Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549

SCHEDULE 14A

(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

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McDonald’s Corporation

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LOGO


PRELIMINARY PROXY SUMMARYSTATEMENT DATED MARCH 28, 2022
SUBJECT TO COMPLETION

This summary contains highlights about our Company and the upcoming 2012 Annual Shareholders’ Meeting. This summary does not contain all of the information that you should consider in advance of the meeting, and we encourage you to read the entire Proxy Statement carefully before voting.

GOVERNANCE HIGHLIGHTS

McDonald’s governance is guided by values that have been partNotice of our business for more than 50 years—integrity, fairness, respectAnnual Shareholders’
Meeting and ethical behavior. The strength of our governance is key to our success, and we continually review our practices to ensure effective collaboration of management and our Board to yield value for shareholders. Highlights of our governance include:

Board of Directors

>Independent Chairman
>14 Directors; 12 are independent
>50% of Directors are women or minorities
>Committee members (except Executive Committee) are independent
>60% of Audit Committee members are “financial experts”
>Executive sessions at each regularly-scheduled meeting
>All Directors attended over 90% of all Board and Committee meetings in 2011
>Limited membership on other public company boards
>Regular succession planning
>Regular Board self-assessments and Director peer review
>Management proposal to declassify our Board (see pages [    ])
>No former employees serve as Directors

Shareholder Interests

>Majority voting standard for uncontested Director elections
>No super-majority voting requirements
>No shareholder rights plan
>No exclusive forum selection clause
>Annual advisory vote to approve executive compensation (see pages [    ])
>Annual advisory vote to ratify independent auditor (see pages [    ])
>Management proposal to allow shareholders to call special meetings (see pages [    ])
>Confidential voting policy
>Publicly disclose corporate political contributions under Board’s policy

FINANCIAL HIGHLIGHTS

McDonald’s continues its strong performance. We were the number-one performing company in the Dow Jones Industrial Average for the one- and five-year periods ending in 2011. McDonald’s cumulative five-year total shareholder return was 263%. The charts below illustrate elements of our strong success:

LOGO



McDonald’s Corporation 2012        iProxy Statement

EXECUTIVE COMPENSATION PROGRAM HIGHLIGHTS

We believe our compensation program provides an appropriate mixTable of elements to incentivize our executives to drive the business forward. Currently, approximately 85% of our CEO’s direct compensation opportunity is performance-based.

Below is a chart that summarizes the significant elements of our executive compensation program:

Contents

Direct compensation
elements

Performance-

based

Primary metric(s)Terms

Salary

   

Chairman’s Letter

Dear McDonald’s Shareholders, Colleagues, Crew Members, Franchisees and Customers,

In my letter last year, I talked of hope for brighter days following a challenging year.

n/As 2021 unfolded, it continued to bring extraordinary challenges around the world, from turbulence in global supply chains to continuing peaks in the COVID-19 pandemic. As a hallmark of the year we are now embarking upon, it is clear that once again society will be tested.

At the time of my writing, we are weeks into a devastating humanitarian crisis that now extends far beyond Ukraine and has reverberated powerfully around the world. It is at times like this we are reminded that in our global and interconnected world, all quadrants of society have a collective responsibility to act.

Throughout our history, McDonald’s has met uncertainty with an express focus on our people, our communities and our values. McDonald’s Board and Executive leadership relied upon these same fundamental principles when tracing the Company’s initial response to this crisis. In a first for our System, we took the significant step of pausing our operations across Ukraine, and then Russia. Knowing how deeply this would affect our people, we immediately made clear our intent to pay full salaries to our employees in both countries, while also funding $5 million to our Employee Assistance Fund for those confronting the human toll of war in Ukraine. And while the Arches dimmed in nearly 1,000 communities in Russia and Ukraine, Ronald McDonald House Charities (RMHC) kept their lights on, providing hope and humanitarian aid to families in need across the region.

Exactly where this crisis goes is unclear, but our approach will continue to be guided by the same principles that have guided us in the past, with our values serving as our North Star.

Therefore, as I reflect on 2021 in light of the continued challenges communities are facing today, looking at

 

the powerful ways that McDonald’s can step forward when our communities need us, I believe there are many reasons to be both proud of our great System and hopeful for the role we will play in the future.

2021 was the start of a new chapter for McDonald’s. It was the first time we entered a year guided by our newly evolved growth strategy, Accelerating the Arches. The integration of McDonald’s values, purpose and mission within the strategy gave the entire McDonald’s community a deeper understanding of our role in the world and provides continued guidance as we navigate uncertainty and opportunity in equal measure.

—  Evaluated annually, basedMcDonald’s progress in 2021 showed we launched Accelerating the Arches at the right time. The past two years of previously unimaginable challenges have placed a renewed focus on such factors as competitive benchmarksthe impact every brand has on the broader communities they serve. Trust has been placed in the spotlight, and individual performanceconsumers increasingly favor brands and businesses they believe in. It’s clearer than ever before that stewardship of our greatest asset – the McDonald’s Brand – is key to our success and to engendering trust in McDonald’s.

Annual Cash

Incentive (TIP)

X

— Operating income

—  Based primarily upon financial performance measures

—  Includes an individual qualitative factor

Three-Year Cash

Incentive (CPUP)

X

— Operating income

— Return on Total

    Assets (ROTA)

—  Based solely upon financial performance measures

—  Non-overlapping three-year cycles

Restricted Stock

Units (RSUs)

X

— Earnings per share (EPS)

— Stock price

—  Cliff vesting at endOur efforts since the launch of three-year service period

—  Vesting subject Accelerating the Arches to financial performance measures

Stock options

X— Stock price

— Vest 25% perrecommit to a clear purpose to feed and foster the communities we serve have led to McDonald’s being one of the most admired brands in the world.1 This was supported by yet another record year

— Ten-year term

—Indirect compensation elements include retirement programs of business performance. For the full year, we achieved Systemwide sales2 of $112 billion, with matching contributionsrevenues of $23.2 billion; the highest ever reported annual comparable sales growth of 13.8% in the U.S., which represents over $5 billion of Systemwide sales2 growth; and other limited, personal benefits.

Best practices associated with our executive compensation program include:

>Strong pay-for-performance connection; variety of quantitative metrics, including total shareholder return relative to S&P 500 Index

>Significant stock ownership requirements; CEO is required to own six times his salary

>Incentive plans require growth inrecord operating income to yield payments

>Capped incentive payments

>Clawback provisions

>No employment agreements

>No intention to enter into new change in control agreements; existing agreements are double-trigger



ii        McDonald’s Corporation 2012

VOTING MATTERS

Board voteof more than $10 billion.

recommendationAll of this proves that McDonald’s can meaningfully deliver industry-leading financial results while focusing on areas of deep importance to each member of the McDonald’s community.

Page reference

(for more detail)

Management proposals:

   
1https://fortune.com/company/mcdonalds/worlds-most-admired-companies.
2Consists of both Company and franchised sales.
  
2McDonald’s
Corporation

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Chairman’s Letter

ElectionContinuing to earn trust with meaningful action and accountability.

Central to strengthening trust in the McDonald’s Brand is our focus on continued action, progress, reporting and accountability across pressing issues affecting our communities – both locally and globally. The Board recognizes that climate change is one of five Directors, eachthe most pressing issues of our time and was proud to oversee progress across a number of initiatives to strengthen our collective resiliency in the past year. A particular highlight was announcing our commitment to achieve net zero emissions across global operations by 2050. The Board, through its Sustainability & Corporate Responsibility Committee, drew on its diverse experience to support the development of the strategy, and through this committee, it will continue to oversee progress to ensure we hold the Company accountable to its targets. We formalized our climate ambition with specific targets included in our inaugural Climate Risk & Resiliency Report, guided by recommendations from the Task Force on Climate-related Financial Disclosures (TCFD). We also made significant progress on our ESG strategy more broadly, particularly on packaging and waste issues, including launching our new sustainable Happy Meal toy strategy and our additional $5 million commitment with the NextGen Consortium to continue work to accelerate and scale sustainable packaging solutions for the industry.

The nature of our business means animal welfare is also a three-year term
expiringkey focus in 2015our ESG efforts and McDonald’s is making important progress across the entire supply chain. We know that our ability to serve safe, quality food comes from animals that are cared for properly, which is why in 2012 we became the first major brand to make a commitment to source from U.S. producers who do not use gestational crates for pregnant sows. We originally intended to achieve this commitment by the end of 2022, however, McDonald’s has had to extend that timeframe by two years due to industry-wide challenges for farmers and producers – such as the impacts from global outbreaks of African Swine Fever and the COVID-19 pandemic. Nevertheless, we remain committed to our goal. We are on track to achieve it by the end of 2024, and expect to reach 85% to 90% of our goal by the end of 2022. The impact of this is significant. Since we first made our commitment in 2012, an estimated 30% to 35% of U.S. pork production has moved to group housing systems. As we look forward, we look to continuing to promote further collaboration across the industry.

 

We continued to demonstrate meaningful action on our purpose to feed and foster communities in 2021, but our work is never done. For as long as we continue to serve, we must always be there for our communities as a beacon of trust.

FOR EACH DIRECTORBuilding a thriving System that reflects the communities we serve.

NOMINEEThe trust we build as a Brand is only possible because of the people representing it. The strength of our System remains our biggest competitive advantage, and our license to operate is dependent upon providing all three legs of the stool – our franchisees, suppliers and employees – with the platform and environment to thrive. We must also make sure the System reflects the rich diversity found in the communities where we operate.

To formalize these areas of focus, the Compensation Committee of the Board implemented new metrics in 2021 that tie executive leadership’s compensation to objectives that mirror the values our System exemplifies in our communities every day. These incentive metrics include championing our Company values, improving diversity representation among leadership and fostering strong feelings of inclusion among employees.

McDonald’s has made important progress this past year. We announced Global Brand Standards to reinforce our commitment to fostering safe, respectful and inclusive workplaces; our Mutual Commitment to Diversity, Equity & Inclusion with our suppliers, an important step to dismantle barriers to economic opportunity in their businesses and in the communities they serve; and a commitment to increase spending with diverse-owned media in the U.S. We also closed identified gender pay gaps across our corporate offices and Company-owned restaurants in the U.S., and in our owned markets around the world, and raised crew member wages at U.S. Company-owned restaurants.

Supporting a world-class leadership team.

Beyond our exceptional business performance, McDonald’s continues to champion values-based leadership. And I am proud that our SLT continues to demonstrate what that means. Everything McDonald’s achieved in 2021 strengthened my conviction that we have a world-class leadership team, complemented by the unique strengths of our dedicated System. It’s an unbeatable combination that was responsible for another record year.

2022 Proxy Statement3

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Chairman’s Letter

The strength of our leadership team is evidence of careful planning and attention by the Board, which takes seriously its role to ensure sustainable value creation for shareholders while acting on some of the world’s most pressing social and environmental challenges important to McDonald’s stakeholders. We will continue to optimize leadership to push the Brand forward while keeping the customer and our role in communities at the center. Last year’s global leadership appointments of Manu Steijaert as Executive Vice President and Chief Customer Officer, Morgan Flatley as Global Chief Marketing Officer, and Desiree Ralls-Morrison as General Counsel and Corporate Secretary were yet more evidence of our progress on that front.

Strengthening our foundations to secure our long-term success.

The past year was one in which the McDonald’s Arches stood as tall as ever, once again demonstrating why the “and” to our successful approach is working. Meaning, fulfilling our role as a leading business focused on sustainable performance, and living our purpose deeply. Being mindful of our role as a business and stretching further to impact society positively. Focusing on the year we’re navigating and setting our sights on the future. Achieving record business performance and continuing to strengthen the foundations of this great Brand to further cement our role as a force for good in the world.

 [   ]

And, in addition to remaining focused on stewarding shareholders’ investments, the Board will continue to ensure the System, our customers and our communities are supported by McDonald’s.

I want to thank the entire System for another memorable year of which we all should be proud. Each and every single person’s contributions help make the Brand what it is, and made this year yet another successful one for McDonald’s.

Sincerely,

Rick Hernandez
Chairman of the Board

4McDonald’s
Corporation

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Notice of 2022 Annual
Shareholders’ Meeting

Your Vote is Important.

Please consider the issues presented in the accompanying Proxy Statement and vote your shares using the WHITE proxy card as promptly as possible, even if you plan to attend the virtual meeting.

   

Important Voting Information

Please carefully review the proxy materials and follow the instructions below to cast your vote on the WHITE proxy card by [•] Central Time on [•], 2022 using one of the options below.

Registered Shareholders:If you hold shares through our transfer agent, Computershare:

Internet

Visit the website shown on your WHITE proxy card

  

Advisory vote to approve executive compensationTelephone

FOR[   ]

Dial the toll-free number shown on your WHITE proxy card (available 24/7)

  

Mail

If you received a WHITE proxy card by mail, you may mark, date, sign and return it in the postage-paid envelope furnished for that purpose

Beneficial Owners:If you hold shares through your bank or brokerage account:

Internet

Visit the website shown on your WHITE voting instruction form

  

Vote to approve 2012 Omnibus Stock Ownership PlanTelephone

FOR[   ]

Dial the toll-free number shown on your WHITE voting instruction form (available 24/7)

  

Mail

If you received a WHITE voting instruction form by mail, you may mark, date, sign and return it in the postage-paid envelope furnished for that purpose

Meeting Date
and Time		Virtual Shareholders’
Meeting
[•], 2022
[•] Central Time

VoteMcDonald’s Corporation will have a virtual meeting at [•]. There will not be a physical location for the meeting, and you will not be able to approve declassification ofattend the Board of Directors

FOR[   ]

Vote to approve shareholders’ right to call special meetings

FOR[   ]

Advisory vote to approve appointment of Ernst & Young LLP
as independent auditor for 2012

FOR[   ]

[Shareholder proposal]:

[Advisory vote requesting a nutrition report], if presented

AGAINST[   ]
meeting in person.

ELECTION OF DIRECTORS (PROPOSAL NO. 1)

We will send this notice, the accompanying Proxy Statement, the form of WHITE proxy card and our 2021 Annual Report, or the Notice of Internet Availability of Proxy Materials, beginning on or about [•], 2022 to shareholders of record as of [•], 2022 (the “record date”).

 

TheTo McDonald’s Corporation Shareholders:

At our 2022 Annual Shareholders’ Meeting, you will be asked to vote upon the following table provides summary information about our nominees for election to the Board of Directors. Additional information for all of our Directors, including the nominees, may be found beginning on page [   ].

proposals:

NameAgendaDirector sinceOccupationIndependentOther company boards

Robert A. Eckert

2003— Chairman, MattelX— Mattel

— Levi Strauss

Enrique Hernandez, Jr.

1996— President & CEO,

    Inter-Con Security

    Systems

X— Chevron

— Nordstrom

— Wells Fargo

Jeanne P. Jackson

1999— President of Direct

    to Consumer,

    Nike

X— Motorola Mobility

    Holdings

Andrew J. McKenna

1991— Chairman, McDonald’s

— Chairman, Schwarz
   Supply Source

X— Aon

— Skyline

Donald Thompson

2011— President & COO,

    McDonald’s

      —Our Board’s Voting
Recommendation Exelon

ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION (PROPOSAL NO. 2)

We are asking shareholders to cast an advisory, nonbinding vote to approve compensation awarded to our named executive officers. The key objectives of our executive compensation program are to motivate our executives to increase profitability and shareholder returns, to pay compensation that varies based on performance and to compete for and retain managerial talent. Additional information regarding our executive compensation may be found elsewhere in this Proxy Statement.



McDonald’s Corporation 2012        iiiProposal 1

VOTE TO APPROVE STOCK OWNERSHIP PLAN (PROPOSAL NO. 3)

We are asking shareholders to approve the proposed 2012 Omnibus Stock Ownership Plan, which the Compensation Committee has adopted, subject to shareholder approval, to enable the Company to continue making equity awards to executives and other employees. The 2012 Plan is an important part of our pay-for-performance philosophy as it allows the Company to award compensation that is tied to performance and aligned with the interests of our shareholders.

VOTE TO APPROVE DECLASSIFICATION OF THE BOARD OF DIRECTORS (PROPOSAL NO. 4)

We are asking shareholders to approve amendments to our Restated Certificate of Incorporation to eliminate the classification of the Board of Directors. If the amendments are approved by shareholders, then Directors would be subject to annual election for one-year terms once their current terms expire, beginning at the 2013 Annual Shareholders’ Meeting.

VOTE TO APPROVE SHAREHOLDERS’ RIGHT TO CALL SPECIAL MEETINGS (PROPOSAL NO. 5)

We are asking shareholders to approve amendments to our Restated Certificate of Incorporation to enable shareholders of at least 25% of our outstanding shares of Common Stock (excluding derivatives) to call a special meeting of shareholders. Currently, only our Board may call a special meeting of shareholders.

ADVISORY VOTE TO APPROVE INDEPENDENT AUDITOR (PROPOSAL NO. 6)

We are asking shareholders to approve the appointment of Ernst & Young LLP as independent auditor for 2012. Set forth below is information about its fees in 2011 and 2010.

Types of fees (In millions)  2011   2010    

 

 

Audit fees

  $11.5    $10.4  
            

 

Audit-related fees                     

   0.4        0.3  
            

 

Tax fees

   1.1        1.0  
            

 

All other fees

   0.0        0.2  

 

 

Total

  $13.0    $11.9  

 

[ADVISORY SHAREHOLDER PROPOSAL (PROPOSAL NO. 7)]

[Shareholders will be asked to vote on an advisory shareholder proposal requesting the Board to issue a nutrition report, if presented at the meeting.] We do not support this request and ask shareholders to vote against this proposal.

MEETING INFORMATION

Date and time

 May 24, 2012, 9:00 a.m. Central Time

Place

Election of 12 Directors to serve until our 2023 Annual Meeting of Shareholders		 McDonald’s Office Campus, The Lodge, Prairie Ballroom“FOR ALL” OF OUR BOARD’S DIRECTOR NOMINEES
Proposal 2 2815 Jorie Boulevard
Oak Brook, Illinois 60523

Record date

March 27, 2012

Voting

Shareholders at the close of business on the record date may vote at the Annual Shareholders’ Meeting. Each share is entitled to one vote on each matter to be voted upon.

Attendance

We encourage shareholders to listen to the meeting via live webcast as seating in the Prairie Ballroom is limited. If you decide to attend in person, please follow the pre-registration instructions on page [     ].



iv        McDonald’s Corporation 2012

Contents

1Notice of the Annual Shareholders’ Meeting
2Election of Directors
2Proposal No. 1.  Election of Directors
2Director qualifications and biographical information
8Executive compensation
8Compensation Committee Report
8Compensation discussion and analysis
18Compensation tables
31Proposal No. 2.Advisory vote to approve executive compensation“FOR”
32Proposal 3 Other management proposals
32Proposal No. 3.  Vote to approve 2012 Omnibus Stock Ownership Plan
36Proposal No. 4.  Vote to approve the declassification of the Board of Directors
37Proposal No. 5.  Vote to approve shareholders’ right to call special meetings
37Proposal No. 6.Advisory vote to approve the appointment of Ernst & Young LLP as our independent auditor for 20122022“FOR”
Proposals 4 — 10Advisory votes on seven shareholder proposals, each only if properly presented.  “AGAINST” EACH SHAREHOLDER PROPOSAL

In addition, we will transact any other business properly presented at the meeting, including any adjournment or postponement thereof, by or at the direction of our Board.

The accompanying Proxy Statement provides detailed information about the matters to be considered at the meeting. You should read the accompanying Proxy Statement carefully. We encourage you to participate in having your views reflected on the matters by voting as promptly as possible, even if you plan to attend the virtual meeting.

Barberry Corp., an activist investment firm affiliated with Carl Icahn (together with their affiliates, the “Icahn Group”), has notified us that it intends to propose two of its own director nominees for election at the meeting. Currently, the Icahn Group collectively holds 200 shares of our common stock. You may receive proxy solicitation materials, including a [•] proxy card, from the Icahn Group. Our Board does NOT endorse any of the Icahn Group’s nominees and strongly recommends that you disregard any such materials, which do not reflect the views of our Board. We are not responsible for the accuracy of any information contained in any solicitation materials filed or disseminated by, or on behalf of, the Icahn Group or any of its affiliates or any other statements that they may otherwise make. The Icahn Group chooses which shareholders receive its proxy solicitation materials.


2022 Proxy Statement5

Table of Contents

Notice of 2022 Annual Shareholders’ Meeting

PLEASE VOTE AS SOON AS POSSIBLE on the WHITE proxy card and do not sign, return or vote any [•] proxy card that may be sent to you by the Icahn Group. If you have any questions or require assistance with voting your WHITE proxy card, please contact our proxy solicitation firms at:

Innisfree M&A Incorporated

501 Madison Avenue, 20th Floor
New York, New York 10022
Shareholders: (877) 456-3463 (toll-free
from the U.S. or Canada) or (412) 232-3651 (from other countries)
Banks and brokers: (212) 750-5833

Kingsdale Advisors

745 5th Avenue, Suite 500
New York, New York 10151
(855) 683-3113 (toll-free in North America)
(416) 867-2272 (outside of North America)
contactus@kingsdaleadvisors.com

Important Notice Regarding the Availability of Proxy Materials for the Shareholders’ Meeting To Be Held on [•], 2022. This notice, the accompanying Proxy Statement and our 2021 Annual Report are available free of charge at www.proxyvote.com.

Our Board unanimously recommends that you vote “FOR ALL” of our Board’s Director nominees on the WHITE proxy card and in accordance with our Board’s recommendation on each other proposal properly presented at the meeting. Our Board urges you to disregard any materials, including any [•] proxy card, that may be sent to you by the Icahn Group. If you have already voted using a [•] proxy card, you can revoke that proxy any time before it is exercised at the meeting by (i) following the instructions on your WHITE proxy card or WHITE voting instruction form to vote by internet or telephone, (ii) marking, dating, signing and returning your WHITE proxy card or WHITE voting instruction form in the postage-paid envelope provided or (iii) voting at the meeting. Only your latest dated, validly executed proxy counts.

How to Attend Our 2022 Annual Shareholders’ Meeting: Shareholders must register in advance to ask questions or vote at the meeting by using the control number located on their Notice of Internet Availability of Proxy Materials, proxy card, voting instruction form or other communication. Detailed instructions are set forth under “Meeting Information” on page 127. Only shareholders as of the record date may attend the virtual meeting.

We encourage you to vote and submit your WHITE proxy card as promptly as possible, even if you plan to attend the virtual meeting.

By order of our Board of Directors,

Desiree Ralls-Morrison
Executive Vice President, General Counsel and Corporate Secretary

McDonald’s Corporation
110 North Carpenter Street, Chicago, Illinois 60607
[•], 2022


6McDonald’s
Corporation

Table of Contents

Table of Contents

Chairman’s Letter2
Notice of 2022 Annual Shareholders’ Meeting5
Proxy Summary8
About McDonald’s8
Highlights11
Executive Compensation Highlights15
Voting Matters and Recommendations17
Forward-Looking Statements and Website Links17
Background of the Solicitation18
Election of Directors22
  PROPOSAL 1: Election of Directors22
Contested Election22
Election Mechanics22
Director Qualifications23
Biographical Information25
Board and Governance Matters37
Board Leadership37
Board Composition and Succession Planning37
Board Diversity38
Process for Selection of New Director Candidates39
Director Independence40
Board Committees40
Board Self-Evaluation46
Board Oversight46
Talent Management and Succession Planning48
ESG: Our Purpose & Impact50
Shareholder Engagement56
Board’s Response to Shareholder Proposals57
Other Governance Policies and Principles57
Director Compensation58
Executive Compensation60
  PROPOSAL 2: Advisory Vote to Approve Executive Compensation60
Compensation Committee Report61
Compensation Discussion and Analysis61
Compensation Tables76
Additional Compensation Matters86
Audit & Finance Committee Matters87
  PROPOSAL 3: Ratification of the Appointment of Ernst & Young LLP as Independent Auditor for 202287
Audit & Finance Committee Report88
Policy for Preapproval of Audit and Permitted Non-Audit Services89
Auditor Fees and Services89
Shareholder Proposals90
  PROPOSAL 4: Advisory Vote on Modifying the Threshold to Call Special Shareholders’ Meetings91
Our Board’s Statement in Opposition92
  PROPOSAL 5: Advisory Vote on Report on Reducing Plastics Use94
Our Board’s Statement in Opposition95
  PROPOSAL 6: Advisory Vote on Report on Antibiotics and Public Health Costs97
Our Board’s Statement in Opposition98
  PROPOSAL 7: Advisory Vote on Disclosure Regarding Confinement Stall Use in the Company’s U.S. Pork Supply Chain100
Our Board’s Statement in Opposition101
  PROPOSAL 8: Advisory Vote on Third-Party Civil Rights Audit104
Our Board’s Statement in Opposition105
  PROPOSAL 9: Advisory Vote on Report on Lobbying Activities and Expenditures110
Our Board’s Statement in Opposition111
  PROPOSAL 10: Advisory Vote on Report on Global Public Policy and Political Influence113
Our Board’s Statement in Opposition114
Stock Ownership116
Communications with Our Board118
Information on our 2023 Annual Shareholders’ Meeting118
Transactions with Related Persons120
Questions and Answers Regarding Proxy Materials and Voting Information121
Meeting Information127
Exhibit A: Supplemental Information Regarding Participants in the Solicitation129
2022 Proxy Statement7

Table of Contents

Proxy
Summary

This Proxy Summary highlights key matters about our Company. We encourage you to participate in having your views reflected on the matters described herein by voting as promptly as possible, even if you plan to attend our 2022 Annual Shareholders’ Meeting.

The Icahn Group has notified us that it intends to propose two of its own director nominees for election at the meeting. You may receive proxy solicitation materials, including a [•] proxy card, from the Icahn Group. Our Board unanimously recommends that you vote FOR ALL of our Board’s Director nominees on the WHITE proxy card and in accordance with our Board’s recommendation on each other proposal properly presented at the meeting. Our Board urges you to disregard any materials, including any [•] proxy card, that may be sent to you by the Icahn Group. Our Board does NOT endorse any of the Icahn Group’s nominees and strongly recommends that you disregard any such materials, which do not reflect the views of our Board. We are not responsible for the accuracy of any information contained in any solicitation materials filed or disseminated by, or on behalf of, the Icahn Group or any of its affiliates or any other statements that they may otherwise make.

If you have already voted using a [•] proxy card, you can revoke that proxy any time before it is exercised at the meeting by (i) following the instructions on your WHITE proxy card or WHITE voting instruction form to vote by internet or telephone, (ii) marking, dating, signing and returning your WHITE proxy card or WHITE voting instruction form in the postage-paid envelope provided or (iii) voting at the meeting. Only your latest dated, validly executed proxy counts.

About McDonald’s

2021 Performance

In the face of ongoing global challenges, 2021 demonstrated what makes McDonald’s not just different, but unique. This includes the strength of our people, the scale of our supply chain, the resilience of our System (comprised of our Company, franchisees and suppliers) and the power of the McDonald’s brand.

In the first full year of our Accelerating the Arches growth strategy, we prioritized our MCD strategic growth pillars by focusing our efforts to maximize our marketing, commit to the core menu and double down on digital, drive-thru and delivery to create memorable experiences for our customers. These efforts allowed us to achieve full-year revenues of $23.2 billion, record Systemwide sales3 of $112.5 billion and operating income of $10.4 billion.

We also continued to advance the elements of our environmental, social responsibility and governance (“ESG”) strategy that help us fulfill our broader role across the communities in which we operate. This includes our pledge to put McDonald’s on the path to net zero emissions by 2050, our progress towards creating more sustainable Happy Meal toys, our $5 million commitment with the NextGen Consortium to continue work to accelerate and scale sustainable packaging solutions and our commitment to increasing advertising spend with diverse-owned media partners in the U.S. More information on these and other efforts can be found under “ESG: Our Purpose & Impact” on page 50.

We remain confident that our strategy will continue to deliver sustained, long-term profitable growth for our System and stakeholders.

 17%  Comparable Sales Growth
 38
 21%  Systemwide Sales3 Growth
 >25%  of Systemwide Sales3 in Our Top Six Markets Came from Digital Channels
3Systemwide sales include sales at all restaurants, whether operated by our Company or franchisees. While franchised sales are not recorded as revenues by our Company, management believes the information is important in understanding our financial performance because these sales are the basis on which we calculate and record franchised revenues and are indicative of the financial health of the franchisee base. Our Company’s revenues consist solely of sales by Company-operated restaurants and fees from franchised restaurants operated by conventional franchisees, developmental licensees and affiliates. Changes in Systemwide sales are primarily driven by comparable sales and net restaurant unit expansion.


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Company Values

At McDonald’s, we are guided by the five core values set forth below. These values were updated as part of our Accelerating the Arches growth strategy with input from our employees, franchisees, suppliers and customers on what makes them proud to be part of our McFamily. We believe that our people, all around the world, set McDonald’s apart and bring these values to life on a daily basis.

  Serve:  Inclusion:  Integrity:  Community:  Family:
  Audit Committee matters
38  
We put our customers and people first.We open our doors to everyone.We do the right thing.We are good neighbors.We get better together.

Our philosophy of “doing the right thing” is enshrined in our core values, and it guides not only the way we conduct our business, but also how we fulfill our broader role in the communities we serve.

Accelerating the Arches

In late 2020, we announced the Accelerating the Arches growth strategy. The strategy, which encompasses all aspects of our business as the leading global omni-channel restaurant brand, reflects a refreshed purpose, updated values and growth pillars that build on our competitive advantages. It focuses on the imperative that we deliver across five critical areas: our purpose to feed and foster communities; our mission to create delicious feel-good moments for everyone; our core values described under “Company Values” above; our growth pillars described below; and our foundation of running great restaurants and empowering our people.

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We believe Accelerating the Arches builds on our inherent strengths by harnessing our competitive advantages and investing in innovations that will enhance the customer experience and deliver long-term growth.

In addition, we will continue to elevate our people practices in order to make people feel welcomed, valued and included within the McDonald’s community. We live by our values every day and are committed to fostering a safe, respectful and inclusive workplace, providing quality jobs and making opportunity open to all.

More information on Accelerating the Arches and our MCD growth pillars can be found under “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Strategic Direction” in our 2021 Annual Report on Form 10-K. More information on our mission and values can also be found on the “Our Mission and Values” section of our website at https://corporate.mcdonalds.com/corpmcd/our-company/who-we-are/our-values.html.

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Highlights

ESG: Our Purpose & Impact

Our purpose at McDonald’s is to feed and foster communities. As part of our Accelerating the Arches strategy, we have prioritized our role and commitment in the communities we serve to focus on the four areas depicted below and described in more detail under “ESG: Our Purpose & Impact” on page 50. More information on these topics, as well as on our impact strategies, goals and performance tracking, can also be found on the “Our Purpose & Impact” section of our website at https://corporate.mcdonalds.com/corpmcd/our-purpose-and-impact.html.

  Food Quality and Sourcing  Our Planet

Our initiatives are focused on: Food Safety; Nutrition & Marketing Practices; Responsible Sourcing; Responsible Antibiotic Use; Animal Health & Welfare; Farming Communities; Supply Chain Human Rights; and Sustainable Agriculture & Beef.

Recent highlights include:

  Substantially achieved (95.0-99.9%) each of our 2020 responsible sourcing goals for our six priority commodities (beef, soy for chicken feed, coffee, palm oil, fish and fiber) as of the end of 2020

  Updated our commitment to phasing out the use of gestation stalls for housing pregnant sows in the U.S. by the end of 2024, a two-year extension of our original goal—set in 2012—due to the impacts of COVID-19 and the global outbreak of African Swine Fever

Our initiatives are focused on: Climate Action; Packaging & Waste; Conserving Forests; and Water Stewardship.

Recent highlights include:

  Joined the United Nations Race to Zero campaign in 2021, committing to put McDonald’s on the path to net zero emissions by 2050

  Released our inaugural Climate Risk & Resiliency Summary in 2021, guided by reporting recommendations from the Task Force on Climate-Related Financial Disclosures (TCFD), demonstrating our continued commitment to assessing, managing and disclosing climate-related risks and opportunities for our business

 39

  Community Connection

  Jobs, Inclusion and Empowerment

Our initiatives are focused on the following areas: Community Support & Crisis Response; Ronald McDonald House Charities® (“RMHC”); and Food Waste & Donations.

Recent highlights include:

  Continued the five-year, $100 million commitment to RMHC that we set in 2020 to help RMHC continue increasing access to quality health care for children around the world

  Donated $5 million in 2022 to our Employee Assistance Fund and support relief efforts led by the International Red Cross in response to recent developments in Ukraine and the resulting humanitarian crisis in Europe

Our initiatives are focused on: Diversity, Equity & Inclusion; Skills & Education; Human Rights & Respectful Workplaces; and People Safety.

Recent highlights include:

  In 2021, set goals to increase representation of women globally and historically underrepresented groups in the U.S. in leadership roles by 2025

  Incorporated quantitative human capital metrics into our executives’ annual incentive compensation in 2021

  In 2021, invited U.S.-based suppliers to sign a Mutual Commitment to DEI

  In 2021, disclosed our corporate employee representation and EEO-1 data for the first time

  In 2021, published an inaugural Diversity Snapshot, including data on employee, Board and franchisee representation, as well as supplier diversity

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Governance Practices

Our Board is committed to good corporate governance. We have strong corporate governance practices, as highlighted in the below chart:

Board and Governance Practices

  Independent Board Chairman

  11 of 12 Directors are independent (all except CEO)

  All standing Committees are independent (except Executive Committee, chaired by our CEO)

  Annual election of all Directors

  Majority voting standard for uncontested Director elections

  Demonstrated commitment to diversity, with 50% of our Board comprised of diverse Directors (25% women and 25% racially/ethnically diverse)

  50% of Directors joining our Board since 2015

  Refreshed Director Selection Process guidelines align with Accelerating the Arches

  No Directors who are current public-company CEOs serve on more than one outside board

  Executive sessions of independent Directors scheduled for Board and Committee meetings

  Annual Board and Committee self-evaluation

  Regular succession planning and effective leadership transitions at the CEO, executive management and Board levels

  No special interest Directors; our Director nominees represent the interest of all shareholders

  No supermajority voting provisions

  No “poison pill” (shareholder rights plan)

  Board access to independent advisors

  Directors are required to obtain the consent of our Chairman and Governance Committee Chair to serve on another public company board

  Proxy access for Director candidates nominated by shareholders reflecting standard market practices

  Meaningful threshold for shareholders to call special meetings

  Robust Director stock ownership requirements

  No Director hedging/pledging of Company stock

  Public disclosure of corporate political contributions and certain trade association memberships

  Significant shareholder outreach and engagement program

  Directors may not serve on more than three public company boards (in addition to our Board)

Shareholder Engagement

We understand the importance of engaging with shareholders and are committed to regularly hearing our shareholders’ perspectives. Our Board and management team have developed a robust shareholder engagement program. Since our last Annual Shareholders’ Meeting, we reached out to shareholders representing nearly 50% of our outstanding shares of common stock. We engage on our business strategy and initiatives, results and financial performance, ESG initiatives, including those relating to environmental matters, human capital management, and diversity, equity and inclusion (“DEI”), executive compensation, and Board governance and refreshment. Members of management and our Directors participate in these discussions.

Shareholder feedback received through direct discussions and prior shareholder votes, as well as engagement with proxy and other investor advisory firms that represent the interests of a wide array of shareholders, is reported to our Governance Committee and other relevant Committees periodically throughout the year. We also review our practices against guidelines published by shareholders and proxy advisory firms.

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The following are highlights of our 2021 shareholder engagement program:

  Response to COVID-19

  Company Values and Culture

  Business Strategy and Performance

  Board Oversight

  Human Capital Management, including DEI

  Board Governance, Composition, Tenure and Refreshment

  Environmental, Social Responsibility and Sustainability Topics, including Climate Change

  Executive Compensation

Ongoing Commitment to Board and Committee Refreshment

Our Governance Committee and Board believe that there should be a balance of institutional knowledge and fresh perspectives among our Directors, and remain committed to ongoing refreshment. Notably, 50% of our Directors have joined our Board since 2015.

  Policy for pre-approval of audit and permitted non-audit services
40  
Auditor fees and servicesJanuary 2015May 2016May 2019December 2019
41  Shareholder proposal
41  
  Proposal No. 7.  [Advisory vote on a shareholder proposal requesting a nutrition report]Margaret Georgiadis elected as Director

  Enrique Hernandez, Jr. appointed as Independent Chairman

  Committee Chairpersons refreshed

  Compensation Committee Chairperson refreshed  Catherine Engelbert elected as Director
42  Board and governance matters
42  Leadership structure
42  Director selection process
 42     Board diversity
42     Succession planning
43     
Director independenceAugust 2015January 2019November 2019December 2019 - May 2020
  Lloyd Dean and John Mulligan elected as Directors  Paul Walsh elected as Director  Christopher Kempczinski appointed as President and CEO and elected as Director  Committee membership refreshed

Additionally, our Governance Committee reviews our Director Selection Process guidelines annually. In 2020, our Governance Committee approved updated Director Selection Process guidelines to more closely align with our values and the strategic drivers associated with Accelerating the Arches. These updates highlight important areas of focus for our Company and investors, including cybersecurity, digital business models, human capital management, DEI and sustainability.

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Overview of Directors

Following is an overview of our Directors, each of whom is standing for re-election at our 2022 Annual Shareholders’ Meeting. Our Board unanimously recommends that you vote FOR ALL of our Board’s Director nominees on the WHITE proxy card. Additional information regarding our Director nominees begins on page 23.

       Standing Committee Membership  Other Public
 NameDirector
Since		Primary OccupationIndependent AFC CC GC SCR PPS EC Company
Boards
Lloyd Dean2015CEO
CommonSpirit Health		           1
Robert Eckert2003Operating Partner
FFL Partners, LLC		          3
Catherine Engelbert2019Commissioner
Women’s National
Basketball Association		           1
Margaret Georgiadis2015Endurance Partner-in-
Residence, XIR General
Catalyst		           1
Enrique Hernandez, Jr.
Independent Chairman		1996Executive Chairman
Inter-Con Security
Systems, Inc.		          1
Christopher
Kempczinski		2019President and CEO
McDonald’s Corporation		             1
Richard Lenny2005Non-executive Chairman
Conagra Brands, Inc.		           2
John Mulligan2015EVP and COO
Target Corporation		          0
Sheila Penrose2006Former Non-executive
Chairman
Jones Lang LaSalle
Incorporated		          1
John Rogers, Jr.2003Founder, Chairman,
Co-CEO and CIO
Ariel Investments, LLC		           3
Paul Walsh2019Executive Chairman
McLaren Group Limited		           2
Miles White2009Former Executive Chairman
Abbott Laboratories		          1*

* In February 2022, Caterpillar Inc. announced that Mr. White had decided not to stand for re-election to its board of directors at its 2022 annual meeting of shareholders.

AFCAudit & Finance CommitteeSCRSustainability & Corporate Responsibility CommitteeMember
CCCompensation CommitteePPSPublic Policy & Strategy CommitteeCommittee Chair
GCGovernance CommitteeECExecutive CommitteeFinancial Expert
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Executive Compensation Highlights

Our executive compensation program supports the following long-standing guiding principles, each of which drive the design, implementation and risk profile of our compensation program:

  Pay-for-performance;

  Drive business results with a focus on creating long-term shareholder value; and

  Pay competitively.

Performance-Based Compensation Philosophy

Our executives’ compensation opportunity is predominantly performance-based, consisting of both annual and long-term incentive awards subject to objective performance thresholds, as reflected in the below graphic:

93%

93% of CEO’s target total direct compensation opportunity* is performance-based

83%

83% of other named executive officers’ target total direct compensation opportunity* as a group is performance-based

*The above charts represent our CEO and other NEOs’ target total direct compensation for 2021, using their salaries, target Short-Term Incentive Plan (“STIP”) payouts, and ASC 718 values for equity awards granted in 2021.

Our Compensation Practices

  What We Do  What We Do Not Do

  Strong pay-for-performance alignment

  Robust performance targets, and payouts under our incentive plans can vary significantly based on Company performance

  Performance metrics support our growth strategy and align interests of management with interests of shareholders

  STIP includes quantitative human capital metrics

  Majority of total direct compensation paid over the long term

  Significant stock ownership and retention requirements

  Clawback provisions in equity agreements and STIP

  Independent compensation consultant

  Double-trigger change in control equity provisions

  Annual compensation peer group review

  Annual Say-on-Pay vote

  Change in control agreements

  Tax gross-up on perquisites

  Repricing of stock options

  Backdating of stock options

  Encourage unreasonable risk taking

  Employment agreements

  Hedging or pledging

 43







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Compensation Program Summary for 2021

The following summarizes our key compensation elements and percentage of direct CEO pay opportunity for 2021:

Key compensation
elements and % of CEO
pay opportunity		Primary metricsKey terms
N/A   Based on competitive considerations, scope of responsibilities, individual performance, tenure in position, internal pay equity and the effect on our general and administrative expenses

  Operating income growth (42.5%)

  Systemwide sales growth (42.5%)

  Human capital metrics (15%) NEW

   Operating income growth requires our Company to balance increases in revenue with financial discipline to produce strong margins and a high level of cash flow

   Systemwide sales is an important metric in a franchise business as income generation is closely correlated to sales growth and is also a measure of the financial health of our franchisees

   Incorporated quantitative human capital metrics in 2021

   Payouts are limited to 200% of the target award

Performance-Based
Restricted Stock Units
(“PRSUs”)

  Earnings per share (EPS) growth (75%)

  Return on invested capital (ROIC) (25%)

  Relative total shareholder return (TSR)
(+/- 25 points)

   Provide the right to receive a share of our common stock at the end of a three-year service period, subject to our Company’s achievement of two key financial metrics, EPS and ROIC

   Also subject to a modifier based on relative TSR over the performance period compared to the S&P 500 Index

   Payouts are limited to 200% of the target award

   See page 71 for more information on PRSU metrics

Stock Options
  Share price increase

   Provide value only if our share price increases (with an exercise price equaling the stock price on the grant date), which closely aligns executive pay with shareholder interests

   Vest ratably 25% per year with a 10-year term

Commitment to Our Pay-for-Performance Philosophy

As a result of strong top and bottom-line financial results across the world, our NEOs nearly achieved the maximum payout factor with a Corporate STIP of 184.9% (inclusive of both financial and human capital metrics). However, the PRSUs that vested in early 2022 paid out below target (66.7%) due to the impact of the COVID-19 pandemic on our 2020 performance (despite strong performance in 2019 and 2021). These payouts demonstrate our Compensation Committee’s commitment to align payouts with Company performance over different time periods in order to drive long-term value creation for our shareholders.

