
Good morning. I'm Amanda Hanley, a board member of As You Sow, which filed proposal 11 on the proxy to assess the environmental impact of polystyrene foam cups. We appreciate that McDonald's has phased out harmful polystyrene foam packaging for food applications, such as hot beverage cups in the U.S. and many other countries. However, we are concerned that it continues to use foam cups in some overseas markets where plastic pollution migration into waterways is highest, such as Hong Kong and parts of the Philippines. Polystyrene foam, or styrofoam, is creating huge environmental problems, especially in our oceans. Plastic packaging is a prime component of ocean gyre pollution, which threatens marine animals and potentially human health. An estimated eight million tons of plastic are swept into the oceans annually, and one study projected that oceans will contain more plastic than fish by 2050.
Foam cups break down into small indigestible pellets, which marine animals mistake for food, resulting in intestinal blockage, buildup of toxins, to death in birds, fish, and whales, and other animals. While recyclable in theory, very little foam gets recycled. In its latest report, the U.S. EPA was unable to find any significant recycling of polystyrene in the United States. Nine countries and more than 100 U.S. cities or counties have banned foam packaging. The International Agency for Research on Cancer has determined that styrene, used in the production of polystyrene, is a possible human carcinogen linked to increased occupational risk of leukemia and lymphoma. We appreciate McDonald's leadership in phasing out foam-based takeout containers 25 years ago and hot cups three years ago, the job isn't finished. The company needs to fully phase out use of foam-based food service packaging materials.
Please support proposal 11 on our proxy statement to protect our valuable brand and our oceans from the harm caused by plastic pollution. Thank you.
Thank you, Ms. Hanley. Now the 12th and final item is an advisory vote on the shareholder proposal requesting a report on charitable contributions. At this time, I call upon Gregory Akili, who is here to present number 12. Good morning.
Good morning. My name is Akili, and I'm a longtime civil rights and social justice advocate. I'm a father of six and from Los Angeles and project coordinator for Corporate Accountability International. I speak on behalf of John Harrington, a longtime shareholder, on behalf of a growing movement of parents, educators, and health professionals concerned about this corporation's role in driving the epidemic of diet-related diseases. Now we are joined by the second-largest school district in the country. To that end, I urge McDonald's to fully report its charitable contributions and to make sure that they are in line with stated values. Charity is about giving back to the community, not about promoting a brand. Far too often, McDonald's charities serve its brand while attacking and disadvantaging the people they say they want to support. For example, McTeacher's Night.
The corporation gets teachers who work behind the counter serving burgers, fries, and sodas to their students. While this is identified as a fundraiser, in reality, what it is predatory marketing. They exploit the trust that children have in the teachers and the schools. McTeacher's Night faces an escalating opposition. More than 50 teacher organizations, including the National Education Association, have denounced the practice. Last month, the Los Angeles Unified School District overwhelmingly passed a resolution demanding an immediate end to the program. McDonald's needs to act and make sure that its values are in line with its position. We are urging people to support Resolution 12. Thank you.
Thank you, Mr. Akili. Is there a motion to move on all these proposals?
Moved.
Second? Okay. Moved and seconded. Your board of directors recommends a vote in favor of the election of all director nominees and in favor of the other four management proposals. The board also recommends a vote against all of the shareholder proposals. The reasons for the board's recommendations are outlined in the proxy statement, which you have available to you. If you're voting at the meeting, please complete and sign your ballot and motion for an usher to collect it. If you've already submitted your proxy, you do not need to vote by ballot. Is there anybody who needs a ballot or would like one? Okay, I don't see anybody. The polls are now closed. I can share with you now that the preliminary voting results will be announced at the end of today's program.
This concludes the formal business of the meeting, and the annual shareholders meeting is now adjourned. Now that we've finished our business and before I turn over the podium to Steve, I thought I'd offer a few comments, observations about our company. This company has made remarkable progress since 2015. In the coming years, I believe we'll maintain our momentum and even accelerate our efforts to build a better McDonald's. The company is well-positioned for the future. We've restructured our organization and strengthened our leadership team. An example, over the past two years since Steve began as CEO, new leaders have been placed in 12 of the 14 top roles in this company. Steve, the presidents of each of our four operating segments, and new leaders in key areas such as strategy, people, marketing, and communications all bring exceptional skills and dynamic abilities.
