McDonald's Corporation (MCD)

AGM 2014

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May 22, 2014

Welcome to McAnno's Annual Shareholders Meeting. So I now call this meeting to order. Do I hear your voice on the right here? Let me speak to Mr. Glasser. Mr. Glasser is a great advocate for corporate governance and we respect that. In fact, we're delighted that you're here. And so Mr. Glasser, you'll be offering a proposal, a shareholder proposal, which we'll be bringing you to the microphone within the next few minutes. You'll be the first one to recognize. So thank you. It was ironic because it was my understanding that Mr. Glauser really wanted to meet at 7 o'clock and we compromised by having at 8 o'clock. Thank you, Mr. Glauser. We appreciate the rest of your patience in arriving to the meeting this morning. There may have been a little traffic, which perhaps is somewhat challenging. So in addition to everyone here, we are joined by those of you listening on our webcast. I'm also pleased that students from Aerial Academy are here with us today. And for those in the room, you have a copy of the agenda for our meeting today and information about our procedures. With me on stage are President and Chief Executive Officer, Don Thompson General Counsel and Corporate Secretary, Gloria Santona and Chief Financial Officer, Pete Benson. Now Don Thompson will discuss McDonald's performance and plans in a few moments, following the presentation of the proxy proposals. The Board in its oversight role believes that Don and his leadership team are doing the right things to move McDonald's forward in today's challenging environment. You can also be assured that your Board continues its commitment to good corporate governance and management oversight. The Board is comprised of a diverse, independent minded and experienced group of business leaders, all of whom remain committed to representing you and enhancing shareholder value. So I'm now pleased to introduce our Board of Directors. And as I introduce our individual members, please hold your response until everyone has been presented. In addition to Don Thompson and me, your directors are Susan Arnold, Operating Executive Global Consumer and Retail Group of The Carlyle Group and are nominated for election of this meeting Bob Eckert, former Chairman and CEO of Mattel Inc. Rick Hernandez, President and CEO of InterContin Security Systems and Non Executive Chairman of Nordstroms, Inc. Gene Jackson, President of Products and Merchandising for Nike, Inc. Rick Lenny, operating partner of Friedman Fleischer and Loew LLC and a nominee for election at this meeting. Walter Massey, President of the School of the Art Institute of Chicago and a nominee for election at this meeting. Carey McMillan, CEO of True Partners Consulting and a nominee for election at this meeting Sheila Penrose, Non Executive Chairman of the Board of Jones Lang Flossail Incorporated and a nominee for election at this meeting John Rogers, Chairman and CEO of Airlaid Investments LLC and a nominee for election at this meeting Roger Stone, Chairman and CEO of Capstone Paper and Packaging Corporation and a nominee for election at this meeting and Myles White, Chairman and CEO of Abbott and a nominee for election at this meeting. I'd like to ask the directors to please stand and be recognized. We appreciate your service and your commitment. Thanks to all of you. And we're also delighted to have with us today retired Vice Chairman and CEO, Jim Skinner. Jim, we're so happy you're here today. I will now turn to Gloria Santona, our Corporate Secretary, to describe our procedures. Thank you, Andy. I can advise that a quorum of the company's shares outstanding is present to conduct a meeting. The polls are open and will close following the presentation of the proposals. Our order of events is as follows: the Chairman will introduce each proxy proposal and after all of the proposals have been presented, we'll ask if anyone has any questions or comments on the proposals. So that as many shareholders as possible have an opportunity to speak, we ask that you limit any comment or question at this time to one proposal and to no more than 1 minute. I also direct your attention to the rules of order that are printed in your program. Following the presentation of all the proposals, the Chairman will ask for a motion and a second on all the proposals at one time. If you've not already voted your shares and need a ballot, please raise your hand and an usher will provide one to you. If you've 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. I'll now turn the meeting back over to our Chairman for the presentation of the proposals. So thank you, Gloria. So our first order of business is the election of Susan Arnold, Rick Lenny, Walter Massey, Carrie McMillan, Sheila Penrose, John Rogers, Roger Stone and Miles White as Directors. The second proposal is an advisory vote on 2013 executive compensation. The 3rd proposal is the approval of performance goals for awards under the McDonald's Corporation 2009 cash incentive plan. The 4th proposal is the approval of Ernst and Young as the company's independent auditors for 2014. And the 5th proposal is an advisory vote on the shareholder proposal. So now it is my pleasure to present Mr. Martin Glosser, who will present that proposal in 2 minutes or less. Mr. Glosser? Thank you, Mr. Chairman. Our proposal is found in the proxy statement on Page 40 something. Let the record indicate that I read the proposal and I read the reason. And I have a few comments and that since I'm the proponent, I have the final say after anybody else makes a comment. First thing, we want to thank all the shareholders who took the time to vote on this proposal, but especially the ones who voted yes. The second comment I made that I've been making at all shareholders meeting that proponents of shareholder proposals are at a distinct disadvantage. They don't have the funds, equal amount of funds that the management uses to solicit novos. We believe that if the proponents had access to the management's funds, company funds, the percentage of our votes would be more increased, possibly voting for approval. We have a distinct disadvantage and I believe in time the rules of the SEC will be changed so that proponents have access to company funds to make it an equal playing field. Thank you. Thank you, Mr. Glasser. Are there any questions or comments on any of these proposals? My name is Shriram Madhusuthanand. I'm with Corporate Accountability International. I have a related to the advisory board on 2013 executive compensation. As you know, we work with thousands of parents, health professionals, educators and communities who demand an end to McDonald's abusive practices that devastate children's health and disregard social justice. Year after year, you tried to deflect this growing concern with half hearted PR stunts and year after year, we're telling you it's not enough. This corporation prioritizes profits over people whether it's predatory marketing to kids, inundating communities that already see soaring rates of diet related disease, undermining your workers are driving a slew of abuses throughout the food system. For instance, while you choose to spend 1,000,000,000 on athletic sponsorships and other marketing tactics to hook more kids on junk food, increase executive compensation, many of your employees can barely make ends meet on poverty wages. When will this corporation commit to ending the onslaught of abuses that harms workers, children and our communities? Thank you for your comments. Are there any further questions? No, Mr. Chairman. Mr. Glasser. I was talking on the election of directors. Yes, sir. Well, the question, we requested directors. Naturally since the shares are fortunately above $100 we make