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Voting Matters and Recommendations

We are asking shareholders to vote on the following matters at our 2022 Annual Shareholders’ Meeting:

Item to be Voted onOur Board’s Voting RecommendationPage
Management Proposals  Board committees
44Proposal 1 BoardElection of 12 Directors to serve until the 2023 Annual Meeting of Shareholders of the Company and committee meetings
45until such Directors’ successors shall have been elected and qualified  Board and committee evaluations“FOR ALL”
45 OF OUR BOARD’S DIRECTOR NOMINEES Risk oversight22
45Proposal 2 Code of Conduct for the Board of Directors
45Director compensation
47Stock ownership
47Stock ownership guidelines
47Security ownership of certain beneficial owners
48Security ownership of management
49Compliance with Section 16(a) of the Exchange Act
49Transactions with related persons, promotersand certain control persons
49Policies and procedures for related person transactions
50Related person transactions
50Communications
50Communications with the Board of Directors and non-management Directors
50Consideration of Director nominations for the 2013 Annual Shareholders’ Meeting
51Shareholder proposals for inclusion in next year’s Proxy Statement
51Other shareholder proposals for presentation at the 2013 Annual Shareholders’ Meeting
52Solicitation of proxies and voting
52Notice and access
52Record date
52Voting prior to the Annual Shareholders’ Meeting
52Voting at the Annual Shareholders’ Meeting
52Quorum
52Voting tabulation
53Registered shareholders
53Beneficial holders
53Proxy solicitation
53Confidential voting
54Additional information
54Executive officers
54McDonald’s Corporation Annual Report on Form 10-K, other reports and policies
54Householding of Annual Shareholders’ Meeting materials
55Information about registering for and attendingthe Annual Shareholders’ Meeting
55Ticket reservation and admission policy
56Exhibits
56Exhibit A
57Exhibit B

McDonald’s Corporation 2012        

Notice of the Annual Shareholders’ Meeting

To McDonald’s Corporation Shareholders:

McDonald’s Corporation will hold its 2012 Annual Shareholders’ Meeting on Thursday, May 24, 2012, at 9:00 a.m. Central Time in the Prairie Ballroom at The Lodge at McDonald’s Office Campus, Oak Brook, Illinois. The registration desk will open at 7:30 a.m. At the meeting, shareholders will be asked to:

1.Elect five Directors, each for a three-year term expiring in 2015;

2.Cast an advisoryAdvisory vote to approve executive compensation;compensation “FOR”60

3.Proposal 3Cast a vote to approve the 2012 Omnibus Stock Ownership Plan;

4.Cast a vote to approve the declassification of the Board of Directors;

5.Cast a vote to approve shareholders’ right to call special meetings;

6.Cast an advisoryAdvisory vote to approve the appointment of Ernst & Young LLP as our independent auditor for 2012;2022 “FOR”87

7.Shareholder Proposals[Cast an advisory
Proposals 4 – 10Advisory vote on oneseven shareholder proposal,proposals, each only if presented;] and

8.Transact other business properly presented at the meeting, including any adjournment or postponement thereof, by or at the direction of the Board of Directors. “AGAINST” ALL SHAREHOLDER PROPOSALS90

Your vote is extremely important. Our Board of Directorsunanimously recommends that you voteFOR the Board’s nominees for Director,FOR the approval “FOR ALL” of our executive compensation,FORBoard’s Director nominees on the approvalWHITE proxy card and in accordance with our Board’s recommendation on each other proposal properly presented at the meeting. Our Board does NOT endorse any of the Icahn Group’s nominees. Our Board urges you to disregard any materials, including any [•] proxy card, that may be sent to you by the Icahn Group.

Forward-Looking Statements and Website Links

This Proxy Statement contains forward-looking statements about future events and circumstances. Generally speaking, any statement not based upon historical fact is a forward-looking statement. Forward-looking statements can also be identified by the use of forward-looking or conditional words such as “could,” “should,” “can,” “continue,” “estimate,” “forecast,” “intend,” “look,” “may,” “will,” “expect,” “believe,” “anticipate,” “plan,” “remain,” “confident” and “commit” or similar expressions. In particular, statements regarding our plans, strategies, prospects and expectations regarding our business and industry are forward-looking statements. They reflect our expectations, are not guarantees of performance and speak only as of the date of this Proxy Statement. Except as required by law, we do not undertake to update such forward-looking statements. You should not rely unduly on forward-looking statements. Our business results are subject to a variety of risks, including those that are described in our 2021 Annual Report on Form 10-K and elsewhere in our filings with the Securities and Exchange Commission (the “SEC”). If any of these considerations or risks materialize or intensify, our expectations (or underlying assumptions) may change and our performance may be adversely affected.

Website links included in this Proxy Statement are for convenience only. Information contained on or accessible through such website links is not incorporated herein and does not constitute a part of this Proxy Statement.

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Background of the Solicitation

McDonald’s is committed to understanding and effectively managing environmental, social responsibility and governance (“ESG”) issues, including animal health and welfare considerations, through ongoing stakeholder engagement and robust governance structures. The Board of Directors, together with its long-standing Sustainability and Corporate Responsibility Committee (the “SCR Committee”), provides oversight of the Company’s business, operations, management and ESG commitments, which encompass McDonald’s animal health and welfare policies. McDonald’s continuously gathers internal and external insights to help evolve its ESG strategy, regularly reviews these issues and actively works towards relevant and aspirational ESG goals. The Company’s ESG tracking and reporting processes reflect input from stakeholders and are well-regarded by the investment community.

In February 2012, McDonald’s announced that it would require its U.S. pork suppliers to outline their plans to phase out the use of sow gestation stalls. Later, in May 2012, the Company communicated its goal of sourcing all pork for its U.S. business from U.S.-based producers that did not house pregnant sows in gestation stalls by the end of 2022. As an interim step, McDonald’s committed that by 2017, it would seek to source pork for its U.S. business only from U.S.-based producers who shared its commitment to phase out the use of gestation stalls for pregnant sows. These 2012 statements are collectively referred to as the “2012 Commitment.”

Confirmation of sow pregnancy typically occurs within four to six weeks after insemination and veterinary scientists believe that, within the context of commercial-scale agriculture, it is beneficial for the safety of the sows and viability of the embryos for inseminated sows to be isolated and kept out of group housing during this four-to-six-week period. In addition to these veterinary health considerations, sow safety and embryo viability are an important determinant of the commercial viability of sow breeding and farrowing operations and vital to ensuring affordability in pork production at the scale of U.S. consumer demand. Based on these considerations, after consulting with animal welfare advocates, agricultural experts and independent veterinary scientists, in 2012, McDonald’s began informing its U.S. pork processors and suppliers that if a sow was confirmed to be pregnant, then the producer would be required to remove that sow from a gestation stall and place it in group housing.

Between 2012 and 2017, McDonald’s continued to engage with its suppliers and other partners to implement the 2012 Commitment. During this period, as part of the Company’s engagement with stakeholders, the Company held a number of discussions with the Humane Society of the United States (“HSUS”) regarding a range of animal health and welfare issues, including the Company’s sow gestation stalls commitment.

By 2017, McDonald’s had fulfilled its interim commitment to cease sourcing pork for its U.S. business from producers who did not share the 2012 Commitment.

McDonald’s continued to make significant progress on its 2012 Commitment between 2017 and 2021, increasing its sourcing volumes from producers who did not use gestation stalls for confirmed pregnant sows.

In August 2021, McDonald’s publicly disclosed that, because of disruptions caused by the COVID-19 pandemic and the African Swine Fever outbreak, the Company had encountered delays toward achieving its conversion rates with respect to its 2012 Commitment. In January 2022, McDonald’s announced that as a result of these disruptions, it was necessary to extend the timeline to meet the 2012 Commitment from the end of 2022 to the end of 2024.

On October 6, 2021, Matthew Prescott, Senior Director of Food & Agriculture at HSUS, informed McDonald’s that HSUS intended to submit a shareholder proposal for inclusion in McDonald’s Proxy Statement for the Company’s upcoming 2022 Annual Shareholders’ Meeting (the “HSUS Proposal”).

Following Mr. Prescott’s email, between October 2021 and March 2022, members of McDonald’s management team communicated through numerous emails, telephone calls and virtual meetings with representatives of HSUS. The discussions focused on the ongoing implementation of the 2012 Omnibus Stock Ownership Plan,Commitment and additional matters raised by HSUS.

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Background of the declassificationSolicitation

On November 9, 2021, HSUS submitted to Desiree Ralls-Morrison, Executive Vice President, General Counsel and Corporate Secretary of McDonald’s, the HSUS Proposal, which is included as Proposal 7 in this Proxy Statement. The resolution included in the HSUS Proposal requests that, among other things, the Company confirm that the confinement of gestating pigs in individual stalls would be eliminated from its U.S. pork supply chain by 2022.

Between November 12, 2021 and January 6, 2022, Jeffrey Pochowicz, McDonald’s Senior Director of Corporate Governance and Assistant Secretary, Jennifer McColloch, McDonald’s Vice President and Chief Sustainability Officer, and other subject matter experts at the Company, twice met virtually with Mr. Prescott regarding the subject matter of the HSUS Proposal. The Company conveyed to Mr. Prescott the progress it has made toward fulfilling its 2021 Commitment, and the circumstances that led to the extension of the timeline to 2024.

On January 12, 2022, Carl C. Icahn called Mr. Pochowicz and indicated that he had been collaborating with HSUS on the HSUS Proposal, and that he planned to nominate two directors for election to the McDonald’s Board of Directors at the Company’s upcoming 2022 Annual Shareholders’ Meeting in connection therewith. On January 13, 2022, Christopher Kempczinski, President and Chief Executive Officer of McDonald’s and a member of the Board of Directors,FOR had a telephone call with Messrs. Icahn and Prescott and Josh Balk, Vice President of Farm Animal Protection at HSUS. The participants discussed the approvalmatters raised in the HSUS Proposal and Mr. Icahn’s statement regarding director nominations. A further conversation took place on January 18, 2022 between Mr. Kempczinski and Mr. Icahn with respect to a letter from HSUS about the use of shareholders’ rightgestation stalls in its supply chain.

On January 19, 2022, Icahn Partners LP (“Icahn Partners”) sent a letter to call special meetings,FORMs. Ralls-Morrison, in her capacity as McDonald’s Corporate Secretary, requesting McDonald’s form of director questionnaire and representation agreement required to be completed by an individual to be eligible as a nominee for election to the approvalMcDonald’s Board of Directors. These documents were provided to Icahn Partners on January 21, 2022.

On January 24, 2022, Enrique Hernandez, Jr., Chairman of the independent auditorBoard of Directors, andAGAINST Mr. Kempczinski, had a virtual meeting with Mr. Icahn to discuss the shareholder proposal.matters raised by Mr. Icahn and HSUS, where Mr. Icahn asked about oversight of the 2012 Commitment.

On January 26, 2022, in response to Mr. Icahn’s request, McDonald’s delivered a letter from Mr. Kempczinski to Mr. Icahn. In this letter, Mr. Kempczinski explained that McDonald’s had a robust process to ensure that U.S. pork suppliers could demonstrate compliance with the 2012 Commitment, including requiring all suppliers to be able to trace pork raw materials back to the farm of origin and to report on their compliance with each shipment of raw materials. Mr. Kempczinski further explained that the Company’s tracking, reporting and governance process around the 2012 Commitment followed the same quality, accountability and transparency standards that governed all of McDonald’s ESG information and goals, including commonly accepted sustainability reporting frameworks to guide its reporting. Additionally, Mr. Kempczinski communicated to Mr. Icahn that McDonald’s also issued an annual Purpose and Impact Report to disclose ESG information and progress against the Company’s public goals. Finally, the letter emphasized that the McDonald’s Board of Directors, together with the SCR Committee, exercised rigorous oversight over the Company’s ESG disclosures and progress.

On February 1, 2022, McDonald’s held a conversation with HSUS that included Francesca DeBiase, Executive Vice President and Chief Global Supply Chain Officer, Katie Beirne Fallon, Executive Vice President and Chief Global Impact Officer, and Claire DiMattina, Senior Director, Public Policy. During this meeting, HSUS stated that its objective was for McDonald’s to completely eliminate the use of all gestation stalls in its worldwide pork supply chain. Representatives from McDonald’s responded that HSUS demands departed from the 2012 Commitment.

In a letter from Mr. Icahn addressed to Mr. Kempczinski, on February 3, 2022, Mr. Icahn requested that McDonald’s: expand its commitment to adopt procurement standards consistent with the California legislation known as “Proposition 12”; expand its current disclosure to the Sustainability Accounting Standards Board; and add two individuals designated by him to the McDonald’s Board of Directors for “compliance verification” purposes.

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Background of the Solicitation

Your vote is important. Please considerBetween February 4 and February 11, 2022, representatives of McDonald’s continued to discuss with HSUS the issues presentedchallenges with respect to the feasibility of completely eliminating the use of all gestation stalls in its supply chain while meeting customer demands. Such representatives also engaged with numerous pork producers, including those identified by HSUS, with respect to supplier availability.

On February 11, 2022, Scott Barshay of Paul, Weiss, Rifkind, Wharton & Garrison LLP, McDonald’s outside counsel, had a telephonic conference with Jesse Lynn, the General Counsel of Icahn Enterprises L.P. During the call, Messrs. Barshay and Lynn discussed the different views held by McDonald’s and Mr. Icahn.

On February 14, 2022, Mr. Barshay had a telephonic conference with Messrs. Icahn and Lynn. During this meeting, Mr. Icahn reiterated his views regarding the 2012 Commitment and the matters raised by HSUS, and Mr. Barshay explained McDonald’s position on these matters.

On February 16, 2022, Mr. Icahn discussed his views on McDonald’s acquisition of gestation stall-free pork in an interview on the Bloomberg Television network in which he stated “[w]e are probably 90% there from putting up a slate. You know, we’re not going to fool around with them anymore.”

On February 19, 2022, Barberry Corp., an investment firm controlled by Mr. Icahn, delivered, on behalf of itself and Mr. Icahn, a Notice of Nomination of Directors at the 2022 Annual Shareholders’ Meeting to Ms. Ralls-Morrison, nominating Maisie Ganzler and Leslie Samuelrich to stand for election of McDonald’s Board of Directors at the Company’s upcoming 2022 Annual Shareholders’ Meeting. The Company issued a press release with respect to the nomination on the following day.

On March 11, 2022, a representative of McDonald’s emailed Mr. Prescott to inform him that McDonald’s planned to include the HSUS Proposal in the Proxy Statement and also provided HSUS with a copy of the “Statement in Opposition” which follows Proposal 7 in this Proxy Statement.

On March 21, 2022, members of the Governance Committee of the McDonald’s Board of Directors (the “Governance Committee”) conducted virtual interviews with each of Mmes. Ganzler and Samuelrich.

On March 23, 2022, the Governance Committee held a regularly scheduled meeting to consider and discuss the credentials, qualifications, skill sets and past experience of director candidates. As part of this work, the Governance Committee reviewed the backgrounds and qualifications of the two candidates that had been nominated by Mr. Icahn. Following extensive discussion, the Governance Committee determined, based upon certain of its members’ interviews with Mmes. Ganzler and Samuelrich, and its review of biographical and other information with respect to the nominees provided in questionnaires and obtained through public records, that neither of Mmes. Ganzler and Samuelrich possessed the experience, expertise or qualifications that would allow them to add meaningful value with respect to the large majority of issues regularly faced by the McDonald’s Board of Directors. In particular, neither Ms. Ganzler nor Ms. Samuelrich has the knowledge or context that a candidate who has led a large corporation or had other “C-suite” experience or served on a public company board would have. Additionally, neither candidate has multinational or international experience or context or has significant experience or expertise on financial or complex supply chain issues. As such, the Governance Committee declined to recommend either of Mmes. Ganzler or Samuelrich be included in the Board of Director’s slate of director nominees for the Company’s 2022 Annual Shareholders’ Meeting.

On March 24, 2022, the McDonald’s Board of Directors held a regularly scheduled meeting at which the Governance Committee reported on its review of, and recommendations with respect to, each of Mmes. Ganzler and Samuelrich. Following extensive discussion, the Board determined to accept the recommendation of the Governance Committee that neither of the Icahn nominees be included in the Board of Director’s slate of director nominees for the Company’s 2022 Annual Shareholders’ Meeting.

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Background of the Solicitation

Also on March 24, 2022, following the completion of the meeting of the McDonald’s Board of Directors, Mr. Barshay contacted Mr. Lynn to inform him that the McDonald’s Board of Directors had determined not to include either of Ms. Ganzler or Ms. Samuelrich as part of its slate of director nominees for the Company’s 2022 Annual Shareholders’ Meeting.

On March 28, 2022, McDonald’s filed its preliminary Proxy Statement with the SEC.

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Election of Directors
Our Board unanimously recommends ALL of our Board’s Director nominees for election to our Board for a one-year term beginning in May 2022 and continuing until our 2023 Annual Shareholders’ Meeting and until their successors have been elected and qualified:
  Lloyd Dean  Margaret Georgiadis  Richard Lenny  John Rogers, Jr.
  Robert Eckert  Enrique Hernandez, Jr.  John Mulligan  Paul Walsh
  Catherine Engelbert  Christopher Kempczinski  Sheila Penrose  Miles White
 Our Board unanimously recommends a vote “FOR ALL” of our Board’s 12 Director nominees.

Contested Election

We encourage you to vote by proxy using your sharesWHITE proxy card or WHITE voting instruction form as promptly as possible.

Ifpossible, even if you plan to attend our 2022 Annual Shareholders’ Meeting. Our Board unanimously recommends that you vote “FOR ALL” of our Board’s Director nominees on the WHITE proxy card or WHITE voting instruction form.

Our Board does NOT endorse any of the Icahn Group’s nominees and strongly recommends that you disregard any materials, including any [●] proxy card, that may be sent to you by the Icahn Group. Importantly, voting on a [●] proxy card to “withhold” with respect to any of the Icahn Group’s nominees is NOT the same as voting FOR our Board’s Director nominees. This is because a vote on a [●] proxy card to “withhold” with respect to any of the Icahn Group’s nominees will revoke any WHITE proxy card or WHITE voting instruction form you may have previously submitted. To support our Board’s Director nominees, you should vote FOR ALL of our Board’s Director nominees on your WHITE proxy card or WHITE voting instruction form.

If you have already voted using a [●] proxy card, you can revoke that proxy any time before it is exercised at the meeting by (i) following the instructions on your WHITE proxy card or WHITE voting instruction form to vote by internet or telephone, (ii) marking, dating, signing and returning your WHITE proxy card or WHITE voting instruction form in person, please be awarethe postage-paid envelope provided or (iii) voting at the meeting. Only your latest dated, validly executed proxy counts.

Election Mechanics

The Icahn Group has notified us that you must pre-register with McDonald’s Shareholder Servicesit intends to nominate two candidates for election to our Board at our 2022 Annual Shareholders’ Meeting, and such nominations were not withdrawn on or prior to the meeting. See page [     ] for information about how to pre-register.

As an alternative to attending10th day before the date we first mailed the notice of the meeting in person, you may listen to our shareholders. As a live webcast by going towww.investor.mcdonalds.com and selecting the “Webcasts and Podcasts” icon and clicking on the appropriate link. The Annual Shareholders’ Meeting webcastresult, Director nominees will be availableelected by a plurality of votes cast, and the 12 Director nominees who receive the greatest number of votes will be elected to our Board for the following year. Any shares not voted “FOR” a limited time afterparticular Director nominee, whether as a result of a withhold vote or a broker non-vote (if applicable), will not be counted in that Director nominee’s favor and will not otherwise affect the meeting.

Thank you.

By orderoutcome of the Boardelection (except to the extent they reduce the number of Directors,

LOGO

Gloria Santona

Corporate Secretaryshares voted “FOR” such Director nominee).

Oak Brook, Illinois

April 13, 2012

McDonald’s Corporation 2012        1

ElectionAll of Directors

PROPOSAL NO. 1.

ELECTION OF DIRECTORS

Theour Director nominees have given their consent to be named as nominees for election and have indicated their intention to serve if they are elected. Our Board does not anticipate that any of our Director are: Robert A. Eckert, Enrique Hernandez, Jr., Jeanne P. Jackson, Andrew J. McKenna and Donald Thompson.

The Board is currently divided into three classes, each having three-year terms that expire in successive years. The five nominees are standing for election as Directors to hold office for three-year terms expiring in 2015.

Information about the voting standard for this proposal appears on page [ ]. Each of the incumbent Directors who is nominated for re-election tendered an irrevocable resignation for the 2012 Annual Shareholders’ Meeting that will be effective if (i) the nominee is not re-elected; and (ii) the Board accepts the resignation following the meeting. The Governance Committee will determine whether to recommend that the Board accept the resignation.

The Board of Directors expects all five nominees to be available for election. If any of them should become unavailableunable to serve as a Director. If for some reason any of our Board’s Director nominees are unable to serve, or for any reason prior togood cause will not serve if elected, the Annual Shareholders’ Meeting,persons named as proxies may vote for a substitute nominee recommended by our Board and, unless you indicate otherwise on the Board may substitute another person as a nominee. In that case,WHITE proxy card, your shares will be voted forin favor of our Board’s remaining nominees. In the alternative, our Board may reduce the size of our Board, as permitted by our By-Laws. If any substitute nominees are designated prior to the meeting, we will file an amended proxy statement that, as applicable, identifies such nominees, discloses that such nominees have consented to being named in the amended proxy statement and to serve if elected, and sets forth certain biographical and other person.information about such nominees as required by SEC rules.

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The BoardElection of Directors recommends that shareholders vote FOR all five nominees.

DIRECTOR QUALIFICATIONS AND BIOGRAPHICAL INFORMATIONDirector Qualifications

Our Board is comprised of Directors consistsa diverse, highly engaged group of 14 Directors, 12individuals that provides strong, effective oversight of whom are independent. Ourour Company. Both individually and collectively, our Directors have the qualifications, skills and experience that are relevant to and contribute to our Board’s oversight of our Company’s global operations and long-term priorities, including our Accelerating the Arches growth strategy.

Importantly, each Director has senior executive experience, including having served as CEOs or high-level executives of large, complex, global organizations. Specifically, several Directors have leadership experience in the consumer products or food sectors, which is particularly relevant to our business as a leading global food service retailer. Our Board values expertise in our industry, information technology/cybersecurity, human capital management, DEI and sustainability matters, which continue to be important to Accelerating the leading branded global quick service restaurant retailer. Each Director has senior executiveArches and focus areas for investors and other stakeholders. This experience, in large organizations, many of which have significant global operations, and has held directorships atalong with the other U.S. public companies and at not-for-profit organizations. In these positions, our Directors have demonstrated leadership, intellectual and analytical skills and gained deep experienceattributes discussed below and described more fully in management and corporate governance.

For information about our Director selection process, please see page [    ].

Biographical information forSelection Process guidelines, is a key consideration in evaluating the composition of our Directors is set forth below, including the qualifications, skills and experiences considered by the Governance Committee when recommending them for election.Board.

Our Director nominees’ individual skills and experiences are set forth on the following pages. In addition, all of our Director nominees demonstrate the following qualities:

 

 Key Attributes and Skills of All Director Nominees

  High integrity and business ethics

LOGO  Strength of character and judgment

  Ability to devote significant time to Board duties

  Desire and ability to continually build expertise in emerging areas of strategic focus for our Company

  Demonstrated focus on promoting equality

  Business and professional achievements

      

Susan E. Arnold, 58  Ability to represent the interests of all shareholders

Director since 2008

Class 2014  Knowledge of corporate governance matters

Other current directorships: The Walt Disney Company  Understanding of the advisory and proactive oversight responsibility of our Board

Career highlights

  Comprehension of their role as a public company director and the fiduciary duties owed to shareholders

  Intellectual and analytical skills

—The Procter & Gamble Company, a manufacturer and marketer of consumer goods
 >
2022 Proxy StatementSpecial assignment23

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Election of Directors

In addition, our Director nominees contribute to our Board the individual experiences, qualifications and skills, as shown in the following matrix. The skills identified in the matrix are intended as a high-level summary and not an exhaustive list. The matrix is intended to depict notable areas of focus for each Director nominee, and not having a mark does not mean that a particular Director nominee does not possess that experience, qualification or skill. Director nominees have acquired these experiences, qualifications and skills through education, direct experience and oversight responsibilities. For information on our Board diversity, see page 38.

 BRAND MANAGEMENT: Contributes to an understanding of how our business, standards and performance are essential to protecting and increasing the value of the McDonald’s brand
 CUSTOMER-CENTRIC: Provides an understanding of our business, operations and customer-centric Accelerating the Arches growth strategy, focusing on our purpose, values and growth pillars
 DIGITAL: Provides an understanding of how the 3 D’s (digital, delivery and drive-thru) leverage competitive strengths
 FINANCE/CAPITAL MARKETS: Supports the oversight of our financial statements and strategy and financial reporting to Chief Executive Officer (2009)investors and other stakeholders
 GLOBAL EXPERIENCE: Contributes to an understanding of how our business is structured to enable the right level of support for our international markets, as well as the sharing of solutions across international markets
 HUMAN CAPITAL MANAGEMENT: Provides an understanding of how we manage and develop our workforce, and how we focus on promoting equality throughout the organization
 INFORMATION TECHNOLOGY/CYBERSECURITY: Contributes to an understanding of information technology capabilities, cloud computing, scalable data analytics and risks associated with cybersecurity matters
 MARKETING: Provides awareness of culturally relevant approaches that effectively communicate the story of our brand, food and purpose
 OTHER PUBLIC COMPANY BOARD: Demonstrates a practical understanding of organizations, processes, governance and oversight of strategy, risk management and growth
 REAL ESTATE: Provides an understanding of how owning or leasing real estate, combined with co-investment by franchisees, enables us to achieve high restaurant performance levels
 SUSTAINABILITY/CORPORATE RESPONSIBILITY: Contributes to an understanding of sustainability issues and corporate responsibility, and their relationship to our business and strategy
       >President–Global Business Units (2007 – 2009)
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Further biographical information about each Director nominee, including his or her professional experience, Committee memberships, qualifications and other directorships is set forth on the following pages.

Biographical Information

Lloyd Dean | 71   INDEPENDENT
Chief Executive OfficerDirector SinceBoard Committees
CommonSpirit Health2015Audit & Finance, Compensation

Professional Experience:
CommonSpirit Health, a non-profit, Catholic health system

   Chief Executive Officer (2019 – Present)

Dignity Health, one of the nation’s largest healthcare systems

   President and Chief Executive Officer (2000 – 2019)

Advocate Health Care, a healthcare organization

   Chief Operating Officer (1997 – 2000)

Director Qualifications:

Mr. Dean brings to our Board over 25 years of leadership, management and strategy experience, which contributes an important perspective to our Board’s discussions of opportunities and challenges in a constantly changing business environment. In his career in executive management at leading healthcare organizations, Mr. Dean has led significant strategic, operational and financial transformations. Mr. Dean’s healthcare experience and knowledge of health and safety risks has enhanced his ability to oversee human capital management, particularly in light of the COVID-19 pandemic. Our Board also benefits from Mr. Dean’s finance, systems operations, service quality, human resources, customer-centric operations, community affairs, healthcare and regulatory experience. In addition, Mr. Dean’s qualification as an “audit committee financial expert” is an important attribute as a member of our Audit & Finance Committee.

Other Directorships:

Mr. Dean also serves on the board of Golden Arrow Merger Corp. Mr. Dean previously served on the board of Wells Fargo & Company.

Skills and Qualifications

Brand
Management
Human Capital
Management

Customer-
Centric
Other Public
Company Board

Finance/Capital
Markets
Sustainability/
Corporate
Responsibility


 >
2022 Proxy StatementVice Chair, P&G Beauty and Health (2006 – 2007)25

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Robert Eckert | 67   INDEPENDENT
Operating PartnerDirector SinceBoard Committees
FFL Partners, LLC2003Public Policy & Strategy (Chair since 2016), Governance, Executive
 >Vice Chair, P&G Beauty (2004 – 2006)

Experience and qualifications: Ms. Arnold was a senior executive responsible for major consumer brands in a large, global brand management company. She has knowledge of product development, strategy and business development, finance, marketing and consumer insights and sustainability.

2        McDonald’s Corporation 2012

LOGOProfessional Experience:

FFL Partners, LLC, a private equity firm

Robert A. Eckert,57   Operating Partner (2014 – Present)

Director since 2003Mattel, Inc., a leading global toy company and entertainment franchise

Class 2012(Nominee)   Chairman Emeritus (2013 – Present)

Other current directorships:  Mattel, Inc. and Levi Strauss & Co.

Career highlights

—Mattel, Inc., a designer, manufacturer and marketer of toy products
>Chairman of the Board (2000 – Present)
>2012)

Chief Executive Officer (2000 – 2011)

Kraft Foods Inc., a packaged food company

   President and Chief Executive Officer (1997 – 2000)

Director Qualifications:

Mr. Eckert brings to our Board an extensive understanding of business and product development, marketing, supply chain management and distribution, and consumer behavior gained from his experience as chief executive officer of large, global consumer brands and food companies with high performance expectations. In addition, through his role on other companies’ boards, Mr. Eckert has extensive experience in corporate governance, leadership development and succession planning, and finance.

Other Directorships:

Mr. Eckert also serves as the lead independent director of Amgen Inc., as chairman of the board of Levi Strauss & Co. and as a director of Uber Technologies, Inc.

Skills and Qualifications

Brand
Management


Customer-
Centric


Digital


Finance/Capital
Markets


Global
Experience
Human Capital
Management


Marketing


Other Public
Company Board


Sustainability/
Corporate
Responsibility

Experience and qualifications:  Having served as chief executive officer

26McDonald’s
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Table of large, global branded companies (consumer branded and food products), Mr. Eckert has knowledgeContents

Election of product development, marketing and consumer insights, corporate governance, leadership development and succession planning, finance, risk assessment, supply chain management and distribution, and strategy and business development.Directors

Catherine Engelbert | 57   INDEPENDENT
CommissionerDirector SinceBoard Committee
Women’s National Basketball Association2019Audit & Finance, Public Policy & Strategy

Professional Experience:

LOGOWomen’s National Basketball Association (WNBA), a professional basketball league

   Commissioner (2019 – Present)

Deloitte LLP, an industry-leading audit, consulting, tax and advisory services firm

   Chief Executive Officer (2015 – 2019)

Deloitte & Touche LLP, audit subsidiary of Deloitte LLP

   Chairman and Chief Executive Officer (2014 – 2015)

   Partner (1998 – 2019)

Director Qualifications:

Ms. Engelbert brings to our Board a wealth of experience in global business operations, finance, leadership, brand, customer strategy, financial reporting and internal controls, and risk management matters having served as Commissioner of a professional sports league and as former chief executive officer of Deloitte LLP. Having led a firm of 100,000 professionals at Deloitte, she also provides our Board valuable insights on talent management and other human capital management matters. Ms. Engelbert also has strong leadership and governance experience from her previous roles on the private company board of Deloitte LLP and as chairman and chief executive officer of Deloitte & Touche LLP, and valuable regulatory experience from her roles on the Strategic Investment, Risk, Regulatory & Government Relations, and Finance & Audit Committees of the board of Deloitte LLP. As a certified public accountant, Ms. Engelbert further brings to our Board a deep understanding of accounting principles and financial reporting rules and regulations and her qualification as an “audit committee financial expert” is an important attribute as a member of our Audit & Finance Committee.

Other Directorships:

Ms. Engelbert also serves on the board of Royalty Pharma plc.

Skills and Qualifications

Brand
Management
Global
Experience

Customer-
Centric
Human Capital
Management

Digital
Marketing

Finance/Capital
Markets
Other Public
Company Board


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Election of Directors

Margaret Georgiadis | 58   INDEPENDENT 

Endurance Partner-in-Residence,Director SinceBoard Committees
XIR
General Catalyst		2015Audit & Finance, Sustainability & Corporate Responsibility

Professional Experience:

General Catalyst, a venture capital firm

   Endurance Partner-in-Residence, XIR (2021 – Present)

Synetro Group, a private investment and strategic advisory firm

   Managing Partner (2021 – Present)

Ancestry, a global family history and consumer genomics company

   President and Chief Executive Officer (2018 – 2020)

Mattel, Inc., a leading global toy company and entertainment franchise

   Chief Executive Officer (2017 – 2018)

Google Inc., a global technology company

   President, Americas (2011 – 2017)

   Vice President, Global Sales Operations (2009 – 2011)

Director Qualifications:

Ms. Georgiadis brings to our Board valuable strategy and development, finance, and leadership experience gained from her senior executive roles, including at Ancestry, Mattel and Google, and her positions at a private investment and strategic advisory firm. Her prior experience as a senior executive at large global businesses affords her a broad knowledge of global consumer businesses and marketing, as well as technology and cybersecurity, digital consumer insights, e-commerce, finance, leadership, and strategy and development. Her knowledge in these and other areas provides critical insights to our business, particularly as our Board considers the impact of technology, digital and cybersecurity risks. Ms. Georgiadis also has over 15 years of analytical and strategic experience at McKinsey & Company, a global management and consulting firm. In addition, Ms. Georgiadis’ qualification as an “audit committee financial expert” is an important attribute as a member of our Audit & Finance Committee.

Other Directorships:

Ms. Georgiadis also serves on the board of AppLovin Corporation. Ms. Georgiadis previously served on the board of Mattel, Inc.

Skills and Qualifications

Brand
Management


Customer-
Centric


Digital


Finance/Capital
Markets


Global
Experience
Human Capital
Management


Information
Technology/
Cybersecurity


Marketing


Other Public
Company Board


Sustainability/
Corporate
Responsibility


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Election of Directors

Enrique Hernandez, Jr. | 66   INDEPENDENT CHAIRMAN(SINCE2016)
Executive ChairmanDirector SinceBoard Committees
Inter-Con Security Systems, Inc.1996Governance, Public Policy & Strategy, Executive

Professional Experience:

Inter-Con Security Systems, Inc.,a provider of security services to corporations, governments, diplomatic missions and non-profit organizations

   Executive Chairman (2021 – Present)

   Chairman and Chief Executive Officer (1986 – 2021)

Nordstrom, Inc.56, a leading fashion retailer

   Non-Executive Chairman and Presiding Director (2006 – 2016)

Director since 1996Qualifications:

Class 2012(Nominee)Mr. Hernandez is executive chairman and former chairman and chief executive officer of Inter-Con Security Systems, Inc., a privately owned global security company, providing knowledge of physical and electronic security. He also has been a director of several large public companies in various industries. In particular, Mr. Hernandez served for five years as lead director and ten years as non-executive chairman and presiding director at Nordstrom, Inc., a large publicly traded fashion retailer known for its customer service and brand management, providing him with significant experience in corporate governance, leadership development, succession planning and finance. Through his extensive experience managing complex, people-oriented organizations, Mr. Hernandez is well-suited to oversee the important human capital management element of our business. Mr. Hernandez’s experience also facilitates our Board’s oversight and counsel regarding strategy and business development, as well as legal and regulatory matters.

Other current directorships:Directorships:

Mr. Hernandez also serves on the board of Chevron Corporation,Corporation. Mr. Hernandez previously served on the boards of Nordstrom, Inc. and Wells Fargo & Company

Former directorships (within past five years): Tribune CompanyCompany.

Career highlights

—Skills and Qualifications
Inter-Con Security Systems, Inc., a provider of high-end security and facility support services to government, utilities and industrial customers

Brand
Management
Global
Experience

Customer-
Centric
Human Capital
Management

Digital


Finance/Capital
Markets
Information
Technology/
Cybersecurity


Other Public
Company Board


 >
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Election of Directors

Christopher Kempczinski | 53
President and Chief
Executive Officer		Director Since
2019		Board Committees
Executive (Chair since 2019)
McDonald’s Corporation

Professional Experience:
McDonald’s Corporation

President and Chief Executive Officer (1986–Present)

—Nordstrom, Inc.
>Non-executive Chairman (2006(2019 – Present)

Experience and qualifications:  Mr. Hernandez is the chief executive officer of a global security company and has been a director of several large public companies in various industries. He has knowledge of strategy and business development, corporate governance, finance, risk assessment, and leadership development and succession planning.

LOGO

   President, McDonald’s USA (2017 – 2019)

   Executive Vice President – Strategy, Business Development and Innovation (2015 – 2016)

Jeanne P. Jackson,The Kraft-Heinz Company, 60a packaged food company

   Executive Vice President of Growth Initiatives and President of Kraft International (2014 – 2015)

   President of Kraft Canada (2012 – 2014)

   Senior Vice President – U.S. Grocery (2008 – 2012)

Director since 1999Qualifications:

Class 2012Mr. Kempczinski is President and CEO of our Company, having previously served as President of McDonald’s USA, where he was responsible for approximately 14,000 McDonald’s restaurants. He first joined our Company in 2015, overseeing global strategy, business development and innovation. In these roles, he has been instrumental in identifying new ideas and best practices to accelerate growth to increase the overall value of the McDonald’s System. His experience leading our U.S. business and overseeing global strategy contributes an important Company perspective to our Board, and he was the architect of (Nominee)Accelerating the Arches. This experience and deep knowledge of the food industry strengthen our Board’s knowledge and understanding as it oversees our operations and strategy.

Other current directorships:  Motorola Mobility Holdings, Inc.Directorships:

Former directorships (within past five years): Harrah’s Entertainment, Inc., NIKE, Inc., Nordstrom, Inc. and Williams Sonoma, Inc.Mr. Kempczinski also serves on the board of The Procter & Gamble Company.

 
Skills and Qualifications
 

Brand
Management
Human Capital
Management
 
 

Career highlights

—
Customer-
Centric


Digital


Finance/Capital
Markets


Global
Experience		NIKE, Inc., a designer, marketer and distributor of athletic footwear, equipment and accessories
Marketing


Other Public
Company Board


Real Estate


Sustainability/
Corporate
Responsibility
>President, Direct to Consumer (2009 – Present)

—MSP Capital, a private investment company
>Chief Executive Officer (2002 – 2009)

Experience and qualifications:  Ms. Jackson is a senior executive for a major consumer retailer and has experience as a senior executive in global brand management with several other major consumer retailers. She also has been a director of several large, public companies, primarily involved in consumer goods and services. She has knowledge of product development, strategy and business development, leadership development and succession planning, finance, and marketing and consumer insights.

McDonald’s Corporation 2012        3

LOGO


 

30Richard H. Lenny,McDonald’s60
Corporation

Director since 2005

Class 2014

Other current directorships:  ConAgra Foods, Inc. and Discover Financial Services

Former directorships (within past five years): The Hershey Company

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Election of Directors

Career highlights

Richard Lenny | 70—   INDEPENDENTFriedman, Fleischer
Non-Executive ChairmanDirector SinceBoard Committees
Conagra Brands, Inc.2005Compensation (Chair since 2019), Sustainability & Lowe,Corporate Responsibility

Professional Experience:

Conagra Brands, Inc., a leading branded food company

   Non-Executive Chairman (2018 – Present)

Information Resources, Inc., a market research firm

   Non-Executive Chairman (2013 – 2018)

FFL Partners, LLC,a private equity firm

>

   Senior Advisor (2014 – 2016)

Operating partnerPartner (2011 – Present)

2014)

—

The Hershey Company, a manufacturer, distributor and marketer of candy,an industry-leading snacks and candy-related grocery products

>company

Chairman, President and Chief Executive Officer (2002–(2001 – 2007)

Experience and qualifications:  Mr. Lenny has experience as a chief executive officer for a global retail food company that is a major consumer brand. He has knowledge of strategy and business development, finance, marketing and consumer insights, supply chain management and distribution, risk assessment and sustainability.

LOGO

Walter E. Massey, 74

Director since 1998Qualifications:

Class 2013Mr. Lenny brings to our Board extensive knowledge of strategy and business development, finance, marketing and consumer insights, supply chain management and distribution, sustainability and social responsibility matters gained from his experience as a chief executive officer of a global retail food company with a major consumer brand. He previously served in executive-level positions at Kraft Foods, Nabisco Biscuit and Snacks and the Pillsbury Company, providing him extensive experience with major consumer brands in the food industry. His current and former board leadership positions in several notable large public companies, including in one of North America’s leading food companies, give him a broad understanding of governance issues facing public companies and strong leadership insights.

Former directorships (within past five years):  BankOther Directorships:

Mr. Lenny also serves as non-executive chairman of America Corporation, BP p.l.c.Conagra Brands, Inc. and Delta Airlines,as the lead independent director of Illinois Tool Works Inc. Mr. Lenny previously served on the board of Discover Financial Services.

Career highlights

—Skills and Qualifications
School of the Art Institute of Chicago

Brand
Management
Human Capital
Management

Customer-
Centric


Digital


Finance/Capital
Markets


Global
Experience
Marketing


Other Public
Company Board


Sustainability/
Corporate
Responsibility


 >
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John Mulligan | 56   INDEPENDENT
Executive Vice President and Chief Operating Officer
Target Corporation		Director Since
2015		Board Committees
Audit & Finance (Chair since 2016), Public Policy & Strategy, Executive

Professional Experience:

Target Corporation, a general merchandise retailer

   Executive Vice President and Chief Operating Officer (2015 – Present)

   Executive Vice President and Chief Financial Officer (2012 – 2015)

   Senior Vice President, Treasury, Accounting and Operations (2010 – Present)2012)

Director Qualifications:

Mr. Mulligan brings to our Board extensive experience in finance, global supply chain, operations, e-commerce, real estate and human resources gained from his service in senior executive roles at a leading general merchandise retailer. His service at a retailer known for its focus on creating an exceptional guest experience brings customer-centric experience to our Board. In addition, his experience in digital and technology issues, including cybersecurity risks, is an important asset as our Board considers these topics and their potential impact on our Company. In addition, Mr. Mulligan’s qualification as an “audit committee financial expert” is an important attribute as our Audit & Finance Committee Chair.

Other Directorships:

None.

—Skills and Qualifications
Morehouse College

Brand
Management
Human Capital
Management

Customer-
Centric


Digital


Finance/Capital
Markets


Global
Experience
Information
Technology/
Cybersecurity


Marketing


Real Estate


       >President Emeritus
>President (1995 – 2007)

Experience and qualifications:  Dr. Massey has experience in chief executive roles of several large academic organizations and as a director of multiple large, global public companies in various industries. He has knowledge of strategy, policy and government relations matters, sustainability, leadership development and succession planning, risk assessment, finance, and shareholder relations.

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Election of Directors

Sheila Penrose | 76   INDEPENDENT 

Andrew J. McKenna, 82

Director since 1991

Former Non-Executive Chairman      Since 2004

Class 2012 (Nominee)

Other current directorships:  Aon Corporation and Skyline Corporation

Career highlights

—Schwarz Supply Source, a printer, converter, producer and distributor of packaging and promotional material
Director Since>Chairman (1992 – Present)

Experience and qualifications:  Mr. McKenna has experience as the chief executive officer of a large global provider of paper-based goods. He has knowledge of strategy and business development, corporate governance, risk assessment, and leadership development and succession planning, shareholder relations and finance. He also has experience as a director of multiple large public companies, charities and civic organizations.Board Committees

4        McDonald’s Corporation 2012

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Cary D. McMillan, 54

Director since 2003

Class 2014

Other current directorships:  American Eagle Outfitters, Inc.

Former directorships (within past five years): Hewitt Associates, Inc.

Career highlights

—True Partners Consulting LLC, a professional services firm providing tax and other financial services
>Chief Executive Officer (2005 – Present)

—Sara Lee Branded Apparel, a branded apparel company
>Chief Executive Officer (2001 – 2004)

—Sara Lee Corporation, a branded packaged goods company
>Executive Vice President (2000 – 2004)

Experience and qualifications:  In addition to serving as chief executive officer of a professional services firm, Mr. McMillan has experience as a senior executive of a large, globally branded consumer and food products company. He is also a certified public accountant. He has knowledge of strategy and business development, finance and accounting, risk assessment, product development, leadership development and succession planning, and supply chain management and distribution.

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Sheila Penrose, 66

Director since 2006

Class 2014

Other current directorships:  Jones Lang LaSalle Incorporated

Former directorships (within past five years): eFunds

Career highlights

—Jones Lang LaSalle Incorporated a global real estate services and investment management firm2006Sustainability & Corporate Responsibility (Chair since 2016), Governance, Executive
 >Non-executive Chairman (2005 – Present)

—Penrose Group, a provider of strategic advisory services on financial and organizational strategies
 >President (2000 – 2007)

—

Professional Experience:

Boston Consulting Group, a global management consulting firm

   Executive Advisor (2021 – Present; 2001 – 2008)

Jones Lang LaSalle Incorporated, a leading professional services firm that specializes in real estate and investment management

   Non-Executive Chairman (2005 – 2020)

Northern Trust Corporation, a financial services firm

   President, Corporate and Institutional Services (1994 – 2000)

Director Qualifications:

Ms. Penrose brings to our Board extensive experience in, and knowledge of, finance and real estate, both of which are areas of significance to our Company. She is well-versed in strategy and business development, finance, and leadership development and succession planning. Ms. Penrose also has significant experience in corporate governance from her service on other public company boards, including as former non-executive chairman at Jones Lang LaSalle Incorporated. In addition, having co-founded the Corporate Leadership Center, a non-profit organization that partners with leading institutions to offer programs in executive leadership development, Ms. Penrose contributes to our Board’s strong human capital management expertise.