On behalf of the board, I can state with confidence that Steve is the right leader for McDonald's. In fact, we believe he is the best leader in the entire sector today. We benefit from an effective working relationship between the board and CEO, and I mean all of us benefit. We share a strongly held commitment to delivering results. Your board is holding itself accountable. I'd like to make a few additional comments about the board. I can assure you that each member of the board is fully engaged. The board operates with an appropriate balance of institutional knowledge and fresh perspectives. Our directors bring experience from many different industries. As our business evolves, so will our board. For example, four new directors have been added to our board since 2015, and as of this meeting, five directors will have retired since 2015.
Our governance committee continues its comprehensive process of identifying candidates best suited to join our board as the need arises and the company takes on new challenges. We also have a robust evaluation process that includes regular self-assessment and director peer review. We remain committed to ensuring that we have the right directors in place to oversee the company's business and serve the interest of McDonald's shareholders well into the future. This past March, just a few months ago, I joined Steve and other members of the management team and leaders from throughout the company at an investor day. This was an extraordinary event. The company offered a frank assessment of the challenges we face and our greatest opportunities to drive growth. We presented an in-depth review of the path we will take to leadership in our industry.
We look forward to seeing those initiatives gain momentum and advance McDonald's in the months and years ahead. We are confident about our future because of our strategic plans and our management team's ability to execute, which has been demonstrated by our recent performance. Our financial results, they were strong in 2016. Comparable sales continued improving. We increased operating income and earnings per share. Restaurant cash flows grew in many markets around the world, and this momentum is building. For example, in the U.K., McDonald's has posted a year-over-year comparable sales increase for 44 straight quarters through the first quarter of this year. To put it another way, that's an 11-year uninterrupted run of like-for-like growth in that market. We successfully completed our three-year plan to return $30 billion to shareholders by the end of 2016.
The $14 billion returned to shareholders in 2016 alone was accomplished with $11 billion of share repurchases and $3 billion in dividends, including a 6% dividend increase in the fourth quarter. We intend to return another $22 billion-$24 billion to shareholders over the next three years between 2017 and 2019. I hope it's clearly apparent to all of you now that at McDonald's, we're advancing our business while also continuing to uphold our commitment to you, our shareholders. We have many reasons to be encouraged and confident about our future. Thank you for taking your time to be with us here today. I thank you for your support of McDonald's. Now with those comments, I'd like to welcome to the podium Steve Easterbrook, our CEO. Steve?
Thank you, Rick. Good morning, everybody. We've made significant progress in building a better McDonald's because of the strong partnership we have, Rick, with you and the entire board of directors. Your leadership, your thought counsel, your challenge and your support has been much appreciated. So on behalf of management, I'd like to recognize the contribution the board has made. Thank you. I'd also like to recognize our senior management team, many of whom are with us 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, President of the Foundational Markets. Lucy Brady, Senior Vice President of Corporate Strategy. Francesca DeBiase, Chief Supply Chain and Sustainability Officer.
Joe Erlinger, President of the High Growth Markets. David Fairhurst, Chief People Officer. Robert Gibbs, Chief Communications Officer. Doug Goare, President of International Lead Markets and Chief Restaurant Officer. Chris Kempczinski, President of McDonald's USA. Silvia Lagnado, Chief Marketing Officer, and Jim Sappington, Executive Vice President of Operations, Digital, and Technology. Please do stand guys 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. Before we continue, I'd like to recognize a longtime friend of McDonald's who's not with us today. This past weekend, many of us gathered to celebrate the rich life and legacy of Al Golin. Al passed away in April. This is the first McDonald's shareholder meeting that he's not attended since we're incorporated.
Al was a trusted advisor to Ray Kroc, Fred Turner, and to every CEO of McDonald's over the years, including myself. As well as being a visionary in his field, he was just a really kind gentleman. We'll miss him. When I became CEO 2 years ago, I had just one mandate, which was turn around the McDonald's business. We took swift actions to revitalize our company and begin changing McDonald's trajectory. Putting the customer back at the center started with running better restaurants. A focus on the fundamentals of quality, service, cleanliness, and value made a noticeable difference for customers. Today, we're customer-focused, forward-looking, and right-sized. Our business results in 2016 are a testament to our progress. They bolster the confidence we have in our ability to drive profitable long-term growth.