a request that the Board of Directors consider splitting the stock. Thank you. Thank you, Mr. Glasser. Yes. I have a question. My name is Casey Hines I'm a mother from Lexington, Kentucky. I am here to address proxy proposal number 1, the election of Director of nominees. With a family history of type 2 diabetes, it's been important to prevent my children from getting hooked on fast food and sugary drinks. We don't eat at McDonald's, but that's not enough when Ronald McDonald is the Joe Camel of fast food. I can and I do turn off the ads at home, but parents like me are undermined when we use schools to market to kids and reach them behind our backs. Fast food fundraisers and Ronald McDonald in libraries benevolence that I've seen in my community. There's a movement at all levels of government to make our classrooms places where kids aren't bombarded by junk food brands. What will you do to stop undermining public health advocates, parents and elected officials who are working to make schools free of fast food marketing? Besides, I think that's the question that will be you can direct during our business section. Well, I would like to know for the voting on the election of director nominees before we make that vote. John, would you like to respond to that? Thanks for the question, Casey. And it's and hopefully we will get a chance to address some of these in the business session as well. And I'd like to maybe address the last two points both together. At McDonald's, we are not as was mentioned predatory or out focused on marketing to kids alone. Matter of fact, if you look at all of our marketing, Ronald McDonald, which will come up I'm sure, has been an ambassador for the Ronald McDonald House Charities for years years. When it comes to the marketing that we do, if you watch our marketing, we have had a commitment with the Food and Beverage Initiative. We got a commitment with the Clinton Global Initiative. And what we were tempted to do is to try to make sure that we're including food within our meals and in our advertising that is enhancing fruits and vegetables, particularly fruits, particularly apples. You'll hear some more about this later with our yogurt penetration relative to what we're trying to do. We have made some very substantial moves in these arenas. As a parent, the other thing that I sometimes hear is you guys are predatory for certain individuals. As a parent we wouldn't do that. Not only that but we are people. We do have values at McDonald's and all of us are parents. And so for those who have challenges with our menus or the choices is that we'd love to hear the feedback and we'll do everything we can to try to address those as we look at the menu pipeline and portfolio. But we've been very, very responsible. And actually if you look in the broader context, we've been one of the strongest movers relative to moving forward with children's nutrition whether it be dairy, whether it be relative to apples, whether it be relative to our actual Happy Meal advertising. And so we're going to continue to do those things and we will continue to market responsibly to whomever it is that we market to. And everyone should understand and know that. And that is a commitment by not only myself, it's also by our entire Board. We discussed this and by our senior leadership team. So appreciate the questions. Appreciate the concern. And when it is a genuine concern as it has been stated, we want to be a help we want to help to be part of a solution. For those who might state it in a slightly different way, you can have some dialogue with some of our folks post the meeting as well. Okay. Thank you. I have a question also directed at the proposed board members for number 1. I'm Leah Seguidi, a mother of 3 small children and a £100 loser and professional blogger. I've had a love affair with McDonald's since I was a young girl. My meal of choice was a Cheeseburger Happy Meal. I'm sure you guys get a jerk kick out of that. But I'm associate when I was a little girl, I associated Happy Meal with happiness. And as a child, that led me to an adult and I blew up all the way to a size 22, which is about 100 pounds heavier than I am today. The day I swore off McDonald's and soda was my first step in regaining my health. I did so because I wanted my children to have a better healthier future. But my battle with McDonald's didn't stop at my refusal to eat it or feed it to my family. Don Thompson, Board members, you are marketing to my children without my consent on websites with Lego characters and even with their school report cards. My children are too young to understand what marketing is. So as you continue to bombard them through their peers, television, the Internet, schools and public spaces, I fear eventually. My brief will be dramatic. I have to interrupt you. I'm going to ask the question. I'm just right there. Just give me a second. And the research on fast marketing backs it up. So my question is here's my question. Go. My question is, since I don't have the upper hand you guys do as backed up by research, when are you guys going to shut down happymeals.com? Thank you for your comments. Okay. If there are no further questions, is there a motion to move on all of the proposals? So moved. Your Board of Directors recommends a vote in favor of the election of all director nominees and in favor of the other management proposals. The Board recommends a vote against the shareholder proposal. The reasons for the Board's recommendations are outlined in the proxy statement. If you are voting at the meeting, please complete and sign your ballot and motion for an usher to collect it. And if you have a question for the general Q and A session with Don Thompson that you have not yet submitted, please hand those to the ushers as well. Again, if you've already submitted your proxy, you do not need to vote by ballot. The polls are now closed. And I will now turn the meeting over to Don Thompson for remarks on McDonald's business. I also want to take this opportunity to thank Don for his strong leadership and his passion for the brand. Don is a tireless champion for McDonald's who epitomizes integrity and always doing the right thing for our business, our people and our customers. Ladies and gentlemen, Tom Townsend. Well, thank you, Andy, for that kind introduction. It seems we've already been off to quite a start. Andy, to you, you're just a true partner. To me, to all of our senior leadership team, to all of us at McDonald's, you're a trusted advisor to us and I want to thank you. I really, really want to thank you for all of your support. Also to our Board of Independent Directors for your outstanding guidance that you give us and the insight that you bring. You all are truly tremendous and you do that on behalf of this brand and our shareholders. And for that, we appreciate and salute you as well. To all of our shareholders that are here with us today, I want to let you know how much we appreciate you for being here. I know that we have a few extra folks outside. Thank you for your patience. I also want to thank you for your investment and your confidence in McDonald's. I'd like to begin by recognizing our senior management team. Please hold your response until everyone has been introduced. On stage with Andy and me are Pete Benson and Gloria Santana. The team also includes Jose Amario, Executive Vice President of Global Supply Chain Restaurant Development and Franchising Bridget Kauffing, Senior Vice President and Chief Communications Officer Steve Easterbrook, Senior Executive Vice President and Chief Brand Officer Rich Florsch, our Executive Vice President and Chief Human Resources Officer Doug Gore, President of McDonald's Europe JC Gonzalez Mendez, Senior Vice President of Global Corporate Social Responsibility, Sustainability