The global chain also said it would work to boost minority representation in the firm’s senior US ranks from 29 per cent to 35 per cent over the next four years.
Executive pay will be tied to meeting the targets, McDonald’s said in a press statement.
“Beginning in 2021, the company is incorporating quantitative human capital management-related metrics to annual incentive compensation for its Executive Vice Presidents. In addition to the company’s financial performance, executives will be measured on their ability to champion our core values, improve representation within leadership roles for both women and historically underrepresented groups, and create a strong culture of inclusion within the company.
“By end of 2025, McDonald’s expects to increase representation of historically underrepresented groups in leadership roles (Senior Director and above) located in the US to 35 per cent. The 2020 baseline data shows underrepresented groups make up 29 per cent of leadership roles. Additionally, by end of 2025, McDonald’s expects to increase representation of women in leadership roles globally (Senior Director and above) to 45 per cent. The 2020 baseline data shows women make up 37 per cent of leadership roles.”
McDonald’s, the world’s largest restaurant chain by revenue, announced plans in July last year to make commitments to diversity and inclusion, following international protests against racism and police brutality. The company also hired Reginald J Miller as its Vice President and Global Diversity, Equity and Inclusion Officer in November.
McDonald’s has faced accusations of racism at all levels of the company in the past year. Two Black executives sued the fast-food chain in January 2020, claiming it shifted advertising away from Black customers. The suit also alleges McDonald’s graded Black franchisees’ stores more harshly than white operators’ locations, CNBC reported.
Executive Vice Presidents will have their compensation tied to annual gender parity goals. The McDonald’s Board of Directors has endorsed the targets, which apply to the highest levels of the company.
Starting in 2021, 15 per cent of bonuses for Executive Vice Presidents will be based on human capital management-related metrics. System-wide sales and operating income growth will account for 42.5 per cent of the company’s incentive plans.
“We recognise these issues weigh heavily on our people and have heard – loud and clear – that diversity, equity and inclusion are priorities for our entire team, from our crews to our senior leaders,” said McDonald’s President and CEO Chris Kempczinski in a letter to employees.
“We make a foundational promise to all those who work under the Arches to provide a safe, respectful, and inclusive workplace. This commitment is critical as we advance on our diversity, equity and inclusion journey, and promote equitable opportunity throughout the system.
“We’re serious about holding ourselves and our leaders accountable to these foundational commitments, and doing so with respect to local regulations and employment laws around the world. That’s why we are adding annual targets designed to meet these five-year goals to our annual compensation incentive metrics for Executive Vice Presidents. These targets are endorsed by our Board of Directors and extend to our most senior leaders – including me.”