We grew comparable sales during all 4 quarters in 2016, making for 6 consecutive quarters of comparable sales growth. That momentum has continued into 2017. Strong first quarter has now made for 7 consecutive quarters of comparable sales growth. In 2016, operating income increased 8%, diluted earnings per share was up 13%, and our franchisees continue to generate cash flow growth that's at or near record all-time high in many markets around the world. Whilst this marks a significant improvement from 2 years ago, we're only getting started. Our company culture is evolving, and we have a restless energy. That is why we developed our Velocity Growth Plan. It's how we're building a better McDonald's. As Rick mentioned, we unveiled the Velocity Growth Plan in March at our Investor Day.
Since then, thousands of McDonald's stakeholders, owner-operators, suppliers, our board members, employees, agency partners, and bankers have walked through a space we created in downtown Chicago. We shared the bold steps we're taking to deliver an improved experience, and our team is highly energized. The reaction from owner-operators in particular has been very strong. With over 90% approval for our plans in the U.S. market in their post-visit survey. At its core, Velocity is about growing guest counts. We will retain customers who visit us regularly today. We will regain customers who are not visiting as often as they once did. We'll also convert casual visitors into committed McDonald's customers.
We are focused on actions that tap into the competitive advantages unique to McDonald's, our unmatched global scale and our iconic brand, our tremendous local market presence, and our connection to the everyday lives of our customers around the world. Let me tell you a little more about our approach to retaining customers. We serve 60 million customers every day, and nearly one-third of those visits are by families. First and foremost, McDonald's was a family restaurant when we launched more than 60 years ago, and it remains so today. We will celebrate the emotional bond families have with McDonald's by continuing to transform the experience in our restaurants. In markets like France, for example, our restaurants have modernized their play areas, made their kiosk screens reachable by kids, and trained their hospitality staff to assist parents.
We offer great value too, because we know how important that is to families. More importantly, as a restaurant, we live up to our commitment to families by serving food that kids like and parents feel good about them eating. We provided billions of servings of fruit and made fruit appealing to kids with fruit on a stick, fun packaging, and organic fruit drinks. Take a look at this commercial we're using in Canada.
Please stand by. We're watching a commercial in the meeting room.
Our breakfast menu brings many of our regular customers to McDonald's. In line with what customers want, we're continuing to use high-quality ingredients such as fresh cracked eggs in our Egg McMuffin sandwich. To build on our strengths, we'll continue putting significant energy towards growing the entire core of our business. The second pillar of our strategy focuses on bringing customers back to McDonald's as we seek to regain visits we've lost in recent years. Some of our customers simply aren't visiting us as much as they used to, and we know why. We didn't keep pace with their rising expectations for quality, convenience, and value. Clearly, as a restaurant business, food is at the heart of everything we do. Our food must be delicious. In fact, we just introduced our Signature Crafted line here in the U.S. a few weeks ago.
We're offering new flavors such as Pico Guacamole, Maple Bacon Dijon, and Sweet Barbecue Bacon for your burger or your chicken sandwich. I hope those of you in the room today will taste one soon using the Be Our Guest card you received on the way in. We're also working to bring our customers juicy and more flavorful burgers. By the middle of next year, in the majority of our restaurants in the U.S., we'll serve quarter-pound patties made with fresh beef cooked to order. I visited our restaurant in Dallas where we've been serving fresh beef. I've tasted the burgers, and I know our customers will appreciate it as we bring this to more restaurants. Taste is not the only way we're making our food better. We've been improving how we serve and source our food.
In the U.S., we're serving only chicken not treated with antibiotics important to human medicine, and we've committed to sourcing only cage-free eggs by 2025. We've removed artificial preservatives from several menu items, including Chicken McNuggets, and we've eliminated high-fructose corn syrup from the buns used on most of our sandwiches. We will continue to work closely with our suppliers, who are true partners in the McDonald's system and that absolutely share our commitment to our customers. It's great to see a good number of them with us here today. Thank you for joining us. We're taking significant steps forward on what matters most to customers, and I'm confident it'll make a difference for our business and for our brand. We continue to create a more convenient and satisfying customer experience.
In Canada, for example, customers have come to rely on the hospitality offered by our guest experience leaders who welcome them in the restaurants and offer to guide them through the ordering process at the kiosk. Customers really appreciate ordering at their own pace and customizing their selections, having their food just the way they like it. Since we introduced kiosks in Canada in 2015, usage has more than doubled year-over-year. We also remain committed to value. If you only have a buck or two in your pocket, there is something good for you at McDonald's. In the U.S., we've made our McPick program even more appealing with $1 any-size soft drinks, which began last month. In Germany, our Taste of McDonald's campaign provides an everyday affordable mid-tier sandwich that is appealing to price-conscious consumers.