Other Directorships:

Ms. Penrose also serves on the board of Jones Lang LaSalle Incorporated.

Skills and Qualifications

Brand
Management


Customer-
Centric


Finance/Capital
Markets


Global
Experience
Human Capital
Management


Marketing


Other Public
Company Board


Real Estate


Sustainability/
Corporate
Responsibility


 >Executive Advisor (2001 – 2008)

Experience and qualifications:  Ms. Penrose has experience as a senior executive of a large investment services and banking company, as executive advisor to a leading global consulting firm, and as a Chairman of a large, global real estate services and investment management firm. She has knowledge of strategy and business development, finance, risk assessment, real estate, leadership development and succession planning and sustainability.

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Election of Directors

John Rogers, Jr. | 64   INDEPENDENT 

John W. Rogers,Jr., 54

Director since 2003

Class 2013

Other current directorships:  Aon Corporation, Ariel Investment Trust and Exelon Corporation

Former directorships (within past five years): Commonwealth Edison Company

Career highlights

—Founder, Chairman, Co-Chief Executive Officer and Chief Investment OfficerDirector Since
2003		Board Committees
Compensation, Governance
Ariel Investments, LLC

Professional Experience:

Ariel Investments, LLC, a privately held institutional money management firm

   Founder, Chairman, Co-Chief Executive Officer and Chief Investment Officer (1983 – Present)

   Chief Executive Officer (1983 – 2019), Co-Chief Executive Officer (2019 – Present)

Ariel Investment Trust, an investment company consisting of mutual funds managed by Ariel Investments, LLC

   Trustee (2000 – Present; 1986 – 1993)

Director Qualifications:

Mr. Rogers brings to our Board broad knowledge of finance, leadership development and succession planning, as well as strategy and business development gained from his experience as a long-serving chief executive officer of an institutional money management firm. Mr. Rogers’ investment management knowledge also provides a unique perspective on shareholder relations. Mr. Rogers is passionate about diversity, equity and inclusion and brings perspective to our Company’s corporate responsibility and community affairs initiatives. His service on other public company boards adds global, customer-centric and brand management experience to our Board.

Other Directorships:

Mr. Rogers also serves on the boards of Nike, Inc., The New York Times Company and Ryan Specialty Group Holdings, Inc. Mr. Rogers previously served on the board of Exelon Corporation.

Skills and Qualifications

Brand
Management


Customer-
Centric


Finance/Capital
Markets


Global
Experience


Human Capital
Management


Other Public
Company Board


Sustainability/
Corporate
Responsibility


       >Founder,
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Election of Directors

Paul Walsh | 66    INDEPENDENT
Executive Chairman of the Director SinceBoard Committees
McLaren Group Limited2019Compensation, Sustainability & Corporate Responsibility

Professional Experience:

McLaren Group Limited, a privately owned luxury automotive and technology group

   Executive Chairman (2020 – Present)

L.E.K. Consulting, a global strategy consulting firm

   Advisor (2014 – Present)

TPG Capital LLP, a private investment firm

   Advisor (2014 – Present)

Bespoke Capital Partners LLC, an investment company

   Operating Partner (2016 – 2021)

Compass Group PLC, a leading food service and support services company

   Chairman (2014 – 2020)

Avanti Communications Group plc, a leading satellite operator providing internet and data services

   Chairman (2013 – 2019)

Diageo plc, a multinational beverage company

   Chief Executive Officer (1983–Present)(2000 – 2013)

   Chief Operating Officer (2000)

Director Qualifications:

Mr. Walsh brings to our Board substantial corporate leadership experience and knowledge of consumer-centric companies gained from his experience as former chief executive officer of a large multinational corporation. His experience at Diageo brings broader food and beverage industry perspective. He also has held executive-level finance positions, including as chief financial officer of Grand Metropolitan Foods and Intercontinental Hotels. Throughout his career, Mr. Walsh has built success and growth at his companies through the deployment of effective brand marketing strategies, which brings valuable perspective to our Board. His background as a UK national based in London provides international diversity on our Board.

Other Directorships:

Mr. Walsh also serves as chairman of the board of Vintage Wine Estates, Inc., as non-executive chairman of Chime Communications Limited and as a director of FedEx Corporation. Mr. Walsh previously served as executive chairman of Bespoke Capital Acquisition Corp. and on the boards of Avanti Communications Group plc, Compass Group PLC, HSBC Holdings plc, RM2 International, S.A. and TPG Pace Holdings Corp.

—Skills and Qualifications
Ariel Investment Trust

Brand
Management


Customer-
Centric


Digital


Finance/Capital
Markets
Global
Experience


Human Capital
Management


Marketing


Other Public
Company Board


 >Trustee (1986 – 1993; 2000 – Present)

Mr. Roger’s biography is continued on next page

McDonald’s Corporation 2012        5

Mr. Roger’s biography continued

Experience and qualifications: Mr. Rogers is the chief executive officer of an institutional money management firm. He has knowledge of finance, shareholder relations, risk assessment, leadership development and succession planning, corporate responsibility and strategy and business development. He also has experience as a director of multiple public companies, charities and civic organizations.

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Election of Directors

Miles White | 67    INDEPENDENT 

James A. Skinner, 67

Director since 2004

Class 2014

Other current directorships:  Illinois Tool Works Inc. and Walgreen Co.

Career highlights

—Former Executive ChairmanMcDonald’s CorporationDirector SinceBoard Committees
Abbott Laboratories2009Governance (Chair since 2014), Public Policy & Strategy, Executive
 >Vice Chairman and Chief Executive Officer (2004 – Present)
>Vice Chairman (2003 – 2004)

Experience and qualifications:  Mr. Skinner provides a Company perspective in Board discussions about the business, relationships with key constituencies and stakeholders, competitive landscape, finance, senior leadership and strategic opportunities and challenges for the Company. In addition, as an independent director of two other public companies, Mr. Skinner has gained additional perspectives, including on governance and operational matters relevant to the Company.

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Roger W. Stone, 77

Director since 1989

Class 2013

Other current directorships:  KapStone Paper and Packaging Corporation

Career highlights

—KapStone Paper and Packaging Corporation, formerly Stone Arcade Acquisition Corporation, a producer of paper, packaging and forest products
>Chairman and Chief Executive Officer (2005 – Present)

—Stone Tan China Holding Corporation, an investment holding company
>Chairman (2010 – Present)

—Stone Tan China Acquisition (Hong Kong) Co. Ltd.
>Chairman (2010 – Present)

—Stone-Kaplan Investment, LLC
>Manager (2004 – 2008)

Experience and qualifications:  Mr. Stone is the chief executive officer of a large, global paper and packaging business. He has experience in the sourcing and sale of product packaging and related commodities, supply chain management and distribution, sustainability, strategy and business development, finance, leadership development and succession planning, and risk assessment.

6        McDonald’s Corporation 2012

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Donald Thompson, 49Professional Experience:

Director since 2011

Class 2012(Nominee)

Other current directorships:  Exelon Corporation

Career highlights

—McDonald’s Corporation
>President and Chief Operating Officer (2010 – Present)
>President, McDonald’s USA (2006 – 2010)
>Executive Vice President and Chief Operations Officer, McDonald’s USA (2005 – 2006)

Experience and qualifications:  Mr. Thompson provides a Company perspective in Board discussions about the business, particularly with respect to worldwide operations, competitive landscape, senior leadership and strategic opportunities and challenges for the Company. In addition, as an independent director of another public company, Mr. Thompson has gained additional perspectives, including on governance and operational matters relevant to the Company.

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Miles D. White, 57

Director since 2009

Class 2013

Other current directorships: Abbott Laboratories, and Caterpillar, Inc.

Former directorships (within past five years):  Motorola, Inc. and Tribune Company

Career highlights

—Abbott Laboratories, a global pharmaceuticals and biotechnologyhealthcare company
>

   Executive Chairman (2020 - 2021)

Chairman and Chief Executive Officer (1999 – Present)- 2020)

Director Qualifications:

Mr. White brings to our Board extensive knowledge of strategy and business development, global operations, finance, leadership development and succession planning, corporate governance, and regulatory and public policy matters gained from his experience as former chairman and chief executive officer of a global healthcare company. Mr. White’s healthcare experience and knowledge of healthcare technology advances has also enhanced his ability to oversee human capital management, particularly in light of the COVID-19 pandemic. In addition, Abbott’s focus on developing consumer products and technologies brings customer-centric, marketing, digital and healthcare knowledge to our Board. We also benefit from Mr. White’s strong experience in addressing the needs of a global public company, as well as insights into our Board’s responsibility to oversee management and operations matters. As our Governance Committee Chair, Mr. White leads our Board’s succession planning and Director candidate selection process, and he is periodically involved in shareholder engagement.

Other Directorships:

Mr. White also serves on the board of Caterpillar, Inc.* Mr. White previously served as executive chairman of Abbott Laboratories.

* In February 2022, Caterpillar Inc. announced that Mr. White had decided not to stand for re-election to its board of directors at its 2022 annual meeting of shareholders.

Skills and Qualifications

Brand
Management


Customer-
Centric


Digital


Finance/Capital
Markets
Global
Experience


Human Capital
Management


Marketing


Other Public
Company Board


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ExperienceBoard and qualifications:Governance Matters

Board Leadership

Our Board has determined that having separate Chairman and CEO roles currently serves the best interests of our shareholders. Our independent Chairman oversees corporate governance matters, and our CEO leads our business. In addition, independent Directors chair each of our Board Committees (other than the Executive Committee, which is chaired by our CEO). Our Board believes that this structure promotes effective oversight, strengthens our Board’s independent leadership and supports our commitment to strong governance, each of which drives enhanced shareholder value.

Our Chairman oversees our Board and facilitates the flow of information between management and our Board. This fosters open dialogue and constructive feedback among our independent Directors and management. Further, our Chairman leads a critical evaluation of our management, business practices and culture, as well as oversight of Company strategy. Our Board assesses its leadership structure annually to confirm it continues to meet the evolving needs of our Company and best serves the interests of our shareholders.

Enrique Hernandez, Jr. was elected as our independent Chairman in May 2016 and has been re-elected as our Chairman each year since then in view of his accomplishments in this role and his extensive knowledge of our operations and governance. Mr. WhiteHernandez has significant experience with Company strategy, business practices and management of human capital, and he has facilitated strong independent Board oversight during his tenure.

Board Composition and Succession Planning

Our Board is the chief executive officercomprised of a large pharmaceutical, biotechnologydiverse, highly-engaged group of Directors with a wide range of skills and nutritional health products company. He hasexperiences who each contribute to overall Board and Committee effectiveness. Each of our Directors is a dynamic leader whose experiences and perspectives are continually evolving as he or she navigates today’s fast-paced, ever-changing business environment, both as a Director of McDonald’s and in his or her other professional roles.

Our Governance Committee is primarily responsible for maintaining a strong and diverse Board through robust succession planning processes, which include recommending Directors for re-election and identifying new Director candidates who will bring complementary skills and varied perspectives to our Board. Our Governance Committee evaluates and determines the most impactful and desirable mix of characteristics, skills, experience and diversity for our Board as a whole, as well as the qualifications and attributes of individual Directors and Director candidates. When identifying new Director candidates and recommending them to the full Board, our Governance Committee considers the qualifications discussed on page 23.

Our Governance Committee strives to achieve an appropriate balance of Board continuity and refreshment through a mix of newer and longer-tenured Directors. Our Governance Committee and Board believe that a balance of institutional knowledge and perspectives from Directors who have more recently joined our Board best serves our shareholders’ interests, and that long tenure does not itself impair a Director’s independence, but often enhances a Director’s ability to apply independent judgment. While our Governance Committee and Board consider tenure in evaluating the overall effectiveness of strategyour Board, it is not a dispositive factor. Our Governance Committee and business development, risk assessment, finance, leadership developmentBoard also consider each Director’s availability and willingness to serve on our Board, recognizing that it is a significant time commitment.

As our strategic priorities continue to evolve and in consideration of potential retirements and departures, our Governance Committee proactively evaluates our Board’s composition and succession planning to facilitate smooth transitions and continuity of skills, experience and diversity in the boardroom.

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Board and Governance Matters

Board Diversity

Due to the global and complex nature of our business, our Board believes it is important that its composition embodies a diverse set of viewpoints and practical experiences. Our Board also believes having Directors with different genders, races and ethnicities contributes to a balanced and effective Board. Our Governance Committee and Board consider diversity in a broad sense. As later discussed, when seeking new Director candidates, our Governance Committee actively endeavors to include women, racial and/or ethnic minorities and geographically diverse persons in the candidate pool. In addition to gender, race and ethnicity, our Directors bring, among other attributes, diverse experiences, skills, perspectives and geographies. We believe this provides the skills and backgrounds that are important to drive our strategy and support our values. As shown below, 50% of our Board is currently comprised of Directors who are women or racially or ethnically diverse. See “Process for Selection of New Director Candidates” on page 39 for more information on how our Governance Committee and Board consider diversity in the Director identification and nomination process.

The following diversity matrix sets forth the self-identified diverse attributes of our Directors.

SELF-IDENTIFIED RACE/ETHNICITY
African American or Black     
Hispanic or Latino 
White or Caucasian  
SELF-IDENTIFIED GENDER
Female   
Male      


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Process for Selection of New Director Candidates

Our Governance Committee, together with our Board, maintains a robust policy for the consideration of potential Director candidates and is responsible for establishing criteria, screening candidates and evaluating the qualifications of persons who may be considered for service as a Director, including candidates nominated or suggested by shareholders. Our Governance Committee also retains independent third-party search firms, consultants and other advisors, as appropriate, to help identify, screen and evaluate potential Director candidates and to enhance our Board’s preparedness in the event of an unplanned Director departure.

Our Director Selection Process affirms our commitment to inclusiveness by setting forth our policy of considering diversity in the Director identification and nomination process. Our Governance Committee proactively seeks diverse Director candidates to provide representation of varied backgrounds, perspectives and experience in the boardroom to support the global demands of our business. When seeking new Director candidates, our Governance Committee actively endeavors to include women, racial and/or ethnic minorities and geographically diverse persons in the candidate pool. However, our Governance Committee does not assign specific weights to any single criterion, and no particular criterion is necessarily applied to all prospective Director nominees. As part of its annual review of our Board composition and Director nominees, our Governance Committee assesses the effectiveness of its approach to diversity.

Our Governance Committee reviews our Director Selection Process annually. In 2020, our Governance Committee updated it to more closely align with our values and the strategic drivers associated with Accelerating the Arches. These updates highlight important areas of focus for our Company and investors, including cybersecurity, digital business models, sustainability, human capital management and DEI.

The following graphic more fully describes our selection process for new Directors:

Ongoing Succession
Planning		Our Governance Committee considers the current and long-term needs of our evolving business and seeks potential Director candidates consistent with our Director Selection Process guidelines, in light of current Board structure, tenure, skills, diversity and experience.
Identification of
Candidates		Our Governance Committee engages in a search process to identify qualified Director candidates, which includes the use of an independent search firm to assess whether candidates’ skills, experiences and backgrounds align with our business strategy and values. Our Governance Committee considers, among other attributes, the qualifications and skills described under “Director Qualifications” on page 23 and “Board Diversity” on page 38.
Meeting with
 Candidates		Potential Director candidates are interviewed by our Chairman, CEO and Governance Committee Chair.  
Decision and
 Nomination		Our Governance Committee recommends, and our full Board nominates, the Director candidates best qualified to serve the interests of our Company and shareholders.  
ElectionShareholders consider the Director nominees and elect Directors at our Annual Shareholders’ Meeting to serve one-year terms. Our Board may also elect Directors on the recommendation of our Governance Committee throughout the year when determined to be in the best interests of our Company and shareholders. In that case, such Directors would stand for re-election by shareholders the following year.
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Shareholders may suggest Director candidates for consideration by our Governance Committee by writing to our Governance Committee and providing the suggested candidate’s name, biographical data, qualifications and written consent to (i) be considered as a Director nominee, (ii) provide information as described in our By-Laws if requested to do so and (iii) serve as a Director if elected. Shareholders who wish to nominate Director candidates for election by shareholders at our Annual Shareholders’ Meeting may do so in accordance with the nomination provisions set forth in our By-Laws.

Our Director Selection Process is available on our website at https://corporate.mcdonalds.com/corpmcd/investors/corporate-governance/governance-resources.html.

Director Independence

Our Corporate Governance Principles require that all non-management Directors be independent under applicable law and stock exchange listing standards, as well as under our Standards on Director Independence. Independence is determined by our Board after reviewing pertinent facts and circumstances and taking into consideration all applicable laws, regulations and the listing standards of the New York Stock Exchange (the “NYSE”), as well as the requirements set forth in our Standards on Director Independence. It is important to determine that each Director is free of any relationship with our Company or management that may impair, or appear to impair, his or her ability to make independent judgments. In doing so, our Board considers relationships involving Directors and their immediate family members and relies on information derived from Company records, questionnaires and other inquiries.

The relationships reviewed by our Board in its most recent determination involved commercial relationships with companies at which Directors or their immediate family members then served as employees, officers, partners or had a 10% or more interest.

These commercial relationships involved our purchases of products and services in the ordinary course of business that were made on arm’s-length terms in amounts and under other circumstances that did not affect Director independence.

Based on its review, our Board determined that none of our non-management Directors has a material relationship with our Company and that all of them are independent. Currently, our non-management Directors are Lloyd Dean, Robert Eckert, Catherine Engelbert, Margaret Georgiadis, Enrique Hernandez, Jr., Richard Lenny, John Mulligan, Sheila Penrose, John Rogers, Jr., Paul Walsh and Miles White. Our Board determined that Christopher Kempczinski s not independent given his role as our CEO.

Our Standards on Director Independence are available on our website at https://corporate.mcdonalds.com/corpmcd/investors/corporate-governance/governance-resources.html.

Board Committees

Our Board currently has six standing Committees: Audit & Finance; Compensation; Governance; Public Policy & Strategy; Sustainability & Corporate Responsibility; and Executive. All Committee members (except for our CEO, who only serves on our Executive Committee) are independent under the rules of the NYSE and our Standards on Director Independence. In addition, Directors who serve on our Audit & Finance Committee and Compensation Committee satisfy additional, heightened independence and qualification criteria applicable to Directors serving on such Committees under NYSE listing standards.

Each Committee has the responsibilities set forth in its respective charter, all of which have been adopted by our Board. Other than our Executive Committee, all standing Committees review their respective charters at least annually, and any changes are recommended to our full Board for approval. All standing Committee charters are available on our website at https://corporate.mcdonalds.com/corpmcd/investors/corporate-governance/governance-resources.html.

The current membership and primary responsibilities of each standing Committee are summarized on the following pages. Each standing Committee also has risk oversight within its respective areas of accountability as discussed under “Risk Oversight” beginning on page 46.

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Audit & Finance Committee

Committee Members:

John Mulligan (Chair)

Lloyd Dean

Catherine Engelbert

Margaret Georgiadis

All members are financially literate and qualify as an “audit committee financial expert” as defined by the SEC

Meetings in 2021: 8

Relevant Areas of Focus:

  Oversee financial reporting, accounting, control and compliance matters

  Appoint, retain, compensate and evaluate our independent auditors

  Review audit scope and results with independent and internal auditors

  Review material financial disclosures, disclosure controls and procedures (“DCPs”) and internal controls over financial reporting (“ICFR”)

  Pre-approve all audit and permitted non-audit services

  Evaluate management’s processes to assess and manage enterprise risk

  Oversee global compliance program, including Sarbanes-Oxley and tax compliance

  Oversee financial risk and financial risk management

  Oversee our financial policies and strategies, including our capital structure, dividend policy and plans for share repurchases

  Oversee any investigations related to specific cybersecurity or technology incidents

Our Audit & Finance Committee establishes its meeting calendar for the following year during the fourth quarter and typically addresses the following key matters throughout the year:

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Board and Governance Matters

Compensation Committee

Committee Members:

Richard Lenny (Chair)

Lloyd Dean

John Rogers, Jr.

Paul Walsh

Meetings in 2021: 5

Relevant Areas of Focus:

  Oversee the design and administration of our executive compensation programs and policies

  Approve business goals and objectives in compensation programs, evaluate performance and approve executive compensation

  Establish, amend, review and administer our incentive plans

  Review the use of compensation programs to motivate and retain executives

  Assess risk associated with our executive compensation programs and corporate incentive plans

  Oversight of compensation-related shareholder proposals

  For more information, see “Compensation Discussion and Analysis” beginning on page 61

Our Compensation Committee establishes its meeting calendar for the following year during the fourth quarter and typically addresses the following key matters throughout the year:

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Governance Committee

Committee Members:

Miles White (Chair)

Robert Eckert

Enrique Hernandez, Jr.

Sheila Penrose

John Rogers, Jr.

Meetings in 2021: 6

Relevant Areas of Focus:

  Advise as to Board structure (including composition and size), leadership and operations, as well as Committee memberships

  Set criteria for Board membership

  Develop Board succession plans and make recommendations to our Board on succession matters

  Consider and recommend Director candidates for election, re-election or to fill vacancies

  Manage responses to shareholder proposals (including oversight of governance-related shareholder proposals)

  Oversee shareholder engagement

  Evaluate Director and Board performance

  Recommend non-management Directors’ compensation

  Review Corporate Governance Principles and oversee governance risks

  Consider trends in corporate governance and present recommendations to our Board, as appropriate 

Our Governance Committee establishes its meeting calendar for the following year during the fourth quarter and typically addresses the following key matters throughout the year:

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Public Policy & Strategy Committee

Committee Members:

Robert Eckert (Chair)

Catherine Engelbert

Enrique Hernandez, Jr.

John Mulligan

Miles White

Meetings in 2021: 4

Relevant Areas of Focus:

  Review and monitor our long-term strategy development and implementation

  Monitor global impact and reputation

  Monitor trends, regulatory matters and other items that do or could materially affect our business

  Oversee franchisee relations

  Review and monitor government affairs, strategies and priorities

  Review and monitor tax strategy

  Review compliance with our Political Contributions Policy

  Review employees’ compliance with our Standards of Business Conduct

  Review and monitor our strategy and processes relating to cybersecurity and technology risks, and consider potential remedies to any strategic and process gaps identified by the Audit & Finance Committee

  Review other risks related to public policy and strategy matters

  Oversight of public policy and strategy-related shareholder proposals

Our Public Policy & Strategy Committee establishes its meeting calendar for the following year during the fourth quarter and typically addresses the following key matters throughout the year:

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Sustainability & Corporate Responsibility Committee

Committee Members:

Sheila Penrose (Chair)

Margaret Georgiadis

Richard Lenny

Paul Walsh

Meetings in 2021: 5

Relevant Areas of Focus:

  Review and monitor our strategies and efforts to address sustainability and brand trust

  Oversee important sustainability priorities and other matters, including corporate philanthropy

  Review and monitor the development and achievement of our sustainability goals and metrics

  Review global sustainability communication plans and reporting

  Review risks related to sustainability and corporate responsibility matters

  Review and monitor Company culture and human capital management matters, including workplace health and safety, respectful workplace and DEI

  Oversight of sustainability and corporate responsibility-related shareholder proposals

Our Sustainability & Corporate Responsibility Committee establishes its meeting calendar for the following year during the fourth quarter and typically addresses the following key matters throughout the year:

Other Committees

Our Executive Committee may exercise most Board powers during the periods between Board meetings. The members of our Executive Committee are Christopher Kempczinski (Chair), Robert Eckert, Enrique Hernandez, Jr., John Mulligan, Sheila Penrose and Miles White. Our Executive Committee did not meet during 2021.

In July 2020, our Board formed a Special Committee to oversee our Company’s legal action against our former CEO and related matters, in recognition of the importance of dedicated Board oversight on issues that pose particular risks to our Company. Our Board later expanded the Special Committee’s responsibilities to include the review and evaluation of additional claims made against our directors and officers as a result of related matters. The Special Committee met 13 times in 2021, remaining actively engaged and receiving frequent reports and updates from management and counsel. In December 2021, the Special Committee guided our Board in securing the successful resolution of the legal action against our former CEO.

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Board and Governance Matters

Board Self-Evaluation

Our Board believes that a self-evaluation process is important to its ongoing effectiveness. Our Governance Committee oversees the annual self-evaluation of our Board. The following describes the process by which our Board carried out these self-evaluations over the past year:

Annual Board and Committee Self-EvaluationThe self-evaluation process sought individual Director feedback on our Board’s role, Committee structure, relationship with management, meeting agendas, oversight of strategy and risk, and other Board-related topics.
Independent Third Party Generates Report  To protect anonymity and the integrity of our evaluation process, an independent third party compiled evaluation responses into a report for our Governance Committee Chair.
Discussion of ResultsOur Governance Committee Chair presented the results of the self-evaluation to our Board.
  Incorporation of Feedback    Our Board assessed the progress in the areas targeted for improvement from the prior evaluation, and developed action plans that, when implemented, would enhance our Board’s and Committees’ effectiveness over the next year. Items requiring follow-up are monitored on an ongoing basis by our Board and committees.

Board Oversight

Risk Oversight

Under our Corporate Governance Principles, our full Board is responsible for overseeing our enterprise-wide risk management (“ERM”) framework. The ERM framework is designed to identify, assess and prioritize strategic, financial and reputational risks with the potential to have a sustained impact on our Company. We periodically review the ERM framework and incorporate learnings to drive transparency and strategic decision-making. Management is responsible for the design and execution of the ERM framework. Our internal auditors also support risk identification and risk monitoring within our Company. The ERM framework leverages internal risk committees comprised of cross-functional leadership, which meet regularly to evaluate and prioritize risk in the context of Accelerating the Arches, with further escalation to our CEO, Board and/or Committees, as appropriate.

Our Board exercises oversight of the ERM framework, both as a full Board and through its standing Committees. An important element of our Board’s oversight involves regular interaction among our Board and senior management regarding our risk exposures and mitigation effects as they relate to our business strategy, operations and values. Our Board also annually reviews strategic and enterprise risks and considers, among other items, our mitigation and overall strategy, competitive landscape, capital structure and management succession planning.

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Our Board’s risk oversight process is further described as follows:

As shown in this graphic, each of our Audit & Finance, Compensation, Governance, Public Policy & Strategy and Sustainability & Corporate Responsibility Committees is responsible for overseeing risks within its respective areas of accountability. Additionally, under our Committees’ charters, each Committee has resources and access to outside advisors. The Committees report to our Board any risks that they conclude may be reasonably likely to be significant to our Company and regularly update our Board on their particular risk oversight activities. Our Board also considers evolving risks, such as those relating to talent management and ESG.

More information about specific risks we face is set forth in our filings with the SEC, as described under “Forward-Looking Statements and Website Links” on page 17.

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Board and Governance Matters

Strategy Oversight

Our Board believes that a fundamental understanding of our business, strategy and industry assists it in the effective discharge of its duties. As part of its oversight role, our Board regularly reviews our Company’s performance.

Our Board also holds an annual strategy session with our senior leadership team and other members of management who present our Board with important information about our strategic priorities. In 2021, our Board reaffirmed our Accelerating the Arches growth strategy, a plan which encompasses all aspects of our business as the leading global omni-channel restaurant brand. It also articulates our purpose to feed and foster the communities we and our franchisees serve around the world, values that define us and guide our actions and behaviors, and growth pillars that build on our competitive advantages.

Our Board’s engagement in our business and oversight of our strategy provides it with important perspectives for the ever-changing business environment.

Information Security Oversight

Our Public Policy & Strategy Committee has oversight of our strategy and processes relating to information risk management, including risks related to cybersecurity, data privacy and technology, and considers potential remedies to any strategic or process gaps that may be identified by our Audit & Finance Committee during its review of any specific cybersecurity or technology incidents. Our Global Chief Information Officer and Chief Information Security Officer biannually report to our Public Policy & Strategy Committee on cybersecurity and other technology-related risks and recent developments. These officers oversee our dedicated information risk management team, which works in partnership with our internal audit department to review information technology-related internal controls with our independent auditors as part of the overall internal controls process. Annual third-party security measure assessments are also conducted, including penetration testing and an overall review of program maturity using applicable security frameworks. We also maintain a cyber insurance policy designed to reduce the risk of loss resulting from security breaches.

ESG Oversight

We have a long history of commitment to incorporating environmentally sustainable and socially responsible practices into our business operations. Our Sustainability & Corporate Responsibility Committee monitors and oversees our strategies and management of ESG issues, as well as our development and achievement of sustainability goals and metrics. Our Sustainability & Corporate Responsibility Committee regularly reports to our Board regarding its activities. In addition, from time to time as circumstances warrant, other Committees and/or our full Board receive reports on our management of ESG issues.

Talent Management and Succession Planning

Our human capital management and succession planning, including initiatives relating to promoting diversity within our workforce and across the System, are important components of our strategy. Attracting, developing and retaining talent is key to our ability to continue to drive long-term sustainable growth. Our Sustainability & Corporate Responsibility Committee is responsible for reviewing and monitoring Company culture and human capital management matters, including workplace health and safety, respectful workplace and DEI.

We strive to ensure a diverse succession slate and consider DEI in succession planning discussions. To that end, our Board regularly reviews short- and long-term succession plans for our CEO and other senior leadership positions. In assessing possible CEO and other senior leadership candidates, our independent Directors identify the skills, experiences and attributes they believe are required to be an effective leader in light of our global business strategies,

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opportunities and challenges. This process is designed to prepare us for both expected successions, such as those arising from anticipated retirements and those occurring when executives leave unexpectedly or due to death, disability or other unforeseen events.

In 2021, Desiree Ralls-Morrison joined McDonald’s as General Counsel and Corporate Secretary, Morgan Flatley became our Global Chief Marketing Officer and Manu Steijaert became our first-ever Chief Customer Officer.

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ESG: Our Purpose & Impact

Our purpose at McDonald’s is to feed and foster communities. When we say “billions served,” we are talking about serving our communities, customers, crew, franchisees, suppliers, producers and farmers. We believe there is a difference between being in a community and being part of one.

As part of our Accelerating the Arches strategy, we have prioritized our role and commitment in the communities we serve to focus on four areas: food quality & sourcing; our planet; community connection; and jobs, inclusion & empowerment. These focus areas and related highlights are summarized below. More information on these topics, as well as on our impact strategies, goals and performance tracking, can be found on the “Our Purpose & Impact” section of our website at https://corporate.mcdonalds.com/corpmcd/our-purpose-and-impact.html.

Food Quality and Sourcing

The safety and quality of our food is a top priority. We source delicious, quality ingredients in responsible ways because how our food is produced, and where it comes from, matters to our customers, communities and the environment. This includes supporting farming communities and the people, locally and globally, who produce and raise our food.

By engaging and partnering with our supply chain, comprised of a global network of suppliers, producers and farmers, we work together toward commitments that support more sustainable production, so we can continue to serve our customers delicious meals they know and love.

Our food quality & sourcing initiatives are focused on the following areas:

Food Safety. We work closely in collaboration with a robust network of suppliers, producers and farmers to ensure safe food is the number one priority for everyone in our value chain. Our Global Food Safety Strategy ensures we integrate food safety into the design of food, packaging, equipment, restaurants, operational procedures and employee training. Our Global Food Safety Structure provides dedicated resources in global food safety risk management and food safety standard development and training.

Nutrition & Marketing Practices. We constantly evaluate our menu to identify ways to evolve our offerings while maintaining the great taste our customers know and love. We have a team of food experts who are passionate about food and looking for the latest flavor and ingredient innovations. We are also proud of our long history as an industry leader in responsible marketing to children. We recognize the role we play as a global food company and are actively involved in self-regulation focused on this important issue.

Responsible Sourcing. We approach responsible sourcing holistically, considering our impact on the planet, the livelihoods of the people who produce our food, the communities in which they live and the well-being of the animals on which we rely. We set standards for our sourcing, including in our Supplier Code of Conduct, and engage closely with our supply chain to ensure these standards are upheld. We want to ensure that our sustainable sourcing programs drive lasting, meaningful outcomes on critical issues for people, animals, the environment and our business.

Animal Health & Welfare. Because our ability to serve safe, quality food comes from animals that are cared for properly, we are using our size and global reach to improve the health and welfare of animals in our supply chain. We encourage industry and cross-sector collaboration, relying on strategic and personal relationships with experts who provide guidance on our policies and implementation strategies in each of our local markets. To achieve positive impact in this area, we focus on creating objective, third-party verified systems to measure our performance against industry standards and key animal welfare indicators, working with recognized subject matter experts and academics to access guidance and challenge the way we think, and leveraging our global scale in local markets to help drive the right outcomes.

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Responsible Antibiotic Use. We are committed to the responsible use of antibiotics. Our Vision for Antimicrobial Stewardship outlines our approach to responsible antibiotic use and commitment to address antimicrobial resistance within our supply chain. It seeks and promotes animal production practices that refine antibiotic selection and administration and, where possible, reduce and replace antibiotics with long-term alternative solutions to prevent disease and protect animal health and welfare. We remain committed to the treatment of sick animals aligned with herd veterinarian direction to support the safety of the consumer food supply chain.

Farming Communities. The strength and resiliency of our supply chain comes from our strong collaborations and partnerships with our farmers, ranchers, growers and other producers. We work closely with them to support economically viable farming and improve access to knowledge, tools and best practice farming methods that lead to positive social, economic and environmental benefits in their communities.

Supply Chain Human Rights. Our commitment to respecting human rights is set out in our Human Rights Policy, which applies to our Company and wholly owned subsidiaries worldwide. The success of the McDonald’s System lies in our trusted relationship with suppliers, all of whom must—regardless of the cultural, social or economic context—meet our expectations regarding fundamental rights for all people. Suppliers must also meet our high standards and treat their employees with fairness, respect and dignity. Suppliers are required to commit to upholding the standards contained in our Supplier Code of Conduct and to hold their supply chain, including subcontractors and third-party labor agencies, to the same standards contained in the Code. McDonald’s incorporates due diligence through third-party audits conducted by external firms to assess compliance and then work with suppliers to remediate as appropriate. We expect, and provide guidance to assist, suppliers to meet the standards for human rights, workplace environment, business integrity and environmental management contained in the Code.

Sustainable Agriculture & Beef. We believe our food can be produced in a way that not only protects the environment and contributes positively to a thriving global food system, but also helps rehabilitate and enhance ecosystems around farms through better soil health, improved water management and increased biodiversity. We have made it a global priority to champion sustainability efforts across our supply chain, starting in the areas where we believe we can have the largest impact, such as beef, and helping take sustainable farming practices to scale. This includes working with experts and our beef supply chain globally to advance research that quantifies the impacts and outcomes of sustainability practices to continuously advance the science that will help solve the challenges we face with communities, farmers, producers and our suppliers around the world.

Recent Highlights
Substantially achieved (95.0-99.9%) each of our 2020 responsible sourcing goals for our six priority commodities (beef, soy for chicken feed, coffee, pam oil, fish and fiber) as of the end of 2020
Updated our commitment to phasing out the use of gestation stalls for housing pregnant sows in the U.S. by the end of 2024, a two-year extension of our original goal—set in 2012—due to the impacts of COVID-19 and the global outbreak of African Swine Fever
Continued to make progress toward the five Global Happy Meal Goals we set in 2018 across 20 major markets to evolve the Happy Meal to make balanced meals more accessible to families
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Our Planet

In partnership with our franchisees, suppliers and producers, we are finding new and innovative ways to drive climate solutions, help keep waste out of nature and help preserve natural resources. From minimizing how much packaging we use to investing in renewable energy and partnering to advance sustainable and regenerative agriculture practices—we want to help protect our planet for communities today and in the future.

Our planet-related initiatives are focused on the following areas:

Climate Action. We believe climate change is the most pressing environmental issue of our time. We are proud that, in 2018, we became the first global restaurant company to set a science-based target, approved by the Science Based Targets initiative (SBTi), to significantly reduce greenhouse gas (GHG) emissions. More recently, we joined the United Nations Race to Zero campaign, pledging to put McDonald’s on the path to net zero emissions by 2050.

Packaging & Waste. We are using our scale and reach to help implement and accelerate solutions to help keep waste out of nature and valuable materials in use. To achieve this, our priorities include eliminating unnecessary packaging through design innovation, introducing reusable solutions and encouraging behavior changes, shifting materials to renewable, recycled or certified sources, increasing recycling and reuse solutions, and closing the loop by using more recycled materials.

Conserving Forests. Forests play a vital role in creating oxygen, absorbing greenhouse gas emissions, and providing food, water and shelter for people, plants and animals. We have been on a journey to conserve forests for more than three decades, and we are committed to driving industry transformation and supporting deforestation-free supply chains at scale. Our Commitment on Forests, which sets our vision for achieving this goal, applies to all commodities and every region that we source from, as well as to all suppliers to the McDonald’s System. We are committed to eliminating deforestation from our global supply chains by 2030.

Water Stewardship. Water is one of the world’s most precious resources, and we recognize its stewardship as an important sustainability area. Water stewardship practices are embedded in our sourcing requirements and restaurant operations practices, and we expect suppliers and franchisees to use water responsibly. We also include water in our Global Sustainable Sourcing Guide, which is updated as we establish new targets, assess emerging risks and develop best practices. We have partnered with experts like the World Wildlife Fund and the World Resources Institute to identify water risks and create a stewardship approach that drives actions and improvements across our value chain, including sourcing, processing, transport and our restaurants. Through the actions we are taking across our supply chain and in restaurants, we are seeking to reduce our overall water footprint, especially related to agriculture and row crops.

Recent Highlights
Joined the United Nations Race to Zero campaign in 2021, committing to put McDonald’s on the path to net zero emissions by 2050
Released our inaugural Climate Risk & Resiliency Summary in 2021, guided by reporting recommendations from the Task Force on Climate-Related Financial Disclosures (TCFD), demonstrating our continued commitment to assessing, managing and disclosing climate-related risks and opportunities for our business
99.6% of our beef, soy sourced for the feed of chicken used in our products, palm oil, coffee and fiber used in guest packaging volumes supported deforestation-free supply chains as of the end of 2020
Made a three-year, $5 million commitment in 2021 with the NextGen Consortium to continue work to accelerate and scale sustainable packaging solutions for the industry
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Community Connection

Being part of the community means supporting people every day, and especially when they need it most. This is why we are proud to support the Ronald McDonald House Charities® (“RMHC”). We also donate millions of pounds of food from our supply chain every year, as well as hot meals from our restaurants, to communities in times of need and crisis.

Our connections with the community focus on the following areas:

Community Support & Crisis Response. Our business thrives when our communities thrive. Because most McDonald’s restaurants are run by independent franchisees, we have deep roots in communities. We have also established shared value relationships with community-based organizations around the world, which help provide us and our franchisees with direct insights into issues and challenges facing our communities. Our community strategies focus on three key areas: local support, including sponsorships, funding and resources, such as to local RMHC chapters; volunteering, including through our Global Volunteer Program; and crisis response, including addressing disasters through our partnership with the Red Cross.

Ronald McDonald House Charities. Through a network of over 260 chapters in 62 countries and regions, RMHC enables families to stay together near world-class care facilities when a child is diagnosed with a life-threatening illness. Our owner/operators, employees, suppliers and customers have supported RMHC since 1974.

Food Waste & Donations. We believe good food and precious resources should never go to waste, and we want to use our scale to help tackle this global challenge. We work with our supply chain and restaurants to help ensure our food serves its purpose, and we donate meals and ingredients to feed families in need in local communities across the globe. Our Global Food Disposition Policy helps ensure that food is not wasted. The policy was put in place to support our suppliers and distributors globally to dispose of food in alignment with a food waste hierarchy, including food donations. In 2020, we expanded salvage methods and updated the policy so ingredients like meat, lettuce, milk and cheese could be donated directly to charities—reaching communities faster and in greater quantities than ever before. In the U.S., we actively engage our franchisees and suppliers in our food waste and donations strategy by providing assistance in finding local donation partners.

Recent Highlights
Donated $5 million in 2022 to our Employee Assistance Fund and support relief efforts led by the International Red Cross in response to recent developments in Ukraine and the resulting humanitarian crisis in Europe
Continued to partner with our crew, franchisees, suppliers, producers and farmers to serve food in our communities, offering free ‘Thank You Meals’ to healthcare workers and first responders
Continued the five-year, $100 million commitment to RMHC that we set in 2020 to help RMHC continue increasing access to quality health care for children around the world
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Jobs, Inclusion & Empowerment

McDonald’s has always been a people business. Fostering safe, respectful and inclusive workplaces wherever we do business is integral to our Company, and we will continue to hold ourselves to the highest standards. We are helping to promote bright futures by providing access to education and the opportunity to develop skills in the communities we serve and through accelerating equity and inclusion across our business. Whether it’s providing access to local education, tuition assistance or job-readiness programs, we—together with our franchisees and suppliers—make opportunity open for all. Guided by our core values, we are also committed to being better allies, sponsors and leaders, helping to create a future where equality, fairness and opportunity are not just goals, but the lived experience of everyone.

Our jobs, inclusion & empowerment initiatives focus on the following areas:

Diversity, Equity & Inclusion. Our aspiration is that no matter where you are in the world, when you interact with McDonald’s, inclusivity and equity are evident. We believe that a diverse workforce is critical to our success, and we are committed to making this a continued priority for our Company. Our DEI strategy is designed to drive accountability across the System to better represent the diverse communities in which we operate, accelerate cultures of inclusion and belonging, and further dismantle barriers to economic opportunity.

Skills & Education. At McDonald’s, people are the face of our brand and critical to our success. Our ambition is to leverage our scale to provide training and education programs to help build a positive future for everyone, no matter where they are in their lives. For those who choose to build a career with McDonald’s, our training, education and leadership development programs can take them to the highest levels of our organization. From apprenticeship opportunities, to language and technical skill training, to support for continuing education and competitive benefits, we are committed to helping staff and Company-owned restaurant employees continue their path forward, and we encourage franchisees to do the same.

Human Rights & Respectful Workplaces. We and our franchisees are committed to fostering environments where everyone is equally empowered to realize their full potential. Upholding human rights and cultivating respectful workplaces protects the integrity of our brand and fuels our success. Our commitment to respecting our people and their rights is set forth in several of our policies, including our Standards of Business Conduct, Human Rights Policy, Global Statement of Principles on Workplace Violence Prevention, and Global Statement of Principles Against Discrimination, Harassment and Retaliation. We also encourage franchisees to uphold these principles and to adopt their own similar policies.

People Safety. Nearly two million people work within a Company-owned or franchised McDonald’s restaurant globally across nearly 40,000 locations worldwide. We have a responsibility to protect the safety, health and wellness of everyone who enters one of our restaurants—whether it’s the employees in our corporate offices, the team members in a restaurant or the customers enjoying a meal. With our international markets and franchisee partners, we promote robust health and safety measures in restaurants, including implementing safety programs, setting goals and providing access to well-being resources and training.

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Recent Highlights

  Announced Global Brand Standards in 2021—aimed at advancing a culture of safety—that the nearly 40,000 McDonald’s brand restaurants across the globe must adhere to, with assessments to hold them accountable

  Raised hourly wages at Company-owned McDonald’s USA restaurants in 2021, with average hourly wages expected to reach $15 an hour by the end of 2024

  In 2021, set goals to increase representation of women globally and historically underrepresented groups in the U.S. in leadership roles (Senior Director and above) by 2025, measuring progress towards achieving both goals incrementally on an annual basis beginning in 2021

  Incorporated quantitative human capital metrics into our executives’ annual incentive compensation in 2021 to hold leadership accountable

  Committed to close pay gaps identified in annual equal pay gap analyses for gender globally and for historically underrepresented groups in the U.S. Our 2021 pay gap analysis showed that we have substantially achieved equal pay for women globally (99.85%) and that there was no pay gap disfavoring historically underrepresented groups in the U.S.