and Philanthropy Eric Hesse, Senior Vice President, Consumer and Brand Strategy Dave Hoffman, President of McDonald's Asia Pacific, Middle East and Africa Ken Kozio, our Executive Vice President and Chief Restaurant Officer Adam Krieger, Senior Vice President of Corporate Strategy Atif Rafik, Senior Vice President and Chief Digital Officer Jim Sappington, our Senior Vice President and Chief Information Officer and Jeff Stratton, President, McDonald's USA. I'd also like to recognize Tim Fenton, who will be retiring after 41 years at McDonald's. Tim has been a partner to me and to all of us. He started his crew and most recently served as the company's Chief Operating Officer. McDonald's has benefited tremendously, Tim, from your experience, from your expertise, from your global knowledge and your proven track record of success. You will certainly be missed, buddy. You'll be missed. So if I could, I'd like to ask all of those members of senior management who are here today to stand and please be recognized. At McDonald's, we're proud to serve about 70,000,000 guests in 120 countries around the world every day. Everything that we do begins and ends with a customer. That's why our system works together to serve great tasting food and beverages, to always be convenient and affordable, to provide opportunities that open doors and to be a good neighbor in our local communities around the world. The McDonald's system of owner operators and our supplier and agency partners and company employees is intensely focused on more intimately knowing, satisfying and connecting with our customers. Our owner operators are one of the world's largest networks of independent businessmen and women. Collectively, they own and operate more than 80% of our restaurants around the world and about 90% of our restaurants here in the United States. In addition to our owner operators, our outstanding network suppliers enables us to deliver safe high quality products to more than 35,000 restaurants every day. And our communications and marketing agency partners help us to responsibly and appropriately share the McDonald's story. We're also proud of the approximately 1,800,000 employees who make the difference on behalf of our brand every single day for the company and our franchisees. They're the ones who make those all important connections with our customers, the ones who create memorable experiences day in and day out. McDonald's is often a first job for many that are entering the workforce. In our company owned U. S. Restaurants, which is a microcosm of the overall McDonald's landscape, about 1 third of our employees are ages 16 to 19. Nearly 60% of our hourly employees are 24 years of age or younger and about 70% of our workforce is part time, many of whom are just getting started. We're proud that we and our franchisees provide training and resources that help open the doors of opportunity that many of us have been blessed to experience. So whether it's through courses at our 7 Hamburger University locations around the world that count toward transferable college credit, whether it's our English under the arches curriculum that has helped more than 2,400 supervisors and managers gain proficiency in English and more importantly confidence in being a business leader or the efforts of McDonald's and its franchisees to actively recruit veterans as part of our ongoing commitment to the Joining Forces coalition led by First Lady Michelle Obama and Doctor. Jill Biden. There is no better testament to McDonald's commitment to employees than the fact that in the U. S. Alone almost 50% of our general managers in our company operated restaurants started as hourly employees. So did about 60% of our owner operators, some of whom are the 2nd or the 3rd generation to work in their family businesses. What's more, we're consistently recognized as the best place to work in many countries around the world. Offering opportunity is a part of the McDonald's heritage. It's part of who we are and something that we're passionate about doing and something that I'm very, very proud to share with all of you. In 2013, we increased global comparable sales by 0.2% and improved system wide sales by 3%, both in constant currencies. We also grew operating income 3% and delivered 4% growth and diluted earnings per share both in constant currencies. Additionally, we returned $4,900,000,000 to shareholders through dividends and share repurchases. And while some results fell short of our expectations, amid challenging dynamics, we remain confident in the underlying strength of our system. Our long term performance is truly a testament to our unique and resilient business model. Our talented and aligned system and our broad and deep experience is in many different operating environments around the world. The potential to continue growing our brand and driving enduring and profitable growth is significant both in the short and the longer term. We have evolved the framework for plan to win to even more strongly emphasize our commitment to leading with the customer as we strive to create experiences that our customers will notice, that our customers will appreciate and that they will feel good about rewarding us with their business. We will continue to build on our core McDonald's strengths as we remain focused on those strategic growth priorities that support what our customers want most from us. And that's providing their favorite food and drinks, creating memorable experiences for them, offering unparalleled convenience and being a trusted brand. Our first strategic priority is about food and drinks and being our customers' favorite. Our customers want to feel good about the great tasting food and beverages that they can get at McDonald's. You see, we're a true restaurant at McDonald's. Every day, we cook and prepare beverages. Yes, we actually cook in our restaurants, burgers, chicken, fries. We crack eggs, we toast muffins, we make salads with fresh vegetables. When you're in our kitchens, you feel the energy. You smell the coffee brewing and the meat on the grill. And whether it's classic favorites like our Quarter Pounder or Egg McMuffin or fresh new choices like our McGrath's or McCafe beverages, we're committed to providing choice and variety for every occasion for our customers. Our second strategic growth priority creating memorable experiences reflects the reality that life truly does happen at McDonald's. It's about being easy, fast, accurate and friendly and delivering the consistent quality service and cleanliness along with the value that our customers have grown and expect. It's also about a more relevant and meaningful way to engage with our customers. And it's about being an even greater part of their daily lives and sharing that warm personal experience that evokes our fun and youthful spirit at McDonald's. You see that's the essence of McDonald's and it's the heart and soul of our brand and it always has been. Our 3rd strategic growth priority is offering unparalleled convenience. It's about making it easy and affordable for our customers to enjoy McDonald's their way, whenever that might be. That's why our restaurants are open longer in more markets and why we continue to strategically open new restaurants, while refreshing and reimaging our existing restaurants. Now earlier this year, we opened our first restaurant in Vietnam. And I have to tell you, having been there, it was electric. The passion that we have for the brand and our customers and the commitment we have to them, there's nothing like it. You can feel it all over the system from our newest locations and markets mature markets like the United States and across the globe. Being convenient also means that we must engage with our customers wherever they are in the world. It's the reason we created a