We also see powerful opportunities to convert casual customers into more frequent, committed McDonald's visitors. Coffee and snacking are two underdeveloped opportunities to do just that. Our McCafé coffee has tremendous growth potential. In Australia, for example, McCafé sales are now 14% of the business. The market has taken a unique approach by serving our high-quality coffee prepared by dedicated McCafé baristas. Our customers enjoy café ambiance and a great cup of coffee with the convenience, speed, and the value they expect from McDonald's. We've also made McDonald's a destination for coffee in Canada, where consumers are passionate about a consistently great cup of brewed coffee. In fact, McDonald's earned recognition there for the best coffee in the country. The success in both these markets demonstrate the promise of what coffee can do for our business.
Just like coffee, we see potential around the world with ice cream and baked goods. We aim to make McDonald's the first choice when someone craves an afternoon or evening snack. Our three pillars of retain, regain, and convert form a sound strategy focused on the biggest opportunities to grow guest counts. We are also prioritizing three major accelerators that extend across everything we do. They are digital, delivery, and Experience of the Future. Digital offers an opportunity to reshape the interactions our customers have with us, whether they dine in our restaurants, take out, or go through the drive-thru. We will launch mobile order and pay in 20,000 restaurants around the world by the end of 2017. In the U.S., we are committed to launching mobile order and pay, along with curbside check-in, in all of our traditional restaurants by the end of this year.
Whilst we are still in the early days of our pilot markets, we are moving aggressively and moving to rapid deployment with mobile order and pay beyond the 400 restaurants across the U.S. where it is being offered initially. We must get digital right to be relevant to modern consumers. Delivery offers remarkable growth potential. Nearly 75% of the population in our six largest markets lives within three miles of a McDonald's. With more than two decades of delivery experience in Asia and the Middle East, we are in a strong position to claim our share of the rapidly growing $100 billion restaurant delivery market. Delivery is now available in over 1,000 U.S. restaurants. We have expanded from offering delivery initially in Miami, Orlando, and Tampa to now include Los Angeles, here in Chicago, Columbus, and Phoenix. We will continue expanding to additional cities in the U.S. and in markets around the world.
Let us watch one of the new commercials we will be using to let our customers know they can have their McDonald's delivered to their home, their office, their door, or wherever they are. Take a look.
Please stand by. We are watching a commercial in the meeting room.
We're moving aggressively to bring Experience of the Future, which we call EOTF, to more restaurants. EOTF involves many changes in our restaurants, including contemporary decor, technology such as self-order kiosks, and overall enhanced hospitality that increasingly includes table service. We're tailoring the experience for our customers, making it less stressful and more convenient. Taken together, these actions enable us to bring the biggest benefit to the most people in the shortest possible time. As we execute our Velocity Growth Plan, our stakeholders and our shareholders will measure our progress against new average annual financial targets effective the beginning of 2019. We expect system-wide sales growth of 3%-5%, operating margin in the mid 40% range, earnings per share growth in the high single digits, and return on incremental invested capital target in the mid 20% range.
When I stepped into the CEO role, I said that we would succeed in revitalizing the business, accelerating our growth, and reasserting our leadership in the industry. We're on our way, and we've never been more confident we'll achieve our ambitions. 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.
Well done, Steve. I think you all can understand why I say the board of directors is so excited and confident with the future of McDonald's. We received the preliminary voting results from the independent inspector of election, and final results will be posted on the McDonald's website after all the votes have finally been tallied and certified. I'll share with you now the preliminary results, and they're as follows. Shareholders have elected each of the director nominees with the average support of at least 96.8% of the shares voted. Shareholders have approved the management proposal relating to an advisory vote on executive compensation with the support of 94.7% of the shares voted. Shareholders have approved the one-year option for the management proposal on the frequency of future advisory votes to approve executive compensation.