  In 2021, invited U.S.-based suppliers to sign a Mutual Commitment DEI – committing to promote DEI within their own organizations

  In 2021, launched a franchisee recruitment initiative to help increase the number of new franchisees from all backgrounds

  McDonald’s USA and its U.S. franchisees set goals in 2021 to increase Systemwide national investments in diverse-owned media companies in the U.S. by the end of 2024

  In 2021, disclosed our corporate employee representation and EEO-1 data for the first time

  In 2021, published an inaugural Diversity Snapshot, including data on employee, Board and franchisee representation, as well as supplier diversity

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Shareholder Engagement

Our Board and management team are highly receptive to feedback and have a robust shareholder engagement program. Notably, our shareholder engagement since our last Annual Shareholders’ Meeting has focused on topics including ESG initiatives, including those relating to environmental matters, human capital management and DEI, executive compensation, and Board governance and refreshment.

The following graphics illustrate elements of our shareholder outreach and engagement, which are ongoing throughout the year, as well as certain items that take place more specifically before, during and after our Annual Shareholders’ Meeting:

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Board’s Response to Shareholder Proposals

Accountability to our shareholders continues to be an important component of our success. Every year, following our Annual Shareholders’ Meeting, our Governance Committee considers the voting outcomes for shareholder proposals. In addition, our Governance Committee and other Committees, as appropriate, consider proposed courses of action in light of the voting outcomes for shareholder proposals under their oversight.

At our 2021 Annual Shareholders’ Meeting, an advisory shareholder proposal requesting to allow shareholders to act by written consent received support of approximately 42% of shares voted. While the majority of our shareholders rejected the proposal (for the sixth time in the past eight years, each time proposed by the same shareholder proponent or his affiliates), our Board and Governance Committee carefully considered the voting results and continued to seek investor feedback, as they have done in prior years. Our Board continues to believe that our shareholders have an effective suite of rights to express their views, effect change between Annual Shareholders’ Meetings and ensure Board accountability. Importantly, the failure of this proposal to receive majority support year after year demonstrates that the majority of our shareholders continue to support our current governance practices.

Other Governance Policies and Principles

Corporate Governance Principles

Our Governance Committee regularly reviews our Corporate Governance Principles and other governing documents and policies to confirm their appropriateness in light of our current and expected long-term circumstances, as well as evolving practices. Our Corporate Governance Principles are available on our website at https://corporate.mcdonalds.com/corpmcd/investors/corporate-governance/governance-resources.html.

Outside Board Service

It is expected that, before accepting an offer to serve on another public company board, a Director will consider whether that service will compromise his or her ability to perform his or her present responsibilities to our Company. Our Board has a policy providing that Directors may not serve on more than three public company boards (in addition to our Board). Our CEO and other management Directors, if any, may only serve on one public company board (in addition to our Board). Moreover, in the event of any conflicts in scheduling between our Board and any board that Directors may subsequently join, Directors shall commit to prioritizing their attendance obligations with our Board. Prior to accepting an invitation to serve on another public company board, each independent Director is required to provide notice to our Corporate Secretary, Chairman and Governance Committee Chair, and to obtain the consent of our Chairman and Governance Committee Chair, otherwise such Director shall offer to submit his or her resignation from our Board to our Governance Committee Chair. Our Governance Committee Chair shall then determine whether to accept or reject such offer. Our Governance Committee reviews our policy on outside Board service as part of its annual review of our Corporate Governance Principles, and recommends to our Board any appropriate changes.

Codes of Conduct

Each year, our Directors must confirm that they have read and will comply with our Code of Conduct for the Board of Directors. Our employees, including executive officers, are subject to our Standards of Business Conduct. These codes are available on our website at https://corporate.mcdonalds.com/corpmcd/investors/corporate-governance/governance-resources.html. If we make any amendments to these codes (other than technical, administrative or other non-substantive amendments) or grant any waiver, including an implicit waiver, from a provision of these codes to our CEO, CFO, chief operating officer, chief accounting officer or controller (or persons performing similar functions), we will disclose the nature of such amendment or waiver, its effective date and to whom it applies on our website or in a report on Form 8-K filed with the SEC.

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Meeting Attendance

Directors are expected to attend all meetings of our Board and the Committees on which they serve, as well as our Annual Shareholders’ Meeting. Our Board met seven times in 2021, and our Committees met the number of times set forth on pages 41 - 45.

On average, our Directors attended 98% of the total number of meetings of our Board and the respective Committees on which they served in 2021, and each Director attended at least 75% of such meetings. In addition, all Directors attended our virtual 2021 Annual Shareholders’ Meeting.

Executive Sessions

Independent Directors meet regularly in executive sessions without management present. An executive session is typically scheduled immediately before or after each regular Board meeting. Our Chairman presides at such executive sessions, except in such matters as may involve his re-election or compensation, or our Board’s leadership structure, in which case our Governance Committee Chair presides. Executive sessions are also regularly scheduled in connection with Committee meetings, other than our Executive Committee, throughout the year.

Director Orientation and Continuing Education

Upon joining our Board, Directors participate in an orientation that includes introductions to members of our senior leadership team and provides information about our operations, performance, strategic plans and corporate governance.

governance practices. In addition, members of senior leadership and other speakers are periodically invited to attend portions of Board and Committee meetings to provide updates on business and general industry trends, as well as governance, regulatory, legal and financial matters.

Directors are encouraged to participate in continuing education programs to stay informed of developments in corporate governance and issues relating to the operation of public company boards. Directors also conduct periodic visits to our restaurants and, of course, are McDonald’s Corporation 2012        7customers. For more information on how Directors oversee and remain informed on Company strategy, see “Strategy Oversight” on page 48.

Director Compensation

Non-management Directors are compensated for their service on our Board, as described below. Directors who are also Company employees do not receive any compensation for their service as Director.

Our Governance Committee annually evaluates the compensation of non-management Directors. Consistent with this practice, in 2021, the independent compensation consulting firm Frederic W. Cook & Co., Inc. performed a comprehensive review of our non-management Director compensation, including benchmarking director compensation at peer and similarly-sized companies, using the same peer group as is used for executive compensation review and described under “Compensation Discussion and Analysis” beginning on page 61. Informed by the results of this review, our Governance Committee recommended that no changes be made to our Director compensation program.

Our Director compensation currently consists of: (i) an annual cash retainer of $115,000; (ii) an annual grant of common stock equivalent units with a value of $185,000 under our Directors’ Deferred Compensation Plan (the “Directors’ Plan”); (iii) an annual cash retainer of $30,000 for our Audit & Finance Committee Chair; and (iv) an annual cash retainer of $25,000 for each Director serving as Chair of our Compensation, Governance, Public Policy & Strategy or Sustainability & Corporate Responsibility Committee. In addition, we match up to $10,000 of charitable contributions made annually by Directors to certain types of tax-exempt organizations.

Common stock equivalent units granted to Directors are credited to an account in the Directors’ Plan that reflects the gains, losses and dividends associated with a notional investment in our common stock. In addition, Directors may defer all or a portion of their cash retainers in the form of additional common stock equivalent units under the Directors’ Plan. Common stock equivalent units so credited are based on a per-share price equal to the closing price of our common stock on the date the units are credited. Amounts credited are deferred until the Director’s retirement from our Board or a date specified by the Director. A Director may elect that all or a portion of the credited common stock equivalent units be paid in a lump sum or equal annual installments over a period of up to 15 years, beginning after retirement from our Board. In the event of death, amounts are paid in a lump sum. All amounts paid from the Directors’ Plan are paid in cash.

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The following table summarizes the compensation received by each non-management Director serving in 2021:

Name     Fees earned
or paid in cash
($)(1)		     Stock
awards
($)(2)		     All other
compensation
($)(3)		     Total
($)
Lloyd Dean 115,000 185,000 10,600 310,600
Robert Eckert 140,000 185,000 10,600 335,600
Catherine Engelbert 115,000 185,000 10,600 310,600
Margaret Georgiadis 115,000 185,000 10,600 310,600
Enrique Hernandez, Jr. 365,000 435,000 10,600 810,600
Richard Lenny 140,000 185,000 5,600 330,600
John Mulligan 145,000 185,000 10,600 340,600
Sheila Penrose 140,000 185,000 10,600 335,600
John Rogers, Jr. 115,000 185,000 10,600 310,600
Paul Walsh 115,000 185,000 10,600 310,600
Miles White 140,000 185,000 10,600 335,600
(1)As described above, Directors may defer all or a portion of their retainer earned in the form of additional common stock equivalent units under the Directors’ Plan.
(2)Amounts in this column represent the aggregate grant date fair value of common stock equivalent units computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718 (“ASC 718”) and granted to each non-management Director who served on our Board during 2021. As discussed above, this column also includes 1,077 RSUs granted to Mr. Hernandez in 2021 in connection with his service as Chairman, with an aggregate grant date fair value of $250,000. These RSUs shall be payable in either shares of our common stock or cash, at our discretion, and shall vest on the later of his retirement from our Board or the first anniversary of the grant date.
(3)Represents our matching gifts of charitable contributions to tax-exempt organizations for participating Directors that were received in 2021 and a McDonald’s gift card provided to Directors as prepayment for their food and beverage expenses at McDonald’s restaurants.

Cumulative Outstanding Stock Awards as of December 31, 2021

NameOutstanding
stock awards
Lloyd Dean9,797
Robert Eckert63,611
Catherine Engelbert1,641
Margaret Georgiadis7,350
Enrique Hernandez, Jr.(1)95,621
Richard Lenny37,878
John Mulligan6,643
Sheila Penrose29,724
John Rogers, Jr.60,794
Paul Walsh3,058
Miles White18,613
(1)Includes 8,931 RSUs granted to Mr. Hernandez in connection with his service as Chairman from 2016 through 2021.
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Executive Compensation

Advisory Vote to Approve Executive Compensation
 Our Board recommends that you vote “FOR” this proposal.

We are asking shareholders to approve, on an advisory basis, pursuant to Section 14A of the Exchange Act, the compensation of our named executive officers for 2021, including the Compensation Discussion and Analysis (the “CD&A”), compensation tables and related material disclosed in this Proxy Statement.

As fully described in the CD&A, our executive compensation program is guided by the following long-standing principles: (i) pay for performance; (ii) drive business results with a focus on creating long-term shareholder value; and (iii) pay competitively. Our executives’ compensation opportunities are predominantly performance-based. Our Compensation Committee has established challenging financial performance targets, and payouts under our incentive plans can vary significantly based on Company performance.

The Company’s strong 2021 performance has continued to prove the strength of our people, the scale of our supply chain, the resilience of our System and the power of McDonald’s brand. Guided by our strategic plan, referred to as Accelerating the Arches, the Company focused on meeting the changing needs of our customers by harnessing competitive advantages that are essential to our future growth.

The Company’s strong 2021 Systemwide sales and operating income performance produced a Corporate STIP payout factor for NEOs of 184.9% (inclusive of both financial and human capital metrics). Despite strong performance in 2019 and 2021, the performance-based restricted stock units awarded to our executives in 2019 had a payout factor of 66.7% due to the impact of the COVID-19 pandemic on our 2020 results. These payouts underscore the Committee’s commitment to align payouts with Company performance in order to drive long-term value creation for our shareholders.

For the reasons expressed above and discussed in more detail in the CD&A, the Board believes the Company’s executive compensation program effectively motivates strong performance while balancing risk, thereby aligning the interests of our executives with the interests of our shareholders.

Consistent with our past practice, we are asking shareholders to approve an advisory vote on executive compensation. Although this vote is advisory and non-binding, our Board values the opinion of our shareholders and our Compensation Committee will review the voting results as well as our ongoing dialogue with shareholders when considering future executive compensation decisions.

We currently hold our advisory vote on executive compensation annually, and the next advisory vote on executive compensation is expected to occur at our 2023 Annual Shareholders’ Meeting.

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Executive compensationCompensation

 

COMPENSATION COMMITTEE REPORT

Dear Fellow Shareholders:Compensation Committee Report

The Compensation Committee (the “Committee”) has reviewed and discussed the Company’s Compensation Discussion and AnalysisCD&A with McDonald’s management. Based on this review and discussion, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and AnalysisCD&A be included in this Proxy Statement and the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2011.2021.

Respectfully submitted,

The Compensation Committee

Richard Lenny, Chair
Lloyd Dean
John Rogers, Jr.
Paul Walsh

Robert A. Eckert,ChairmanCompensation Discussion and Analysis

Susan E. Arnold

Richard H. Lenny

John W. Rogers, Jr.

Miles D. White

COMPENSATION DISCUSSION AND ANALYSIS

EXECUTIVE SUMMARY

McDonald’sThis CD&A describes the Company’s executive compensation program supports our long-term business plan,and provides insights into the Plan to Win, which is customer-focusedCommittee’s process and concentrates on being better, not just bigger. The key objectivesrationale for reviewing and implementing the compensation program. To enable easier navigation of our executive compensation program are to motivate our executives to increase profitability and shareholder returns, to pay compensation that varies based on performance and to compete for and retain managerial talent.the information provided below, we have organized the disclosure into the following sections:

PERFORMANCE HIGHLIGHTSTable of Contents

Our 2021 Year in Review62
Named Executive Officers63
Compensation Guiding Principles63
Aligning Compensation with Business Strategy64
Compensation Setting Process65
Performance-Based Compensation Metrics67
Direct Compensation Elements68
Adjustments to Reported Results72
Other Compensation Elements73
New Hire Compensation74
Compensation Policies and Practices74
Mitigating Risk in Executive Compensation75
2022 Proxy Statement61

McDonald’s 2011 performance was very strong both on an absolute basis and in comparison to our peers’ performance. Our total return to shareholders for the fiscal year ended December 31, 2011 was 35%, which was highest among the 30 companies that comprise the Dow Jones Industrial Average (DJIA) and second highest among our peer group. The following graph shows McDonald’s TSR against our peer group’s average TSR; the TSR for the Standard & Poor’s 500 Stock Index and the TSR for the DJIA for the period from December 31, 2006–December 31, 2011 (based on $100 investment and reinvestmentTable of all dividends).

LOGOContents

Source: S&P Capital IQ

8        McDonald’s Corporation 2012

We performed well in the primary measures that we use to determine executive compensation:Executive Compensation

 

>Our 2021 Year in Review

Business Performance

The Company’s 2021 performance has continued to prove the strength of our people, the scale of our supply chain, the resilience of our System and the power of McDonald’s brand. Guided by our strategic plan, referred to as Accelerating the Arches, the Company focused on meeting the changing needs of our customers by harnessing competitive advantages that are essential to our future growth. The Company prioritized our strategic growth pillars by maximizing our marketing, committing to the core menu items and doubling down on digital, drive-thru and delivery to create memorable customer experiences.

These efforts resulted in broad-based momentum, despite the challenging and evolving macro-economic environment, including a comparable sales increase of 17% over 2020 and 8% over 2019. The following graphics highlight the Company’s strong performance on financial metrics that drive our business and are key elements of our incentive compensation plans.

Systemwide Sales*Operating income increased by 14% (10% in constant currencies)* to $8.5 billion.Income*Earnings Per Share*
21%41%59%

 

>*Earnings per share was $5.27, an increase of 15% (11%As reported in constant currencies).*our Annual Report on Form 10-K for the year ended December 31, 2021

   * See page 14 of Annual Report on Form 10-K for reconciliation.

Further highlights of our 2011 performance:Compensation

>2011 was McDonald’s eighth consecutive year of positive comparable
The Company’s strong 2021 Systemwide sales growth in every geographic segment, with a global increase of 5.6% over 2010.

>We returned $6 billion to our shareholders through share repurchases and dividends paid in 2011.

Over the last five years, we have produced consistent year-over-year growth in operating income (excluding one-time chargesperformance produced a Corporate STIP payout factor for NEOs of 184.9% (inclusive of both financial and human capital metrics). However, despite strong performance in 2007 associated with2019 and 2021, the sale of our Latin American business) despite an exceptionally challenging global economic and operating environment. During this period, our operating income increased significantly each year for a total increase of more than $4 billion. For the five-year period ending December 31, 2011, our total return to shareholders was 263%.

PAY FOR PERFORMANCE

Our total direct compensation package includes salary, our annual bonus plan, which we refer to as TIP, our long-term cash incentive plan, which we refer to as CPUP, stock options andperformance-based restricted stock units each as described below. awarded to our executives in 2019 had a payout factor of 66.7% due to the impact of the COVID-19 pandemic on our 2020 results. These payouts underscore the Committee’s commitment to align payouts with Company performance over different time periods in order to drive long-term value creation for our shareholders.

The following table listsgraphics illustrate the quantitativesignificant variance in STIP and PRSU payouts over the last three years as a result of our strong pay for performance measures the Company uses in its executive compensation program. The rationale for the use of each primary measure is explained below in the detailed discussions of each element of compensation.

alignment.

Historical STIP Payouts*

Historical PRSU Payouts

                                                                                                                      TIP
 CPUP
*STIP includes multiple performance metrics each year, including operating income as a primary financial metric in each of these years.*PRSU payouts include multiple performance factors each year, including total shareholder return (TSR) in each year.
**Represents GAAP growth rate.  Stock options

For more detailed information on the Company’s incentive plans and the calculation of our payout factors, see “Performance-Based Compensation Metrics” and “Direct Compensation Elements” beginning on pages 67 and 68, respectively.

       RSUs  
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Executive Compensation

Primary performance measureNamed Executive Officers

Our named executive officers (or NEOs) for 2021 are listed below:

Christopher Kempczinski
President and Chief Executive Officer		 

Joe Erlinger
President, McDonald’s USA

Operating IncomeXX
ROTAX
EPSX
Share price   

Kevin Ozan
Executive Vice President and Chief Financial Officer

 Desiree Ralls-Morrison
Executive Vice President, General Counsel and Corporate Secretary
Ian Borden
President, International

Compensation Guiding Principles

The Company is guided by the following long-standing principles: (i) pay for performance; (ii) drive business results with a focus on creating long-term shareholder value; and (iii) pay competitively. These principles drive the design, implementation and risk profile of our compensation program.

Throughout the year, management engages in dialogue with a significant portion of our shareholders on a variety of topics, including our executive compensation program (for more details, see the “Proxy Summary” beginning on page 8). The Committee considers feedback received through these direct discussions with investors as well as prior “Say on Pay” results. Accordingly, the Committee considered the approval by approximately 93% of the votes cast for the Company’s 2021 Say on Pay vote and determined that the Company’s compensation guiding principles and compensation elements continued to be appropriate and did not make any changes to the Company’s executive compensation program in response to the 2021 Say on Pay vote.

Strong support for our executive compensation program at our 2021
Annual Shareholders’ Meeting.

First Principle: Pay for Performance

Our executives’ compensation opportunity is predominantly performance-based. As shown in the graphic to the right, for 2021, 93% of our CEO’s target total direct compensation opportunity was performance-based. This graphic reflects the impact of the 2021 increase in the value of the annual equity grant to Mr. Kempczinski (as discussed further below under “Long-Term Incentive Compensation”). In addition, for the NEOs other than Mr. Kempczinski, approximately 83% of the target total direct compensation opportunity for 2021 was performance-based (excluding one-time sign-on bonus and certain time-based equity awards for Ms. Ralls-Morrison in connection with her hire).

Our incentive plans are based on a variety of strategic financial metrics that are aligned with our key measures of long-term sustainable growth. Beginning in 2021, the STIP includes quantitative human capital metrics that reinforce the importance of our Company’s values and hold executives accountable for making progress on DEI goals (as discussed further below under Aligning Compensation with Business Strategy). The Committee has established challenging performance targets, and payouts under our incentive plans can vary significantly based on performance.

*The above chart represents the CEO’s target total direct compensation for 2021, using Mr. Kempczinski’s salary, target STIP payout, and ASC 718 values for equity awards granted in 2021.

KEY 2021 METRICS

STIPPRSUs
Operating income growthEarnings per Share (“EPS”) growth
Systemwide Sales growthReturn on Invested Capital (ROIC)
Human Capital MetricsTotal Shareholder Return (TSR)
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Executive Compensation

Second Principle: Drive Business Results and Long-Term Value Creation

While we believe it is important to reward success against short-term goals, our overall focus is on driving long-term shareholder value. The Committee regularly considers how the Company’s compensation program drives its current business strategy, as described below. In order to incent long-term value creation, we have generally delivered more than 75% of our CEO’s compensation opportunity in the form of equity awards that vest over several years.

Third Principle: Pay Competitively

Our compensation program is designed to attract, engage and motivate talented executives critical to our success. The Committee monitors the compensation practices of our peer group of companies with which we compete for talent. Additionally, the Committee considers internal pay equity, as described below, when making executive compensation decisions.

Aligning Compensation with Business Strategy

Philosophy

The Committee annually reviews the executive compensation program to evaluate whether the program and performance metrics support the Company’s business strategy. The Committee assesses the effectiveness of the program each year and refines the metrics as needed to reflect the most important elements of business performance in a given year. As a result of such review and assessment, the Committee retained the financial metrics of Systemwide sales and operating income, but added human capital metrics, as described in more detail below.

2021 Awards

The evolving macroeconomic operating environment and consumer expectations informed the development of the new Accelerating the Arches growth strategy the Company announced in November 2020. Accelerating the Arches is a strategic framework for delivering growth that builds on the Company’s competitive advantages, while also driving greater impact in the communities we serve. Consistent with this strategy and current consumer behavior, the 2021 STIP metrics are designed to increase executives’ focus on driving key top and bottom-line measures, Systemwide sales growth and operating income growth.

In order to drive progress on our DEI priorities, the Committee also introduced new human capital metrics to the 2021 STIP. These new human capital metrics include four quantitative metrics for 2021 focused on championing our Company values, improving diversity representation among leadership, and fostering strong feelings of inclusion among employees.

For 2021, STIP metrics consisted of Systemwide sales growth (42.5%), operating income growth (42.5%) and human capital metrics (15%).

2022 Awards

Consistent with its Accelerating the Arches growth strategy, the Committee will utilize the same primary performance metrics under the 2022 STIP as under the 2021 STIP. In late 2021, the Company launched a new franchisee recruitment initiative designed to increase the number of franchisees from all backgrounds. In order to incent success of this initiative, Messrs. Borden and Erlinger will be eligible for an additional payout modifier based on the achievement of a quantitative performance metric measuring increased diversity in our franchisee pipeline. The maximum impact of this modifier for Messrs. Borden and Erlinger is to increase their 2022 STIP payouts by up to 15 percentage points (their maximum payout remains at 200% of target).

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Executive Compensation

Compensation Setting Process

As discussed above, the Committee reviews our overall executive compensation program to evaluate whether it remains aligned with current business objectives and evolving best practices. The following highlights the Committee’s annual review process.

Number of meetings:
5 throughout 2021

Agendas:
Determined by the Committee Chair with the assistance of our Chief People Officer

Attendees:
The Committee, members of management (including our Chief People Officer), representatives from FW Cook and, when appropriate, other external professional advisors

Input from ourcompensationconsultantFW Cook, the Committee’s independent compensation consultant, reviews and provides input on overall compensation design and NEO target compensation opportunities.
OtherconsiderationsThe Committee considers peer data and market benchmarking pay data obtained from various sources.
Role ofmanagementManagement provides the Committee with its perspectives on compensation matters. No member of management is involved in decisions regarding their own compensation.

The Committee Chair regularly reports to the Board following Committee meetings. Further, the Committee Chair, along with our Chairman, lead the independent directors in the evaluation of our CEO’s performance. Based upon the results of this performance evaluation and informed by input from FW Cook, the Committee reviews and approves CEO compensation.

Internal Pay Equity

The Committee considers the following in determining the amounts reflected in our direct compensation opportunities: competitive considerations, relative scope of responsibilities, individual performance, tenure in position, and the effect on our general and administrative expenses. In addition, as circumstances warrant, we may provide compensation to executives outside of our regular compensation structure in connection with their hiring, promotion or retention (see “New Hire Compensation” below for more information related to sign-on awards received by Ms. Ralls-Morrison). This permits us to meet specific business objectives without distorting pay equity. The Company does not discriminate based on gender, race, religion, age or any other similarly protected personal characteristics.

Independent Compensation Consultant

The Committee has the sole authority to retain and dismiss an independent compensation consultant and has engaged FW Cook as its consultant. FW Cook also advises the Governance Committee on non-employee director compensation. Consistent with its Charter, the Committee regularly considers FW Cook’s independence. In 2021, the Committee concluded that FW Cook is independent and that its work for the Committee did not raise any conflicts of interest. Management may not engage the Committee’s consultant for any purpose.

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Executive Compensation

Peer Companies

Consistent with our goal of providing competitive compensation to incent and retain executive talent, we review total direct compensation compared to levels at peer companies that we believe are reflective of our business. When we set executive compensation targets, we use the market median for each compensation element as a reference point; however, we do not specifically target any element of compensation at a particular percentile.

Annually, based on input from FW Cook and management, the Committee selects a peer group comprised of companies with which we compete for talent, including our direct competitors, major retailers, producers of consumer branded goods and companies with a significant global presence. In identifying the Company’s peer group, the Committee considered the Company’s industry classification (under the S&P’s Global Industry Classification Standard), and the revenues and market capitalization of potential peer companies as well as peers of peers, among other criteria.

As a result of its annual review, the Committee retained the same peer group for 2021 that was used to evaluate 2020 pay decisions, in particular given the unique and uncertain macroeconomic environment created by the COVID-19 pandemic during 2020 and 2021. Our 2021 peer group and statistics comparing these companies to McDonald’s in terms of size and performance are included in the following graphics.

3M CompanyKellogg CompanyThe Procter & Gamble Company
Best Buy Co., Inc.Kimberly ClarkStarbucks Corporation
Carnival CorporationThe Kraft Heinz CompanyTarget Corporation
The Coca-Cola CompanyLowe’s Companies, Inc.Walgreens-Boots Alliance, Inc.
Colgate-PalmoliveMarriott InternationalWal-Mart Inc.
FedEx CorporationMondeléz International, Inc.Yum! Brands Inc.
General Mills, Inc.NIKE, Inc.
Johnson & JohnsonPepsiCo

        McDonald’s vs. Peer Group
Financial Comparisons McDonald’s* Percentile     Rank     Sample Size
Revenues (most recent fiscal year)       $23.2 32% 16 out of 23
Market Capitalization (12/31/21) $200.03 73% 7 out of 23
Systemwide Sales (most recent fiscal year) $112.14 91% 3 out of 23
1-Year TSR (12/31/21)* 27.81% 82% 5 out of 23
3-Year TSR (12/31/21)* 62.15% 50% 12 out of 23
5-Year TSR (12/31/21)* 153.12% 82% 5 out of 23

*Dollars in millions. Data retrieved from Bloomberg Terminal and verified using CapitalIQ. TSR is non-annualized.
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Executive Compensation

2022 Peer Group

In 2021, the Committee conducted an extensive analysis of our peer group with the support of management and FW Cook and determined that the peer group for 2022 should be updated in light of the Accelerating the Arches strategy and the associated impact on our talent needs. As part of this analysis, the Committee reviewed the peer group through the following screens.

  Covered Industries: continued current related industries (restaurants and leisure, retail, consumer products and food and beverage) and added technology as a result of the importance of digital capabilities in the Company’s growth strategy.

  Size: focused on peers that fall within the general size parameters, specifically companies with revenue and a market cap in the range of 0.25 to four times those of the Company.

  Strategic Criteria: iconic global brand, global business and talent market competitor.

The Committee’s analysis yielded a smaller peer group of 16 companies for 2022. The new group reflects 14 companies that were part of our 2021 peer group, the addition of two technology companies and the removal of eight companies who are viewed as less relevant using the above screens. The graphic to the right illustrates the specific changes to our peer group for 2022.

Companies Added to Peer Group:

Mastercard

Visa

Companies Removed From Peer Group:

3M Company

Best Buy Co., Inc.

Carnival Corporation

FedEx Corporation

General Mills, Inc.

Kellogg Company

Kimberly Clark

Lowe’s Companies, Inc.

Performance-Based Compensation Metrics

Our 2021 compensation program was comprised of both annual and long-term incentive awards, based on objective performance metrics (both absolute and relative), as well as our stock price performance, as reflected in the graphic below:

   

X  The Committee takes a holistic approach to establishing performance targets under the Company’s incentive compensation plans.

  The Committee recognizes the importance of achieving an appropriate balance between rewarding executives for strong performance over both the short- and long-term, and establishing realistic but rigorous targets.

  The Committee focuses on the need to motivate and retain executives, without encouraging excessive risk taking.

  In setting these objective performance targets, the Committee considers the Company’s financial objectives and the economic, industry and competitive environments.

 

 

X

42.5%		Operating Income Growth
  
42.5%Systemwide Sales Growth
Secondary performance measure
Comparable Guest CountsX
Customer Satisfaction OpportunityX
G&A Expense ControlX
TSR   

X

 15%Human Capital Metrics
    

We believe that our executive compensation program has been effective at incentivizing strong results by appropriately aligning pay and performance. We seek to utilize metrics and a mix of incentives under our compensation program that further our main objective of long-term sustainable growth and that are designed to mitigate risk.

In addition to the quantitative factors, determinations of TIP payouts and the grants of annual equity-based compensation take into account qualitative aspects of individual performance as well as potential for future performance. For example, Mr. Skinner’s individual performance results were focused on delivering long-term sustainable growth, talent management and leadership development, and encouraging innovation around balanced active lifestyles. For TIP, a multiplier based on the assessment of individual performance is used in calculating final awards, as described on page [    ].

McDonald’s Corporation 2012        9

The pie chart below illustrates the composition of Mr. Skinner’s 2011 total direct compensation opportunity, using his target TIP award and annualized target CPUP award (one-third of three-year opportunity). This chart highlights that 85% of his total direct compensation opportunity is directly influenced by Company performance.

LOGO

BEST PRACTICES

In 2011, we provided shareholders with an advisory vote on executive compensation (Say on Pay vote). Our executive compensation program was approved by over 95% of the votes. These results demonstrate strong shareholder support for our executive compensation program. In addition, we continued our shareholder outreach program, which provides our principal shareholders an opportunity to engage in dialogue with us about aspects of our executive compensation program.

We evaluate our executive compensation program at least annually, and this year, we have taken into account the outcome of our 2011 Say on Pay vote when considering 2012’s executive compensation program. Based on our evaluation and shareholder feedback, we have not made any significant changes to our executive compensation program for 2012.

The following policies and practices are important elements of our executive compensation program:

>Pay for Performance.    The vast majority of total direct compensation is tied to performance.75%EPS Growth

>
Stock Ownership.    We have stock ownership requirements for our senior management, including requiring our CEO to own stock equal in value to at least six times his annual base salary.25%ROIC

>
Bonuses.    TIP+/- 25 pointsRelative and CPUP both require growth in operating income to yield a payout and utilize caps on potential payments.Absolute TSR

>
100%Clawbacks.    TIP and CPUP contain clawback provisions.Share Price Increase

>Change in Control.    We do not intend to enter into any new change in control agreements and our current agreements are double-trigger.

>Independent Consultant.    The Committee benefits from its utilization of an independent compensation consultant and the compensation consultant acts at the sole direction of the Board or Committee.

KEY TERMS

We use the following terms in describing our compensation plans, measures of Company performance and other aspects of our executive compensation program.

COMPANY COMPENSATION PLANS

>TIP.    Target Incentive Plan. Our annual cash incentive plan.

>CPUP.    Cash Performance Unit Plan. Our long-term cash incentive plan which operates on three-year non-overlapping cycles.

>RSUs.    Restricted stock units. An RSU provides the right to receive a share of McDonald’s stock. RSUs granted to executives generally have both service and performance-based vesting requirements.

10        McDonald’s Corporation 2012

QUANTITATIVE MEASURES OF COMPANY PERFORMANCE

Operating income, ROTA and EPS are based on the corresponding measures reported in our financial statements and are adjusted for purposes of our compensation program. For more information about adjustments in measuring performance, see page [    ].

>Operating income.    Profit attributed to the operations.

>ROTA.    Return on total assets (operating income divided by average assets).

>EPS.    Earnings per share (net income divided by diluted weighted-average shares). Diluted weighted-average shares include weighted-average shares outstanding plus the dilutive effect of share-based compensation.

>Comparable guest counts.    Represents the percent change in transactions from the same period for the prior year for all restaurants in operation at least 13 months.

>

Customer satisfaction opportunity.    Represents the percentage of times that Quality, Service or Cleanliness (QSC®) critical drivers are missed in a customer visit.

>G&A expense control.    Represents a way that the corporate function can contribute to operating income. If spending is at or below plan, this modifier has no impact on the Corporate TIP team factor, but if spending is above plan, it will have a negative impact on the Corporate TIP team factor.

>TSR.    Total shareholder return. The total return on our shares over a specified period, assuming reinvestment of dividends.

GROUPS OF COMPANY EMPLOYEES

>Staff.    Company employees, including home office, divisional office and regional office employees.

>Senior management.    Employees at the level of senior vice president and above; about 52 employees.

>Executives.    The 11 most senior executives of the Company.

>Named executive officers (NEOs). The following five executives whose compensation is described in this Proxy Statement, pursuant to requirements of the Securities and Exchange Commission (SEC).

 
—2022 Proxy StatementJames A. Skinner, Vice Chairman and Chief Executive Officer or CEO67

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Executive Compensation

Incentive Awards – 2021 Payouts

The Committee established rigorous targets that were closely aligned with our business plans. As a result of strong top and bottom-line financial results across the world, our NEOs nearly achieved the maximum payout factor with a Corporate STIP of 184.9% (inclusive of both financial and human capital metrics). However, despite strong performance in 2019 and 2021, the PRSUs that vested in early 2022 paid out below target (66.7%) due to the impact of the COVID-19 pandemic on our 2020 performance. The below-target payouts for these PRSUs, despite the strong performance in two of the three years in the performance period, demonstrates our commitment to our pay for performance philosophy and our emphasis on creating long-term shareholder value. See “Short-Term Cash Incentive (STIP)” on page 69 and “Long-Term Incentive Compensation” on page 71 for more information on the payouts with respect to these awards.

The following graphics highlight the Company’s results against the performance targets established for the key financial metrics in the Company’s incentive plans.

2021 STIP PERFORMANCE VS TARGETS

Systemwide sales

Operating income growth

 
—2019 PRSUs VS TARGETSPeter J. Bensen, Chief Financial Officer or CFO

 —Donald Thompson, President and Chief Operating Officer or President/COO

EPS*

 

ROIIC*

*2019-2021 compound annual EPS growth.
**2019-2021 ROIIC.
—Timothy J. Fenton, President of McDonald’s Asia/Pacific, Middle East and Africa, or APMEA

—Janice L. Fields, President of McDonald’s USA

OTHER

>Total direct compensation.    The aggregate value of base salary, TIP, CPUP, stock options and RSUs.Direct Compensation Elements

Annual Compensation

>Total direct compensation opportunity for 2011.    The targeted value of total direct compensation that the NEOs had an opportunity to earn in 2011 for target performance.

>Committee.    The Compensation Committee of the Company’s Board of Directors.

>AOWs.    The Company’s geographic business units, namely the U.S., Europe and APMEA.

McDONALD’S EXECUTIVE COMPENSATION PROGRAMBase Salary

ELEMENTS OF McDONALD’S EXECUTIVE COMPENSATION

ALLOCATION OF TOTAL DIRECT COMPENSATION AMONG THE ELEMENTS

Approximately 81%To maintain competitiveness and internal pay equity, the Committee considers market practice, scope of the NEOs’ total direct compensation opportunity for 2011 was allocated to variable compensation that is at-risk based on performance, including short-term and long-term incentive compensation.

Short-term incentive compensation is provided under our TIP program and long-term incentive compensation is allocated approximately two thirds to equity-based compensation (stock options and RSUs) and one-third to long-term cash incentive compensation under the CPUP.

McDonald’s Corporation 2012        11

DETAILED INFORMATION ABOUT ELEMENTS OF COMPENSATION

>Annual salary

In setting annual salary levels, we take into account competitive considerations,responsibilities, individual performance, tenure in position, internal pay equity and the effect on our general and administrative expenses. For 2011, decisions regarding executiveIn early 2021, the Committee approved increases to the base salaries were initially informed by a review of externalour NEOs to better align their compensation relative to comparable roles within our peer group, as illustrated in the following table. In determining Ms. Ralls-Morrison’s base salary information atupon her hire in April 2021, the Committee considered the compensation for General Counsels in our stated objectivepeer group as well as internal pay equity.

Named Executive Officer2020 Salary*($)     2021 Salary*($)
Christopher Kempczinski1,250,000 1,313,000
Kevin Ozan880,000 910,000
Ian Borden**664,000 815,000
Joseph Erlinger775,000 815,000
Desiree Ralls-MorrisonN/A 800,000
*Effective March 1 of applicable year.
**Mr. Borden is paid in Canadian dollars, with a salary of CAD 850,000 for 2020 and CAD 1,045,000 for 2021.
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Executive Compensation

Short-Term Cash Incentive (STIP)

For 2021, the STIP was aligned with the Company’s Accelerating the Arches growth strategy and rewarded growth in Systemwide sales, operating income and performance against quantitative human capital metrics. Systemwide sales is an important metric in a franchise business as income generation is closely correlated to sales growth and is also a measure of the financial health of our franchisees. Operating income growth requires the Company to balance increases in revenue with financial discipline to produce strong margins and a high level of cash flow. In 2021, the Committee introduced four new quantitative metrics focused on human capital to the STIP, which reinforces our Company’s values and holds executives accountable for making progress on DEI goals.2021 STIP METRICS

In light of the 50th percentile of our peer group. However, executives’ salaries vary based on individual circumstances and may be above or belowuncertainty in the 50th percentile. For example, in 2011, our CEO’s salary was at approximately the 70th percentileglobal economic environment due to his long tenurethe pandemic, the Committee established a target performance range for both Systemwide sales and strong contributions tooperating income. The chart below provides the success of the Company. In 2011, NEOs’ salaries were increased by between 2.8%Systemwide sales and 4.4% over 2010 levels.

>TIP

Our TIP is designed primarily to reward growth in annual operating income, which measures the success of the most important elements of our business strategy. If there is no growth in operating income, the TIP formula results in no payouts. Operating income growth requires the Company to balance increases in revenue with financial discipline to produce strong margins and a high level of cash flow. The individual performance of our executives is also an important factor in determining their TIP award.

For purposes of determining an executive’s TIP payout, operating income growth is measured on a consolidated (referrednecessary to as Corporate) basis or an AOW basis, or a combination of the two, depending on the executive’s responsibilities. In addition to operating income growth, final TIPachieve threshold, target and maximum payouts take into account pre-established “modifiers” reflecting other measures of Corporate and/or AOW performance (for example, for 2011, comparable guest count increases, customer service improvements and G&A expense control). In addition to Company performance, TIP payouts are adjusted based on the application of an individual performance factor (IPF) (from 0 up to 150% in 2011) which acts as a multiplier and can have a significant effect, whether positive or negative, in determining the final payout. Final payouts are capped at 250% of target. Additional details on how each element of performance affects actual 2011 TIP payouts can be found in the description following the Grants of Plan Based Awards table on pages [     ] and [     ].

Our executives’ 2011 target awards were set at approximately the 60-65th percentile of our peer group.

In 2011, operating income growth exceeded the targets under the TIP2021 STIP for each AOW as well as Corporate. Further, TIP results for each AOW and Corporate benefitted by the cumulative performance against the pre-established targets for the modifiers.Corporate:

2021*     Threshold     Target*     Maximum
Systemwide sales growth 0% 8-12% 21%
Comparable operating income growth 0% 19-26% 41%
*Payout percentage interpolated for results that fall between each of the performance levels specifically identified.
**Achievement of any performance level in the range would have resulted in a target payout.

Performance Versus 2021 STIP Target

The following table shows the Systemwide sales and operating income targets and results under 2021 STIP for each of the 2011 TIPsegments. STIP payouts are shown in the following table:capped at 200% of target.

  Systemwide Sales (42.5% weighting) Operating Income* (42.5% weighting)
Dollars in billions Target
Systemwide
Sales**
($)		     Target 2021
Systemwide
Sales
Growth Over
2020**
(%)		     2021
Systemwide
Sales ($)		     2021
Systemwide
Sales
Growth Over
2020 (%)		     Target
2021
Operating
Income**
($)		     Target
2021
Operating
Income
Growth
Over
2020** (%)		     2021
Adjusted
Operating
Income
($)		     2021
Adjusted
Operating
Income
Growth
Over 2020
(%)
Corporate 100.7-104.5 8-12 110.5 18 8.4-8.9 19-26 9.8 39
U.S. 41.2-42.9 2-6 46.0 13 4.0-4.2 5-11 4.8 25
International Operated
Markets (“IOM”)		 34.9-36.1 14-18 37.8 24 4.3-4.5 29-35 4.9 48
International Developmental
Licensed Markets (“IDL”)		 24.6-25.6 11-15 26.8 20 1.2-1.3 11-15 1.4 21
*The 2021 operating income target and results above have been adjusted in accordance with the Committee’s pre-established guidelines. See page 72 for further information on the Committee’s guidelines as well as 2021 STIP adjustments.
** Under the payout curves, the Committee established a performance range or the achievement levels that would have resulted in a target payout for these goals.
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(Dollars in millions)  Target 2011 
operating income*		   

2011 

operating income*

   

 

Target 2011 

operating income 
growth over 2010*

   

2011 

operating income 

growth over 2010*

     

 

Corporate

   $8,140       $8,229       8.5%     9.7%    

U.S.

   3,625       3,666       5.2        6.4       

Europe

   3,010       3,070       7.6        9.7       

APMEA

   1,398       1,415       12.0        13.3       
                        

    * Adjusted for compensation purposes as described on page [     ].Executive Compensation

With respect to human capital, the Committee established quantitative metrics to measure the Company’s performance. NEOs earned 5 STIP points for each human capital metric achieved with achievement of three metrics corresponding to a target-level payout of 15 STIP points. In addition (as reflectedearly 2022, the Committee reviewed our performance with respect to the quantitative human capital metrics under the 2021 STIP and determined that the NEOs earned 10 STIP points (66.7% of target) by achieving two of the four human capital metrics. Although the Company increased representation of underrepresented minorities in the table on page [     ])leadership roles (senior director and above), the IPFspecified metric was not achieved resulting in no STIP points earned.

Please refer to the chart below for each NEO was above 100%.

Consistent with our 2011 resultsmore details on these metrics and our executives’ individual performance, TIP awards were above target. achievement.

CategoryMetricMetric AchievedSTIP Points
ValuesMeet or exceed specified McDonald’s Values Index* score5
RepresentationMeet or exceed specified increase in global representation of women in senior director and above positions5
RepresentationMeet or exceed specified increase in U.S. representation of underrepresented minorities in senior director and above positions—0
InclusionMeet or exceed specified McDonald’s Inclusion Index*score—0
Total STIP Points: 10
Performance factor: 66.7%
*Comprised of employee survey questions that measure the extent to which employees believe the Company is taking actions to support our values and produce an inclusive environment.

Individual 2021 STIP Payouts

The 2021 STIP target awards and final TIPactual payouts for the NEOs are shown in the following table:table below.

Named Executive Officer Applicable Team
Factors		 Performance
Factors		 Target
2021 STIP
Payment as
Percentage
of Salary
(%)*		 2021 Target
STIP Payout
($)		 2021 STIP
Payout
($)		 2021 STIP
Payment as
Percentage
of Target
(%)
Christopher Kempczinski* Corporate (85%) 205.7 180 2,363,400 4,368,745 184.9
  Human Capital (15%) 66.7        
Kevin Ozan Corporate (85%) 205.7 120 1,092,000 2,018,562 184.9
  Human Capital (15%) 66.7        
Ian Borden IOM (42.5%) 185.9 110 896,500 1,532,408 170.9
  IDL (21.25%) 178.3        
  Corporate (21.25%) 205.7        
  Human Capital (15%) 66.7        
Joseph Erlinger* U.S. (63.75%) 225.0 110 896,500 1,767,484 197.2
  Corporate (21.25%) 205.7        
  Human Capital (15%) 66.7        
Desiree Ralls-Morrison** Corporate (85%) 205.7 90 493,151 911,590 184.9
  Human Capital (15%) 66.7        
*In 2021, the Committee increased the 2021 STIP targets for Messrs. Kempczinski (from 170% to 180%), Ozan (from 110% to 120%), Borden (from 90% to 110%) and Erlinger (from 100% to 110%), to improve market competitiveness and to better align their compensation internally.
**Ms. Ralls-Morrison’s 2021 STIP target pro-rated based on her start date of April 26, 2021.
70McDonald’s
Corporation
000000.0000000000.0000000.0000000000.0000000.0000000000.0000000.0000000000.0

Named

executive officer

  

2011

target TIP award

   

 

2011

TIP final payout

   TIP final payment
as percentage of target		    

 

James A. Skinner

   $2,220,000     $3,300,000     149%  

Peter J. Bensen

   675,000     987,000     146   

Donald Thompson

   1,043,750     1,526,000     146   

Timothy J. Fenton

   514,250     667,000     130   

Janice L. Fields

   507,450     679,000     134   
                  

Additional detail about the NEOs’ 2011 TIP awards begins on page [     ].