global digital function last year led by Atif and empowered this team to develop a more cohesive approach to our digital strategy and execution across the system. More than ever, we're leveraging the great digital work that's already happening around the world in places like France and Australia, Denmark and also in Sweden. Through order kiosk, mobile ordering and 1 to 1 consumer engagement, we're creating increasingly more personal dialogues with our customers and making McDonald's even more accessible in ways that already resonate with our customers. And finally, our commitment to being a trusted brand. I'm very proud of this one. We do more than serve delicious food at McDonald's. We also stand for making a positive difference. We provide real jobs that lead to real careers and we stand for opportunity. We make a difference in our communities and for the world at large. And we know that our business and our brand are inextricably linked. And we believe that making a positive difference contributes to overall success. At McDonald's, collaboration with a wide range of experts and NGOs has been and continues to be a key to our progress. One prime example is our collaboration with the Global Roundtable on sustainable beef. Another one is the World Wildlife Fund and others in the industry to advance the sourcing of sustainable So back on sustainable beef. Few global companies have such an awesome opportunity and a responsibility as we do at McDonald's. This fall, our charity of choice, Ronald McDonald House Charities will be celebrating our 40th anniversary. Now this is from 1 house in Philadelphia in 1974. Ronald McDonald House Charities has grown to 336 Ronald McDonald Houses, 200 Ronald McDonald family rooms, 51 Ronald McDonald Care Mobiles, grants to non profit organizations that also focus on the needs of children and scholarships to students across the United States. Every year, Ronald McDonald House Charities makes a real difference for 7,000,000,000 children and families around the world. And while RMHC may be one of the more well known ways in which McDonald's supports communities, it's not the only way. Last year, we also announced a powerful global partnership as I mentioned earlier with the Alliance For A Healthier Generation, which is founded by the American Heart Association and the Clinton Foundation. These are both organizations that have really taken the time to get to know our brand and the truth about our brand and what we actually stand for in communities around the world. We're committed to increasing customers' access to fruits and vegetables in 20 of our top markets, which represent more than 85% of our global sales. Combining forces with the Clinton Foundation means we can make an even more substantial and positive impact on families and children, while we continue to grow our business. To underscore the importance of this new relationship, let's take a look at what former U. S. President Bill Clinton had to say about our commitments last fall. The meeting will resume after this commercial break. At McDonald's, many people have seen the signs that said 1,000,000,000 and 1,000,000,000 served in the past. We don't have those signs anymore. But today, we talk about 1,000,000,000 and 1,000,000,000 served and it's no longer just hamburgers. It's about fruit. It's about vegetables and other choices as well. There are farmers and ranchers and fishermen and they're critical part of our success in our supply chain. And as any great chef will tell you, good food starts with great ingredients. That's why we're proud to buy many of our ingredients from the same family farmers and food suppliers that many of you do in the grocery stores, including beef and chicken, strawberries, lettuce, potatoes, coffee and crisp Michigan apples. In fact, with us here today are Mike and Lorraine Dietrich from Dietrich Orchards. This is a 6th generation family farm and one of several Michigan orchards that supplies more than £20,000,000 of apples from McDonald's Happy Meals every single year. Mike and Lorraine, I know you're here. Thanks so much for all that you guys do for this time. In fact, since we began and made our commitment relative to Happy Meal and we began automatically including apple slices in every Happy Meal and Mighty Kids Meal, we've provided at McDonald's more than 1,100,000,000 bags of apple slices to our youngest guests. Again, thanks Mike and Lorraine. We appreciate you. Our U. S. Business also recently announced that beginning of the summer we'll offer a new choice in our Happy Meals and our Mighty Kids meals, Go Gurt Low Fat Strawberry Yogurt. Now this is made exclusively for McDonald's and this tasty new offering on our menu has 25 percent less sugar than the leading kids' yogurt. In addition, McDonald's new Happy Meal character, Happy and he really is a Happy character. He's not scary. We meet every 9 and then chitchat a little bit, but Happy does represent fun and wholesome food and beverages and choices. Happy will promote the consumption of fruit, vegetables, low fat dairy and water or juices. Happy is also a great advocate for fun fruits and vegetables everywhere from France to Latin America and he's been that way for several years now. So we're really glad that Happie is now coming to the United States as well to help us in our efforts. Our commitment to being a trusted brand is all about knowing what's important to our customers and understanding how their priorities align with those things that are most important to us and our shareholders. In fact, we launched our 1st global social responsibility and sustainability framework last month as well. The framework is organized around 5 key pillars: food, sourcing, people, planet and community. These five pillars are most important to our business and they matter most to our customers. We're determined to keep doing more as McDonald's. We have an incredible iconic brand that we'll continue to leverage as we accelerate our growth and deliver the most meaningful impact for our customers in our business and for our shareholders. And we're committed to doing this in an even more focused way as we strive to achieve our brand ambitions of serving good food through good people and while being a good neighbor. So providing our customers favorite food and drinks, creating memorable experiences, offering unparalleled convenience and being embraced as a trusted brand, these are McDonald's top priorities. As I look forward, I'm even more energized by our opportunity to become an increasingly relevant and memorable part of our customers' daily lives. And I'm more confident than ever in our ability to grow our business as we continue to strengthen the connection that we have with our customers. I want to thank you all again for your investment and your confidence in McDonald's. And now I'd like to bring our Board Chairman, Andy McKenna back to the podium. Thank you, Don. We have received the preliminary voting results from an independent Inspector of Election. Now final results will be posted on McDonald's website after all the votes have been tallied and certified. The preliminary results are as follows. Shareholders have been elected each of the director nominees with the support of at least 96.4% of the shares voted. Shareholders have approved the management proposal related to an advisory vote and executive compensation with the support of 93.5% of the shares loaded. Shareholders have approved the performance goals for award under the company's 2,009 cash incentive plan with the support of 96.9 percent of the shares loaded. Shareholders have approved Ernst and Young as the company's independent auditor for 2014 with the support of 98.8% of the shares voted. And the advisory shareholder proposal requesting the ability for shareholders to act by written