Shareholders also have approved the material terms of the performance goals for awards under the company's 2012 Stock Ownership Plan, with support of 96.4% of the shares voted. Shareholders have approved Ernst & Young as the company's independent auditor for 2017, with support of 98.1% of the shares voted. The advisory shareholder proposals were not approved. The advisory shareholder proposal requesting a change to the vote counting standard for shareholder proposals received the support of 9.3% of the shares voted. The advisory shareholder proposal regarding the threshold to call special shareholder meetings received the support of 47.5% of the shares voted. The advisory shareholder proposal to issue a class of preferred stock with the right to elect its own director received the support of 1.3% of the shares voted.
The advisory shareholder proposal requesting that the board make all lawful efforts to implement and/or increase the activity on the Holy Land Principles received the support of 2.6% of the shares voted. The advisory shareholder proposal requesting the board to update the company's policy regarding use of antibiotics by its meat suppliers received the support of 29.7% of the shares voted. The advisory shareholder proposal requesting a report assessing the environmental impact of polystyrene foam beverage cups received the support of 30.9% of the shares voted. The advisory shareholder proposal requesting a report on charitable contributions received the support of 3.5% of the shares voted. Now, with that behind us, we'll begin the question and answer period. Earlier in this meeting, Jerry Krulewicz reviewed the rules of order for today's meeting. As a reminder, they're printed in your program, and we really urge everyone to follow those rules.
This will extend courtesy and respect to each shareholder asking a question today, and we hope to be able to answer all of the questions. Now I'll turn to Steve, who will lead this part of our meeting.
Thank you, Rick. We set aside up to 20 minutes for questions, and I have many of the questions and the question cards that many of you filled in earlier. We've also tried to batch the subjects together so we can address as many of the most popular topics that are on your minds today. When I call your name, please go to one of the two microphones on either side of the room, and we will intend to address as many of the questions as we can. Please do, though, limit your questions to one topic and your discussion to one minute or less. If we can start with Ronald Friedman, who has a question on stock buybacks and franchising policy. Perhaps Tom Lykins, who's interested in delivery, could move to the other side and be ready. That would be great. Thank you.
Hi. My name is Ron Friedman. Last year, you bought about 10% of the stock back, and if you could just tell us why you bought that much back and how you paid for it and your future intentions. Thank you.
Thank you very much. It's a great question. This is clearly a significant strategic decision and discussions we have at a board level. If I just share with you our overall policy on what we do with our financials, because we're a very strong cash-generative business. The priorities of the business is the first use is to invest in the business for growth. After that, we then ensure we maintain a competitive and compelling dividend. The remaining cash we use for cash and stock buybacks. We tend to look at this over a two- to three-year period, and I think Rick mentioned the targets from 2014-2016, which we hit, which was a combined $30 billion returned to shareholders. We've outlined a target from 2017-2019 for $22 billion-$24 billion.
The reality is it's all about allocation resource. Fundamentally, because of our confidence in the business, the first and foremost discussion we have, both from the management side, then we present it for discussions with the board and approval, is we want to invest first and foremost in the business because we believe that's the greatest growth potential. When the numbers of the stock buybacks are of the size that you referenced, it really just demonstrates quite how strong cash-generative business we are. Thank you for your question. Tom, question on delivery, I believe.
I'm a crew member at McDonald's in Geneva, and I was talking to our managers because I figured it'd be a pretty profitable thing to have Uber Eats deliver food, because I know a lot of my friends like ordering it but can't always make it to McDonald's. I was wondering, he was telling me that there was going to be a drive-through section for them. I was thinking, with the double drive-throughs, are we just making one for people and one of them for Uber? Also, he was saying that they're not just going to be paying us for just one order. They're going to be paying us at the end of the week, each week. I was wondering how the collection of that money is going to go down.
Okay. Well, first of all, thanks for the work you do in the restaurant. Really appreciate it, seriously. Well done. Appreciate that, Tom. It's a good question. We're learning really quickly on delivery. I mentioned earlier, in Asia and the Middle East, we've offered a delivery system for the last 20 years. It's grown to be a pretty significant business. We've used a very different model. We actually hire our own drivers, have our own mopeds or cycles, and we deliver the food ourselves. We don't think that's necessarily the best model in certain other markets, and certainly here in the U.S. and in Western Europe as well. With the advance of technology and companies such as Uber Eats, and there's many others, these are called third-party operators.