Table of Contents

12Executive Compensation

Long-Term Incentive Compensation

Setting 2021 Equity Award Values

The Committee considers market practice, scope of responsibilities, individual performance, tenure in position, internal pay equity and the effect on our general and administrative expenses in setting equity award values in an effort to maintain market competitiveness and internal pay equity. In order to energize and retain our most critical senior leaders and in recognition of their essential role in leading the business through a strong recovery from the impact of COVID-19 and to drive further growth over the next several years, the Committee approved an increase in the 2021 values of the annual equity awards granted to certain NEOs, including Messrs. Kempczinski, Ozan, Borden and Erlinger. The Committee believes that awarding this increase is consistent with our pay-for-performance philosophy and further aligns the interests of our executives with the long-term interests of our shareholders.

The following table illustrates the 2021 increase in annual equity award value for the NEOs who received an award in 2020:

Named Executive Officer 2020 Award Value ($)     2021 Award Value ($)
Christopher Kempczinski 9,500,000 14,000,000
Kevin Ozan 3,600,000 7,000,000
Ian Borden 1,900,000 4,250,000
Joseph Erlinger 2,250,000 4,500,000

Performance-Based Restricted Stock Units

PRSUs provide the right to receive a share of McDonald’s Corporation 2012stock, subject to certain vesting requirements, and accrue dividend equivalent rights that are reinvested in additional PRSUs and earned in proportion to and only to the extent the underlying PRSUs vest. These awards also align the interests of our NEOs with those of our shareholders by delivering payouts in the form of Company stock.

PRSUs granted in 2021 will vest on the third anniversary of the grant date, subject to the Company’s achievement of two key financial metrics, EPS growth (weighted 75%) and ROIC (weighted 25%). The Committee implemented ROIC as a metric for 2021 awards replacing Return on Incremental Invested Capital (“ROIIC”) that was used in previous years. ROIC considers balance sheet metrics beyond capital expenditures, ties more readily to U.S. GAAP metrics and is the more commonly reported metric by our peer companies. The Committee incorporated the planned level of share repurchase in setting the EPS targets. The PRSUs are also subject to a modifier based on the Company’s relative TSR measured over the three-year performance period versus the S&P 500. The Committee believes this balanced set of metrics encourages executives to increase profitability and efficiently and effectively use capital, which will enhance shareholder value.

The PRSUs are also subject to a cap of 100% of target if the Company’s absolute TSR for the three-year performance period is negative, which further supports our commitment to ensuring that the interests of executives are aligned with those of our shareholders.

Maximum payout of PRSUs is limited to 200% of the target award (calculated as a cap of 175% of target based on EPS and ROIC results, subject to a modifier of up to an additional 25 percentage points based on the Company’s relative TSR versus the S&P 500 Index over the performance period), plus any dividend equivalents earned on the PRSUs.

>2022 Proxy StatementCPUP71

We believe it is importantTable of Contents

Executive Compensation

The chart below provides the compound annual EPS growth and ROIC necessary to have a long-term component based on measures that are not limitedachieve threshold, target and maximum payouts for the 2021-2023 PRSUs.

2021-2023* Threshold     Target     Maximum
Compound annual EPS growth 0.0% 10.0% 14.0%
3-year ROIIC 15.0% 17.5% 17.5%
*Payout percentage interpolated for results that fall between each of the performance levels specifically identified.
Cumulative TSR vs. S&P 500 Index Modifier
0 - 19%-25%
20 - 39%-12.5%
40 - 59%0%
60 - 79%+12.5%
80 - 100%+25%

In 2019, the Committee granted PRSUs to stock price. As operating income focuses onour executives, which were subject to EPS, ROIIC and relative TSR performance metrics for the key elements associated with driving our business2019-21 performance period. Despite the challenges presented by the COVID-19 pandemic, both the Company’s EPS growth and ROTA measuresROIIC exceeded threshold performance levels and the efficiency of our capital investments, we believe these strike an appropriate balance asCompany’s TSR was at the primary measures for our long-term cash incentive plan. CPUP also incorporates a TSR multiplier that rewards strong shareholder returns relative40th percentile compared to the S&P 500 Index, while holding senior management accountable for below-market performance.

Every three years, senior management is eligible for a long-term cash incentive award under CPUP, which provides for a cumulative payoutresulting in the PRSUs vesting at the end of the three-year cycle. CPUP awards do not overlap and were granted most recently in 2010. These awards are scheduled to be paid (if performance targets are met) in 2013 following completion of the current three-year performance cycle ending on December 31, 2012. The maximum award allowed under the 2010–2012 CPUP is 230%66.7% of the target award. Based upon performance through 2011, we currently expectamount in early 2022. Although the 2010–2012 CPUP payout factor to be intargets for the range of 170%–190% of target awards. As a result of these awards, we expect 2012 compensation for all members of senior management to be significantly higher than 2011.

Final payouts will be determined based on the following three quantitative measures over the 2010–2012 performance period: consolidated compound annual growth in operating income, average ROTA and TSR relative2019 PRSUs were set prior to the S&P 500 Index which functionstime when the Committee could have contemplated the impact of the COVID-19 pandemic, consistent with our pay for performance philosophy, the Committee determined not to adjust the performance targets or performance outcomes resulting from the impact of COVID-19 with respect to the 2019 PRSUs.

In addition to the PRSUs awarded as part of the annual grant cycle, from time to time, a NEO may receive a service-based restricted stock unit (“RSU”) award as part of a new hire package or as a multiplier (either positiveretention or negative). Detailed information about the calculationpromotional incentive. In 2021, Ms. Ralls-Morrison received grants of the 2010 CPUP awards was includedRSUs in our 2011 proxy statement.connection with her hiring, as more fully described below under “New Hire Compensation.”

Stock Options

>Stock options

Options align the compensation executives receivegranted to the return earned by shareholders, thereby incentivizing executives to increase shareholder value. Options, including those granted in 2011,our NEOs have an exercise price equal to the closing price of our common stock on the grant date, a term of ten years and vest ratably over four years.years, subject to continued service. Options provide value only if our share price increases, thereby closely aligning executive pay with shareholder interests. The Company’s policies and practices regarding option grants, including the timing of grants and the determination of the exercise price, are described on page [    ].

75.

>Adjustments to Reported Results

In order to focus our executives on the fundamentals of the Company’s underlying business performance, certain adjustments that are not indicative of ongoing performance may be approved for purposes of incentive-based compensation. Our goal is to align incentive payouts with underlying business results that our investors use to measure performance, as opposed to allowing special gains or losses from having a significant impact on payouts.

The Committee considers potential adjustments pursuant to pre-established guidelines, including materiality, to provide consistency in how the Committee views the business. The graphic below illustrates the three categories (“strategic”, “regulatory” and “external”) of items the Committee may exclude from financial results for purposes of determining incentive payouts. In addition, the Committee excludes the effects of foreign currency translation (either positive or negative) for purposes of incentive payouts since changes in foreign exchange rates may cause our reported results to appear more or less favorable than business fundamentals indicate.

The Committee may approve adjustments to reflect events in the prior period and/or the results achieved during the applicable performance period to account for items not indicative of underlying performance, in STIP and/or PRSUs. Individual adjustments may have a positive or negative impact, and in any given year, aggregate adjustments may increase or decrease incentive payouts.

72McDonald’s
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Table of Contents

Executive Compensation

2021 STIP ADJUSTMENTS TO OPERATING INCOME
CategoryAdjustmentsAmount of
Adjustment ($)*
RSUsSTRATEGICAsset impairment and gains/losses related to strategic initiatives, including restructurings, acquisitions, divestitures and developmental licensee transactions

Excluded gains associated with partial divestment of ownership in McDonald’s Japan (Corporate and IDL)

Excluded losses and potential future gains associated with the sale of McD Tech Labs

(353)


50

REGULATORYChanges in tax or accounting law or regulationsN/AN/A
EXTERNALExtraordinary, unforeseeable events, such as natural disasters or the impact of social or political unrest that are outside of management’s controlN/AN/A
*Pre-tax amounts in millions. The amounts in the table for each segment sum to the total adjustments identified below for the respective segment.

The valuefollowing chart provides the net adjustment (other than for foreign currency translation), by segment, made to 2021 operating income for purposes of RSUs is linked to our stock price. The performance-based vesting conditions based uponcalculating STIP payouts.

Corporate$(303) million
U.S.N/A
International Operated Markets (IOM)N/A
International Developmental Licensed Markets (IDL)$(353) million

2019 PRSU Adjustments

In determining EPS growth requireand ROIIC results for 2019-2021 PRSU awards, the executives to achieveCommittee adjusted performance consistent with the Company’s strategic objectives in order to vest in the awards. The Company believes that EPS growth is a strong indicator of profitability.

The RSUs granted to executives in 2011 are scheduled to vest in full at the end of a three-year service period, subject to the Company’s achievement of EPS growth targets over that period. The targetabove pre-established guidelines, adjusting performance level for the RSUs grantedsame items that applied to executives in 2011 is 6% compounded annual growth in EPS on a cumulative basis over baseline 2010 EPS of $4.60. If targetSTIP awards for the respective performance is achieved (cumulative EPS of $15.53),years. In addition, the full number of RSUs coveredCommittee adjusted performance to exclude certain tax benefits recognized by the 2011 awards will vest. Achievement of below target performance reducesCompany in connection with changes in UK tax law. In the number of RSUs that will vest, but above target performance does not increaseaggregate, the number of RSUs earned.

All of the RSUs granted to the NEOs in 2008 vested in 2011 based on the achievement of 16.6% compounded annual EPS growth over the performance period, which exceeded the target of 7%.

Committee’s adjustments decreased 2019-2021 PRSU payouts.

>Retirement savings plansOther Compensation Elements

The NEOs participate in our tax-qualified defined contribution retirement savings plan and a supplemental non-qualified deferred compensation retirement plan. Retirement Savings Arrangements

We believe a competitive retirement program aligns with market practices, and thereby contributes to the recruitment and retention of top executive talent.

>Severance and change in control arrangements

Executive Retention Replacement Plan (ERRP). We do not have any supplemental executive retirement plans. Our NEOs participate in the same tax-qualified defined contribution retirement savings plan and non-tax qualified deferred compensation retirement plan that is applicable to U.S.-based employees, except Mr. SkinnerBorden who participates in the Company’s Canadian retirement program.

Perquisites and Other Benefits

The Company provides certain limited perquisites to NEOs, including a car allowance, financial planning, physical examination (which are also available for the NEOs’ spouses), life insurance and matching charitable donations. Mr. Kempczinski is permitted to use the Company’s aircraft for personal travel; however, the Company requires full reimbursement of costs associated with personal use of the corporate aircraft once the Company’s cost reaches a predetermined threshold. In certain circumstances, Mr. Kempczinski may permit other executives to use the aircraft for personal travel or to be joined by their spouses on the aircraft for business travel. The safety and security of our employees is a priority for the Company; accordingly, we provide risk-based executive security for select NEOs. The Company does not provide any tax gross-ups on the perquisites described above.

2022 Proxy Statement73

Table of Contents

Executive Retention Replacement Plan or ERRP. Since Mr. Skinner fulfilledCompensation

NEOs also participate in the retention periodbroad-based benefit and welfare plans available to Company staff. The Company maintains a Global Assignment Policy, covering employees who temporarily relocate to another country but remain subject to their home country’s terms of employment; a Localization Policy, covering employees who transition from 1999 through 2002a global assignment to local employment in another country; and satisfiesan International Relocation Policy, covering employees who relocate to another country and immediately transition to local employment. These policies provide certain relocation and expatriate benefits, which are intended to equalize cost of living differences between the retirement age requirement under the ERRP, he is entitled to retire at any timehome and receive certain cash benefits,assignment country, as well as to facilitate the vesting of all of his outstanding equity awards. Options would continuetransition associated with an international assignment. During 2021, Messrs. Borden and Erlinger received benefits under these policies.

Please refer to become exercisablefootnote 4 to the 2021 Summary Compensation Table beginning on their originally scheduled dates and RSUs would be paid outpage 76 for additional details on the originally scheduled dates, based on the Company’s achievementcosts of the applicable performance goals. In addition,benefits provided to the NEOs.

Severance and Change in Control Arrangements

The Company has a U.S. severance plan that covers all U.S.-based officers, including our NEOs except Mr. Skinner would receive substantially similar economic benefits if his employment is terminated for any reason other than death, disability or “cause.” Mr. Skinner’s receipt of benefitsBorden. Benefits under the ERRP is subject to the execution of an agreement that includes covenants not to compete and not to solicit employees, nondisparagement and nondisclosure covenants as well as a release of claims.

Severance plan.  Messrs. Bensen, Fenton and Thompson and Ms. Fields participate in our broad-based U.S. severance plan. Benefits under the severance plan are described under “Potential Payments Upon Termination of Employment or Change in Control” beginning on page [    ].

82. In the event of Mr. Borden’s departure, he may be entitled to receive payments and benefits, as required by local law.

McDonald’s Corporation 2012        13

Change in control employment agreements.  The Company has change in control employment agreements with its NEOs. Benefits under the change in control employment agreements are described under “Potential Payments Upon Termination of Employment or Change in Control” beginning on page [    ]. The Committee does not intend to enter into new change in control agreements.

>Perquisites and other fringe benefits

McDonald’s provides the following perquisites to executives: company-provided cars or a car allowance, financial planning, annual physical examinations (which are also available for the executives’ spouses), executive security, matching charitable donations, limited personal items and, generally in the case of the CEO only, personal use of the Company’s aircraft. The Company does not have any change in control agreements. Further, we do not provide for any single-trigger change of control benefits or Section 280G tax gross-ups with respect to perquisites. See footnote 5 to the Summary Compensation Table on page [     ] for a discussion of perquisites received by NEOs in 2011. Executives also participate in all of the broad-based benefit and welfare plans and perquisites available to McDonald’s staff in general.gross-up payments.

CERTAIN ADJUSTMENTS IN MEASURING PERFORMANCE

New Hire Compensation

In measuring financial performanceApril 2021, the Company hired Ms. Ralls-Morrison as Corporate Executive Vice President, General Counsel and Corporate Secretary. In connection with her hiring, the Committee focuses ongranted Ms. Ralls-Morrison PRSUs, RSUs and options. The PRSUs and options have terms consistent with the fundamentals ofannual grants that had been made to our other executives in February 2021. In addition, as an inducement to join the underlying business performanceCompany and adjusts for itemsto replace compensation she forfeited with her former employer, Ms. Ralls-Morrison received RSUs that are not indicativescheduled to vest between 2022 and 2023 (subject to continued employment) and a cash sign-on bonus in the amount of ongoing results. For example, operating income and EPS are expressed in constant currencies (i.e., excluding the effects of foreign currency translation), since we believe that period-to-period changes in foreign exchange rates can cause our reported results to appear more or less favorable than business fundamentals indicate. The Committee’s approach to other types of adjustments is subject to a materiality threshold and pre-established guidelines to provide clarity and consistency on how it views the business when evaluating performance. Charges/credits that may be excluded from operating income include: “strategic” items (such as restructurings, acquisitions and divestitures); “regulatory” items (changes in tax or accounting rules); and “external” items (extraordinary, non-recurring events such as natural disasters). Similar principles apply to exclusions from EPS and when calculating ROTA.

There were no significant items excluded in calculating adjusted operating income for 2011 TIP except for adjustments resulting from certain natural disasters in APMEA that only impacted APMEA TIP results.

Significant items excluded from base EPS (2010 EPS) for the RSUs granted to the executives in 2011 were:

$150,000.

>impairment charges, net of taxes.Compensation Policies and Practices

Significant items excluded from base EPS (2007 EPS) for RSUs that were granted in 2008 and vested in 2011 were:

>impairment charges, net of taxes;

>the net tax benefit from an IRS audit settlement; and

>income from discontinued operations.

THE PROCESS FOR SETTING COMPENSATION

The Committee is responsible for reviewing and approving senior management’s compensation. The Chairmen of the Governance and Compensation Committees lead the Board’s independent Directors in the evaluation of the CEO’s performance. Based upon the results of this performance evaluation, the Committee determines the CEO’s compensation.

THE ROLE OF MANAGEMENT

Management recommends compensation for executives other than the CEO to the Committee. The CEO recommends compensation packages for the NEOs who report directly to him: Messrs. Bensen and Thompson. The President/COO does the same for the NEOs who report directly to him: Mr. Fenton and Ms. Fields. The head of human resources also provides input on compensation for each of the executives. In 2011, prior to each Committee meeting, the CEO and the CFO provided input on the materials prepared by management and presented to the Committee (except with respect to their own compensation).

14        McDonald’s Corporation 2012

THE ROLE OF COMPENSATION CONSULTANTS

The Committee has adopted a policy under which it has the sole authority to select, evaluate, retain and dismiss an independent compensation consultant. Management may not engage the consultant.

Frederic W. Cook & Co., Inc. (Fred Cook) is the Committee’s independent compensation consultant. Fred Cook advises the Committee regarding (i) trends in executive compensation; (ii) specific compensation recommendations for the CEO, CFO and COO; (iii) applicable legislative developments; and (iv) other matters as requested by the Committee from time to time. Fred Cook also provided assistance to the Board in carrying out certain routine functions (compiling and summarizing the results of certain Board and Director evaluations) and advice on Director fees.

Management considers survey data and similar information about compensation programs that it obtains from various sources, including Aon Hewitt, which also provides significant benefit plan administration services to McDonald’s, and Towers Watson & Co. and Equilar. From time to time, data obtained from these other sources is provided to the Committee to provide information about compensation trends and practices generally.

COMPANIES IN OUR PEER GROUP IN 2011

Consistent with our goal of providing competitive compensation, we benchmark our executives’ compensation compared to executive compensation at a peer group of companies. The companies in the peer group are companies with which we compete for talent, including our direct competitors, major retailers, producers of consumer branded goods and companies with a significant global presence.

The Committee reviews our peer group annually. The peer group was selected based on the following criteria: industry, comparable size based on revenue and market capitalization; global presence; high performing companies that compete with us for talent; and availability of data. The table below shows market capitalization and revenues for each of our peer group companies for 2011 (except for Burger King, Nestlé and Unilever, for which such information is not available). McDonald’s market capitalization as of the end of 2011 was $102.5 billion (at the 78th percentile of our comparator group) and revenue was $27.0 billion (at the 35th percentile of our comparator group).

McDONALD’S 2011 PEER GROUP COMPANIES

(Dollars In billions)

000000000000000000000000000000000
Peer  Market capitalization ($)(1)   Revenues (2)     

 

Branded Consumer Products:

      

3M Company

   $  57.3     $29.6    

The Coca-Cola Company

   159.0     46.5    

Colgate-Palmolive Company

   44.7     16.7    

The Walt Disney Company

   67.4     40.9    

General Mills, Inc.

   26.1     14.9    

Johnson & Johnson

   179.1     65.0    

Kellogg Company

   18.2     13.2    

Kraft Foods, Inc.

   66.0     54.4    

Nestlé (United States) (3)

   –     –    

NIKE, Inc.

   44.7     20.9    

PepsiCo, Inc.

   103.7     66.5    

The Procter & Gamble Company

   183.5     82.6    

Sara Lee

   11.2     8.7    

Unilever (United States) (3)

   –     –    

 

Table continued on next page

McDonald’s Corporation 2012        15

Table continued from previous page

 

Peer

  Market capitalization ($)   Revenues     

Major Retailers/Services:

      

Best Buy Co., Inc.

                    $8.5                    $50.3    

Costco Wholesale Corporation

   36.2     87.0    

The Home Depot, Inc.

   64.8     68.0    

Lowe’s Companies Inc.

   31.8     48.8    

Sears Holding Corporation

   3.4     43.3    

Target Corporation

   34.4     67.4    

Walgreen Co.

   29.8     72.2    

Wal-Mart Stores, Inc.

   204.7     419.0    

 

Key Competitors:

      

Burger King Holdings, Inc.

   –     –    

Starbucks Corporation

   34.3     11.7    

Wendy’s Company

   2.1     2.4    

Yum! Brands, Inc.

   27.2     12.6    

 

(1)Source for market capitalization: Bloomberg.com. Data as of December 31, 2011.

(2)Reflects revenues, sales or comparable data as publicly disclosed by the applicable company in its annual report filed with the SEC for its most recently completed fiscal year.

(3)Unlisted U.S. division of non-U.S. company.

COMPENSATION POLICIES AND PRACTICES

POLICY REGARDING STOCK OWNERSHIP OF MANAGEMENTPolicy Regarding Management’s Stock Ownership

The Company has adoptedmaintains stock ownership requirements for senior management because we believe theyit believes executives will more effectively pursue the long-term interests of shareholders if they are shareholders themselves. Executives have five years to achieve their required ownership level. This five-year period restarts when an executive is promoted to a position with a higher ownership requirement. An executive who is not on track to meet his or her ownership requirements following the third year (of the five-year period) is required to retain the lesser of 50% of the net after-tax shares received upon the vesting of an RSU or PRSU award or such percentage of net after-tax shares necessary to satisfy the applicable requirement. If an executive has not achieved the requisite stock ownership within five years, they must retain 100% of the net after-tax shares received upon the vesting of an RSU or PRSU award and/or a stock option exercise until the required ownership level is attained.

The following table providesillustrates our currentstock ownership requirements.

Stock ownership requirementsMultiple of salary
President & CEO  6x
Other NEOs  4x

The Committee reviews compliance with these stock ownership requirements by level.

annually. Based on the most recent annual evaluation, all NEOs are in compliance.

Level

Stock ownership requirements
(multiple of base salary)

         
74

Vice Chairman & CEO

6 X

President/COO

5 X

CFO

4 X

President U.S./Europe/APMEA

4 X

Executive Management (EVP)

4 X

Division President — U.S. paid

4 X

Division President — non-U.S. paid

3 X

Senior Management (SVP) — U.S. paid

3 X

Senior Management (SVP) — non-U.S. paid

2 X

McDonald’s
Corporation

Table of Contents

Executive Compensation

Policy Regarding Prohibition on Pledging and Hedging

The Committee reviews share ownership requirements and where members of senior management stand against their respective requirements annually. Once a member of senior management becomes subject to the stock ownership requirements, he/she has five years to satisfy the requirements. Currently, all executives meet or are on track to meet their respective stock ownership requirements.

Further, the Company has adopted restrictions that prohibit certain employees, including all of senior management,executives and directors from engaging in pledging and/or derivative transactions to hedge the economic risk associated with their Company stock ownership. These restrictions also require approvalFurther, executives and directors may not enter into an agreement that has the effect of transferring or exchanging economic interest in order to hold Company shares in a margin account.any award.

16        McDonald’s Corporation 2012

CLAWBACKCompensation Recoupment and Forfeiture Provisions

The Company’s compensation plans contain clawback provisionsSTIP awards and equity grant agreements for executives provide that applythe Company may terminate awards and/or recapture previously paid awards if a participant engages in willful fraud that (i) causes harm to senior management.the Company or (ii) is intended to manipulate performance goals either during employment, or after employment has terminated.

Senior managementFurthermore, executives are required to have executed restrictive covenants as a condition to receiving equity awards. An executive who violates the restrictive covenants to which they are subject will forfeit outstanding equity awards, whether or not vested, and may be required to repay compensationawards that have previously been paid.

The Company’s equity grant agreements also contain a repayment/forfeiture provision that triggers repayment of any benefits received in connection with such grants as may be required to comply with (i) NYSE listing standards adopted in accordance with Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (regarding recovery of erroneously awarded compensation) and any implementing rules and regulations of the SEC adopted thereunder, and (ii) similar rules under TIP and CPUPthe laws of any other jurisdiction, as well as pursuant to any policies adopted by the Company to implement such requirements, in certain circumstances (for example, the commission of fraud) andall cases to the extent permitted under applicable law.

Payments under the ERRP, including some stock option gains and RSU payouts, are also subject to forfeiture and repayment in certain circumstances, such as violation of an applicable restrictive covenant or the commission of an act that would have resulted in termination for “cause.”

Under our severance plan, the Company may cease payment of any future benefits and require repayment of any previously paid severance amounts upon violation of an applicable restrictive covenant or commission of an act that would have resulted in termination for “cause.”

Unexercised stock options and unpaid RSUs are subject to forfeiture if the Company determines that any employee commited an act or acts involving dishonesty, fraud, illegality or moral turpitude. Further, if an executive violates a restrictive covenant, the Company has the right to cancel outstanding awards.

POLICY REGARDING FUTURE SEVERANCE PAYMENTS

The Company has a policy under which we will seek shareholder approval for severance payments to a NEO if such payments would exceed 2.99 times the sum of (i) the NEO’s annual base salary as in effect immediately prior to termination of employment; and (ii) the highest annual bonus awarded to the NEOdetermined by the Company in any of the three full fiscal years immediately preceding the fiscal year in which termination of employment occurs. Certain types of payments are excluded from this policy, such as amounts payable under arrangements that apply to classes of employees other than the NEOs or that predate the implementation of the policy, as well as any payment that the Committee determines is a reasonable settlement of a claim that could be made by the NEO.

RISK AND COMPENSATION PROGRAMS

In considering the risksapplicable to the Companyaward recipient.

Policies and its business that may be implied by our compensation plans and programs, the Committee focuses primarily on senior management, but also considers the design, operation and mix of the plans and programs at all levels of the Company. Our compensation program is designed to mitigate the potential to reward risk-taking that may produce short-term results that appear in isolation to be favorable, but that may undermine the successful execution of our long-term business strategy and erode shareholder value.Practices Regarding Equity Awards

INTERNAL PAY EQUITY

Compensation opportunities reflect our executives’ positions, responsibilities and tenure in a given position and are generally similar for executives who have comparable levels of responsibility (although actual compensation delivered may differ depending on relative performance). Mr. Skinner has ultimate responsibility for the strategic direction of theThe Company and therefore is the most highly paid.

POLICY WITH RESPECT TO DEDUCTIBILITY OF COMPENSATION

We generally design our compensation programs to allow the Company to deduct compensation expense under Section 162(m) of the Internal Revenue Code (Code), which limits to $1 million the tax deductibility of annual compensation paid to NEOs unless the compensation is performance-based. However, the Company reserves the discretion to pay compensation that does not qualify as performance-based compensation under Section 162(m)grant equity awards when in possession of the Code.

POLICIES AND PRACTICES REGARDING EQUITY AWARDS

Equity awards cannot be granted when the Company possesses material non-public information. The Company generally makes broad-based equity grants at approximately the same time each year following our release of full-year financial information;results; however, the Company may choose to make equity awardsgrants outside of the annual broad-based grant (i.e.(e.g., foras part of a new hires)hire package or as a retention or promotional incentive). Stock options may be granted only with an exercise price at or above the closing market price of the Company’s stock on the date of grant.

Mitigating Risk in Executive Compensation

Our compensation program is designed to mitigate the potential for rewarding excessive risk-taking that may produce short-term results that appear in isolation to be favorable, but which, in fact, may undermine the successful execution of our long-term business strategy and erode shareholder value. In particular, our executive compensation program has the following design features that help mitigate risk, as described throughout this Proxy Statement:

balance of short- and long-term incentives;
mix of both cash- and stock-based awards;
objective performance metrics related to various measures of operational performance;
performance targets closely aligned with the Company’s business plans;
diverse time horizons for incentive awards;
caps on all incentive payouts;
recoupment and forfeiture provisions; and
significant stock ownership requirements to align with shareholder interests.

Each year, FW Cook reviews the Company’s global incentive compensation programs, including both broad-based programs and its executive compensation programs, taking into consideration the factors described above. Based on this review, the Committee agreed with FW Cook’s assessment that the risks arising from its compensation program are not reasonably likely to have a material adverse effect on the Company.

2022 Proxy Statement75

Table of Contents

McDonald’s Corporation 2012        17Executive Compensation

COMPENSATION TABLESCompensation Tables

2021 Summary Compensation Table

The table below summarizes the total compensation earned by or paid to our NEOs in 2009, 20102021 and, 2011.if required, 2020 and 2019.

Name and principal

position (a)

  Year
(b)		   Salary (1)
($)(c)		   

Stock

awards (2)
($)(e)

   Option
awards (3)
($)(f)		   

Non-equity incentive

plan compensation (4)

($)(g)

   

All other
compensation (5)

($)(i)

   

Total

($)(j)

 
                

 

James A. Skinner

   2011     $1,473,333     $1,429,035     $1,796,501    Annual:   $3,300,000     $752,024     $8,750,893  

Vice Chairman and

          Long-term:   0      

Chief Executive Officer

          Total:   3,300,000      
   2010     1,433,333     1,415,255     1,752,389    Annual:   4,500,000     631,641     9,732,618  
          Long-term:   0      
          Total:   4,500,000      
   2009     1,391,667     1,670,500     2,238,608    Annual:   3,250,000     743,350     17,574,125  
          Long-term:   8,280,000      
          Total:   11,530,000      

 

 

 

Peter J. Bensen

   2011     670,833     446,730     561,559    Annual:   987,000     226,504     2,892,626  

Corporate Executive

          Long-term:   0      

Vice President and

Chief Financial Officer

 

          Total:   987,000      
   2010     641,667     398,084     492,891    Annual:   1,296,000     198,800     3,027,441  
          Long-term:   0      
          Total:   1,296,000      
   2009     554,167     291,702     390,873    Annual:   956,000     177,514     4,981,715  
          Long-term:   2,611,459      
          Total:   3,567,459      

 

 

 

Donald Thompson

   2011     829,167     625,165     785,902    Annual:   1,526,000     307,514     4,073,748  

President and

          Long-term:   0      

Chief Operating Officer

          Total:   1,526,000      
   2010     794,952     583,838     722,908    Annual:   1,855,000     174,662     4,131,360  
          Long-term:   0      
          Total:   1,855,000      
   2009     570,833     344,725     715,758    Annual:   581,000     166,077     5,138,393  
          Long-term:   2,760,000      
          Total:   3,341,000      

 

 

 

Timothy J. Fenton

   2011     601,500     401,969     505,299    Annual:   667,000     302,468     2,478,236  

President,

          Long-term:   0      

McDonald’s Asia/

Pacific, Middle East and Africa

 

          Total:   667,000      
   2010     581,083     371,564     460,033    Annual:   961,000     385,411     2,759,091  
          Long-term:   0      
          Total:   961,000      
   2009     563,750     344,725     461,941    Annual:   834,000     1,164,702     6,129,118  
          Long-term:   2,760,000      
          Total:   3,594,000      

 

 

 

Janice L. Fields

   2011     593,333     321,602     404,242    Annual:   679,000     155,854     2,154,031  

President,

          Long-term:   0      

McDonald’s USA (6)

          Total:   679,000      
   2010     573,351     291,947     361,459    Annual:   780,000     146,659     2,153,416  
          Long-term:   0      
          Total:   780,000      

 

 

18        McDonald’s Corporation 2012

Name and
principal position
(a)		     Year
(b)		     Salary
($)(c)(1)		     Bonus
($)(d)		     Stock
awards
($)(e)(2)		     Option
awards
($)(f)(2)(3)		     Non-equity
incentive plan
compensation
($)(g)		     All other
compensation
($)(i)(4)		     Total
($)(j)
Christopher Kempczinski
President and Chief Executive Officer		 2021 1,302,500 0 7,000,179 7,000,002 4,368,745 356,706 20,028,132
 2020 963,506 0 4,750,129 4,750,011 0 383,386 10,847,032
 2019 867,500 0 1,250,129 1,250,022 1,707,478 154,026 5,229,155
Kevin Ozan
Corporate Executive Vice President and Chief Financial Officer		 2021 905,000 0 3,500,198 3,500,001 2,018,562 84,372 10,008,133
 2020 774,179 0 1,800,180 1,800,015 0 156,847 4,531,221
 2019 841,667 0 1,625,078 1,625,011 1,236,750 128,072 5,456,578
Ian Borden(5)
President, International		 2021 791,133 0 2,125,213 2,125,001 1,532,408 1,702,035 8,275,790
 2020 587,601 0 950,211 950,002 0 2,296,449 4,784,263
 2019 561,329 0 750,078 750,003 714,631 470,856 3,246,897
Joseph Erlinger
President, McDonald’s USA		 2021 808,333 0 2,250,034 2,250,001 1,767,484 369,552 7,445,404
 2020 686,209 0 1,125,055 1,125,020 0 1,727,232 4,663,516
 2019 712,500 0 850,088 850,022 1,132,819 1,232,877 4,778,306
Desiree Ralls-Morrison(6) 2021 548,718 150,000 4,187,589 562,504 911,590 29,601 6,390,002
Corporate Executive Vice President, General                
Counsel and Secretary                
(1)Reflects annual increases in salary that took effect March 1, 2011. AnnualizedAnnual base salaries as of December 31, 20112021 for our NEOs were as follows:

Messrs. Kempczinski: $1,313,000; Ozan: $910,000; Borden: $815,000 (CAD$1,045,000); and Erlinger: $815,000; and Ms. Ralls-Morrison: $800,000. The base salary amount for Ms. Ralls-Morrison reflected in column (c) above is pro-rated based on her start date in April 2021.

James A. Skinner

(2)		$1,480,000

Peter J. Bensen

675,000

Donald Thompson

835,000

Timothy J. Fenton

605,000

Janice L. Fields

597,000

(2)Represents the aggregate grant date fair value as computed in accordance with FASB ASC Topic 718,of performance-based restricted stock units (PRSUs) granted under the McDonald’s Corporation Amended and Restated 2012 Omnibus Stock Ownership Plan (Equity Plan), based on the probable outcome of the applicable performance conditions and excluding the effect of estimated forfeitures during the applicable vesting periods of RSUs granted under the McDonald’s Corporation Amended and Restated 2001 Omnibus Stock Ownership Plan,PRSUs, as amended (Equity Plan).computed in accordance with Accounting Standards Codification (ASC) 718. Values generally are based on the closing price of the Company’s common stock on the grant date, less the present value of expected dividends over the vesting period. Generally, RSUsdate. Except as otherwise described herein, PRSUs vest on the third anniversary of the grant date and are subject to performance-based vesting conditions linked to the achievement of earnings per share (EPS) growth, return on invested capital (ROIC), and a relative total shareholder return (TSR) modifier over the performance period (as described beginning on page 71). PRSUs are subject to a cap of 100% of target levelsif the Company’s absolute TSR for the three-year performance period is negative. The fair value of diluted EPS growth. Additional informationPRSUs that include the TSR modifier is discloseddetermined using a Monte Carlo valuation model. Assuming the highest level of performance is achieved for the 2021 PRSU awards, the maximum value of these awards at the grant date would be as follows: Messrs. Kempczinski - $14,000358; Ozan-$7,000,396; Borden-$4,250,426; and Erlinger-$4,500,068; and Ms. Ralls-Morrison-$2,250,022. This column also includes certain time-based restricted stock units (RSUs) granted to Ms. Ralls-Morrison in 2021, as described in footnote 6 below, as well as in the 2021 Grants of Plan-Based Awards table on page [    ]78 and the Outstanding Equity Awards at 2011 Year-end2021 Year-End table beginning on pages [    ] and [    ]. page 80.

A more detailed discussion of the assumptions used in the valuation of RSU awards (including PRSUs) may be found in the Notes to Consolidated Financial Statements under “Share-based Compensation” on pages 4148 and 4258 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2011.2021.

(3)Represents the aggregate grant date fair value as computed in accordance with FASB ASC Topic 718,of options granted under the Equity Plan, excluding the effect of estimated forfeitures during the applicable vesting periods of options.options, as computed in accordance with ASC 718. Options have an exercise price equal to the closing price of the Company’s common stock on the grant date and vest in equal installments over a four-year period and are subject to the Equity Plan.period. Values for options granted in 20112021 are determined using a closed-form pricing model based on the following assumptions, as described in the footnotes to the consolidated financial statements: expected volatility based on historical experience of 21.5%21.8%; an expected annual dividend yield of 3.2%2.4%; a risk-free return of 2.8%0.7%; and expected option life based on historical experience of 6.35.7 years. Additional information about options is disclosed in the 2021 Grants of Plan-Based Awards table on page 78 and the Outstanding Equity Awards at 2011 Year-end2021 Year-End table beginning on pages [    ] and [    ].page 80. A more detailed discussion of the assumptions used in the valuation of option awards may be found in the Notes to Consolidated Financial Statements under “Share-based Compensation” on page 31pages 48 and 58 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2011.2021.
76McDonald’s
Corporation

Table of Contents

Executive Compensation

(4)Our annual cash incentive plan is referred to as TIP and our long-term cash incentive plan is referred to as CPUP. CPUP operates on non-overlapping three-year cycles.

(5)“All other compensation” for 20112021 includes the Company’s contributions to the Profit Sharing and Savings(i) 401(k) Plan and Excess BenefitDeferred Compensation Plan, except for Mr. Borden who participates in our Canadian retirement plan and Deferred Bonus PlanMs. Ralls-Morrison who was not yet eligible for Company contributions in 2021 and (ii) Canadian retirement plan for Mr. Borden, as follows:

 

Christopher Kempczinski $79,382 
Kevin Ozan $55,144 
Ian Borden $11,412 
Joseph Erlinger $49,250 
Desiree Ralls-Morrison $0 
The incremental cost of perquisites is included in the amounts provided in this column and based on actual charges to the Company. This also includes the following categories of perquisites: car allowance; financial planning; annual physical examinations for the executives and their spouses; executive security (for select executives); matching charitable donations and Company-paid life insurance. In addition, this includes personal use of the Company’s aircraft by the CEO. The Company requires full reimbursement of costs associated with personal use once Company costs reach a predetermined threshold. In 2021, the costs for Mr. Kempczinski’s personal flights were $241,957, including fuel, on-board catering, landing/handling fees, maintenance costs and crew costs attributable to personal flights and excluding fixed costs, such as pilot salaries and the cost of the aircraft. In certain circumstances, the CEO may permit other executives to use the aircraft for personal travel or to be joined by their spouses on the aircraft for business travel. In 2021, Mr. Erlinger was permitted to use the Company’s aircraft for one personal flight at a cost to the Company of $25,243. The Company does not provide any tax gross ups on the perquisites described above.

James A. Skinner

In addition, Mr. Borden is based overseas and, in 2021, he received certain benefits in connection with his international assignment. This included Company-provided housing in the amount of $349,262, which includes rent, utilities, rental furniture and storage; a cost-of-living adjustment; global health insurance; children’s tuition; family and home leave allowances; shipping services; Company-provided vehicle; tax preparation fees; a global banking allowance; and tax equalization in the amount of $1,144,177. As Mr. Erlinger was previously based overseas, he received tax equalization in the amount of $239,622, tax preparation services in the amount of $26,586 and shipping and storage services in 2021. Ms. Ralls-Morrison received certain benefits in connection with her relocation to Chicago, including shipping and transportation costs, and tax equalization.
(5)Certain amounts for Mr. Borden were paid in non-U.S. currency and, when information is available, reflect the exchange rate on the date the respective payments were made. When information is not available, the amounts reflect the average monthly exchange rate for the reporting year.
(6)$597,333As an incentive to join the Company and to replace compensation she forfeited with her former employer, Ms. Ralls-Morrison received a cash sign-on bonus of $150,000, a sign-on incentive equity grant of $2,500,000 in time-based RSUs vesting equally on the first two anniversaries of the grant date and an equity grant intending to align with the 2021 annual equity grant for the Company’s executive vice presidents. The latter grant was valued at $2,250,000, consisting of (a) 25% of the grant value in time-based RSUs vesting on the third anniversary of the grant date, (b) 25% of the grant value in stock options vesting equally on the first four anniversaries of the grant date and (c) 50% of the grant value in PRSUs vesting on the third anniversary of the grant date, subject to the achievement of performance conditions (which are the same as for other NEOs). For more information, please see the 2021 Grants of Plan-Based Awards table on page 78 and the Outstanding Equity Awards at 2021 Year-End table beginning on page 80, as well as the discussion in the CD&A on page 74. Ms. Ralls-Morrison’s 2021 STIP payout was prorated to reflect her Company service during 2021.
        

Peter J. Bensen

2022 Proxy Statement		196,684

Donald Thompson

268,417

Timothy J. Fenton

156,250

Janice L. Fields

137,333
77

Also includes the following categoriesTable of perquisites: personal use of Company-provided cars or an allowance; life insurance; financial counseling; annual physical examinations for the executives and spouses; executive security; matching charitable donations; limited personal items; and personal use (which includes travel for service on boards of directors other than our Board) of the Company’s aircraft (with a net cost to the Company in 2011 of $108,851 for Mr. Skinner). In general, the CEO is the only executive permitted to use the aircraft for personal travel. However, in certain circumstances the CEO may at his discretion permit other executives to use the aircraft for personal travel. In 2011, Mr. Thompson used the aircraft for one personal trip. In addition, at the discretion of the CEO, other executives may be joined by their spouses on the aircraft. The Company does not provide any tax gross-ups on the perquisites described above.

Mr. Fenton previously performed an international assignment in Hong Kong. As a result, he received certain tax-related benefits in connection with his international assignment. In particular, Mr. Fenton participated in the Company’s tax equalization program, which reimburses an executive’s tax obligations arising solely as a result of an international assignment, to the extent that those tax obligations are in excess of taxes that would have been due had the executive not performed the international assignment. Although Mr. Fenton returned to the U.S. in April of 2010, he continued to have tax liability in Hong Kong in 2011 arising from his international assignment. In 2011, the Company made a Hong Kong tax payment in the amount of $86,195 on Mr. Fenton’s behalf. Consistent with Company policy, the Company also provided Mr. Fenton with tax preparation services at a cost of $29,514.

Contents

McDonald’s Corporation 2012        19Executive Compensation

The incremental cost of perquisites is included in the amount provided in the table and based on actual charges to the Company, except as follows: (i) Company-provided cars includes a pro rata portion of the purchase price, fuel and maintenance, based on personal use, and (ii) corporate aircraft includes fuel, on-board catering, landing/handling fees and crew costs and excludes fixed costs, such as pilot salaries and the cost of the aircraft. In accordance with Company policy, the CEO must reimburse the Company for a portion of personal use of the corporate aircraft, calculated as the lower of (i) amount determined under the Code based on four times the Standard Industry Fare Level (SIFL) rate per person or (ii) 200% of the actual fuel cost.

(6)Ms. Fields was not an executive officer in 2009.

2021 Grants of Plan-based Awards–Fiscal 2011Plan-Based Awards

In 2011, the NEOs received annual cash awards under TIP. The formula for determining payouts under the TIP is described following the footnotes to the table. Columns (d) and (e) below show the target and maximum awards they could have earned. Actual payouts are in column (g) of the Summary Compensation Table. In 2011, the NEOs also received two types of equity awards: RSUs subject to performance-based vesting criteria (see columns (f), (g), (h) and (l)) and stock options (see columns (j), (k) and (l)).

 

 
      Grant  Estimated future payouts
under non-equity incentive
plan awards		   Estimated future payouts
under equity incentive
plan awards (1)		   

 

All other

option

awards:

number of

securities

underlying

   

Exercise

or base
price

of option

   

Grant date

fair value

of stock

and option

 
Name (a)  Plan  date (b)  Threshold
($)(c)		   

Target

($)(d)

   Maximum
($)(e)		   Threshold
(#)(f)		   Target
(#)(g)		   Maximum
(#)(h)		   options (2)
(#)(j)		   awards
($/Sh)(k)		   awards (3)
($)(l)		 

 

 

James A.

