By Frederick H. Lowe
The Board of Directors of McDonald’s Corp., the world’s largest restaurant chain, announced on Wednesday that Don Thompson, the company’s president and chief executive officer, will retire March 1.
Thompson, who was named CEO in July 2012, also announced that he also is retiring from McDonald’s board of directors. Oakbrook, IL-based McDonald’s elected Steve Easterbrook president and CEO, to replace Thompson. Easterbrook is currently serving as the corporation’s chief brand officer.
“It’s tough to say goodbye to the McFamily, but there is a time and season for everything. I am truly confident as I pass the reins over to Steve, that he will continue to move our business and brand forward,” Thompson said in a statement.
Thompson, 51, is one of the few African-American men to head a Fortune 500 company. The company ranked 106 on the Fortune 500 list, up from 111 in 2013.
He had been the company’s president and chief operating officer when he was elected in 2012 to succeed Jim Skinner as CEO.
As president and chief operating officer, Thompson directed global strategy and operations for more than 33,000 McDonald’s restaurants in 119 countries.
Thompson retired less than a week after the company reported a net income of $1.097 billion, down 21 percent compared to $1.397 billion for the same three-month period 2013. Net income for 2014 was $4.75 billion, down 9 percent compared to $5.58 billion in 2013.
Revenues for 2014 also dropped to $5.72 billion, down 7 percent compared with $7.09 billion during the same three-month period in 2013. Revenues for the full year were $27.4 billion, down 2 percent compared to $26.10 billion in 2013.
Fourth quarter earnings per share were $1.13, down 19 percent, compared to $1.40 for the same three-month period in 2013.
Following the announcement of Thompson’s retirement, the company stock price dropped 79 cents per share to $88.75. In after-hours trading, the stock price was $91.79, up 3.4 percent.
The company had been beset by problems concerning its menu offerings and individuals changing their eating habits. Fewer customers are buying hamburger and cheese burgers.
Other problems were well beyond Thompson’s control. In August, Russia closed nine McDonald’s restaurants and placed 200 under investigation in retaliation for sanctions the U.S. and Europe imposed on Moscow over its role in the Ukraine crisis.
And in the third-quarter, McDonald’s profits fell 30 percent after authorities accused a Chinese supplier with intentionally selling expired meat to McDonald’s and other fast-food restaurants. The supplier, Shanghai Husi, picked up meat, including McNuggets sold to McDonald’s, from the floor and threw them into processing machines until the company passed inspection.
Millions of people, however, still visit McDonald’s restaurants, and in 2014, it commanded the largest share of the fast-food industry market in the United States.
Thompson joined McDonald’s nearly 25 years ago as an electrical engineer. He held a variety of leadership positions at the company before winning the two top jobs.
McDonald’s operates 36,000 locations in more than 100 countries. The company’s restaurants serve more than 69 million customers each day.