What they do is they take, I guess, the complications of the drivers, the car, the insurance, and understanding the navigation, the rest of it. We can do what we do best, which is just prepare the food, offer great value, and have them come and collect it. To your question around, operationally, how's it going to work? We started off with a test down in Florida, and we initially were asking the drivers to come in and pick up at the front counter because we didn't necessarily want to add any more traffic to the drive-through. As we learned through the test and expanded to more cities, we found that we could cope with both. Frankly, the Uber drivers can come and collect it in whichever way they want.
Frankly, you and I wouldn't know they're necessarily an Uber driver or whether they came through the drive-through. They're just visible. They're the regular customers. In terms of the financials of it's a really strong incremental business for our owner-operators, for our company restaurants, and it's great for Uber as well because it keeps their drivers busy. The more active we can keep their drivers, the better as well. We're seeing incremental business that's coming to at a strong level. As the awareness raises, I think people like you and your friends will start getting more and more used to when you call up the app on your phone that it'll know your local McDonald's. The other thing that we find exciting about it, and I mentioned it's not to be underestimated.
We at McDonald's have more restaurants closer to more of the population than any other restaurant business. That makes delivery such a great opportunity for us. Because we are so efficient and effective, most of the time in our restaurants, our delivery times are lower than most other restaurant businesses as well. That makes us particularly strong, because when you do work with partners like Uber Eats, they don't allow for promotional activity. You can't promote and get yourself higher up the list. It's really down to your performance. If we can perform better than everyone else, we'll come higher up the selection list, and hopefully, we'll keep you even busier in the restaurant. Thank you for your question, Tom. Appreciate it. Maybe we could have Dwayne Bradley come up, as I think there's a question around the office move and perhaps the campus.
We could line up Al Polistrini, who wants to talk about customer experience at the front counter. Do we have Dwayne? You can both go to the same side. It's no problem.
Hi, I'm Dwayne Bradley.
Hi, Dwayne.
I have a question regarding the purpose of the move to Chicago from the campus out here in Oak Brook. When will that be effective? When will it be completed? Will you be continuing to have your meetings out here, the annual meetings at Oak Brook campus now?
The move downtown, let me address the timing piece first, because we're under construction for the new head office, the new headquarters down in the West Loop area, you know downtown Chicago. We're in the West Loop area, around about 1,000 West Randolph, and it's where the old Oprah Winfrey studios used to be. We've taken that site, and we're developing a new, a very modern facility where we can take Hamburger University as well, so we can take our students down there. We just think as a customer-facing business and with society moving so quickly with trends in food, in technology, in behavioral patterns, it's more important for us and our people, not just our leaders, but all of our staff, to be closer to the action.
Whilst this is a beautiful facility and we've loved being here and being based here for more than 40 years, it's a little remote from the day-to-day realities of life. Frankly, life is moving so quickly, we think we'd be better positioned as a business to be closer to the trends and to the marketplace. In terms of timing, we're hoping to have that building completed. We're saying in the spring of next year, so it'll be around this time next year. I'm guessing it'll be unlikely the next shareholder meeting will be held in this venue, and we'll consider where the best opportunity is. That's kind of the timing. To all the people of Oak Brook and the village of Oak Brook, they've been great partners. We've really enjoyed doing business here.
It's served us so well. It's such an important part of our history and our legacy. We've also got to look forward, and we think for the benefit of the business, our people, and frankly, our customers and shareholders, that we ought to head downtown.
It seems so much more convenient to get out here for people out in the western suburbs anyhow than to get into Chicago or drive in or take transportation in and then get to the location. It'd be appreciated probably if the annual meetings were still held out in Oak Brook.
I appreciate it's very convenient for yourself, sir, and maybe one or two others, but we have shareholders all around the world. We'll try and make the best decision we can on behalf of our shareholders. Al, thank you for your question. Move on.
Yes, I was wondering about. People come into the restaurant, they have a choice of hamburger or breakfast, sometimes you want something really light and healthy. I was suggesting that they would have a soup of the day, they can come in and have a soup and possibly a side salad and a drink, which would probably come to about $4. Which is cost-efficient because the soups come in frozen, you add 50% water to them, most of them, and you get a gallon at a time, so you can control it. Also, you can reserve it the next day, as long as it's not a cream soup. Also, it doesn't take much to serve it.
Okay.
Also, I'd like to say that, strictly business-wise, there's been 25 million abortions, I feel that all these people would be eating at McDonald's right now.
Thank you for your question. Can I ask a question? Are you a soup supplier, Al? No?
I just love soup.