  TIP     0    $2,220,000    $5,550,000              

Skinner

  Equity                    
  Plan  2/9/11         5,268     21,071     21,071        $1,429,035  
  

 

Equity

                    
  Plan  2/9/11               147,496    $75.93     1,796,501  

 

 

Peter J.

  TIP     0     675,000     1,687,500              

Bensen

  Equity                    
  Plan  2/9/11         1,647     6,587     6,587         446,730  
  Equity                    
  Plan  2/9/11               46,105     75.93     561,559  

 

 

Donald

  TIP     0     1,043,750     2,609,375              

Thompson

  Equity                    
  Plan  2/9/11         2,305     9,218     9,218         625,165  
  

 

Equity

                    
  Plan  2/9/11               64,524     75.93     785,902  

 

 

Timothy J.

  TIP     0     514,250     1,285,625              

Fenton

  Equity                    
  Plan  2/9/11         1,482     5,927     5,927         401,969  
  

 

Equity

                    
  Plan  2/9/11               41,486     75.93     505,299  

 

 

Janice L.

  TIP     0     507,450     1,268,625              

Fields

  Equity                    
�� Plan  2/9/11         1,186     4,742     4,742         321,602  
  

 

Equity

                    
  Plan  2/9/11               33,189     75.93     404,242  

 

 

      Estimated future payouts
under non-equity incentive
plan awards(1)		 Estimated future payouts
under equity incentive plan
awards		 All  other
stock
awards:
number
of shares
of stock
or units
(#)(i)		 All other
option
awards:
number of
securities
underlying
option
(#)(j)		 Exercise
or base
price of
option
awards
($/Sh)
(k)		 Grant
date fair
value of
stock
and
option
awards
($)(l)(2)
Name
(a)		 Plan Grant date
(b)		 Threshold
($)(c)		 Target
($)(d)		 Maximum
($)(e)		 Threshold
(#)(f)		 Target
(#)(g)		 Maximum
(#)(h)		    
Christopher
Kempczinski		    STIP   2/16/2021   0   2,363,400   4,726,800                            
 Equity Plan(3) 2/16/2021       0 32,247 64,494       7,000,179
 Equity Plan(4) 2/16/2021               226,464 215.03 7,000,002
Kevin Ozan STIP 2/16/2021 0 1,092,000 2,184,000              
 Equity Plan(3) 2/16/2021       0 16,124 32,248       3,500,198
 Equity Plan(4) 2/16/2021               113,232 215.03 3,500,001
Ian Borden(6) STIP 2/16/2021 0 896,500 1,793,000              
 Equity Plan(3) 2/16/2021       0 9,790 19,580       2,125,213
 Equity Plan(4) 2/16/2021               68,748 215.03 2,125,001
Joseph Erlinger STIP 2/16/2021 0 896,500 1,793,000              
 Equity Plan(3) 2/16/2021       0 10,365 20,730       2,250,034
 Equity Plan(4) 2/16/2021               72,792 215.03 2,250,001
Desiree Ralls-Morrison STIP 5/17/2021 0 493,151 986,302              
 Equity Plan(3) 5/17/2021       0 4,810 9,620       1,125,011
 Equity Plan(4) 5/17/2021               16,892 231.68 562,504
 Equity Plan(5) 5/17/2021             2,428     562,519
 Equity Plan(5) 5/17/2021             10,791     2,500,059
(1)Reflects grants of RSUs subject to performance-based vesting conditionsEach NEO received an annual cash award under the Equity Plan.STIP. The RSUs vest2021 STIP measured Company performance based on February 9, 2014, subjectSystemwide sales growth (42.5%), operating income growth (42.5%) and four quantitative human capital metrics (15%). Target awards were established based on a percentage of salary, and Ms. Ralls-Morrison’s target award was prorated to reflect her Company service during 2021. Achievement of targets results in a 100% payout. Actual payouts are based on achievement of a specified EPS growththe metrics and can range from 0% to 200%. Columns (d) and (e) above show the target during the performance period ending on December 31, 2013. The performance target for all RSU awards granted to the NEOsand maximum awards. Actual STIP payouts are shown in 2011 is compounded annual EPS growth of 6% on a cumulative basis, adjusted to exclude certain items as described on page [    ]. If target is achieved, 100%column (g) of the RSUs will vest. If no compounded EPS growth is achieved, no RSUs will vest. If compounded EPS growth is achieved, but below target, the awards will vest proportionally.

20        McDonald’s Corporation 2012

(2)  Reflects grants of options in 2011. For details regarding options, please refer to footnote 3 to the2021 Summary Compensation Table on page [     ].76. See the CD&A beginning on page 68 for a further discussion.

(3)  (2)The values in this column for RSUs and stock options were determined based on the assumptions described in footnotes 2 and 3, respectively, to the 2021 Summary Compensation Table on page [     ].76.

TIP AWARDS

Target TIP awards for 2011 were equal to a percentage of salary. The final payouts (shown in column (g) to the Summary Compensation Table) were determined based on the following principles:

>(3)TIP measuresEach NEO received PRSUs shown in columns (f), (g), (h) and (l), which have dividend equivalent rights. The PRSUs vest on February 16, 2024 (except for Ms. Ralls-Morrison, whose PRSUs vest on May 17, 2024), subject to achievement of positive three-year compound annual EPS growth (75% weight) and three-year ROIC (25% weight) of at least 15%. If performance usingagainst EPS and ROIC meets the threshold for a “team factor”payout, a relative TSR modifier can impact final payouts by up to plus or minus 25 percentage points. The maximum payout is 200% of target, provided that if absolute TSR for the three-year period is initially determinednegative the maximum payout is 100% of target. These PRSUs also provide for dividend equivalent rights. See the discussion beginning on page 71 for more information.
(4)Reflects option grants in 2021, which vest 25% on each of the first four anniversaries of the grant date. For details regarding options, refer to footnote 3 to the 2021 Summary Compensation Table on page 76.
(5)In addition to her annual award of PRSUs and options, as described on page 74, as an inducement to join the Company and to replace compensation she forfeited with her former employer, Ms. Ralls-Morrison received a sign-on grant of time-based RSUs, which vest as follows: 10,791 RSUs, which vest in two equal installments on the May 17, 2022 and 2023, and 2,428 RSUs, which vest on May 17, 2024. See columns (i) and (l) above and footnote 6 of the 2021 Summary Compensation Table beginning on page 76.
(6)The STIP amounts represent the U.S. dollar equivalent of Mr. Borden’s target and maximum payouts, however, the 2021 STIP payout was paid in non-U.S. currency and is reflected in the 2021 Summary Compensation Table based on growth in operating income. The team factor increases with growth in operating income up to 100% at the target level of growth and to higher percentages at higher levels of growth, up to the maximum (175% in 2011). The team factor can then be adjusted up or down, within specified limits, based on “modifiers” reflecting other measures of Corporate and/or AOW performance. The target amount is multiplied by the team factor, which includes the modifiers. The product is the “adjusted target award.”U.S. converted amount.

>Each participant is assigned an individual performance factor determined based on a combination of both subjective and objective factors. The adjusted target award is multiplied by the individual performance factor, and the product is the final payout.

The flowchart below illustrates this process:

LOGO

McDonald’s Corporation 2012        21

The table below shows how increases in operating income determined the team factor for each business segment in 2011, before the application of modifiers. The table shows the target and maximum levels of growth in operating income. Operating income at the Corporate level was included in the TIP team factor calculation for all of our executives. In addition, the results for the U.S. were included in the calculation for Ms. Fields and the results for APMEA were included in the calculation for Mr. Fenton.

TIP team factor and growth in operating income for 2011

Team factor as % of target  0%  100%
(Target)		  175%
(Maximum)		    
                

Growth in operating income over 2010:

     

Corporate factor

   0%   8.5%   13.7%  

U.S. factor

   0    5.2    9.4   

APMEA factor

   0    12.0    20.9   

Europe factor

   0    7.6    13.5   
                

Operating income growth in 2011 was 9.7% (Corporate), 6.4% (U.S.), 13.3% (APMEA) and 9.7% (Europe). The resulting Corporate, U.S., APMEA and Europe team factors were 115.1%, 119.7%, 110.1% and 125.2%, respectively, before the application of modifiers.

The target TIP awards, the team factors (including the modifiers), the individual performance factors and the final payouts as a percentage of target awards for the NEOs in 2011 are summarized below.

      Team factors (Corporate factor; AOW factor; blend)       

Named executive

officer

  Target TIP
award (% of
base salary)		  

Applicable

team factor(s)

   

Team factor(s)
before
application

of modifiers

(% of target
award)

  

Impact

of modifiers
(% added or
subtracted)

  Final team
factor applied
to determine
TIP payout
(% of target
award)		  Personal
factor (%)		  Final
TIP payout
(% of target
award)		 
        

James A. Skinner

   150%   Corporate     115.1%   6.7%   121.8%   122%   148.6% 
                               

 

Peter J. Bensen

   100    Corporate     115.1    6.7    121.8    120    146.2  
                               

 

Donald Thompson

   125    Corporate     115.1    6.7    121.8    120    146.2  
                               

 

Timothy J. Fenton

   85    Corporate     115.1    6.7    121.8    107    129.7  
    (weighted 25%)        
    APMEA     110.1    10.9    121.0    
    (weighted 75%)        
                               

 

Janice L. Fields

   85    Corporate     115.1    6.7    121.8    107    133.8  
    (weighted 25%)        
    U.S.        
    (weighted 75%)     119.7    6.3    126.0    
                               

The applicable modifiers are described in the following table:

Team factorModifiers

Potential weight of

each modifier (range)

Potential overall adjustment of
team factor by modifiers (range)
         
78McDonald’s
Corporation

Table of Contents

Executive Compensation

2021 STIP

The target STIP awards, team factors and final payouts for the NEOs in 2021 are summarized below:

Name Target
STIP award
(% of salary)		     Applicable team
factor(s)		     Team factor(s)
(% of target
award)		     Final STIP
award
($)(1)
Christopher Kempczinski 180 Corporate (85%) 205.7 4,368,745
   Human Capital (15%) 66.7  
Kevin Ozan 120 Corporate (85%)    
   Human Capital (15%)    
Ian Borden 110 IOM (42.5%) 185.9 1,532,408
   IDL (21.25%) 178.3  
   Corporate (21.25%) 205.7  
   Human Capital (15%) 66.7  
Joseph Erlinger 110 U.S. (63.75%) 225.0 1,767,484
   Corporate (21.25%) 205.7  
   Human Capital (15%) 66.7  
Desiree Ralls-Morrison(2) 90 Corporate (85%) 205.7 911,590
   Human Capital (15%) 66.7  
(1)These amounts are also reflected in column (g) of the 2021 Summary Compensation Table on page 76.

Corporate factor

(2)

>  Comparable Guest Counts Growth            

Up to +7.5 or -5Up to +/-15Ms. Ralls-Morrison’s STIP is pro-rated based on her start date.

>  Customer Satisfaction Opportunity

percentage pointspercentage points

>  G&A Expense Control

        

AOW factor

2022 Proxy Statement

>  Comparable Guest Counts Growth

Up to +/-10Up to +/-25

>  Customer Satisfaction Opportunity

percentage pointspercentage points

>  Improvements in Employee Commitment            

79

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22        McDonald’s Corporation 2012Executive Compensation

Outstanding Equity Awards at 2011 Year-end2021 Year-End

    Option awards   Stock awards 
   

Number of
securities
underlying
unexercised
options

exercisable (1)

   

Number of
securities
underlying
unexercised

options

unexercisable (1)

   

Option
exercise

price

   

Option
expiration

date

   

Number
of shares
or units of
stock that
have not

vested (2)

  

Market value
of shares

or units of

stock that

have not

vested (2)(3)

  

Equity incentive
plan awards:
number of unearned
shares, units

or other rights that
have not vested (4)

   

Equity incentive

plan awards: market
or payout value of
unearned shares, units
or other rights that

have not vested (3)(4)

 
Name (a)  (#)(b)   (#)(c)   ($)(e)   (f)   (#)(g)  ($)(h)  (#)(i)   ($)(j) 
                                     

 

James A. Skinner

   40,000     0     $14.31000     03/18/2013          
   106,193     0     35.25000     03/21/2013          
   62,500     0     26.63000     02/16/2014          
   62,500     0     25.31000     05/20/2014          
   250,000     0     31.21000     12/01/2014          
   151,910     0     34.54000     03/23/2016          
   116,589     0     45.02000     02/14/2017          
   278,073     92,690     56.64000     02/13/2018          
   115,870     115,870     57.08000     02/11/2019          
   44,253     132,756     63.25000     02/10/2020          
   0     147,496     75.93000     02/09/2021          
               79,478     $7,974,028  
                                     

 

Peter J. Bensen

   12,000     0     26.63000     02/16/2014          
   6,000     0     25.31000     05/20/2014          
   15,971     0     32.60000     02/16/2015          
   15,870     0     36.37000     02/14/2016          
   15,157     0     45.02000     02/14/2017          
   18,075     6,025     56.64000     02/13/2018          
   20,233     20,230     57.08000     02/11/2019          
   12,449     37,338     63.25000     02/10/2020          
   0     46,105     75.93000     02/09/2021          
               19,484     1,954,830  
                                     

 

Donald Thompson

   500     0     39.50000     01/24/2013          
   41,800     0     35.25000     03/21/2013          
   30,000     0     26.63000     02/16/2014          
   30,000     0     25.31000     05/20/2014          
   25,299     0     32.60000     02/16/2015          
   20,611     0     36.37000     02/14/2016          
   24,984     0     45.02000     02/14/2017          
   33,369     11,123     56.64000     02/13/2018          
   37,049     37,046     57.08000     02/11/2019          
   18,256     54,765     63.25000     02/10/2020          
   0     64,524     75.93000     02/09/2021          
               26,486     $2,657,340  
                                     

 

Timothy J. Fenton

   28,315     0     45.02000     02/14/2017          
   33,369     11,123     56.64000     02/13/2018          
   23,910     23,910     57.08000     02/11/2019          
   11,617     34,851     63.25000     02/10/2020          
   0     41,486     75.93000     02/09/2021          
               19,401     $1,946,502  
                                     

Table continued on next page

McDonald’s Corporation 2012        23

Table continued from previous page

    Option awards   Stock awards 
   Number of
securities
underlying
unexercised
options
exercisable (1)		   Number of
securities
underlying
unexercised
options
unexercisable (1)		   Option
exercise
price		   Option
expiration
date		   Number
of shares
or units of
stock that
have not
vested (2)		   Market value
of shares or
units of
stock that
have not
vested
(2)(3)		   Equity incentive
plan awards:
number of unearned
shares, units or
other rights that
have not vested (4)		   Equity incentive
plan awards: market
or payout value of
unearned shares,
units or other rights
that have not vested
(3)(4)		 
Name (a)  (#)(b)   (#)(c)   ($)(e)   (f)   (#)(g)   ($)(h)   (#)(i)   ($)(j) 
  

 

Janice L. Fields

   26,400     0     $35.25000     03/21/2013          
   7,500     0     26.63000     02/16/2014          
   2,000     0     25.31000     05/20/2014          
   23,460     0     32.60000     02/16/2015          
   19,580     0     36.37000     02/14/2016          
   19,987     0     45.02000     02/14/2017          
   18,075     6,025     56.64000     02/13/2018          
   12,875     12,874     57.08000     02/11/2019          
   9,130     27,381     63.25000     02/10/2020          
   0     33,189     75.93000     02/09/2021          
           3,680     $369,214     9,960     $999,287  
                                         

  Option awards Stock awards
Name
(a)		     Number of
securities
underlying
unexercised
options
exercisable
(#)(b)(1)		     Number of
securities
underlying
unexercised
options
unexercisable
(#)(c)(1)		     Option
exercise
price
($)(e)		     Option
expiration
date
(f)		     Number
of shares
or units
of stock
that
have not
vested
(#)(g)(2)		     Market
value of
shares or
units of
stock that
have not
vested
($)(h)(3)		     Equity
incentive
plan awards:
number of
unearned
shares, units
or other rights
that have
not vested
(#)(i)(4)		     Equity incentive
plan awards:
market or
payout value
of unearned
shares, units or
other rights that
have not vested
($)(j)(3)(4)
Christopher Kempczinski 9,291 0 112.11 11/12/2025        
  52,553 0 128.09 3/8/2027        
  31,513 10,504 157.79 2/19/2028        
  24,415 24,414 174.15 2/13/2029        
  40,392 121,173 216.15 2/18/2030        
  0 226,464 215.03 2/16/2031     59,544 15,961,960
Kevin Ozan 71,388 0 116.73 2/11/2026        
  75,076 0 128.09 3/8/2027        
  45,694 15,231 157.79 2/19/2028        
  31,739 31,738 174.15 2/13/2029        
  15,307 45,918 216.15 2/18/2030        
  0 113,232 215.03 2/16/2031     31,161 8,353,329
Ian Borden 5,320 0 94.00 2/13/2023        
  5,796 0 94.89 2/12/2024        
  7,264 0 97.15 3/16/2025        
  17,134 0 116.73 2/11/2026        
  27,028 0 128.09 3/8/2027        
  19,696 6,565 157.79 2/19/2028        
  14,649 14,648 174.15 2/13/2029        
  8,079 24,234 216.15 2/18/2030        
  0 68,748 215.03 2/16/2031     17,324 4,644,045
Joseph Erlinger 4,000 0 97.15 3/16/2025        
  7,853 0 116.73 2/11/2026        
  27,028 0 128.09 3/8/2027        
  23,635 7,878 157.79 2/19/2028        
  16,602 16,602 174.15 2/13/2029        
  9,568 28,698 216.15 2/18/2030        
  0 72,792 215.03 2/16/2031     19,107 5,122,013
Desiree Ralls-Morrison 0 16,892 231.68 5/17/2031 13,432 3,600,716 4,888 1,310,326
(1)In general, optionsOptions vest 25% on each of the first four anniversaries of the grant date and expire on the tenth anniversary of grant. However, the options due to expire on March 21, 2013 were granted on March 21, 2000. Options generally vest and become exercisable in equal installments over a four-year period.grant date. For details regarding customary equity treatment upon termination, see the section on Potential Payments Upon Termination of Employment or Change in Control beginning on page [    ].82.

(2)These RSUs vested on February 11, 2012 and were notPRSUs are typically granted to our NEOs subject to performance-based vesting conditions, but from time to time, we grant RSUs. In connection with her hiring, Ms. Ralls-Morrison received PRSUs and options that have terms consistent with the annual grants that had been made to other executives in February 2021, as they were granted towell as a sign-on incentive grant consisting of time-based RSUs. Ms. Fields prior to servingRalls-Morrison’s RSUs vest as Presidentfollows: 10,791 RSUs vest in two equal installments on each of McDonald’s USA.May 17, 2022 and 2023, and 2,428 vest on May 17, 2024. See footnotes 2 and 6 of the 2021 Summary Compensation Table beginning on page 76.

(3)Calculated by multiplying the number of shares covered by the award by $100.33,$268.07, the closing price of Company stock on the New York Stock ExchangeNYSE on December 30, 2011.31, 2021.

(4)ReflectsThe following table reflects the number of shares that vested on February 14, 2022, based on the 66.7% payout factor and the unvested performance-based RSUsPRSUs that are scheduled to be paid out as followsin 2023 and 2024 if the targets are met (or were paid out, inat 100%. In the caseevent of awards that vested in 2012).fractional shares, amounts are rounded up to the nearest whole share.

Named executive officerVesting dateNumber of RSUs         
80McDonald’s
Corporation

Table of Contents

Executive Compensation

James A. Skinner

Name*		     02/11/12Vesting date     Number of performance-
based RSUs*
Christopher Kempczinski 33,1122/13/2022 
02/10/1325,295
02/09/1421,071
5,000
  2/18/2023 

Peter J. Bensen

02/11/125,782
02/10/137,115
02/09/146,587
21,585
  2/16/2024 32,959
Kevin Ozan 2/13/2022 

Donald Thompson

02/11/126,833
02/10/1310,435
02/09/149,218
6,500
  2/18/2023 

Timothy J. Fenton

02/11/126,833
02/10/136,641
02/09/145,927
8,181
  2/16/2024 16,480
Ian Borden 2/13/2022 

Janice L. Fields

02/10/135,218
02/09/144,742
3,000
  2/18/20234,318
  2/16/202410,006
Joseph Erlinger2/13/20223,400
  2/18/20235,113
  2/16/202410,594
Desiree Ralls-Morrison5/17/20244,888

24        McDonald’s Corporation 2012

*Number of unvested PRSUs that are scheduled to be paid out include dividend equivalents.

Option Exercises and Stock Vested–Vested - Fiscal 20112021

0000000000000000000000000000000000000000
   Option awards     Stock awards     
  Number of shares
acquired on exercise		   Value realized
on exercise		     Number of shares
acquired on vesting		   Value realized
on vesting		    
Name (a) (#)(b)   ($)(c)     (#)(d)   ($)(e)    
 

James A. Skinner

  100,000     $3,623,510       52,967     $4,032,907    

 

Peter J. Bensen

  13,826     812,825       7,857     598,232    

 

Donald Thompson

  30,000     1,618,317       6,356     483,946    

 

Timothy J. Fenton

  0     0       6,356     483,946    

 

Janice L. Fields

  63,250     3,114,340       3,443     262,150    
                         
  Option awards Stock awards
Name (a)     Number of hares
acquired on exercise
(#)(b)		     Value realized
on exercise
($)(c)		     Number of shares
acquired on vesting
(#)(d)		     Value realized
on vesting
($)(e)
Christopher Kempczinski 0 0 10,251 2,175,587
Kevin Ozan 47,649 7,018,101 0 0
Ian Borden 5,948 852,646 0 0
Joseph Erlinger 4,324 641,078 0 0
Desiree Ralls-Morrison 0 0 0 0

Non-qualifiedNon-Qualified Deferred Compensation–Compensation - Fiscal 20112021

000000000000000000000000000000000000000000000000
   Executive   Registrant   Aggregate   Aggregate   Aggregate    
   contributions   contributions   earnings   withdrawals/   balance at    
   in last FY (1)   in last FY (1)   in last FY   distributions   last FYE (2)    
Name (a)  ($)(b)   ($)(c)   ($)(d)   ($)(e)   ($)(f)    
 

 

James A. Skinner

   $4,699,000     $579,717     $2,006,917     0     $38,471,994    

 

Peter J. Bensen

   298,193     182,115     512,250     0     4,717,035    

 

Donald Thompson

   250,972     243,917     356,447     0     2,246,397    

 

Timothy J. Fenton

   1,119,450     143,767     664,926     0     7,027,459    

 

Janice L. Fields

   449,067     112,833     234,413     0     3,902,619    
                             

Name
(a)		     Executive
contributions
in last FY
($)(b)(1)		     Registrant
contributions
in last FY
($)(c)(1)		     Aggregate
earnings in
last FY
($)(d)		     Aggregate
withdrawals/
distributions
($)(e)		     Aggregate
balance at
last FYE
($)(f)(2)
Christopher Kempczinski 78,390 61,982 918,925 0 4,750,721
Kevin Ozan 36,360 37,744 866,790 0 6,350,831
Ian Borden(3) — — — — —
Joseph Erlinger 162,467 31,850 133,327 0 3,215,148
Desiree Ralls-Morrison 20,200 0 1,845 0 22,045
(1)Represents salary deferrals which are also reported as compensation for 20112021 in the 2021 Summary Compensation Table on page [    ]: $199,000 for Mr. Skinner; $90,833 for Mr. Bensen; $41,750 for Mr. Thompson; $158,450 for Mr. Fenton; and $39,800 for Ms. Fields. The remaining amounts represent bonus deferrals under TIP, which were previously reported in the Summary Compensation Table for 2010. The amounts reported in column (c) are included in “All other compensation” in column (i) of the Summary Compensation Table.76.

(2)Includes the following aggregate amounts previously reported in the Summary Compensation Table in the aggregate, as follows:prior years:

 

Christopher Kempczinski $2,996,102 
Kevin Ozan $1,569,802 
Ian Borden $0 
Joseph Erlinger $1,159,117 
Desiree Ralls-Morrison $0 
(3)Mr. Borden is not eligible to participate in the Company’s non-qualified deferred compensation plan.
2022 Proxy Statement81

 

James A. Skinner

  $14,998,733     

 

Peter J. Bensen

   2,873,894    

 

Donald Thompson

   627,881    

 

Timothy J. Fenton

   3,572,004    

 

Janice L. Fields

   1,000,440    
         

Table of Contents

EXCESS BENEFIT AND DEFERRED BONUS PLAN (EXCESS PLAN)Executive Compensation

Deferred Compensation Plan

The Company’s ExcessAmended & Restated Deferred Compensation Plan (Deferred Plan) is a successor plan to the Supplemental Plan described below. The Excess Plan is a non-tax-qualified,non-tax qualified, unfunded deferred compensation retirement plan that allows U.S.-paid NEOs and certain management and highly compensated employees toto: (i) make tax-deferred contributions from their salary TIP and CPUPSTIP awards; and (ii) receive Company matching contributions, (on deferrals of salary and TIP awards only), in excess of the Internal Revenue Service (IRS)(“IRS”) limits under the Profit Sharing and SavingsCompany’s 401(k) Plan.

At the time of deferral, participants maymust elect how and when they will receive distributions. Under the current Deferred Plan, participants can elect distributions to receive distributionsbegin upon a specified date (at least three years in the future) or upon their separation from service, as either in a lump-sum distribution or in regular installments over a period of up(up to 15 years followingyears). Distributions upon a separation from service. Distributionsservice are delayed for six months following separation from service.the participant’s separation.

DeferralsParticipants select the investment option(s) for their contributions. Funds are nominally invested in investment funds selected by participantspursuant to the participant’s selection, and they are credited with a rate of return based on the investment option(s) selected. The investment options are currently based on returns of the 401(k) Plan’s Capital Preservation Fund, Large Cap Equity Index Fund, and the Company’s Common Stock Fund.

Supplemental Profit Sharing and Savings Plan’s McDonald’s common stock fund; a stable value fund; and an S&P 500 Index fund.

McDonald’s Corporation 2012        25

SUPPLEMENTAL PROFIT SHARING AND SAVINGS PLAN (SUPPLEMENTAL PLAN)Plan

Prior to the ExcessDeferred Plan, the Company’s Supplemental Profit Sharing and Savings Plan (the “Supplemental Plan”) allowed participants to defer compensation in excess of the IRS limits that applied to the Profit Sharing and Savings401(k) Plan. In 2004, the Company froze the Supplemental Plan. Prior to 2005, theThe Supplemental Plan allowed deferrals of salary and all or a portion of cash incentives, as well as Company contributions on deferrals of salary and TIP.STIP payouts. At the end of 2004, the Company froze the Supplemental Plan. The investment options for existing accounts under the Supplemental Plan are identical to those under the ExcessDeferred Plan. A participant may elect to have distributions commence in the year following termination in a single lump-sum;lump-sum, in installments commencing on a date of the participant’s choice;choice or in an initial lump-sum payment with subsequent installment payments, all of whichpayments.

Distributions may commence in the year following termination or any later date and must be completed within 25 years. If the participant does not file a distribution election in the year of termination, the participant’s entire Supplemental Plan balance is paid out in cash in the calendar year following termination. In-service and hardship withdrawals are permitted subject to certain conditions.

Potential Payments Uponupon Termination of Employment or Change in Control

OurIn the event of a termination or change in control followed by termination of employment, our NEOs would become entitled toreceive certain payments and benefits, as described below.

Termination of Employment

Severance

The McDonald’s Corporation Officer Severance Plan (the “Severance Plan”) would provide benefits to Messrs. Kempczinski, Ozan and Erlinger and Ms. Ralls-Morrison upon termination of their employment by the Company without “cause.” Mr. Borden is not entitled to any severance benefits as the result of a termination beyond any notice requirements and separation pay required under Canadian law.

The applicable benefits under the Severance Plan consist of a lump-sum payment with respect to severance pay, based on salary at the time of termination, and a continued subsidy of medical, dental and vision benefits through COBRA. Amounts are based on position and length of service. In addition, in connectiona covered termination, each eligible NEO would receive prorated STIP payments based on actual performance (and paid at the same time payments are made to other participants), unused sabbatical leave, and transitional assistance. Payments are delayed for six months following termination of employment to the extent required under Section 409A of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”).

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Executive Compensation

The value of the benefits that would have been payable to eligible NEOs under the Severance Plan, assuming a covered termination of employment on December 31, 2021, are set forth below:

Name     Salary
continuation
($)		     Benefit
continuation
($)		     Other
($)(1)		     Total
($)
Christopher Kempczinski 625,000 9,767 24,400 690,667
Kevin Ozan 835,385 5,190 163,631 1,004,206
Joseph Erlinger 626,924 13,952 149,785 790,661
Desiree Ralls- Morrison 400,000 8,944 24,400 433,344

(1)Reflects outplacement assistance and, for Messrs. Ozan and Erlinger, payment for unused sabbatical.

Stock Options

Under the Equity Plan and the applicable award agreements, if a NEO satisfies the conditions for retirement or is terminated without “cause” (subject to age and years of Company experience) and agrees to certain restrictive covenants and a general release of claims in favor of the Company, then they are entitled to additional options becoming exercisable on the originally scheduled dates and an extended post-termination exercise period. In the case of retirement, all outstanding options continue to become exercisable and remain exercisable for the full term of the option. In the case of a termination by the Company without “cause”, the options that would continue to become exercisable and the length of the extension is based upon the NEO’s age and years of Company service.

If a NEO terminates employment as a result of death or disability, the options vest upon termination and remain exercisable for three years following their termination of employment (but not beyond the expiration date). If the NEO voluntarily departs, unvested options are forfeited, and vested options remain outstanding and exercisable for 90 days. In the event of a termination for “cause” (other than a policy violation) all options are immediately forfeited.

The following table provides the value of the options that would become exercisable post-termination in the event each NEO left the Company on December 31, 2021, either due to retirement or termination by the Company without “cause”. The value of the options is calculated by multiplying the difference between the respective exercise price for each option and the closing price of the Company’s stock on December 31, 2021.

Name     Retirement     Termination
Without “Cause”		 
Christopher Kempczinski $0            $13,651,371 
Kevin Ozan $10,047,483 $11,548,939 
Ian Borden $5,181,155 $6,092,753 
Joseph Erlinger $5,848,490 $6,813,712 
Desiree Ralls- Morrison $0 $153,675 

If a NEO violates a restrictive covenant following termination, the Company may cancel any outstanding options and, beginning with awards granted in 2018, recoup any gains realized on the exercise of such options.

PRSUs

Under the Equity Plan and the applicable award agreements, if a NEO retires or is terminated without “cause,” they receive full or pro rata vesting of outstanding PRSUs (and related dividend equivalents), subject to the Company satisfying the applicable performance criteria. PRSUs (and any related dividend equivalents) are not accelerated on termination of employment, except for termination as a result of death or disability. Upon termination for death or disability, the performance conditions are waived and 100% of the award (and any dividend equivalents) immediately vest at target. In the event of a termination for “cause,” all RSUs (and any dividend equivalents) are forfeited.

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Executive Compensation

For the PRSUs held by our NEOs, vesting is based on achievement of performance goals in addition to length of Company service during the vesting period. The following table provides the value our NEOs would have received from their PRSUs based upon target performance for each award using the closing price of the Company’s stock on December 31, 2021.

Name     Retirement     Termination
Without “Cause”		 
Christopher Kempczinski $0            $8,350,381 
Kevin Ozan $5,290,898 $7,014,320 
Ian Borden $2,731,633 $3,704,459 
Joseph Erlinger $3,072,082 $4,157,230 
Desiree Ralls- Morrison $0 $291,392 

A pro rata portion of Ms. Ralls-Morrison’s respective time-based RSUs (and any related dividend equivalents) would have vested in the event the Company had terminated her employment without “cause,” and the full award (and any related dividend equivalents) would have vested in the event of her death or disability. Based on the closing price of the Company’s common stock on December 31, 2021, the value of the pro rata time-based RSUs that Ms. Ralls-Morrison would vest in is $1,617,266.

Change in Control

The Company does not have any change in control agreements.

If employment is terminated following a change in control, and/or if their employment withcertain rights under the Company were to terminate as described below.

POTENTIAL PAYMENTS UPON OR IN CONNECTION WITH A CHANGE IN CONTROL

Severance Plan and Equity Plan apply. A “change in control” is generally defined in the Equity Plan as eithereither: (i) the acquisition of 20% or more of our common stock or voting securities by a single purchaser or a group of purchasers acting together; (ii) the incumbent members of the Board cease to constitute at least a majority of the Board as a result of an actual or threatened election contest; (iii) a significant merger or other business combination involving the Company; or (iv) a complete liquidation or dissolution of the Company.

>Change in control employment agreements (CIC Agreements)

The Company has CIC Agreements with some of its senior management, including all of the NEOs. The Company does not intend to enter into any new CIC agreements. An executive who also participates in the ERRP would be entitled to receive the greater of the benefits under the ERRP or the benefits under the CIC Agreement, but not both. A minimum of two years’ notice is required to terminate a CIC Agreement.Severance Plan Payments

The CIC Agreements provide that, during the three-year period followingHad a change in control referred to as the “protected period,” the executive’s (i) position and authority may not be reduced; (ii) place of work may not be relocated by more than 30 miles; (iii) salary may not be reduced; (iv) annual bonus opportunity may not be reduced; and (v) participation in benefit plans will continue on terms not less favorable than before the change in control. In addition, within 30 days after a change in control, if it is also a change in control under Code Section 409A, the Company will pay a prorated portion of (i) the target annual bonus and (ii) the target long-term incentive bonus, both for the partial performance period in which the change in control occurs. If it is not a change in control under Code Section 409A, the Company will pay (i) a prorated portion of the executive’s annual bonus, based on the Company’s actual performance, and (ii) a prorated portion of the executive’s long-term incentive bonus based on target performances, both on the date on which such bonuses are paid to Company employees generally. The treatment of outstanding equity awards is described under “Equity awards” on page [ ]. If the Company fails to comply with these provisions, the executive may terminate employment for “good reason” during the protected period.

If the executive terminates employment for good reason or is terminated by the Company without “cause” during the protected period, then, in addition to receiving accrued but unpaid salary, bonus, deferred compensation and other benefit amounts due on termination, the executive will be entitled to: (i) a lump-sum cash payment equal to three times the sum of the executive’s salary, target annual bonus and contribution received under the Company’s deferred compensation plan; (ii) a pro rata portion of the target annual bonus, reduced (but not below zero) by the amount of annual bonus paid for that year; (iii) a lump-sum payment equal to continued medical, life insurance, fringe and other benefits for three years after the termination; and (iv) a lump-sum cash payment for any accrued sabbatical leave. In addition, for purposes of determining eligibility for any post-retirement medical benefits, the executive will be treated as having three additional years of age and service. The executive will be eligible for these benefits subject to execution of an agreement that includes restrictive covenants and a release of claims. Payment of these benefits will be delayed for six months.

The Company will reimburse an executive on an after-tax basis for excise tax payments that are considered to be contingent upon a change in control. If the aggregate after-tax amount of benefits is not more than 110% of what the executive would receive if benefits were reduced to a level that would not be subject to excise taxes, the executive will not be entitled to receive a reimbursement and the aggregate amount of benefits to which he/she is entitled will be reduced to the greatest amount that can be paid without triggering excise taxes.

26        McDonald’s Corporation 2012

In the case of the death or disability of an executive during the protected period, the executive or his/her estate will be entitled to receive accrued salary, bonus, deferred compensation and other benefit amounts due at levels provided to peers and at least as favorable as those immediately preceding the change in control.

If (i) the Company terminates an executive for cause following a change in control; (ii) an executive voluntarily terminates employment without good reason following a change in control; or (iii) an executive who is otherwise eligible to receive severance benefits fails to execute the requisite agreements, then that executive will receive only a lump-sum payment of accrued salary, bonus, deferred compensation and other benefit amounts.

The following table sets forth the benefits that would have been payable under the CIC agreements, assuming that on December 31, 2011 they had been terminated without cause or resigned with good reason in the protected period following a change in control. Pro rata 2011 TIP payments are not included because if the NEOs had terminated employment on December 31, 2011, they would have earned these awards in full under the 2011 TIP and the pro rata payout they would have been entitled to would be zero. Pro rata CPUP payments are not included because the NEOs would be entitled to these awards pursuant to the 2010–2012 CPUP following a change in control, as described below, and there is no incremental benefit upon termination.

   

Severance payment

(3x salary, bonus and Company
contribution to deferred
compensation plan) ($)

   Benefit
continuation ($)		   Sabbatical ($)   Tax gross-up
payments ($)		   Total ($) 

 

 

James A. Skinner

   $12,869,174     $110,033     $227,692     $11,157,824     $24,364,723  

 

Peter J. Bensen

   4,614,532     121,595     0     4,986,114     9,722,241  

 

Donald Thompson

   6,282,179     119,787     128,462     5,716,141     12,246,569  

 

Timothy J. Fenton

   3,837,280     121,117     0     0     3,958,397  

 

Janice L. Fields

   3,704,797     109,564     91,846     0     3,906,207  

 

 

>CPUP

Under the 2010–2012 CPUP, all of the NEOs would be entitled to accelerated vesting and, in certain circumstances, payment of CPUP awards on a change in control. If a change in control were to occur before December 31, 2012, notwithstanding the terms of the CIC agreements, each NEO would be entitled to receive a pro rata portion of the award based on performance prior to the CIC event. If the change in control also qualified as a change in control under Section 409A, we intend to pay this amount immediately. Otherwise, the prorated award would be paid out as originally scheduled.

The table below sets forth the payments that the NEOs would have been entitled to receive under the 2010–2012 CPUP if a change in control had occurred on December 31, 2011, based on performance through that date:2021, and their employment was terminated as a result, Messrs. Kempczinski, Ozan and Erlinger and Ms. Ralls-Morrison would have a right to the above-described payments under the Severance Plan.

Treatment of Equity Awards Upon a Change in Control

James A. Skinner

$10,885,333  

Peter J. Bensen

3,809,867  

Donald Thompson

5,170,533  

Timothy J. Fenton

2,245,100  

Janice L. Fields

2,245,100  

>Equity awards

Under the Equity Plan and the applicable award agreements, upon a change in control, outstanding unvested options, and RSUs including PRSUs will be replaced by equivalent awards based on publicly-tradedpublicly traded stock of the successor entity. The replacement awards will vest and become exercisable (in the case of options) or be paid out, (in the case of service-based RSUs)as applicable, if the grantee’sNEO’s employment is terminated for any reason other than “cause” within two years following the change in control. In addition, if employment is terminated other than for “cause” within two years following the change in control, all options will remain outstanding for not less than two years following termination or until the end of the original term, if sooner.

If the awards cannot beare not replaced (e.g., because the acquirer does not have publicly-tradedpublicly traded securities) or if the Committee so determines, vesting will be accelerated. RSUs including PRSUs would vest (performance-based RSUs(with PRSUs vesting at target) and be paid out upon a Codechange in control (as defined in Section 409A change in control;of the Internal Revenue Code); otherwise, the RSUs including PRSUs would be paid out on the originally scheduled payment date or, if earlier, on the executive’sNEO’s death, disability or termination of employment, subject to any required delay under Section 409A.

409A of the Internal Revenue Code. Terminations initiated by the employeeNEO will not result in accelerated vesting of replacement awards.

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McDonald’s Corporation 2012        27Executive Compensation

If a change in control had occurred on December 31, 20112021, and either (i) if the outstanding options and RSUs including PRSUs held by the NEOs could not be replaced or (ii) if the Committee so determined, assuming that the transaction met the applicable definition of a change in control under the Equity Plan and Section 409A: (i)409A of the Internal Revenue Code: (a) options would have become fully vested, exercisable and (ii)free of restrictions and (b) RSUs including PRSUs would have vested (PRSUs at target) and been paid out immediately (performance-based RSUs at target).immediately. The awards held by the NEOs as of December 31, 20112021, are set forth in the Outstanding Equity Awards at 2011 Year-end2021 Year-End table beginning on page [    ].80.

The table below summarizes the value of the change in control payoutspayments that the NEOs could have received based onon: (i) in the case of options, the “spread” between the exercise price and the closing price of the Company’s common stock on December 30, 201131, 2021, and (ii) in the case of RSUs including PRSUs, the target number of shares, multiplied by the closing price of the Company’s common stock on December 30, 2011.31, 2021. The table sets forth the hypothetical value that the NEOs could have realized as a result of the accelerated equity awards, based on these assumptions. If there werewas no change in control, the amounts shown would have vested over time, subject to continued employment and, with respect to the RSUs, performance-based vesting conditions, except for Mr. Skinner due to the ERRP. As a result, the values shown are greater than the benefit attributable solely to acceleration of the awards.

Named

executive officer

  

Stock options
(closing price on 112/30/11

minus exercise price) ($)

   

 

RSUs

(number of shares/target
number of shares multiplied by
closing price on 12/30/11) ($)

   Total ($)     

 

James A. Skinner

   $17,582,498     $7,974,028     $25,556,526    

Peter J. Bensen

   3,647,635     1,954,830     5,602,465    

Donald Thompson

   5,693,275     2,657,340     8,350,615    

Timothy J. Fenton

   3,824,605     1,946,502     5,771,107    

Janice L. Fields

   2,645,132     1,368,501     4,013,633    

 

POTENTIAL PAYMENTS UPON TERMINATION OF EMPLOYMENT

(OTHER THAN FOLLOWING A CHANGE IN CONTROL)

>McDonald’s Corporation Severance Plan (Severance Plan)

Under the Severance Plan, Messrs. Bensen, Fenton and Thompson and Ms. Fields would receive severance benefits if they were terminated by the Company without “cause”; due to a reduction in work force or job elimination, but excludes terminations for performance reasons. Applicable benefits consist of a lump-sum payment with respect to severance pay, based on final salary, and the cost of continued medical and dental benefits. Amounts are based on position and length of service. In addition, in a covered termination, each eligible NEO would receive prorated TIP and CPUP payments both based on actual performance, paid at the same time payments are made to other participants; accrued sabbatical leave; and outplacement assistance. Payments would be delayed for six months following termination of employment to the extent required under Section 409A.

The value of the benefits that would be payable under the Severance Plan on December 31, 2011 are as set forth below. Pro rata 2011 TIP payments are not included because they would have earned these awards in full under the 2011 TIP. The pro rata CPUP payment for under the 2010–2012 CPUP is estimated based on performance through 2011. Any pro rata CPUP payment would be based on actual performance for the full performance period and would be paid after the completion of the 2012 fiscal year at the same time as payments are made to other CPUP participants.

 

 
   Salary
continuation		   Benefit
continuation		   

 

Other
(sabbatical and
out-placement)

   Pro rata
CPUP
awards		   Total 

 

 

Peter J. Bensen

   $389,423     $34,187     $12,000     $3,809,867     $4,245,477  

Donald Thompson

   674,423     43,634     140,462     5,170,533     6,029,052  

Timothy J. Fenton

   605,000     37,531     12,000     2,245,100     2,899,631  

Janice L. Fields

   597,000     32,945     103,846     2,245,100     2,978,891  

 

 

BENEFITS UNDER THE EXECUTIVE RETENTION REPLACEMENT PLAN

Under the ERRP, Mr. Skinner is entitled to certain benefits if his employment is terminated for any reason other than death, disability or “cause” or if Mr. Skinner retired or resigned for “good reason.” If Mr. Skinner were to retire, he would receive the benefits described in (i) through (iv) below plus secretarial services for two years following his retirement and $135,000 in lieu of fringe benefits and provision of an office. In addition, a pro rata portion of any outstanding

28        McDonald’s Corporation 2012

CPUP award would vest and would be paid at the end of the performance period, based on the Company’s achievement of the applicable performance goals. All of Mr. Skinner’s outstanding RSUs would vest and would be paid out on the originally scheduled payment dates, subject to the Company’s achievement of the applicable performance goals. All of Mr. Skinner’s outstanding options would become exercisable in accordance with their original vesting schedule and remain outstanding for 9 1/2 years following his retirement (or until the expiration of the option’s original term, if sooner).