consent has not been approved by shareholders, receiving the support of 41% 0.7% of the shares loaded. So thank you all again for your investment and support of McDonald's. The annual meeting is now adjourned. And at this time, I would ask Don to come back up and lead a general question and answer session for the next 20 minutes. Don? So we have quite a few questions and what we'll do is, again, we're trying to make sure that we're going to do this in as fair manner as possible. For the last several years, we received feedback about the Q and A process. So we've heard you. We understand that it's not always easy to get everyone's topic on the Board. So in an effort to hear from as many people as possible and those So I know you'll give us feedback on it post the meeting. As you know, we ask those of you interested in asking a question to complete a question card before the meeting began. I have the cards. When I call your name, please proceed to a microphone to introduce yourself and ask your question. Please limit your question to 1 minute and one topic. Please do that out of respect to all the shareholders. In the interest of time, questions on similar topics will be consolidated and we'll try to give an answer on that one. In addition, we'll provide individual responses to shareholders whose questions are not addressed during the meeting. Our goal is to accommodate as many individuals and topics as possible during the next 20 minutes. So our first question is going to be from Paul Shapiro. And Paul, if you wouldn't mind coming up to one of the mics here. Paul is from the Humane Society of the United States. And also the second one, excuse me if I mispronounce your name, Tom Bekovitz, and it's relative to a menu item, for breakfast. And Tom, if you wouldn't mind approaching the mic on the other side. Paul? Good morning, Don. Thanks so much for calling me first. I appreciate it. Paul Shapiro with the Humane Society of the United States. 2 years ago, McDonald's made an announcement that it was helping its pork suppliers move into the 21st century by phasing out a practice that many have derided as unsustainable, including McDonald's deriding it as such, where they take mother pigs and confine them in cages for their entire lives, where they can't even turn around. McDonald's announcement ushered in a wave of announcements from other retailers in this sector with similar commitments to phase this practice out. McDonald's took a leadership position on that. My question for you on this particular topic is, track to meet its goals to phase out this inhumane and unsustainable practice? And more generally speaking, Mr. Thompson, where does Animal Welfare rank in your priorities regarding corporate social responsibility and responsible business practices in general? I know that the topic that you guys released your report on and I congratulate you for that. And so 1, what progress has the company made on phasing out gestation crates? And 2, animal welfare as far as the CSR initiatives are concerned? Thank you. Thanks, Paul. I know that you know that we were very serious when we made the commitment. You and several others were part of that. We continue to move toward that. We've had quite a few sessions. We also with not only producers, but also with some of the NGOs that support the movement. One of the things we can do as McDonald's is try to facilitate bringing people together toward the middle because both ends have very specific needs that they'd like to have met. As you know, this is supported by our Animal Health and Welfare Council and so that piece has started. You also I know that through Bob Langer and through Jill Scandres, they've been giving you a bit of an update as to the progress we're making. We committed that by 2022, we'd like to be phased out and we are still moving in that direction. So specific pieces on all the meetings, Jill and or Bob could give you the updates on that Paul, but we are very, very focused on continuing to move forward. Relative to where animal welfare sits in our overall sits in our overall sustainability commitment, clearly it's right there. It's under the sourcing aspect of it. And we were very, very specific about food and sourcing at the top of our list. And it's not I will tell you it's not just the gestation at the top of our list. And it is it's not I will tell you it's not just the gestation to us. We talked about beef sustainability as well. We've also talked about some of the other things that we're doing and a lot of it's outlined in the corporate social responsibility report. Thanks, Karl. Tom? Thank you. My name is Tom Buckovich. I have a quick question. I know that McDonald's and some of their areas of South, they offer biscuits and gravy on their menu for the breakfast. I'd like to see it may be offered at all of the restaurants throughout the U. S. Thank you very much, Tom. This is Jeff Stratton is here. I know along with Greg Watson, who's Head of Menu in the U. S. They're sitting over on the side. I'm actually looking right at them now. Frankly, I love our biscuits and gravy. One of the challenges is whether or not in certain markets there's enough customers that will embrace the menu offering. And so that's typically what happens. And it's usually a local decision. There's 22 different regions in the U. S. We've kind of broken the U. S. Apart. And in those markets, they're able to do what we call certain products or shelf promotions or local promotions. So you'll see in some of our Southern markets like the chicken biscuit, which goes much better than it might go out in some of the West Coast markets. Bagels go better in certain parts of the country than they do in other parts of the country. Not as well in the South, biscuits much stronger in the South. So what we'll do is I know that they'll take that into consideration though and we'll continue to relook at that though. But thank you for being a supporter of Biscuits and Gravy. Thank you. Sriram, you were up a little bit earlier and I'm hoping you got your question in. So we're going to ask a couple of other people. Sally and again, I hope I get this right. Sally Kazimchick, and it's relative to parental authority. And also Ricardo Casares. Ricardo, would you mind taking the second mic? Thank you. Hello, Sally. Hello. My name is Sally Kazimchak. I'm a mother of 2, a blogger and a registered dietitian. If McDonald's advertising continues to target children, you will lose the trust of mothers and dietitians no matter how much you try to court us. You claim that you care about kids, yet your ads during the Winter Olympics equated earning a gold medal with eating a Chicken McNuggets. You say it's about families, yet you continue to use Ronald McDonald to lure children. In my own neighborhood of Columbus, Ohio, my children paid no attention to our McDonald's until a giant balloon of Ronald McDonald appeared on its roof one day. Moms are watching and what we're seeing looks like what tobacco companies did a couple of years ago using Joe Camel as a kid friendly mascot for cigarettes. Mr. Thompson, you claim you have a commitment to moms and families. So how do you justify this marketing to children? Thanks for the question, Sally. It's amazing this alignment on Joe Camel between several of you. You all don't know each other, do you? Okay. Here's what I would say, Sally, and we've said this quite a few times. Many people will say to McDonald's, you're predatory marketing to children. I have to say it again. Every last one of the folks who was here as part of this senior team, the head of our menu team, all of our folks are parents as well. It would violate a person's value set to go out and do something that you know with her children. I mean it would be directly opposed to all the things that we do in the broader set of