Okay, I can tell. Thank you.
I end up with soup.
A couple of points there. Part of the changes we've consciously made, and here in the U.S. business and one or two other markets around the world, was we overcomplicated our menu, and that impacted the quality of all the items, but also the speed of service, and it just made us less efficient at what we do. In certain markets around the world, we've had to make some tough decisions by taking some items off because we think that will provide notable benefits overall. I'm not sure if soup will muscle its way back onto the menu or not. Frankly, we'll always be led by the customer, and if there's a demand that grows with that, then we would go with that. Your broader point of just lighter options. Certainly through the salad range, there's some lighter options anyway.
Also, we believe, and I reference in my prepared comments around the opportunity around snacking. We think around snacking and baked goods is an opportunity where you can just have a coffee and a croissant maybe, or coffee and a muffin, and something like that, just to help keep you going. We'll continue to evolve, but I appreciate your comments, and we'll always keep an eye on soup.
We can always use an English scone.
Oh, well, there we go. Excellent thought. Now you're talking. Now you and me have bonded really well now, Al, so. I appreciate it. Thank you for your question. Now I would like to ask Teofilo Reyes to the microphone, please, who's got comments to make on political spending and trade associations. Perhaps we could have Prentiss Shaw, who has a question on China.
Good morning. My name is Teofilo Reyes, I'm here today on behalf of the Nathan Cummings Foundation, which earlier this year engaged McDonald's on its political spending. I'm also the National Research Director at Restaurant Opportunities Centers United, which represents 25,000 restaurant workers, over 200 employers, and thousands of consumers around the country. The foundation appreciates the steps you have taken to disclose McDonald's political contributions and its membership in various trade associations like the National Restaurant Association, also known as the NRA. We think this is an important step. Today, there's a growing perception that the NRA is pushing to repeal the Affordable Care Act, stop $15 an hour wage requirements in cities and states across the country, and keep the federal tip minimum wage at $2.13 an hour.
This is despite the fact that both limited service and full-service licenses have increased in New York State since its adoption of a $15 minimum wage. When trade associations like the NRA walk the corridors of Capitol Hill or City Hall, they are perceived to do so on behalf of their members. When they align themselves with anti-worker and anti-health policies, they're a source of liability to McDonald's and its investors. We would like to encourage McDonald's to push the NRA and indeed to all of the trade associations to which it belongs to support policies that better align with the values McDonald's claims to espouse. Thank you. I'd love to hear your comments.
Okay. Well, thank you for your comment as well. Here's our approach to trade associations. We support trade associations that we can work with to better understand and appreciate a whole broad range of views and perspectives. It works for the benefit of our business and our customers in a number of different ways. First of all, interacting with other companies within our sector, it gets us exposure to a better appreciation of some of the issues that we have as a common ground. Also, certainly for people within our business, it gets them access to people in similar positions in similar type businesses where we can collaborate and understand certain situations and just move the entire sector forward. Also, we have very strict policies on our dues as well.
Our dues cannot be used for, and it's clearly stated, political contributions, for any independent expenditures, any electioneering communications, or ballot initiatives. We have a very precise expectation of how our dues are used. We're also very transparent about the trade associations we're with. I appreciate your comments, and I hope you also recognize and understand our position on that.
Absolutely. Thank you so much. Just wanted to ask you to consider the fact that the association with the Restaurant Association, as it takes increasingly aggressive positions, such as on healthcare and on immigration, might tarnish the McDonald's image as well.
Okay. Well, thank you for your comments. I appreciate that. Thank you. It's Prentiss Shaw.
Hi.
Please.
I'm Prentiss Shaw. I was curious about how, with the strange political climate we've had lately, whether we will have any problems with China as far as the business we do over there in retaliation for anything that we do over here.
It's a fair question. We operate in 120 countries around the world, We operate under many governments and under many different leaders. We're used to there being tensions or just dynamic changes in any marketplace. Our position on China is one of extreme confidence, to be honest with you. You'll probably be aware that we've recently entered into an agreement, which we're hoping to conclude soon with what we call a strategic partner in China, where we're working with a combination of one of the most significant state-owned enterprises, which is backed and financed by Carlyle, who are a well-known financial vehicle. We believe that that combination will put us in a very good place to be better assimilated within China. As to any political tensions, frankly, we try and be as apolitical as possible at McDonald's.