If Mr. Skinner were to be terminated without “cause,” he would be entitled to receive a cash lump-sum equal to the present value of (i) final salary for 18 months; (ii) 50% of final salary for five years; (iii) prorated TIP, based on actual performance, for the year of termination; (iv) target TIP for 18 months; (v) the equivalent of Company matching contributions under deferred compensation plans for 6.5 years, based on full final salary for 18 months and 50% of final salary for five years; and (vi) the estimated value of continued participation in Company health and welfare plans for 6.5 years. In addition, his options that would have vested within five years following termination would vest and become exercisable, and all vested options would remain outstanding until five years following termination or until the expiration of the option’s original term, if sooner. RSUs would vest on a pro rata basis, based on the number of months employed during the vesting period, and would be paid out in accordance with actual performance results achieved during the vesting period. A pro rata portion (based on the portion of the performance period prior to termination) of any outstanding CPUP award would vest and would be paid at the end of the performance period, based on the achievement of the applicable performance goals.

Any payments under the ERRP would be delayed for six months following the termination of his employment. Receipt of benefits is subject to the execution of an agreement that includes restrictive covenants, including a non-compete agreement, and a release of claims.

The benefits that would have been payable if Mr. Skinner’s employment had terminated under the ERRP on December 31, 2011 are as follows:

   

 

Lump-sum ERRP
payment ($)

   Pro rata CPUP
payment ($)(1)		   Other (2)   Total ($)    

 

Termination without cause

   $9,714,124     10,885,333     N/A     $20,599,457    

Retirement

   9,714,124     10,885,333     $135,000     20,734,457    

 

(1)Following completion of the performance period, Mr. Skinner would be entitled to receive a pro rata CPUP award based upon actual performance against the specific metrics. This number represents the pro rata CPUP payment based on actual performance through 2011.

(2)Payments in lieu of fringe benefits and provision of an office, plus secretarial services, as described above.

The table below shows the effect on outstanding equity awards if Mr. Skinner’s employment had terminated on December 31, 2011 under the ERRP based on: (i) in the case of options, the “spread” between the exercise price and the closing price of the Company’s stock on December 30, 2011; and (ii) in the case of RSUs, the number of prorated shares in which he would vest, multiplied by the closing price of the Company’s stock on December 30, 2011.

Amount of outstanding
equity upon termination
without cause ($)

Effect of retirementEffect of termination without cause

James A. Skinner

$23,079,880No acceleration of vesting; outstanding options would be exercisable in accordance with original vesting schedule and remain outstanding for 9.5 years or until expiration of the original term if sooner. RSUs would vest in accordance with the original vesting schedule and would be paid out in accordance with actual performance results achieved.All options that would have vested within five years following termination would vest and become exercisable, and all vested stock options would remain outstanding until five years following termination or until the expiration of the option’s original term, if sooner. RSUs would vest on a pro rata basis based on the number of months employed during the vesting period and would be paid out in accordance with actual performance results achieved.

McDonald’s Corporation 2012        29

If Mr. Skinner’s employment were to terminate due to death or disability, under the ERRP, he or his estate would be entitled to receive: (i) accrued salary and annual incentive awards; and (ii) payment or provision of death or disability benefits, as applicable, equal to the benefits provided by the Company to the estates and beneficiaries of his peers. Upon termination for “cause,” he would be entitled to receive accrued salary and annual incentive awards and no other benefits.

EFFECT OF TERMINATION OF EMPLOYMENT UNDER EQUITY INCENTIVE PLANS

>Stock Options

Unvested options are generally forfeited on termination of employment, with vested options remaining outstanding and exercisable for 90 days, except on termination for “cause.” For grants prior to 2010, executives (and all other employees) may be entitled to accelerated exercisability and an extended post-termination exercise period (generally one to three years) upon certain termination events (including retirement and termination by the Company without “cause”).

Beginning with awards granted to executives in 2010, options no longer provide for accelerated exercisability. Instead, the options continue to become exercisable on the originally scheduled dates and remain exercisable for the extended post-termination exercise period, as applicable. If an executive violates a restrictive covenant following termination, the Company may cancel any outstanding options. Further, beginning in 2011, except for participants in the ERRP, if an executive terminates employment for any reason other than death or disability, all options granted in the last 12 months are immediately forfeited.

The table below summarizes the value of the payouts on termination of employment in circumstances that would result in acceleration of the option awards (i.e., retirement or “special circumstances,” which includes termination by the Company without “cause,” death or disability), if termination had occurred on December 31, 2011. The values shown are based on the “spread” between the exercise price and the closing price of the Company’s common stock on December 30, 2011. The table sets forth the total hypothetical value that a NEO could have realized as a result of acceleration of awards. The values shown are greater than the incremental benefit attributable solely to acceleration of the awards.

Named executive officerType of termination

Stock options
(closing price on 12/30/11
minus exercise price) ($)

James A. Skinner

Retirementn/a(1)
Special circumstances$17,582,498
Death/disability17,582,498

Peter J. Bensen

Retirement0(2)
Special circumstances2,061,175
Death/disability3,647,635

Donald Thompson

Retirement4,118,890
Special circumstances4,118,890
Death/disability5,693,275

Timothy J. Fenton

Retirement2,812,346
Special circumstances2,812,346
Death/disability3,824,605

Janice L. Fields

Retirement1,835,320
Special circumstances1,835,320
Death/disability2,645,132

(1)Please refer to the table on page [     ] for a description of Mr. Skinner’s treatment upon retirement under the ERRP.

(2)Mr. Bensen is not eligible to receive favorable treatment upon retirement under the Equity Plan.

30        McDonald’s Corporation 2012

>RSUs

Unvested RSUs are generally forfeited on termination of employment. In the case of certain termination events (including retirement and termination by the Company without “cause”), executives (and all other employees) are entitled to accelerated vesting of RSUs, prorated based upon the number of months worked during the vesting period. However, RSUsPRSUs, subject to performance-based vesting conditions are not accelerated on termination of employment; instead any pro rata vesting is subject to the satisfaction of the applicable performance conditions, determined following completion of the performance period. As discussed on page [     ], the Company’s practice is to grant executives RSUs with performance-based vesting conditions. Further, beginning in 2011, except for participants in the ERRP, if an executive (or any other employee) terminates employment for any reason other than death or disability, all RSUs granted in the last 12 months are immediately forfeited upon termination.

Name     Stock options
(closing price on
12/31/21 minus
exercise price) ($)		     RSUs (target number
of shares multiplied
by closing price on
12/31/21) ($)		     Total
($)
Christopher Kempczinski 21,754,297 16,631,331 38,385,628
Kevin Ozan 13,050,395 9,223,216 22,273,611
Ian Borden 7,004,352 5,045,614 12,049,966
Joseph Erlinger 7,778,934 5,577,196 13,356,130
Desiree Ralls- Morrison 614,700 4,911,045 5,525,745

DEFERRED COMPENSATIONDeferred Compensation

Following separation from service for any reason, the NEOs wouldwho participate will receive distributions from their accounts under the SupplementalDeferred Plan and the ExcessSupplemental Plan in accordance with their elected distribution schedules, as described on pages [     ].page 82.

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Executive Compensation

PROPOSAL NO.2Additional Compensation Matters

ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION2021 Pay Ratio

We are asking our shareholders to provide an advisory, nonbinding vote to approveThe Company has approximately 200,000 employees, which include those in the Company’s corporate and other offices as well as in Company-owned and operated restaurants, of which over 75% were based outside of the U.S. Most of these employees work in flexible, part-time roles, which is reflected in the compensation awardedlevels of our employees, including our median employee. In order to our named executive officers for 2011, as described in the “Executive Compensation” section, beginning on page [     ], which includes the Compensation Discussion and Analysis, the compensation tables and related material.

As described in the Compensation Discussion and Analysis section, the Compensation Committee oversees our executive compensation program in light of McDonald’s circumstances and to promote the objectives of the program. These objectives include: to motivate our executives to increase profitability and shareholder returns, to tie pay to performance effectively, and to compete effectively forattract and retain managerial talent.

We are asking our shareholders to indicate their support for our named executive officer compensation. We believe that the information we have provided in this Proxy Statement demonstrates that our executive compensation program was designed appropriately and is working to ensure that management’s interests are aligned with our shareholders’ interests to support long-term value creation.

This vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers and the philosophy, policies and procedures described in this Proxy Statement.

Information about the voting standard for this proposal appears on page [     ]. While this vote is advisory and not binding, the Board and the Compensation Committee will consider the outcome of the vote, along with other relevant factors, when considering future executive compensation decisions.

The Board of Directors recommends that shareholders vote FOR the approval of the compensation awarded to McDonald’s named executive officers for 2011, as disclosed under SEC rules, including the Compensation Discussion and Analysis, the compensation tables and related material included in this Proxy Statement.

McDonald’s Corporation 2012        31

Other management proposals

PROPOSAL NO. 3.

VOTE TO APPROVE 2012 OMNIBUS STOCK OWNERSHIP PLAN

On February 8, 2012, the Compensation Committee of the Board, adopted the McDonald’s Corporation 2012 Omnibus Stock Ownership Plan (2012 Plan) and recommended that the Board submit the 2012 Plan for shareholder approval so thattalent, the Company may continueprovides competitive compensation commensurate with an employee’s position and geographic location, while also aligning compensation to grant equity awardsCompany and individual performance.

The Company is committed to a strong pay-for-performance culture that payments made under it qualify for deductibility by the Company for federal income tax purposes. The 2012 Plan will replace the Amended and Restated 2001 Omnibus Stock Ownership Plan (2001 Plan) and will apply to awards granted on or after June 1, 2012.

The material features of the 2012 Plan are summarized below, which summary is qualified in its entirety by reference to the text of the 2012 Plan.A copy of the 2012 Plan is available on our website at www.governance.mcdonalds.com and the SEC website at www.sec.gov, where it is an exhibit to the electronic version of this Proxy Statement. We will provide you with a copy without charge if you call Shareholder Services at 1.630.623.7428, or write to us at McDonald’s Corporation, Shareholder Services, Department 720, One McDonald’s Plaza, Oak Brook IL 60523. Copies will also be available at the Annual Shareholders’ Meeting.

PURPOSE

The 2012 Plan is an important part of our pay-for-performance compensation strategy. The Compensation Committee and management continually evaluate ways to attract, retain and motivate highly qualified individuals and to ensure compensation is tied to performance andclosely aligns the interests of employees and directorsour executives with those of our shareholders. Except as otherwise specified below, the termsWe aim to have approximately 90% of the 2012 Plan are generally consistent with the terms of the 2001 Plan.

GENERAL INFORMATION

The 2012 Plan provides for the granting of non-qualified stock options, restricted stock units, stock bonuses, dividend equivalents and other stock-based awards (collectively, Awards). The Compensation Committee expects to grant non-qualified stock options and restricted stock units under the 2012 Plan, and may consider the grant of other types of Awards. Awards may be granted under the 2012 Plan to any employee (including officers), as well as non-employee director of the Company or any of its subsidiaries.

COMMON STOCK AVAILABLE

Under the 2001 Plan, approximately 27.6 million shares were available for grant as of December 31, 2011. If the 2012 Plan is approved, no further grants will be made under the 2001 Plan after June 1, 2012, and those shares (including the portion of those shares subject to awards that have been granted since December 31, 2011, as hereinafter described, and that mayour CEO’s total target direct compensation opportunity be subject to awards granted prior to June 1, 2012)performance against the Company’s robust and any shares returned to the pool of shares available under the 2001 Plan will become available for grant under the 2012 Plan. We are also asking shareholders to authorize an additional 27.5 million shares for grant under the 2012 Plan. Approximately 5 million shares have been granted under the 2001 Plan from December 31, 2011 through March 1, 2012. Therefore, total shares available under the 2012 Plan would be approximately 55.1 million shares, and would in no event exceed 56 million shares. As under the 2001 Plan, common stock issued under the 2012 Plan may be treasury shares or newly issued shares.objective performance targets. The Company intends to use treasury shares purchased through its share repurchase programhad strong performance in 2021 and our CEO compensation was higher than in prior years. For 2021, our CEO’s total compensation was $20,028,132, resulting in a ratio of 2,251:1.

Median Employee Methodology

In 2019, we identified our median employee for Awards. As of December 31, 2011, 639.2 million shares of common stock were held in treasury, and an additional approximately $3.5 billion in share repurchases remained authorized.

The closing price for the common stock on the New York Stock Exchange Composite Tape on March 1, 2012 was $99.25.

To meet the performance exception under Internal Revenue Code Section 162(m), the 2012 Plan provides that the maximum number of shares of common stock for which Awards may be granted to any single participant during any one-year period is 2 million for options, and 500,000 for restricted stock units that are intended to qualify for the performance exception, subject to adjustments as described below.

AWARDS UNDER THE 2012 PLAN

Stock options.The 2012 Plan provides that the per-share option price cannot be less than 100%purposes of the fair market value of a share ofpay ratio disclosure by annualizing one month’s total gross wages for our employees (other than our CEO) located in markets across the common stockglobe who were employed on the grant date. The Committee expects to continue to grant this type of Award under the 2012 Plan. Payment of the option price may be made in cash, through the exchange of common stock, or through a broker-assisted exercise.

32        McDonald’s Corporation 2012

The Committee determines when and how an option may be exercised, and establishes its maximum term, which may not be greater than 10 years. Generally, an option may not be exercisable within one year after its grant date.

Restricted stock units (RSUs). The 2012 Plan provides for the grant of RSUs. The Committee expects to continue to grant this type of Award under the 2012 Plan. RSUs are generally similar to restricted stock awards, except that instead of issuing actual shares at the time of grant, the units are settled at or after the time they vest by the delivery of the appropriate number of shares of common stock, or of cash equal to the then-value of those shares, depending upon the terms of the Award. Unless and until RSUs are settled with actual shares, the participant does not have the rights of a shareholder, although he or she may, if the Award so provides, be entitled to dividend equivalents.

Stock bonuses. As under the 2001 Plan, the Committee may grant stock bonuses or incentives to eligible employees other than executive officers under the 2012 Plan. The maximum number of shares available for this form of Award isOctober 1, million over the life of the 2012 Plan.

Other stock-based awards. As under the 2001 Plan, the 2012 Plan provides that the Committee may grant other stock-based awards, that is, Awards other than options, SARs, RSUs, or restricted stock, the value of which is based on or otherwise related to the common stock, on terms and conditions specified by the Committee.

Dividend equivalents. The 2012 Plan provides for dividend equivalents, a form of stock-based award representing the right to receive cash or shares of common stock measured by the dividends payable with respect to specific shares of common stock or a number of shares. Dividend equivalents may only be granted as part of another Award. The 2012 Plan specifies that if the value of another stock-based award is based on the excess of the fair market value of a share of common stock on the date the value is determined over the Award’s exercise or grant price, the per-share exercise or grant price for such an Award may not be less than 100% of the fair market value of a share of common stock on the date of grant.

The 2012 Plan provides that RSUs and other stock-based awards, the value of which is based on the full value of a share of stock, will be subject to a minimum vesting requirement of one year if the award vests based solely on continued employment (subject to accelerated vesting upon certain terminations of employment and upon a change in control, as described below). The Committee cannot waive this requirement.

PLAN ADMINISTRATION

The 2012 Plan will be administered by the Compensation Committee, in conformity with the SEC’s short-swing trading requirements and the requirements for the performance exception described below. Committee members must also be independent under applicable listing standards. The Committee may delegate certain of its administrative responsibilities, and its powers may also be exercised by the full Board.

The Committee has the authority, subject to the 2012 Plan, to administer the 2012 Plan, including the right to: approve the persons to whom, and the times when, Awards are to be granted, as well as the type, size and terms of such Awards and to modify such grants; interpret the 2012 Plan; accelerate the exercisability of, and waive the restrictions and conditions applicable to, Awards; and extend the time during which Awards may be exercised (but not beyond 10 years). The Committee’s powers are identical to those under the 2001 Plan, except that the Committee also has authority to make all other determinations required or that it deems appropriate for the administration of the 2012 Plan.

AMENDMENT AND TERMINATION

The 2001 Plan terminates on March 14, 2014. If shareholders approve the 2012 Plan, we will terminate the 2001 Plan on June 1, 2012. In either case, the 2001 Plan may be terminated by the Board before its scheduled termination date. Termination will not affect outstanding Awards under the 2001 Plan.

The 2012 Plan and Awards may be amended by the Board or the Committee, subject to shareholder approval if required by applicable listing requirements.The 2012 Plan provides that shareholder approval is required for any amendment that would result in the reduction of the option price of any option, except for the adjustments described below. The 2012 Plan provides that amendments may not adversely affect outstanding Awards without the consent of the affected grantees, unless the amendment does not materially decrease the value of the Award or is made to comply with applicable law, stock exchange rules or accounting rules.Moreover, no amendment may be made that would cause the loss of Section 162(m) performance exception for any outstanding Qualified Performance-Based Awards (as defined below under “Certain Federal income tax consequences”). In addition, Awards may not be amended

McDonald’s Corporation 2012        33

in a way that is inconsistent with the requirements of the 2012 Plan. For example, an Award that is subject to the minimum vesting schedule for service-vesting restricted stock, RSUs and other full-value stock-based Awards may not be amended to eliminate that minimum vesting schedule.

ESTIMATE OF BENEFITS

Because the grant of Awards pursuant to the 2012 Plan will be within the discretion of the Committee, it is not possible to determine the Awards that will be made to executive officers. Information about Awards made under the 2001 Plan to our NEOs in 2011 is provided on pages [     ] and [     ]. In 2011, no options were granted to non-employee Directors, options covering 469,706 shares of common stock were granted to all current executive officers as a group, and options covering over 3,416,122 shares of common stock were granted to approximately 3,520 employees, including all current officers who are not executive officers. In addition, in 2011, 67,106 RSUs were granted to all current executive officers as a group, and 559,297 RSUs were granted to 3,706 employees, including all current officers who are not executive officers.

OTHER TERMS AND CONDITIONS

Transferability. Awards granted under the 2012 Plan are non-transferable other than by will or the laws of descent and distribution and may be exercised, during a grantee’s lifetime, only by the grantee.

Termination of employment. The 2012 Plan provides that treatment of Awards upon termination of employment or directorship shall be determined by the Committee in the applicable grant agreement or thereafter. Absent a determination otherwise, unvested Awards are forfeited upon termination and vested options will remain exercisable for 90 days following termination.

Tax withholding.2019. The Company may make such provisions as it deems appropriate to withhold any taxes due in connection with any Award,considered all full-time, part-time, seasonal and may require the grantee to satisfy relevant tax withholding requirements before authorizing any issuance of shares to a grantee. This requirement may be satisfied by the grantee’s payment of cash or delivery of shares of common stock, or by having shares of common stock otherwise issuable to the grantee withheld.

CHANGE IN CONTROL

The 2012 Plan provides for a “double-trigger approach. In the event of a “Change in Control” of the Company (defined in the 2012 Plan identically as under the 2001 Plan), all options and other service-vesting awards will be replaced with a “Replacement Award” (as defined in the 2012 Plan). If a Replacement Award cannot be issued or upon determination by the Committee prior to the Change in Control, the “Replaced Awards” (as defined in the 2012 Plan) will instead vest and become fully exercisable upon the Change in Control. In addition, if a grantee’s employment or status as a director, as applicable, terminates other than for cause and other than upon a termination initiated by the grantee, within two years after a Change in Control, all Replacement Awards become fully vested and exercisable and all stock options held by the grantee immediately before the “Termination of Employment” (as defined in the 2012 Plan) and that were held by such grantee as of the date of the Change in Control or which are Replacement Awards remain outstanding for the shorter of (i) two years following such Termination of Employment and (ii) the expiration of the term of the option or stock appreciation right, unless otherwise provided in the applicable grant agreement.

The Committee will have the ability to vary these general rules for particular Awards at the time of grant in the grant agreements. The consequences of a Change in Control for performance-vesting Awards, other than options, will be specified in the grant agreements.

ADJUSTMENTS FOR CHANGES IN CAPITALIZATION AND CORPORATE TRANSACTIONS

The 2012 Plan authorizes the Committee to adjust the limitations on shares available for Awards, and to adjust outstanding Awards, as appropriate in connection with stock dividends, stock splits, reverse stock splits, share combinations, recapitalizations, mergers, consolidations, acquisitions of property or shares, separations, spinoffs, reorganizations, stock rights offerings, liquidations, sales or spinoffs of subsidiaries, and similar events. These may include canceling Awards in exchange for payments of cash and/or property, substituting other equity (including equity of another entity that agrees to the substitution) for the common stock available under the 2012 Plan and subject to then-outstanding Awards or in the case of a sale or spinoff of a subsidiary, arranging for the buyer or the subsidiary to assume the Awards held by subsidiary employees.

34        McDonald’s Corporation 2012

CERTAIN FEDERAL INCOME TAX CONSEQUENCES

The following describes the principal United States federal income tax consequences related to options granted under the 2012 Plan.

Non-qualified Options. A grantee will not be subject to tax at the time a non-qualified option is granted, and no tax deduction is then available to the Company. Upon the exercise of a non-qualified option, an amount equal to the difference between the option price and the fair market value of the shares acquired on the date of exercise will be included in the grantee’s ordinary income and the Company will generally be entitled to deduct the same amount. Upon disposition of shares acquired upon exercise, appreciation or depreciation after the date of exercise will be treated by the grantee or transferee of the non-qualified option as either capital gain or capital loss.

Incentive Stock Options. A grantee will not be subject to tax at the time an incentive stock option is granted or exercised, and no tax deduction is available to the Company; however, the grantee may be subject to the alternative minimum tax on the excess of the fair market value of the shares received upon exercise of the incentive stock option over the option price. Upon disposition of the shares acquired upon exercise of an incentive stock option, capital gain or capital loss will generally be recognized in an amount equal to the difference between the sale price and the option price, as long as the grantee has not disposed of the shares within two years of the date of grant or within one year from the date of exercise and has beentemporary workers employed by the Company at all times from the grant date until the date three months before the date of exercise (one year in the case of permanent disability). If the grantee disposes of the shares without satisfying both the holding period and employment requirements (a disqualifying disposition), the grantee will recognize ordinary income at the time of the disqualifying disposition to the extent of the difference between the option price and the amount realized on such disqualifying disposition or, if the disqualifying disposition resulted from a failure to satisfy the holding period requirement, the fair market value of the shares on the date the incentive stock option is exercised (if less). Any remaining gain or loss is treated as a capital gain or capital loss.

If the grantee pays the option price, in whole or in part, with previously acquired shares, the exchange willdate. Our methodology was straightforward and transparent; we did not affect the tax treatment of the exercise. Upon such exchange, and exceptexclude employees. Our median employee for disqualifying dispositions, no gain or loss is recognized upon the delivery of the previously acquired shares to the Company, and the shares received by the grantee equal in number to the previously acquired shares exchanged therefor will have the same basis and holding period for capital gain or capital loss purposes as the previously acquired shares. Shares received by the grantee in excess of the number of previously acquired shares will have a basis of zero and a holding period which commences as of the date the shares are issued to the grantee upon exercise of the incentive stock option. If such an exercise is effected using shares previously acquired through the exercise of an incentive stock option, the exchange of the previously acquired shares will be considered a disposition of such shares for the purpose of determining whether a disqualifying disposition has occurred.

The Company is not entitled to a tax deduction upon either the exercise of an incentive stock option or upon disposition of the shares acquired pursuant to such exercise, except to the extent that the grantee recognized ordinary income in a disqualifying disposition.

Limits on Company’s deductions. Code Section 162(m) generally places a $1 million annual limit on a company’s tax deduction for compensation paid to a “covered employee.” A “covered employee” is defined as the chief executive officer and the other three highest paid officers named in the company’s proxy statement. This limit does not apply to compensation that satisfies the requirements for the “performance-based compensation” exception, including shareholder approval of the material terms of the compensation. Approval of the 2012 Plan at the Annual Shareholders’ Meeting will satisfy this requirement.

The 2012 Plan incorporates the provisions required to satisfy the performance exception for options, in addition to shareholder approval. These include limiting the maximum number of shares of common stock for which options and SARs may be granted to any single participant during any one-year period to 2 million (subject to adjustments as described above), allowing such Awards to only be granted by the Committee, which must be comprised of “outside directors” as defined under Code Section 162(m), and requiring that the option price of such Awards be not less than the fair market value of the underlying stock on the date of grant. Therefore,all options granted to covered employees under the 2012 Plan are intended to qualify for the performance exception.

In addition, the 2012 Plan gives the Committee the ability to grant RSUs and other stock-based awards designed to qualify for the performance exception (Qualified Performance-Based Awards). As explained earlier, the 2012 Plan provides that the number of shares subject to Qualified Performance-Based Awards of this type that may be granted to any single participant during any one-year period may not exceed 500,000 shares, subject to adjustments as described above.

McDonald’s Corporation 2012        35

Qualified Performance-Based Awards (other than options) also must be subject to the achievement of performance goals based upon the attainment of specified levels of one or more of the following measures, applied to the Company as a whole or to any subsidiary, division or other unit of the Company: revenue, operating income, net income, basic or diluted earnings per share, return on revenue, return on assets, return on equity, return on total capital, or total shareholder return. The 2012 Plan permits the use of any other measure of financial performance that can be determined under U.S. generally accepted accounting principles.

Performance goals may be absolute or relative to the performance of one or more other companies or of an index. The Committee may specify that there be excluded the effect of restructuring charges, discontinued operations, extraordinary items, cumulative effects of accounting changes, and other unusual or nonrecurring items, as well as asset impairment and the effects of foreign currency fluctuations determined under generally accepted accounting principles, so long as they are objectively determinable by reference to the Company’s financial statements (including the notes) and/or management’s discussion and analysis.

If the Committee makes Awards other than options and SARs subject to the achievement of performance goals, and complies with the other procedures required by the performance exception, the Awards should qualify for the performance exception. These procedures require that the Committee establish objective performance goals based upon one or more of the above measures within the time allowed by the performance exception and at a time when achievement of the goals is not substantially certain, and that it certify the achievement of those goals before the vesting or payment of the Awards. In addition, the 2012 Plan, like the 2001 Plan, provides that except in the event of death, disability or Change in Control, the achievement of the performance goals associated with Qualified Performance-Based Awards may not be waived, nor may the amounts of such Awards be increased after they have been granted.

The Committee expects, in general, to administer the 2012 Plan so as to avoid loss of the Company’s tax deduction because of Code Section 162(m), but it is possible that some Awards may not qualify for the performance exception. Further, if Awards vest or are paid on an accelerated basis upon a Change in Control or a subsequent termination of employment, some or all of the value of that acceleration may be considered an “excess parachute payment” under Section 280G of the Code. This would result in the imposition of a 20% federal excise tax on the recipients of the excess parachute payments and a loss of the Company’s deduction for the excess parachute payments.

RECOMMENDATION

The Board believes that the approval of the 2012 Plan will enable us to continue its pay-for-performance compensation strategy and motivate our employees. If shareholders do not approve the 2012 Plan, management and the Compensation Committee will examine available alternatives, including continuing to use the 2001 Plan as in effect before the amendments made after shareholder approval of that plan on March 14, 2004.

The Board recommends that shareholders vote FOR the approval of the 2012 Omnibus Stock Ownership Plan.

PROPOSAL NO. 4.

VOTE TO APPROVE THE DECLASSIFICATION OF THE BOARD OF DIRECTORS

At the 2011 Annual Shareholders’ Meeting, shareholders approved an advisory proposal that requested the Board of Directors to take the steps necessary to eliminate the classification of the Board of Directors. After careful consideration, the Board has adopted proposed amendments to our Restated Certificate of Incorporation to eliminate the classification of the Board of Directors.

Article TWELFTH of our Restated Certificate of Incorporation currently provides that our Directors are divided into three classes, with the term of office of one class expiring each year and the Directors in each class serving three-year terms. If the proposed amendments are adopted and become effective, Directors elected at or before this Annual Shareholders’ Meeting will serve out their three-year terms, but Directors elected by shareholders after this Annual Shareholders’ Meeting will be elected to one-year terms. Beginning at the 2015 Annual Shareholders’ Meeting, all Directors would be subject to annual election for one-year terms.

In addition, because Delaware law specifies that directors serving on an unclassified board must be removable by shareholders either with or without cause, Article TWELFTH would be amended to specify that Directors may be removed with or without cause, but amended Article TWELFTH will provide that Directors serving the remainder of a three-year term will be removable only for cause.

36        McDonald’s Corporation 2012

Article TWELFTH would be further amended to provide that, following the termination of the classified Board structure in 2015, a Director appointed to a vacancy or new directorship would serve for a term expiring at the next Annual Shareholders’ Meeting following his or her appointment.

Finally, Section (d) of Article TWELFTH sets forth the standard to modify Article TWELFTH (i.e., the affirmative vote of the holders of a majority of the voting power of the outstanding capital stock). This2021 is the same standard as would be required to amend any other Articleindividual identified in our Restated Certificate2019 and 2020 (a part-time restaurant crew employee located in the United Kingdom) and in 2021 had total compensation of Incorporation; therefore, Section (d)$8,897.

86McDonald’s
Corporation

Table of Article TWELFTH would be repealed to remove this language that is duplicative of applicable law.Contents

The proposed changes to Article TWELFTH are set forth in their entirety inExhibit A.

In accordance with Delaware law, the Board of Directors has adopted resolutions approving and declaring advisable these proposed amendments and is recommending them to shareholders for approval.

Information about the voting standard for this proposal appears on page [ ]. If the proposed amendments are adopted and become effective, the Board will adopt conforming amendments to our Amended and Restated By-Laws.

The Board of Directors recommends that shareholders vote FOR the declassification of the Board of Directors.

PROPOSAL NO. 5.Audit & Finance Committee Matters

Ratification of the Appointment of Ernst & Young LLP as Independent Auditor for 2022
 Our Board recommends that you vote “FOR” this proposal.

VOTE TO APPROVE SHAREHOLDERS’ RIGHT TO CALL SPECIAL MEETINGS

The Board of DirectorsOur Audit & Finance Committee is requesting that shareholders approve amendments to our Restated Certificate of Incorporation that would enable holders of at least 25% of our outstanding shares of Common Stock (excluding derivatives) to request the Secretary of the Company to call a special meeting of shareholders.

Currently, Article THIRTEENTH of our Restated Certificate of Incorporation specifies that only the Board of Directors may call special meetings of shareholders. The Board frequently reviews corporate governance best practices and, after due consideration, has determined that our shareholders should be permitted to call special meetings. The proposed 25% threshold to exercise this right balances competing interests. It ensures that shareholders with substantial holdings in our Company could convene a meeting to address significant strategic concerns prior to the next annual meeting, but special interest groups with views not shared by shareholders with substantial holdings cannot damage the interests of shareholders by causing our Company to incur unnecessary costs and diversion of key personnel.

Additionally, the exclusion of derivative securities from the determination of satisfaction of the prescribed ownership threshold will ensure that the shareholders seeking to call a special meeting have a true economic interest in the Company.

The proposed changes to Article THIRTEENTH are set forth in their entirety inExhibit B.

In accordance with Delaware law, the Board of Directors has adopted resolutions approving and declaring advisable these proposed amendments and is recommending them to shareholders for approval.

Information about the voting standard for this proposal appears on page [ ]. If the proposed amendments are adopted and become effective, the Board of Directors will consider amendments to our Amended and Restated By-Laws to adopt provisions, including notice and timing restrictions, relating to the shareholders’ right to call special meetings.

The Board of Directors recommends that shareholders vote FOR shareholders’ right to call special meetings.

PROPOSAL NO. 6.

ADVISORY VOTE TO APPROVE THE APPOINTMENT OF ERNST & YOUNG LLP AS INDEPENDENT AUDITOR FOR 2012

The Audit Committee isdirectly responsible for the appointment, compensation, retention, evaluation and termination of theour independent auditor engaged by the Company. Theexternal audit firm. Our Audit & Finance Committee has appointed Ernst & Young LLP (“EY”) as our independent auditorexternal audit firm for 2012. The2022. In executing its responsibilities, our Audit & Finance Committee conducts a thorough annual evaluation of EY’s qualifications, past performance and continuing independence. Among other things, our Audit & Finance Committee is informed by the results of a comprehensive assessment survey undertaken by senior financial personnel from our headquarters and largest global markets, and discusses opportunities for improvement with the lead audit partner. Our Audit & Finance Committee has sole authority to approve all engagement fees to be paid to EY. In assessing independence, our Audit & Finance Committee reviews the fees we have paid to EY, including those related to both audit and non-audit services, and compliance with our Hiring Policy for Employees of External Audit Firm and Its Affiliates. Our Audit & Finance Committee regularly meets with the lead audit partner without members of management present, as well as in executive session, which provides the opportunity for continuous assessment of EY’s effectiveness and independence and for considering alternative audit firms.

EY (or its predecessor, Arthur Young & Company) has been retained as our independent external audit firm continuously since 1964. In accordance with SEC rules and EY policies, the firm’s lead engagement partner rotates every five years. Our Audit & Finance Committee and its Chair are directly involved in the selection of EY’s lead engagement partner.

Our Audit & Finance Committee and Board believe that the continued retention of EY as our independent external audit firm for 2022 is in the best interests of our Company and shareholders, and are therefore asking shareholders to approveagain ratify this annual appointment. Ernst & Young LLP audited the Company’s financial statements and internal control over financial reporting for 2011. A representative of that firm willEY is expected to attend theour 2022 Annual Shareholders’ Meeting, where he or she will be available to answer shareholders’ questions and will have anthe opportunity to make a statement and answer questions. Information about the voting standard for thisstatement.

The proposal appears on page [    ].

The Board of Directors recommends that shareholders vote FORto ratify the appointment of ErnstEY as our independent external audit firm is advisory. If shareholders do not ratify the appointment of EY, our Audit & Young LLP as independent auditor for 2012.Finance Committee will reconsider such appointment, after which it may select another audit firm or nonetheless retain EY if it determines such retention to be in the best interests of our Company and shareholders. In addition, even if shareholders ratify the appointment of EY, our Audit & Finance Committee may select another audit firm if it determines doing so to be in the best interests of our Company and shareholders.

 Our Board recommends that you vote “FOR” the appointment of Ernst & Young LLP as independent auditor for 2022.
2022 Proxy Statement87

Table of Contents

McDonald’s Corporation 2012        37Audit & Finance Committee Matters

Audit & Finance Committee matters

AUDIT COMMITTEE REPORT

Dear Fellow Shareholders:Report

The role of our Audit & Finance Committee is composed of five Directors, each of whom meets the independence and other requirements of the New York Stock Exchange. Enrique Hernandez, Jr., Cary D. McMillan, and Roger W. Stone qualify as “audit committeeto assist our Board in fulfilling its responsibility to oversee our financial experts.” The Committee has the responsibilities set out in its charter, which has been adopted by the Board of Directors and is reviewed annually.

reporting process. Management is primarily responsible for the Company’sour financial statements, including the Company’sour internal control over financial reporting. Ernst & Young LLP (Ernst & Young)(“EY”), the Company’sour independent auditor, is responsible for performing an audit of the Company’sour annual consolidated financial statements in accordance with generally accepted accounting principles (GAAP) and for issuing a report on those financial statements. Ernst & YoungEY also reviews the Company’sour interim financial statements in accordance with Statement on Auditing Standards No. 100 (interim financial information). Theapplicable auditing standards. Our Audit & Finance Committee oversees the Company’sour financial reporting process and internal control structure on behalf of the Board of Directors. Theour Board. Our Audit & Finance Committee met nine times during 2011, including meeting regularly with Ernst & YoungEY and the head of internal auditor,audit, both privately and with management present.present, during 2021.

In fulfilling its oversight responsibilities, theour Audit & Finance Committee reviewed and discussed with management and Ernst & YoungEY the audited and interim financial statements, including Management’s Discussion and Analysis, included in the Company’sour Annual and Quarterly Reports on Form 10-K and Form 10-Q. These reviews included a discussion of:

>critical accounting policies of the Company;

>the reasonableness of significant financial reporting judgments made in connection with the financial statements, including the quality (and not just the acceptability) of the Company’s accounting principles;

>the clarity and completeness of financial disclosures;

>the effectiveness of the Company’s internal control over financial reporting, including management’s and Ernst & Young’s reports thereon, the basis for the conclusions expressed in those reports and significant changes made to the Company’s internal control over financial reporting during 2011;

>items that could be accounted for using alternative treatments within GAAP, the ramifications thereof and the treatment preferred by Ernst & Young;

>the annual management letter issued by Ernst & Young, management’s response thereto and other material written communications between management and Ernst & Young;

>unadjusted audit differences noted by Ernst & Young during its audit of the Company’s annual financial statements; and

>the potential effects of regulatory and accounting initiatives on the Company’s financial statements.

In connection with its review of the Company’sour annual consolidated financial statements, theour Audit & Finance Committee also discussed with Ernst & YoungEY other matters required to be discussed with the auditor under Statement on Auditing Standards No. 61,applicable Public Company Accounting Oversight Board (“PCAOB”) standards, as modified or supplemented (communication with audit committees), and those addressed by Ernst & Young’sEY’s written disclosures and its letter provided under the applicable PCAOB requirements, of the Public Company Accounting Oversight Board, as modified or supplemented (independence discussions with audit committees).

TheOur Audit & Finance Committee is responsible for the engagement of theour independent auditor and appointed Ernst & YoungEY to serve in that capacity during 20112021 and 2012.2022. In that connection, the Committee:

>reviewed Ernst & Young’s independence from the Company and management, including Ernst & Young’s written disclosures described above;

>reviewed periodically the level of fees approved for payment to Ernst & Young and the pre-approved non-audit services it has provided to the Company to ensure their compatibility with Ernst & Young’s independence; and

>reviewed Ernst & Young’s performance, qualifications and quality control procedures.

38        McDonald’s Corporation 2012

Among other matters, theregard, our Audit & Finance Committee also:reviewed EY’s independence from our Company and management, including EY’s written disclosures described above.

>reviewed the scope of and overall plans for the annual audit and the internal audit program;

>consulted with management and Ernst & Young with respect to the Company’s processes for risk assessment and risk management;

>reviewed and approved the Company’s policy with regard to the hiring of former employees of the independent auditor;

>reviewed and approved the Company’s policy for the pre-approval of audit and permitted non-audit services by the independent auditor;

>received reports pursuant to our policy for the submission and confidential treatment of communications from employees and others about accounting, internal controls and auditing matters;

>reviewed with management the scope and effectiveness of the Company’s disclosure controls and procedures, including for purposes of evaluating the accuracy and fair presentation of the Company’s financial statements in connection with certifications made by the CEO and CFO;

>reviewed significant legal developments and the Company’s processes for monitoring compliance with law and Company policies; and

>reviewed the Company’s related person transactions.

Based on the reviews and discussions referred to above, theour Audit & Finance Committee recommended to theour Board of Directors that theour audited financial statements be included in the Company’sour Annual Report on Form 10-K for the year ended December 31, 20112021 for filing with the SEC.

Respectfully submitted,

The Audit & Finance Committee

Enrique Hernandez, Jr., Chairman

Walter E. Massey

Cary D. McMillan

Sheila A. Penrose

Roger W. Stone

POLICY FOR PRE-APPROVAL OF AUDIT AND PERMITTED NON-AUDIT SERVICESJohn Mulligan, Chair
Lloyd Dean
Catherine Engelbert
Margaret Georgiadis

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The Audit & Finance Committee has a policyMatters

Policy for Pre-Approval of Audit and Permitted Non-Audit Services

Our Policy for Pre-Approval of Audit and Non-Audit Services Provided by External Audit Firm (our “Pre-Approval Policy”) covers the pre-approval of all audit and permitted non-audit services to be provided by EY to the Company by its independent auditor. Theour Company. Our Audit & Finance Committee may pre-approve engagements on a case-by-case basis or on a class of service basis if the relevant services are predictable and recurring.

Pre-approvals for classes of services are granted at the start of each fiscal year and are applicable for the year. In considering these pre-approvals, theour Audit & Finance Committee reviews a description of the scope of services falling within each class and imposes budgetary estimates that are largely based on historical costs.

Any audit or permitted non-audit service that is not included in an approveda pre-approved class, or for which total fees are expected to exceed the relevant budgetary estimate, must be pre-approved on an individual basis. Pre-approval of any individual engagement may be granted not more than one year before commencement of the relevant service. Pre-approvals of services that may be provided over a multiple-year period of years must be reconsideredreviewed for renewal each year.

TheOur Corporate Controller monitors services provided by the independent auditorEY and overall compliance with the pre-approval policy. Theour Pre-Approval Policy. Our Corporate Controller also reports periodically to theour Audit & Finance Committee about the status of outstanding engagements, including actual services provided and associated fees, and must promptly report any noncompliance with the pre-approval policyour Pre-Approval Policy to the Chairman of theour Audit & Finance Committee Chair.

In accordance with our Pre-Approval Policy, all services provided to our Company by EY in 2021 and 2020 were pre-approved by our Audit & Finance Committee.

The policyOur Pre-Approval Policy is available on the Company’sour website atwww.governance.mcdonalds.comhttps://corporate.mcdonalds.com/corpmcd/investors/corporate-governance/governance-resources.html..

McDonald’s Corporation 2012        39

AUDITOR FEES AND SERVICESAuditor Fees and Services

The following table presentssets forth the fees paid for professional services rendered for the audit of theour Company’s annual financial statements for 20112021 and 2010 and2020, as well as fees paid for other services provided by our independent auditorEY in those years:

(In millions)  2011     2010     

 

Audit fees(1)

  $11.5      $10.4    

 

Audit-related fees(2)

   0.4       0.3    

 

Tax fees(3)

   1.1       1.0    

 

All other fees(4)

   0       0.2    

 

Total

  $13.0      $11.9    

 

Dollars in millions2021 2020
Audit fees(1)$ 9.5 $10.2
Audit-related fees(2)0.9 0.3
Tax fees   
Compliance0.4 0.7
Planning/advisory0.2 0.2
Total tax fees:0.6 0.9
Total$11.0 $11.4
(1)Fees for services associated with the annual audit (including internal control reporting), statutory audits required internationally, reviews of Quarterly Reports on Form 10-Q and accounting consultations.
(2)Fees for employee benefit plan audits, review of internal controls related to our Company’s finance systems transformation and certain attestation services not required by statute or regulation.

(2) Fees for employee benefit plan audits and certain attestation services not required by statute or regulation.

(3) Primarily fees for tax compliance in various international markets.

(4) Fees for miscellaneous advisory services.

2022 Proxy Statement89

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40        McDonald’s Corporation 2012

Shareholder proposal

[PROPOSAL NO. 7.

ADVISORY VOTE ON A SHAREHOLDER PROPOSAL REQUESTING A NUTRITION REPORTProposals

The text of the following shareholder proposalproposals and supporting statementstatements appear exactly as received byfrom the Companyproponent(s) unless otherwise noted. All statements contained in the shareholder proposalproposals and supporting statementstatements are the sole responsibility of the proponent.proponents. The shareholder proposalproposals may contain assertions about theour Company or other matters that the Company believeswe believe are incorrect, but the Company haswe have not attempted to refute all of thosesuch assertions. TheEach shareholder proposal is required to be voted on at our 2022 Annual Shareholders’ Meeting only if properly presented. Our Board recommends athat you vote against“AGAINST” each of the following shareholder proposalproposals based on the reasons set forth in our Board’s statements in opposition.

The names and share ownership of the Company’s statement in opposition followingproponents of the shareholder proposal.proposals are set forth below. The addresses of the proponents are available, and will be provided promptly, upon request by email to: shareholder.services@us.mcd.com or by calling (630) 623-7428.