our business also relative to whether it be Ronald McDonald houses or kids in fruits and vegetables. We want kids to have fun also though. I will say that. And as a parent, my children ate at McDonald's. They're here today. They're quite healthy. My daughter is a track star. I can't run too much more because I've had 6 knee surgeries playing ball, but she can do a lot of things. We are not predatory. So I just want to put the humane side in it because often we say your question said you claim, you claim, you claim. It's the truth. We're not predatory. So it's not a claim, it's just the truth. Relative to our marketing, we have been marketing responsibly. And as I mentioned, with the Children's Food and Beverage Initiative, if you look around the globe, the things that we do in our marketing, you don't see Ronald McDonald eating food. You'll see Ronald relative to 2 things. Ronald McDonald House Charities primarily and yes in kids or in schools or in our restaurants, you never see Ronald because most of the schools at this point aren't requesting Ronald and we don't put Ronald out in schools, but you will see Ronald at our restaurants when someone calls as a parent to say, we'd like to have a birthday party at Ronald and we don't put Ronald out in schools, but you will see Ronald at our restaurants when someone calls as a parent to say, we'd like to have a birthday party at McDonald's and we'd like to have Ronald McDonald there. And so we try to make sure we do that. It's fun for kids, but that's it. It's not intended to be anything other than fun for kids. And so we'll continue to do that. We'll continue to support our nutritional goals relative to more fruits and vegetables. We'll continue to take the feedback. We want the feedback, especially from those who really want to help us get better as McDonald's. That's really important. If you really want to help us get better, I've spent the last 24 years of my life trying to help McDonald's and trying to get better. And McDonald's has been great to me as well. All of these folks have. All of our directors spend their time trying to help us be better. So we are a company that has integrity. I wouldn't be here if that were not the case. So I thank you for your question. We appreciate it. We'll continue to take the feedback. We'll continue to try to have more choice, more variety and we will be responsible as we market to whichever groups that we market to. Thank you. Ricardo? Don, my name is Ricardo Caceres. I came to the United States from El Salvador in 1993 and got my first job at a McDonald's in Los Angeles. McDonald's gave me training and financial assistance to go to college and into graduate school. As I acquired skills and experience, I was given opportunities to move up in the ranks and turn that first job into a career. Today, I'm an approved My story is not unique. I know many others who owe their success to McDonald's. This is part of the company's culture and history. And I'm grateful to McDonald's and optimistic about its future. Don, I ask that you continue offering the opportunities that were offered to me to current employees so that they could also grow and thrive with the system. Thank you. Thank you. Ricardo, thank you very much. I wish you absolutely the best in the registered applicant program. And you represent a lot of people who often their voices aren't heard. So it was very nice to hear from you. Thank you very much. We've got questions from Fred Seba relative to the dollar menu and also from Eric Jaworski relative to where do you see McDonald's relative to veterans, if you guys wouldn't mind please? Yes, I'm Fred Siva. Hi, Fred. We dine in New York City in Manhattan for breakfast and we order off the dollar menu and nothing is a dollar. So why even have a dollar menu? Fred, where are you from? Columbus Circle, we have friends near Columbus Circle and everything is like $1.49 to $3 on the dollar menu. Fred, if you wouldn't mind immediately afterwards, you find a gentleman over here by the name of Jeff Stratton and give him a little information on that. I will say this Fred, depending upon being a franchised organization, we can't control the price of any franchisee. We can't control their prices. What happens is there is a collective OPNAV body. It's the administrative and the advertising body. They will get together and discuss what kinds of programs we should offer. And then it's up to individual franchisees to take that. We've been really happy that most of the franchisees have definitely supported Dollar Menu and Dollar Menu and more. With the evolution of Dollar Menu and more, we know that there's tiered pricing. So you have some dollar based products and then up. There are certain areas I will tell you that based upon the real estate cost and the operating cost in certain areas, they may decide not to adhere to the dollar menu and more. Most of the restaurants do, but some may not. But if you wouldn't mind touch base with Jeff and we'd be happy to see if there's anything that we can at least discuss or surface with the franchisee, but it is their decision. Okay. Thanks, Bushford. How about Langston oh, I'm sorry. We got Eric Jaworski and Langston Johnson up next. Yes, Eric. Good morning, Mr. Thompson. So I've had the pleasure of working for McDonald's since I was 15, started as crew, worked my way up. I'm now the Director of Operations for Ferro and his 8 stores. Through those 15 years, I also had the pleasure of joining the military when I was 17, having my parents' permission of course. And I served 2 tours, 1 in Iraq, 1 in Afghanistan and just finished my career there after 12 years. But my question is to So my question is where do you see McDonald's taking the lead with regards to veteran employment now and into the future? Thanks much for the question, Eric. The and also thank you for your service to our country. We appreciate that. The one of the things that we've done is clearly at McDonald's we have a great deal of respect for veterans. We have been a part of, as I mentioned, the White House Joining Forces Coalition to create more jobs for veterans. And this is something that we're very proud of. The U. S. Company has made this commitment. In 2013, I know the number was about 50,000 veterans that we had employed. We made a 2 year commitment to increase veteran employment or hire 100,000 veterans, which will be the most of any of the anyone in the industry. And so we are very, very committed there. And many people have asked what kind of jobs. And so they range. Some come in who may have had experience and they may be accelerated in their development through McDonald's and the management positions and beyond. Some may come into corporate level roles. Others may come into hourly employee roles based upon their past experiences. So we have a broad range, but we are working quite closely within that coalition and really, really very supportive of it. Thank you. Hello, Langston. Hello, Langston. How are you from Ariel? Yes. Very nice to see you Langston. You look quite nice today. Thank you. Being a vegetarian, thank you for the current menu options. Are you considering more for vegetarian consumers such as myself? Greg Watson says, yes, we are. What's the newest one? Yes. We'll get a mic over to Greg Watson. Greg heads up menu development for the U. S. While he's preparing to talk. I will say this, similar to the conversation on biscuits and gravy, what we'll try to do is it depends upon what customers want in certain areas. So we have markets and I mentioned this like India, where 70% of our menu sales are vegetarian based products. Clearly no beef and in India and you have another big chunk that's chicken. In the U. S, we will have to see whether or not customers will come to McDonald's for the more vegetarian based offerings. We