It just doesn't work for us to take a particular stance because we serve customers who have all different beliefs and political persuasions. We believe that the local nature of the partnership that we'll be entering into in China will actually enhance our position and strengthen our position in China and would in no way compromise us back here, say, in the U.S. or elsewhere. We're confident. We believe we're actually going to increase our growth in China and do better as a result of this partnership. We're also mindful of tensions around the world and protecting our people and our business. Your sensitivity is understood, and we do feel that as well. Thank you.
Thank you.
Right. Should we line up? I just need to keep a little check on time here so we don't go too far over. Perhaps we could have Deborah Brown come to the microphone, who has got a question around another menu question, and perhaps Howard Silvers as well.
Good morning. I'm Deborah Brown. I was visiting Florida a couple of years ago and was really impressed at the McDonald's. They had a custom-made, custom-ordered burger. I visited Florida again this year, and it was discontinued.
Yeah.
Just wanted to know, are there any plans to reactivate or reinstitute that burger, custom-made burger? We really enjoyed it.
Yeah, it's a really good question. I'll tell you what, they were really delicious. They were. We sold it under the Create Your Taste banner, I think. Does that ring a bell, Create Your Taste?
Yes.
We launched it through all of Australia, and we used Florida here as a, let's call it, test market. What we found was customers loved the burger, but we could only serve it in the store, in restaurants, not through the drive-thru because the preparation time took too long. Even the customers who actually loved the taste and the profile of the burger in the restaurant enjoyed it once but didn't come back and buy it again often enough, which is a shame. However, it did excite us about using different flavors and offering some options as customized.
If perhaps you want to take a look at the Signature Crafted, which doesn't allow as much build-your-own, but really gets almost all those benefits, the taste profiles, the juiciness, the freshly made for you, I think you'll find that. We can offer that through the drive-thru as well. We think that's a longer-term solution. For us, it was really important to do Create Your Taste because you can learn things even if they don't ultimately work. You take the most beneficial parts, what you can learn, and then take it forward and do something of maybe a better magnitude. Hope you try the Signature Crafted, and I hope you get to enjoy it, be it on either a burger or chicken burger as well.
Okay. If that doesn't work, would you reconsider reinitiating it?
I would hate to say never, but it's highly unlikely. Let me say that. It really was operationally. We weren't able to offer a great-tasting food at the speed that our customers expect from us.
Okay. Thank you
Thank you. Okay, we have time for one last question, actually. Just like to make a brief introduction to our next questioner, because I think in many ways he represents many of our shareholders. He is an investor who clearly will want to get a return on his investment, just like every single shareholder would. He's actually just a brand and business enthusiast. He's a regular correspondent with me in particular, whether it's on Twitter, LinkedIn, email, and he's a great generator of ideas. It's with much anticipation and a little bit of trepidation that, Howard, I'd be interested in your views today because then you can take us home to the end of the meeting.
Thank you. I would like to know when we can get a world-class McDonald's museum honoring our founding fathers, our celebrities and professionals that had their first jobs at McDonald's. It would have the world's largest toy and memorabilia collection. It will honor our great athletes from the McDonald's All-American Games, the likes of Magic Johnson, Michael Jordan, and LeBron James. It would also have exhibits not only on the future of McDonald's, but the future of food in the world. These words, can you say, I am McDonald's?
I am McDonald's.
I'm proud to be your restaurant.
Well, the time's up, Howard. As I say, a brand enthusiast. Somewhere amongst your thoughts and your passion is a really interesting point, which is: How do we maintain the heritage of a business which has such rich heritage, that is looking to transform itself to be competitive in the modern day? It's not lost on us also when you move from a location such as this into any other. How do you take the heritage and the rich heritage from Ray and Fred and everything that has become something that we've all benefited from, customers and employees, and many of the other remarkable successes and brand achievements that we've achieved, and you listed just some of them.
Whether that's a physical museum, whether we somehow make our archive available to people, because we actually have an archivist in the company who can chronicle many wonderful items of our history. Somehow we do need to find a better way. Whether it's a traditional museum, I don't know. If there's a way we can start to share the richness of our history with those who are interested, I think that could be a fun idea, so I appreciate it. Well, that is all we have time for today for questions. For those of you who indicated on your question forms if you'd like a response, we'll get back to you by email if we didn't get around to your question. With that said, thank you all for joining us today, and safe journeys home. Thank you.