do have our salads now and you can get the salads with or without the chicken. We also have the wraps now. We brought those out. You can get those with or without the chicken. Actually, it's a really good wrap if you get it without the chicken with the ranch based sauce. It really is very good. But great parfaits and some of the other products that we have, but Greg can talk to you a little bit more. I just want to say thank you for your question. And you must be a really smart kid going to Aerial, great school. I think Don has already asked the question. But what I was going to say is we do have some great vegetarian options. We know that we need to add more, but you can't have our salads without the chicken and we have a premium McGrath that we've developed where you can order those without the chicken and it's a great vegetarian offer. And we are looking to add more in the future. So thank you. We have a question from Kim Isson. Pete, I think this was probably going to be for you. Kim, if you wouldn't mind coming forward. I think it's relative to our stock price or and then there's one from Gail Johnson relative to styrofoam cup use. And Gail, if you wouldn't mind coming forward as well. And whoever Gail, I think we'll go to you first since it looks like you'll get there first. Thank you. And first of all, I want to say we're delighted there's going to be a new Ronald McDonald House opening in Winfield. We had groundbreaking in March and that's for Central DuPage Hospital. So that's wonderful. My family when we go to McDonald's, we end up bringing home the milk jugs and our salad things and our cups because there's no recyclable things right at the McDonald's. Like out here in the lobby, I noticed today that they have one that's parts for trash and parts for recyclability. Sweet tea comes in styrofoam cups, which are not recyclable. I know that you like the coffee has to come in styrofoam cups, but free tea doesn't. So I'm requesting that we don't have styrofoam cups when we don't need them because you can have sweet tea and plastic cups that can be recyclable. And I know that McDonald's does great recycling that for the boxes and everything else, but I think that we can do better. Thank you, Gail. First of all relative to the house, JC Gonzalez Mendez is our is the President of Ronald McDonald House Charities and Linda Dunham, she's an owner operator out of New York is our chairperson for RMHC. So I'm glad to know there's a new house opening. On the cuff piece, so this is an interesting one about areas of the U. S. So just on the Styrofoam cup for sweet tea. Sweet tea originated for McDonald's in the South. And in the South, particularly in the areas where it came up, it started out in the Raleigh areas and the Houston areas, when they would take the paper cups and put them in the cup holders over a period of time in the humidity, they would break down a bit. And so the franchisees there went with and they had approval, but went with a Styrofoam based cup to keep it cold and keep the cup together. We are continuously looking at opportunities to change that. We did just change the we call it a PLEX cup. It was a polystyrene wrapped paper cup. We just changed that in the U. S. And we're going to all paper. So we're eliminating the foam piece from the U. S. Coffee cups. On the sweet tea one, that's a tougher road for us. We'll keep working on that one though. And I'm sure that Jeff and the team have taken that down and we'll definitely look at that to see if there's a way to change that out. We do have the plastic cups as you all know. We're looking at ways to also make sure that that's even more recyclable. The plastic cups even sweat a little bit. So we're trying to get those corrected a little bit better. The other thing that I'd offer is in the U. S. One of the challenges we have unlike in some of the other countries, we need more recycling centers in the U. S. So when you separate, what you want to make sure is that once it's separated at a restaurant, it's separated throughout the rest of the recycle chain. In some countries, once it's separated, there are separate bins and everything continues to be separated as it goes into a recoverability mode and recyclability mode. So one of the things we've got to work on too is partnering with others to create even more recycling center, so that when we do separate, it doesn't just get separated at the restaurant and then go all back together, because that wouldn't be recycling. That'd just be showing something and we want to make sure we make real change. Thank you very much. Okay, Gail. Kim, I believe you had a question. Hi, I'm Kim Eason and I've been a stockholder for over 20 years. And I know the stock price has been right around $100 if not a little bit over. And I was just wondering when the stock is going to split if that's in the process? Pete, Vincent? Kim, thanks for the question. And as Martin pointed out earlier, a decision like that is actually a Board decision. We talk about that periodically. But at the end of the day, a split really doesn't increase value. It takes the total value of the company and just divides it over more shares. And actually, when you add those more shares, you add additional costs. So those are the different things we balance when we look at this and many in our industry are over $100 stock price and seem to be trading just fine. So we periodically discuss it, but I know it's not a popular answer, but at this time there's really nothing in the cards for that. Okay. Thank you. We have one from Bob Liking on McDonald's jobs and also from Reverend Jeanette Wilson. If you all would please approach the mic. How are you, Bob? Good. How about you? Very good. I understand that McDonald's is a level entry job and there are opportunities to work your way up in the organization. And someday I'd like to be considered for your job. Bob, there's some days I'm ready to give it to you buddy. Thank you. Thank you, Bob. I do believe and seriously one of the things that we get to see that many people really just don't get to see and I think it's a shame, but they don't. As we travel around the world and so many of us do and as we're in the restaurants around the world in the U. S. And other places, we see people will come in one time and you'll see a person that was an hourly employee the last time you saw them. This time they're a swing manager. You come back a little later they moved into the management ranks. If you happen to see them 3 or 4 years later and they may be up here walking across the bridge, they're up here for a supervisor's class. And later on, they may be coming in and they want to own their own restaurant. I think that McDonald's probably provides more opportunity than any place that I've ever seen in that regard. It doesn't mean we don't have opportunities. We've had people that have been outside. And you know what? We respect the fact that they have some they want to challenge us relative to wages. We continue to believe that we pay fair and competitive wages and we provide opportunity and we provide job opportunities and training for those entering the workforce. And we're trying to be a really great employee. And McDonald's has done this throughout time and we'll continue to do that. That is a commitment from all of us. And so Bob hopefully, if you decide at some point you would like to work at a McDonald's down the road or something as you get a little older, right now you seem a little younger than 16, but maybe you are, then please put in an application buddy. But I will tell you Tim Fenton started as a crew person. He's the Chief Operating Officer of the company. Jeff Stratton started as a crew person, an hourly person. He's the President of the U. S. Business. J. C. Gonzalez started in Mexico as our first employee. All of us who are in management left certain roles. Doug left being an accountant to go into restaurants to work. I left being an engineer to go into restaurants to work. We have so many of us. Kevin left being marketing to go back into restaurants to work. Debbie Roberts is the number 2 person in the East division. She's left financial to go into restaurants. Rick Colon is the number 1 person in the East. He started in the restaurants from crew. McDonald's has a great story and it's a great story of diversity. So we'll continue to try to make that possible. So Bob, the spot will be ready for you. Yes, Doctor. Willis. Good morning. Good morning. Let me first express our thanks to McDonald's for our working relationship across the years, which encompasses employment, management, development and investment in programs that escort our youth from employment to management and ownership. Thrilla McQueen was one of our founding board members was a major African American McDonald's franchisee. He modeled the McDonald's process by hiring and mentoring hundreds of youth and young adults through the process. I offer my sincere appreciation and thanks to the McDonald's team, including you Don Thompson, Pat Harris for your unwavering support to our push for excellence college scholarship and college bound programs. Because of your steadfast support, we've been able to send several 100 inner city youth to college. Many of these students have graduated and are presently in the workforce or they have completed graduate school. Again, I salute you and thank you on behalf of our organization for your commitment to equity and fairness in education for minority students. We will continue to work with you to reconcile any issues that affect your growth and capacity to serve. One question I would have for you, are you planning to invest in STEM education in the coming months years since STEM is a very impactful part of our educational process in America and even around the world. Thank you, Doctor. Wilson very, very much. And relative to what you all have done at PUSH, it has been impressive to see the students going to college and going on college visits. And many of them I know it's the first time never ever left the neighborhood like that to go outside. So we'll continue to support that. Relative to STEM, there are some things that we're doing. We've got a much broader piece that you'll be hearing about in the near future and we call it Archways to Opportunity. And it's going to be something that focuses on our existing employee base and how we might be able to help them. Some of them don't have their high school diplomas yet. Some of them don't have their college degrees. And so, we're going to try to do even more to be able to advance education in that way. I have to we'll take back the notion of can we put a little more specific focus on the STEM side of that as well though. Let's see. We've got Terrence Brady. There's a question relative to from the aspect of restaurant activity, not quite sure, Terence. I'll let you come forward if you wouldn't mind. And also, let's see we've got Sophie Stump. I think this is about the meeting time. So, Sophie, if you wouldn't mind taking the other mic. Yes, Tim. Just one quick comment. I was hoping maybe next year if you're going to have an 8 meeting, you get something better than sugary chocolate chip cookies for breakfast down there. I mean the apples are okay, but that's something better choice than that because you're going to come up with the rest of it. We'll take that into consideration, Janssen, try to maybe Egg McMuffins or something, Egg White Delight or Something other than pure sugar cookies. Yes. I had a business question. Everybody else has been talking about the company in the details. But I was kind of you're kind of a multinational company. And as an investor, would my quality of life depended on how my stock investments do? I was kind of interested in how your perspective is against the international marketplace and how you see this company growing in the world and the world growing around it. Is the economy coming back? Are we finding areas where there's more growth or less growth in the multinational marketplace? Thanks very much for the question. The Terrence, the so across McDonald's right now, clearly, we're growing in a broad spectrum. It's one of the strengths of McDonald's that we do have McDonald's that we do have talented individuals and teams. One of the things that we've been able to do is as we look at our development schedule for the future, a lot of it is skewed toward the Asia Pacific, Middle East Africa area. You've got 2 very large populations there being the Chinese population, the Indian population. Also some other markets in the Koreas and Malaysias of the world, Singapore that are really strong markets for McDonald's. Also across Europe, we still have growth in the major markets. There's potential growth even further in the Eastern European markets. The U. S. Still has solid growth and we're still growing in Latin America. And so we have more of a balanced approach across the globe. In the economies, There's still some consumer confidence. It's a little challenging in some of the markets. I think Europe still has a high unemployment rate across Europe and the European countries. We got a couple of markets that are very strong, but it's still high unemployment. In the U. S, I think we're starting to see it's kind of like you see a little bit coming back and then we saw retail sales a little soft here recently. But I think by and large we're seeing it's a little muted in terms of consumer confidence, but I'm optimistic that it will come back. I think we have time for one more question. And so would love to take the question from, I believe, Sophie. Sophie Stump, I'm a shareholder. I live in South Holland, Illinois. I want to tell you our South Holland McDonald's is the greatest. I just want to know why you have to start your meetings for the so early in the morning. And another question I had was, we used to play bingo at our McDonald's in South Holland and they stopped it. So I was wondering why they stopped it because people used to enjoy that? Thank you, Sophie. We will on that latter one, Jeff Stratton understands. Is it the one on 159th Street? Yes, 159th and the Cottage Grove. Okay. So they've got that one and they will check into that one. We used to have a really good time. Nice people used to come there play bingo, we used to enjoy the afternoon. Is that a company operated restaurant or franchisee? Do you all know? And I wanted to note too that when we have like breakfast here with coffee, if they could sometimes have muffin rather than a cookie for us, so it wouldn't be so sweet? There Sophie on that one without giving away the menu pipeline, I think there's a couple of things that are coming down the pipe, but we just have to hold on that one just a moment. But I think there may be some things coming down the pipe for you. Thank you. All right. And on the meeting time, I will definitely take that up with our Chairman and with the Board and we will get back to you relative to the start of the meeting. I really want to thank everyone for your participation today and for your investment in McDonald's. I know that you'll give us feedback on the way that this work for all of the shareholders. We thank you for that. This does conclude today's meeting. And as I mentioned earlier, we will follow-up with any of the questions that we didn't get a chance to address this morning. And so thank you all very much. In addition, we do have a team in the back of the room available to talk. If you'd like to speak with someone today and you submitted a question, they're right in the back of the room waving their hands back there. Thanks again everyone. Have a great day.