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Shareholder Proposals

Advisory Vote on Modifying the Threshold to Call Special Shareholders’ Meetings
 Our Board recommends that you vote “AGAINST” this proposal.

Mr. John Harrington advised the CompanyChevedden has notified us that he intends to presentsubmit the following shareholder proposal at theour 2022 Annual Shareholders’ Meeting. Mr. HarringtonAs explained below, our Board recommends that you vote “AGAINST” this proposal. The proponent beneficially owns 10050 shares of the Company’sour common stock. The addressstock, and there were [●] shares of our common stock outstanding as of the record date.

The proponent is available upon request by calling 1-630-623-2553 or by sending a request to McDonald’s Corporation, Shareholder Services, Department 720, One McDonald’s Plaza, Oak Brook, IL 60523.

Shareholder Proposal

Evaluating Our Company’s Policy Responsesresponsible, and Financial Risks

Regardingneither we nor our Board accept any responsibility, for the Childhood Obesity Issue

Whereas, the contributioncontent of the fast food industryfollowing proposal:

Shareholder Proposal

Proposal 4 – Special Shareholder Meeting Improvement

Shareholders ask our board to take the steps necessary to amend the appropriate company governing documents to give the owners of a combined 10% of our outstanding common stock the power to call a special shareholder meeting.

Currently it takes a theoretical 25% of all shares outstanding to call for a special shareholder meeting. This theoretical 25% of all shares outstanding translates into 37% of the shares that vote at our annual meeting.

It would be hopeless to think that shares that do not have time to vote would have the time to go through the special procedural steps to call for a special shareholder meeting.

Plus 100% shares are excluded that are not held in a “net long position.” Thus a group of shareholders who own 37% of the shares that vote at the annual meeting could determine that they own 45% of the shares that vote at the annual meeting after they include their shares that are not “net long.”

A theoretical 25% share ownership to call a special shareholder meeting that potentially translates into a 45% share ownership is nothing for management to brag about. However McDonald’s management made the dubious claim that it was a “Strong Communication Tool for Our Shareholders.”

Plus we have absolutely no right to act by written consent. We gave 42% support to a 2021 shareholder proposal for a right to act by written consent in spite of an extreme management opposition statement.

This 42% support likely translated into 51 % support from the shares that have access to independent proxy voting advice. There is no evidence that management subsequently talked to the global epidemiclarge shareholders who voted in favor of childhood obesity has becomethe 2021 proposal to determine the action they expected McDonald’s management to take.

Management should support a major public issue:

majority vote from the shares that have access to independent proxy voting advice and are not forced to rely on the dubious opposition statement of management. Deep pockets McDonald’s management is getting a free ride on the backs of small shareholders who do not have access to independent proxy voting advice.

 
§2022 Proxy StatementThe Centers for Disease Control reports that 1 in 3 US children born in the year 2000 will develop diabetes as a result of diet.91

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Shareholder Proposals

We need an improved right to call for a special shareholder meeting to make up for its current severe limitation and to make up for the fact that we have absolutely no right to act by written consent. Conagra shareholders gave 85%-support to a 2021 shareholder proposal for a shareholder right to act by written consent.

Please vote yes:

Special Shareholder Meeting Improvement - Proposal 4

Our Board’s Statement in Opposition

Our Board recommends that you vote “AGAINST” the advisory proposal requesting that it take steps to modify our shareholders’ existing ability to call special meetings. After careful consideration, our Board continues to believe that shareholders’ existing special meeting rights, together with our strong governance principles, policies and practices, already provide shareholders with meaningful opportunities to interact with our Board and senior management. For the reasons set forth below, our Board believes lowering the ownership threshold needed to call special meetings is not in the best interest of our Company or shareholders.

Shareholders already have a meaningful ability to call special meetings, and our current ownership threshold strikes a balance to protect the interests of long-term shareholders.

Shareholders currently have a meaningful right to call special meetings, the ownership threshold for which is 25% of shares outstanding held for at least one year. A 25% threshold, which is common among public companies, strikes an appropriate balance between providing shareholders with the year-round ability to call a special meeting to address topics that are important to our shareholders generally, while protecting against the risk of a small minority of shareholders using the special meeting mechanism to disrupt business plans and/or advance their narrow, self-serving or short-term interests. We believe reducing our special meeting threshold to 10%, as suggested by the proponent, significantly increases this risk, while our existing special meeting threshold promotes and protects the long-term interests of our shareholders at large.

McDonald’s is dedicated to robust shareholder engagement throughout the year.

Active shareholder engagement and responsiveness to shareholder feedback are important to both our Board and management. As described under “Shareholder Engagement” on page 56, since our 2021 Annual Shareholders’ Meeting, we continued to reach out to our broad group of shareholders around the world, touching base with the holders—both large and small—of nearly 50% of our outstanding shares in order to understand investors’ current viewpoints and inform Board discussions on a variety of topics. In addition to gathering feedback, we utilize these engagements to develop ongoing relationships with our shareholders. In recent engagements, shareholders were interested in discussing topics including ESG initiatives, including environmental matters, human capital management and DEI, executive compensation, and Board governance and refreshment. Notably, shareholders have not identified our existing special meeting threshold as a concern.

Special meetings require substantial Company resources.

Convening a special meeting of shareholders requires a substantial commitment of Company time, effort and resources, including significant legal and administrative fees, costs for preparing, printing and distributing materials and soliciting proxies, and the diversion of Board and management time away from overseeing and operating our business. Because of these considerable burdens and costs, special shareholder meetings should be extraordinary events that occur only when there are urgent and important strategic matters or profound fiduciary concerns to address. If such a situation were to occur, our current ownership threshold affords shareholders a full and meaningful opportunity to call a special meeting.

       
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Shareholder Proposals

McDonald’s is committed to strong and evolving corporate governance practices that promote accountability.

Our Board has continually demonstrated its commitment to strong corporate governance principles that promote our shareholders’ rights and our Board’s accountability. By responding to emerging governance best practices over the years, we maintain leading governance policies, including those highlighted below.

Select Board and Governance Practices

  A diverse, independent Board

  Board tenure that balances refreshment with institutional knowledge

  Separate Chairman and CEO roles

  An independent Chairman

  The annual election of all Directors

  Proxy access for Director candidates nominated by shareholders reflecting standard market practices

  Majority voting standard for uncontested Director elections

  Regular succession planning and effective leadership transitions at the riskCEO, executive management and Board levels

  Annual advisory vote to approve executive compensation

  No supermajority voting provisions

  No “poison pill” (shareholder rights plan)

  Additional avenues for shareholder input, including (i) the ability of diabetes, hypertension, heart disease, cancers, asthma, arthritis, reproductive complicationsshareholders to suggest Director nominees to our Board, (ii) our robust shareholder outreach and premature death.engagement and (iii) mechanisms for shareholders to communicate directly with our Board, our independent Directors and/or any individual Director

Shareholders have previously rejected multiple proposals to lower the ownership threshold for calling special meetings.

The same proponent has submitted substantially similar shareholder proposals to us twice in the last five years. In both 2020 and 2017, the proponent sought to lower our special meeting threshold to 15% (a less drastic change than the 10% threshold now proposed) and—in each case—a majority of our shareholders rejected the proposal.

For all of these reasons, it is neither necessary nor in our shareholders’ best interests to modify their existing ability to call special meetings. Therefore, our Board recommends that you vote “AGAINST” this proposal.

Our Board recommends that you vote “AGAINST” this proposal.
 
§2022 Proxy StatementA study from the Institute of Medicine of the National Academies (IOM) concluded that fast food marketing influences children’s food preferences, diets and health. In 2009, the IOM recommended that local governments take actions such as adopting zoning policies that restrict fast food near schools and limiting the density of fast food restaurants in residential communities.93

Growing public concerns have spurred action by policymakers:Table of Contents

Shareholder Proposals

Advisory Vote on Report on Reducing Plastics Use
   §In August 2010, Congress subpoenaed 48 food companies, including our company, to submit data to the Federal Trade Commission regarding marketing activities and product nutrition.

 § In January 2011, the USDA released 2010 Dietary Guidelines, recommending limiting the “fast food environment” as key to healthy eating.Our Board recommends that you vote “AGAINST” this proposal.

§In January 2011, Senator Harkin introduced the HeLP America Act of 2011 to restore the rulemaking authority of the FTC to issue restrictions on unfair advertising to kids.

§In June 2011, the American Academy of Pediatrics released a policy statement calling for a total ban on child targeted television junk food advertising as well as interactive digital advertising.

§In July 2011, the U.S. Interagency Working Group on Food Marketing to Children proposed nutrition standards to limit marketing unhealthy foods to children.

§On December 1, 2011, San Francisco implemented an ordinance prohibiting toys with children’s meals failing basic nutritional standards. Instead of complying with the spirit of the law, our company exploited a legal loophole to include a toy for a nominal fee with kids meals instead of meeting the nutrition standards mandated by the law. Other municipalities are currently considering passing similar measures.

A leading obesity research institution,As You Sow Foundation, on behalf of The Leventhal-Walton Family Trust dated May 8, 2015 as amended, and two co-filers, has notified us that it intends to submit the Yale Rudd Center on Food Policyfollowing shareholder proposal at our 2022 Annual Shareholders’ Meeting. As explained below, our Board recommends that you vote “AGAINST” this proposal. The lead proponent beneficially owns 14 shares of our common stock, and Obesity, recentlythere were [●] shares of our common stock outstanding as of the record date.

The proponent is responsible, and neither we nor our Board accept any responsibility, for the content of the following proposal:

Shareholder Proposal

WHEREAS: The growing plastic pollution crisis poses increasing risks to our company. Corporations could face an annual financial risk of approximately $100 billion should governments require them to cover the waste management costs of the packaging they produce, a policy that is increasingly being enacted around the globe.4

Pew Charitable Trusts released a groundbreaking study, Breaking the Plastic Wave (Pew Report), concluding that if all current industry and government commitments were met, ocean plastic deposition would be reduced by only 7%. Without immediate and sustained new commitments throughout the plastics value chain, annual flows of plastics into oceans could nearly triple by 2040.

The Pew report finds that improved recycling is insufficient to stem the plastic tide — it must be coupled with reductions in use, materials redesign, and substitution. It concludes that at least one-third of plastic use can be reduced and that reduction is the most attractive solution from environmental, economic, and social perspectives. The European Union has banned 10 single-use plastic products commonly found in ocean cleanups and enacted a $1/kg tax on fast food marketing and nutrition. The study reports that 21 percent more preschoolers saw McDonald’s ads in 2009 than 2007. The study ranks our company’s nutritional quality among the worst, and notes that our marketing especially targets Hispanic and African American children.non-recycled plastic packaging waste.

Resolved:McDonald’s is part of a “to go” packaging culture, contributing to plastic pollution of land and water through its disposable packaging. The company has removed polystyrene foam containers from its operations but continues to use significant amounts of single-use plastic. McDonald’s reported the tonnage of plastic packaging it used in its beverage cups, lids, and utensils in 2018 at 153,000 metric tons,5 with only 2% recycled content. To reduce plastic use, McDonald’s should position the company to shift permanently away from single-use packaging and towards reusable containers.

Competitor Starbucks is shifting away from single-use packaging and developing new global reusable container goals, which could reduce plastic use by thousands of tons.

Unilever has taken the most significant corporate action to date, agreeing to cut virgin plastic packaging by 50% by 2025, including absolute elimination of 100,000 tons of plastic packaging. Seventeen other consumer goods companies have virgin plastic reduction goals, including Procter & Gamble, Colgate-Palmolive, Nestlé, and Target.6 McDonald’s has no virgin plastic reduction goal.

BE IT RESOLVED: Shareholders request that the McDonald’s Board of Directors issue a report, at reasonable expense and excluding proprietary information, within six monthsdescribing how the company will reduce its plastics use in alignment with the reductions findings of the 2012 annual meeting, assessing the company’s policy responsesPew Report, or other authoritative sources, to growing evidencefeasibly reduce ocean pollution.

4https://www.pewtrusts.org/-/media/assets/2020/07/breakingtheplasticwave_report.pdf
5https://www.worldwildlife.org/publications/transparent-2020
6https://www.asyousow.org/report-page/plastic-pollution-scorecard-2021
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Table of linkages between fast food and childhood obesity, diet-related diseases and other impacts on children’s health. SuchContents

Shareholder Proposals

SUPPORTING STATEMENT: The report should, include an assessment of the potential impacts of public concerns and evolving public policy on the company’s finances and operations.]at Board discretion:

Assess the reputational, financial, and operational risks associated with continuing to use substantial amounts of plastic packaging while plastic pollution grows unabated;
Evaluate the benefits of dramatically reducing the amount of plastics used in our packaging.
Describe how McDonalds can further reduce single-use packaging, including any planned reduction strategies or goals, materials redesign, transition to reusables, substitution, or reductions in use of virgin plastic.

[Our Board’s Statement in Opposition to be inserted]

McDonald’s Corporation 2012        41

Our Board and governance matters

recommends that you vote “LEADERSHIP STRUCTUREAGAINST

Since 2004,” the advisory proposal requesting that we issue a report on reducing plastics use. After careful review of this proposal, our Board has been leddetermined that doing so would require unnecessary expense, be duplicative of current efforts, and divert management’s time and Company resources without providing any meaningful benefit to our Company or shareholders. We have a long history of making the sustainability of our packaging a key business priority by an independent Chairman, Andrew McKenna. This structure has worked wellshifting to assure constructive engagement among the Boardmore sustainable materials, designing packaging to reduce waste and to meet technical recycling requirements, managing waste impacts on communities and nature and, ultimately, moving toward a more circular economy. A cross-functional team meets regularly to advance our sustainable packaging strategy, including by recommending investments in innovation, assessing applicable regulations, partnering with local markets, advising on public disclosures and keeping senior leadership updated on progress and the Chief Executive Officer,evolving landscape.

McDonald’s has already made a series of meaningful commitments and effective oversightachievements that address more sustainable packaging and waste reduction, prioritizing the areas where we have the greatest opportunity for impact.

In recent years, we have announced many commitments and initiatives to enhance the sustainability of management. In addition, this structure allows the CEO to focus on the Company’s business, while the Chairman can focus on corporate governance matters,our packaging materials, including plastics, as well as leadership developmentto increase recycling and succession planning.reduce packaging waste. Some recent key efforts and achievements include:

In 2018, we committed to source 100% of primary guest packaging, including plastics, from renewable, recycled or certified sources by the end of 2025.7 This means any plastics used in primary guest packaging will be sourced from renewable or recycled sources instead of virgin fossil fuel-based plastics. We prioritize fiber packaging material in our global portfolio, with approximately 80% of global guest packaging weight coming from fiber materials and 20% comprised of plastics. Our strategy focuses on eliminating packaging where possible, shifting materials, recovering and recycling packaging and closing the loop by creating end markets for recycled materials. We are approximately 80% of the way toward our goal. Notably, in 2020, 99.6% of our primary fiber-based guest packaging was sourced from recycled or certified sources and supported de-forestation-free supply chains.
In 2019, we developed a plastics position and action plan to augment our 2018 commitments. The focus of our position is to reduce plastics not needed for safety or functionality by 2025, with an emphasis on plastics that are difficult to recycle or prone to leak into the environment.
In 2021, as part of our larger sustainable packaging and materials strategy, we began phasing out certain plastics (including straws and lids) in several markets around the world. For example: a new fiber lid from certified sources saved approximately 1,800 metric tons of plastic; the phase out of plastic straws and cutlery in Europe saved approximately 4,200 metric tons of plastic; and the phase out of plastic straws for cold drinks in China saved approximately 400 metric tons of plastic.
In 2021, we also announced an ambition to drastically reduce plastics in Happy Meal toys around the globe. The completion of this transition to more renewable, recycled or certified materials by the end of 2025 is expected to result in a 90% reduction in virgin fossil fuel-based plastics in these toys. Happy Meal toy innovations are already underway in many markets around the world.
7The commitment is inclusive of centrally managed guest packaging and Happy Meal book and toy packaging.
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DIRECTOR SELECTION PROCESSShareholder Proposals

More information about our packaging and waste strategy and related commitments, initiatives and actions can be found on our website.8

The CompanyMcDonald’s has a policy for the considerationstrong track record of Director candidates under which the Governance Committee establishes criteria for nominees, screens candidatescollaborating with industry partners to help identify and evaluates the qualifications of persons nominated or recommended by shareholders. The Governance Committee recommends Director nominees for approval by the Board. The Governance Committee considers candidates suggested by other Directors, senior managementpromote long-term solutions to packaging and shareholders. The Committee may, at the Company’s expense, retain search firms and other advisors to assist it.waste challenges.

The Governance Committee reviews the size and structureWe are engaged in many cross-industry partnerships. In 2018, we became a founding member of the BoardNextGen Cup Consortium and considers Director tenure, skillsmade a three-year, $5 million commitment to help develop a recyclable and/or compostable cup. In 2021, we made another three-year, $5 million commitment to help strengthen the sustainable packaging ecosystem, with a focus on circularity of additional packaging materials such as polypropylene plastic.

We are also a founding partner of the World Wildlife Fund’s Resource: Plastic program, which is focused on eliminating plastic in nature, and we were one of five companies to publicly disclose plastic usage through the first ReSource report.9 Transparent reporting on plastics usage is important to identify opportunities for improvement within our Company and how cross-industry collaboration can lead to scalable change in priority areas. We continue to report annually through ReSource and to incorporate recommendations to measure and advance solutions that address plastic waste.

McDonald’s regularly tests and pilots more sustainable packaging solutions in our restaurants around the world.

With a presence in over 100 countries, our approach to sustainable packaging must be flexible to accommodate varied laws and customer preferences, and we strive to ensure that new materials meet our high-quality, safety and performance standards. We will achieve this by partnering with employees and franchisees in local markets across the globe to pilot and test packaging solutions that reduce plastic use and waste, and scale successful pilots. For example, the Nordic markets are partnering with local organizations to pilot opportunities to recover ocean plastic and recycle it into trays used in McDonald’s restaurants.

We are actively exploring how to best utilize reusable models in our restaurants in a way that provides customers with options that reduce waste while maintaining safety and experience standards. We view reusables as one of many tools to help accelerate more circular packaging solutions and drive progress on our commitments. In 2020, we launched a global partnership with TerraCycle’s circular packaging service, Loop, to test a reusable model for take-out beverages, starting in determining the slateU.K. Learnings from this pilot and others across the globe will allow us to better understand the impact of nomineesreusables on safety and hygiene, customer experience, operations, logistics, supply chain and local infrastructure in order to determine the best fit. We are also carefully evaluating the impacts of reusables against regional environmental considerations such as part of Director succession planning. All candidates are evaluated onwater scarcity and the basis of qualifications. The Governance Committee seeks Directors with records of achievement in their chosen fields and experience relevantoverarching impact to the Company’s scope, strategyenvironment through environmental risk assessment studies.

McDonald’s regularly and operations. Director candidatestransparently reports our progress relating to sustainable packaging, including plastics.

We regularly track progress against our sustainable packaging goals through supplier and market reports and we also are expected to possess certain qualities,report our ESG strategies, governance and performance annually on our website. We voluntarily disclose relevant sustainability metrics in line with well-regarded disclosure frameworks such as integrity, independence of mind, analytical skills, a commitmentCDP, Sustainability Accounting Standards Board (SASB) and The Task Force on Climate-Related Financial Disclosures (TCFD), in addition to serve the interests of shareholders, and a willingness to challenge management in a constructive and collegial environment,public reporting via partnerships such as well as the ability to exercise good judgment and provide practical insights and diverse perspectives. Candidates also are evaluated inReSource. More information can be found on our website.10

In light of Board policies, such as thoseMcDonald’s existing commitments, progress and regular reporting relating to Director independencepackaging and service on other boards.

Candidates with appropriate qualifications are interviewed in person, typically bywaste, including plastics, we believe the Chairman, the Chief Executive Officer, a majority of the members of the Governance Committeeproposed request is unnecessary and other available Directors. The Governance Committee also periodically evaluates all Directors in light of the above considerationswould divert management’s time and their contributionsCompany resources without providing any meaningful benefit to the Board.

Shareholders who wish to suggest candidates for nomination by the Boardour Company or who wish to directly nominate Director candidates for election at the Company’s 2013 Annual Shareholders’ Meeting should follow the procedures described in the section on Consideration of Director Nominations for the 2013 Annual Shareholders’ Meeting, appearing on page [    ].

BOARD DIVERSITYshareholders.

In selecting Director candidates, the Governance Committee and the Board take diversity into account, seeking to ensure a representation of varied perspectives and experience, although the Company’s nomination policy does not prescribe specific standards for diversity. Currently, 50% of the Board is composed of women or individuals who are minorities.

SUCCESSION PLANNING

The Board regularly reviews short and long-term succession plans for the Chief Executive Officer and for other senior management positions. In assessing possible CEO candidates, the independent Directors identify the skills, experience and attributes they believe are required to be an effective CEO in light of the Company’s global business strategies, opportunities and challenges.

The Board also considers its own succession. In doing so, the Governance Committee and Board take into account, among other things, the needs of the Board and the Company in light of the overall composition of the Board with a view to achieving a balance of the skills, experience and attributes that would be beneficial to the Board’s oversight role.

42        McDonald’s Corporation 2012

DIRECTOR INDEPENDENCE

[Our Corporate Governance Principles require that all Directors except management Directors be independent under applicable law and listing standards, as well as under the Board’s Standards on Director Independence. The Board considers relationships involving Directors and their immediate family members and relies on information derived from Company records, questionnaires and other inquiries.

The relationships reviewed by the Board in its most recent determination involved commercial relationships with companies:

>at which Board members then served as officers (including Mattel, Inc., Inter-Con Security Systems, Inc. and NIKE, Inc.);

>in which Board members or their immediate family members then held an aggregate 10% or more direct or indirect interest (including Schwarz Supply Source and Inter-Con Security Systems, Inc.); and

>at which Board members then served as outside Directors (including Aon Corporation, Chevron Corporation, ConAgra Foods, Inc., Discover Financial Services, Exelon Corporation, Jones Lang LaSalle Incorporated, The Walt Disney Company and Wells Fargo & Company).

These relationships involved McDonald’s purchases of products and services in the ordinary course of business that were made on arm’s-length terms in amounts and under other circumstances that did not affect the relevant Directors’ independence.

The Board also reviewed Company donations to not-for-profit organizations with which Board members or their immediate family members were affiliated by membership or service as directors or trustees.

Based on its review, the Board determined that none of its non-management Directors has a material relationship with the Company and that all of them are independent. Currently, our non-management Directors are Susan E. Arnold, Robert A. Eckert, Enrique Hernandez, Jr., Jeanne P. Jackson, Richard H. Lenny, Walter E. Massey, Andrew J. McKenna, Cary D. McMillan, Sheila A. Penrose, John W. Rogers, Jr., Roger W. Stone and Miles D. White.]

BOARD COMMITTEES

Our Corporate Governance Principles provide for six standing committees: Audit, Compensation, Governance, Corporate Responsibility, Finance and Executive. Committee charters are available on the Company’s website atwww.governance.mcdonalds.com.

CommitteeCurrent membersPrimary responsibilities

Number of

2011 meetings

Audit

Enrique Hernandez, Jr.

(Chairman)

Walter E. Massey

Cary D. McMillan

Sheila A. Penrose

Roger W. Stone

>    Oversees financial reporting, accounting, control and compliance matters.

>    Appoints and evaluates the independent auditor.

>    Reviews with the internal and independent auditors the scope and results of their audits and the adequacy and effectiveness of internal controls.

>    Reviews material financial disclosures.

>    Pre-approves all audit and permitted non-audit services.

>    Annually reviews the Company’s compliance programs and receives regular updates about compliance matters.

>    Annually reviews the Company’s disclosure controls and procedures.

>    Reviews, and makes recommendations to theOur Board about, related person transactions.

9

Compensation

Robert A. Eckert

(Chairman)

Susan E. Arnold

Richard H. Lenny

John W. Rogers, Jr.

Miles D. White

>    Approves the CEO’s compensation based upon an evaluation of his performance by the independent Directors.

>    Reviews and approves senior management’s compensation and approves compensation guidelines for all other officers.

>    Administers incentive and equity compensation plans and, in consultation with senior management, approves compensation policies.

>    Reviews executive compensation disclosure.

8

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McDonald’s Corporation 2012        43recommends that you vote “AGAINST” this proposal.

Table continued from previous page

CommitteeCurrent membersPrimary responsibilities

Number of

2011 meetings

Governance

Andrew J. McKenna

(Chairman)

Robert A. Eckert

Enrique Hernandez, Jr.

Jeanne P. Jackson

Roger W. Stone

Miles D. White

>   Monitors the Board’s structure and operations.

>   Sets criteria for Board membership.

>   Searches for and screens candidates to fill Board vacancies and recommends candidates for election.

>   Evaluates Director and Board performance and assesses Board composition and size.

>   Recommends to the Board non-management Director compensation.

>   Evaluates the Company’s corporate governance process.

>   Recommends to the Board whether to accept the resignation of incumbent Directors who fail to be re-elected in uncontested elections.

7

Corporate Responsibility        

Walter E. Massey

(Chairman)

Susan E. Arnold

Richard H. Lenny

Sheila A. Penrose

John W. Rogers, Jr.

>   Advises management about the Company’s global sustainability strategies and reporting.

>   Reviews social trends and stakeholder activities that may impact the Company’s brand reputation.

>   Reviews the Company’s diversity activities, corporate political contributions and philanthropy efforts.

>   Considers shareholder proposals about the Company’s sustainability practices.

4

Finance

Jeanne P. Jackson

(Chair)

Richard H. Lenny

Cary D. McMillan

John W. Rogers, Jr.

Roger W. Stone

>   Reviews the Company’s dividend policy and share repurchase program in light of the Company’s strategy and performance.

>   Oversees certain material financial matters, such as derivatives commodities, liqidity and debt.

>   Annually reviews the Company’s banking arrangements.

2

Executive

James A. Skinner

(Chairman)

Robert A. Eckert

Enrique Hernandez, Jr.

Andrew J. McKenna

>   May exercise most Board powers during the periods between Board meetings.

0

BOARD AND COMMITTEE MEETINGS

Directors are expected to attend the Annual Shareholders’ Meeting and all Board meetings and meetings of the Committees on which they serve. Our Board met eight times during 2011. At each regularly scheduled Board meeting, our independent Directors met in executive session. Each Director attended over 90% of the total number of meetings of the Board and relevant Committees while the Director was a member. All Directors attended the 2011 Annual Shareholders’ Meeting.

44        McDonald’s Corporation 2012

BOARD AND COMMITTEE EVALUATIONS

The Governance Committee annually evaluates the performance of the Board of Directors. Directors are evaluated periodically, but no less often than each time they are slated for re-election. In addition, each of the Audit, Compensation and Governance Committees annually conducts self-evaluations and each of the Corporate Responsibility and Finance Committees conducts such evaluations at least every two years. Results of these evaluations are discussed at Committee meetings and with the full Board.

RISK OVERSIGHT

The Board is actively engaged in overseeing and reviewing the Company’s strategic direction and objectives, taking into account (among other considerations) the Company’s risk profile and exposures. The Board conducts an annual in-depth review of the business, which includes consideration of certain risk exposures. In addition, the Board receives regular updates on risk exposures.

Although the Board as a whole has responsibility for risk oversight, including CEO succession planning, the Board’s Committees also oversee the Company’s risk profile and exposures relating to matters within the scope of their authority and report to the Board about their deliberations. The Audit Committee considers audit, accounting and compliance risk, and it receives reports from the head of internal audit, the head of corporate tax, the General Counsel, the Chief Compliance Officer and the Chief Information Officer. The Audit Committee annually reviews the Company’s policies with respect to financial risk assessment and financial risk management. The Audit Committee is also responsible for discussing audit, accounting and compliance risk exposures with management, internal audit and Ernst & Young, and taking steps to monitor and control such exposures, and for evaluating management’s process to assess and manage enterprise risk issues. The Compensation Committee considers the level of risk posed by our compensation programs, including incentive compensation programs. The Governance Committee monitors potential risks to the effectiveness of the Board, notably Director succession and Board composition. The Corporate Responsibility Committee reviews risks to the business and the Company’s brand reputation that may result from trends in sustainability issues. The Finance Committee monitors the Company’s risk profile through its review of our worldwide insurance program and other material financial matters.

CODE OF CONDUCT FOR THE BOARD OF DIRECTORS

Each year, Directors confirm that they have read, and will comply with, the Code of Conduct for the Board of Directors.

DIRECTOR COMPENSATION

The Governance Committee recommends to the Board the form and amount of compensation for non-management Directors. Only non-management Directors are paid for their service on the Board. In 2011, this compensation structure was as follows: (i) an annual cash retainer of $90,000; (ii) an annual retainer fee of $20,000 for each Director serving as Chair of the Audit, Compensation or Governance Committees, and an annual retainer fee of $10,000 for each Director serving as Chair of other Board Committees; and (iii) common stock equivalent units with a $130,000 value granted annually to each Director serving for the entire calendar year, under the Directors’ Deferred Compensation Plan. Directors serving for a portion of the year receive prorated grants of common stock equivalent units.

The Company reimburses non-management Directors for expenses incurred in attending Board, Committee, shareholder and other McDonald’s business meetings. On limited occasions, the Company may permit Directors to be joined by their spouses and reimburses the spouses’ travel expenses. The Company also reimburses expenses for Director continuing education.

Beginning in 2012, non-management Directors will receive: (i) an annual cash retainer of $100,000; (ii) an annual retainer fee of $25,000 for serving as Chair of the Audit, Compensation or Governance Committees and an annual retainer fee of $15,000 for serving as Chair of other Board Committees; and (iii) common stock equivalent units with a $140,000 value.

McDonald’s Corporation 2012        45

The following table summarizes the compensation received by each non-management Director in 2011:

Name

(a)

  

Fees earned

or paid in cash (1)
(b)

   

Stock

awards (2)(3)

(c)

   

All other

compensation (4)

(g)

   

Total

(h)

 

 

 

Susan E. Arnold

   $  90,000     $  130,000     $  10,000     $  230,000  

Robert A. Eckert

   110,000     130,000     10,000     250,000  

Enrique Hernandez, Jr.

   110,000     130,000     10,000     250,000  

Jeanne P. Jackson

   100,000     130,000     10,000     240,000  

Richard H. Lenny

   90,000     130,000     10,000     230,000  

Walter E. Massey

   100,000     130,000     10,000     240,000  

Andrew J. McKenna (5)

   110,000     895,438     10,000     1,015,438  

Cary D. McMillan

   90,000     130,000     10,000     230,000  

Sheila A. Penrose

   90,000     130,000     5,000     225,000  

John W. Rogers, Jr.

   90,000     130,000     10,000     230,000  

Roger W. Stone

   90,000     130,000     10,000     230,000  

Miles D. White

   90,000     130,000     10,000     230,000  

 

 

(1)Non-management Directors may defer all or a portion of their retainer and/or fees in the form of common stock equivalent units under our Directors’ Deferred Compensation Plan. Such deferrals, as well as the annual grant of common stock equivalent units described in footnote 2 below, are credited to an account that is periodically adjusted to reflect the gains, losses and dividends associated with a notional investment in our common stock. Common stock equivalent units so credited are based on a per-share price equal to the closing price of our common stock on the date of credit. Amounts credited are paid in a single lump-sum cash payment after retirement from the Board or death, or on the date specified by the Director. If the Director has made a valid prior written election, all or a portion of the credited amount may be paid in equal annual installments over up to 15 years beginning after retirement from the Board.

(2)Represents the aggregate grant date fair value computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718 (FASB ASC Topic 718) of (i) common stock equivalent units granted under the Directors’ Deferred Compensation Plan on December 31, 2011 to each non-management Director who served on the Board during 2011; and (ii) in the case of Director McKenna, a special grant of 10,434 restricted stock units (RSUs) on June 14, 2011, awarded in recognition of his service as non-executive Chairman of the Board, as described in footnote 5 on page [     ].

(3)Outstanding stock awards held by each non-management Director as of December 31, 2011 are set forth below. Stock awards include common stock equivalent units under the Directors’ Deferred Compensation Plan and, in the case of Director McKenna, both common stock equivalent units and RSUs:

 

8See https://corporate.mcdonalds.com/corpmcd/our-purpose-and-impact/our-planet/packaging-and-waste.html.
Name9The ReSource Transparent 2021: Plastic Report can be found at https://resource-plastic.com/backend/sites/default/files/2021-12/Transparent%202021%2012-1-21.pdf.
10See https://corporate.mcdonalds.com/corpmcd/our-purpose-and-impact/impact-strategy-and-reporting.html.
 

Outstanding stock awards96McDonald’s
as of December 31, 2011Corporation

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Shareholder Proposals

Advisory Vote on Report on Antibiotics and Public Health Costs
   
 Our Board recommends that you vote “AGAINST” this proposal.

The Shareholder Commons, representing Trinity College, Cambridge, has notified us that it intends to submit the following shareholder proposal at our 2022 Annual Shareholders’ Meeting. As explained below, our Board recommends that you vote “AGAINST” this proposal. The proponent has beneficially owned, and had beneficially owned continuously for at least three years, shares of our common stock worth at least $2,000, and there were [●] shares of our common stock outstanding as of the record date.

The proponent is responsible, and neither we nor our Board accept any responsibility, for the content of the following proposal:

Shareholder Proposal

ITEM 6: Report on Public-Health Costs of Antibiotic Use

RESOLVED, shareholders ask that the board commission and publish a report on (1) the link between the public-health costs created by the use of antibiotics in the Company’s supply chain and McDonald’s prioritization of enterprise risk and (2) the manner in which such costs may affect the market returns available to its diversified shareholders.

Supporting Statement:

At least 700,000 people die annually due to antimicrobial resistance (AMR), the phenomenon of pathogens becoming resistant to antibiotics and other antimicrobials. The death toll may rise to 10 million by 2050.11 The 2021 YUM! Antimicrobial Resistance Report12 (“Yum Report”) identifies AMR as “among the 21st century’s main threats,” noting:

[T]he World Bank estimates a global GDP shrinkage of 3.8% [due to AMR], with direct costs reaching over $3 trillion USD, annually… However, even high-AMR scenarios may reflect an underestimation of the true costs of AMR because of the challenges in calculating second order effects....

Misuse of antimicrobials in animal husbandry accelerates resistance. The Yum Report notes the link between producing meat and AMR, finding that “agriculture and livestock settings account for approximately two-thirds of global antibiotics [use]” and that many “factors point to alternative practices that can decrease the need for excessive antibiotic use in animal husbandry.”

While the Company says it is reducing antibiotic use,13 McDonald’s addresses environmental and social issues like AMR only to the extent that doing so optimizes its financial returns. In describing its approach to such issues, McDonald’s says it “identifies and addresses a broad range of risks that can directly or indirectly impact the organization.”14 By only addressing risk to the enterprise, McDonald’s prioritizes financial returns over threats to public health, so that it can continue to profit from conduct that creates such threats, so long as doing increases financial returns. Nowhere does the Company suggest that it will surrender any long-term financial returns if necessary to preserve the efficacy of antibiotics.

11https://www.who.int/publications/i/item/no-time-to-wait-securing-the-future-from-drug-resistant-infections

12		https://www.yum.com/wps/wcm/connect/yumbrands/41a69d9d-5f66-4a68-bdee-e60d138bd741/Antimicrobial+Resistance+Report+2021+11-4+-+final.pdf?MOD=AJPERES&CVID=nPMkceo

Susan E. Arnold13

https://corporate.mcdonalds.com/corpmcd/en-us/our-stories/article/ourstories.beef_antibiotics.html
14https://corporate.mcdonalds.com/corpmcd/our-purpose-and-impact/impact-strategy-and-reporting/governance-and-stakeholder-engagement.html
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But a gain in profit that comes at the expense of public health is a bad trade for most McDonald’s shareholders, who are diversified and rely on broad economic growth to achieve their financial objectives. A strategy that increases Company financial returns but threatens global GDP is counter to the interests of most McDonald’s shareholders: reducing GDP will directly reduce long-term returns of diversified portfolios.15

This proposal requests a report on the trade-offs McDonald’s makes by prioritizing enterprise risk over risks to public health from the perspective of its largely diversified shareholders.

The requested report will help shareholders determine whether current Company policies serve shareholders’ best interests and whether McDonald’s should prioritize AMR over financial returns.

Please vote for:

Report on Public-Health Costs of Antibiotic Use – Proposal 6

Our Board’s Statement in Opposition

Our Board recommends that you vote “AGAINST” the advisory proposal requesting that we commission and publish a report on the public health costs created by the use of antibiotics in our supply chain. After careful review of this proposal, our Board has determined that doing so would be duplicative of current efforts given our existing work to address the responsible use, and preserve the long-term effectiveness, of antibiotics, as well as divert management’s time and Company resources without providing any meaningful benefit to our Company or shareholders. McDonald’s has a strong track record on this topic, and we are leading global partnerships across our supply chain to gather global data on antibiotic use to further develop and implement antibiotic use policies. We look to external expertise to help inform our strategy on this issue and believe that studies and reports regarding the public health impacts of antibiotic use are best conducted by the diverse stakeholders most familiar with public health concerns.

McDonald’s is committed to doing our part to help preserve the long-term effectiveness of antibiotics.

Antimicrobial Resistance (“AMR”) is a critical global public health issue that we believe we have a role to help address. We take this seriously, striving to provide antibiotic effectiveness for future generations by doing our part to work across our industry and supply chain with producers, veterinarians, academics and other experts in the field. Our longstanding commitment to reducing antibiotic use in food animals spans over 18 years, since we outlined our position on antibiotic use in our supply chain in 2003.

In 2017, we implemented our latest Vision for Antimicrobial Stewardship (“VAS”), which outlines our approach to responsible antibiotic use and commitment.16 Our VAS seeks and promotes animal production practices that reduce and, where possible, eliminate the need for antibiotic therapies by helping to identify and scale leading alternative practices.

Our position on antibiotics is one of responsible use. This focuses on refining antibiotic selection and administration, reducing antibiotic use and, ultimately, replacing antibiotics where possible with long-term alternative solutions to proactively prevent disease and protect animal health and welfare. We remain committed to the treatment of sick animals aligned with herd veterinarian direction to support the safety of the consumer food supply chain.

McDonald’s regularly engages with external experts.

Our VAS and species-specific policies are based on a “One Health” approach, which emphasizes the need for collaborative, multi-disciplinary efforts at the local, national and global levels to attain optimal health for people, animals and the environment. As such, we regularly engage with external experts, including veterinarians, academics, non-governmental organizations, producers and suppliers, who have a deep understanding of these important issues and responsible use strategies, and can provide us with advice and direction related to policy development.

15https://www.unepfi.org/fileadmin/documents/universal_ownership_full.pdf
16See https://corporate.mcdonalds.com/content/dam/gwscorp/scale-for-good/McDonalds-Global-Vision-for-Antimicrobial-Stewardship-in-Food.pdf.
  
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McDonald’s has made commitments and progress across its global supply chain.

We are engaged in global partnerships across our supply chain to gather data on antibiotic use helping to inform the development and implementation of responsible antibiotic use policies for chicken, beef and pork.

Chicken. In 2017, leaning on external expertise and in partnership with our supply chain, we announced our global chicken antibiotics policy, which aims to eliminate the use of the Highest Priority Critically Important Antibiotics (“HPCIAs”), as defined by the World Health Organization (the “WHO”), by 2027. Since February 2019, we have tracked and gathered data from over five billion birds across our top 20 suppliers, representing 85 facilities and 88 separate medicines. Through this tracking and reporting program, we have verified significant antibiotic use reductions in our poultry supply chain globally. Markets around the world, including Australia, Brazil, Canada, Japan, South Korea, the U.S. and Europe17, have eliminated the use of HPCIAs, and other in-scope markets remain on track to meet the 2027 commitment.

Beef. In 2018, we announced our global beef antibiotics policy, which fortifies our long-term position on antibiotics as one of continuous improvement and responsible use. Our policy includes the overall reduction of medically important antibiotics (as defined by the WHO), where appropriate and measurable, with our efforts focused on Australia, Brazil, Canada, France, Germany, Ireland, New Zealand, Poland, the U.K. and the U.S., which represent our top 10 beef sourcing markets and accounted for over 82% of our global beef supply chain in 2020. As a first step in our policy, we committed to global pilot tests, partnering with producers and suppliers, to establish market-specific baseline antibiotic use from commercial feedlots, small farm operations and dairies in our top beef sourcing markets. This data will be used to inform market-appropriate targets for responsible antibiotic use in collaboration with input from multi-stakeholder perspectives. Starting in 2022, we will collaborate with industry leaders, academics, suppliers and other expert stakeholders to refine the targets and measurement capabilities that will shape our path forward for responsible antibiotic use. Following this engagement, we will report insights from our pilot test baselines across our major beef sourcing markets later in 2022.

Pork. As outlined in our VAS, we are committed to developing species-specific antibiotics policies, including for pork. In 2021, a global cross functional working group was formed to assist with the development of a policy for pork in our supply chain, anchored to responsible use. In April 2021, the draft policy was introduced to our global suppliers, who were asked to conduct gap assessments between the requirements in our policy and their current internal policies on antibiotic use. These gap assessments will be evaluated during the first half of 2022 and used to inform the implementation timeline for the policy.

Further information regarding our strategy, governance and performance on the responsible use of antibiotics is available on our website.18

In light of the effectiveness of McDonald’s current antibiotic use policies and practices and the continuing focus given to the topic by our Company, our Board believes the proposed report is unnecessary, would require unnecessary expense and would divert management’s time and Company resources without providing any meaningful benefit to our Company or shareholders.

Our Board recommends that you vote “AGAINST” this proposal.

17“Europe” includes Austria, Azerbaijan, Belarus, Belgium, Bosnia & Herzegovina, Bulgaria, Croatia, Czech Republic, Denmark, Estonia, Finland, France, Georgia, Germany, Greece, Hungary, Ireland, Italy, Kazakhstan, Latvia, Lithuania, Luxembourg, Malta, Moldova, Netherlands, Norway, Poland, Portugal, Romania, Serbia, Slovakia, Slovenia, Spain, Switzerland, Sweden, Ukraine and the U.K.
18See https://corporate.mcdonalds.com/corpmcd/our-purpose-and-impact/food-quality-and-sourcing/responsible-antibiotic-use.html.
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Advisory Vote on Disclosure Regarding Confinement in the Company’s U.S. Pork Supply Chain
                

Robert A. Eckert

35,517

Enrique Hernandez, Jr.

55,464

Jeanne P. Jackson

43,727

Richard H. Lenny

18,679

Walter E. Massey

26,446

Andrew J. McKenna

196,198

Cary D. McMillan

25,412

Sheila A. Penrose

12,534

John W. Rogers, Jr.

32,100

Roger W. Stone

92,918

Miles D. White

4,161

46        McDonald’s Corporation 2012

Outstanding options held by each non-management Director as of December 31, 2011 are set forth below. Director Stone’s options are held indirectly by a revocable trust, of which he is trustee. The Company has not granted options to non-management Directors since May 20, 2004.

Name

Outstanding stock options

as of December 31, 2011

   
 Our Board recommends that you vote “AGAINST” this proposal.

The Humane Society of the United States has notified us that it intends to submit the following shareholder proposal at our 2022 Annual Shareholders’ Meeting. As explained below, our Board recommends that you vote “AGAINST” this proposal. The proponent beneficially owns at least $2,000 in market value of our common stock, and there were [●] shares of our common stock outstanding as of the record date.

The proponent is responsible, and neither we nor our Board accept any responsibility, for the content of the following proposal:

Shareholder Proposal

Is McDonald’s misleading shareholders about ESG initiatives?

For context, McDonald’s claims its ESG initiatives are “fundamental to how we operate.” Particularly, McDonald’s says its very “ability to serve safe, quality food comes from animals that are cared for properly.”

One specific initiative relates to gestation stalls in its pork supply.

These solitary confinement cages detain pigs so restrictively, they can’t even turn around.

Here’s how McDonald’s former VP of CSR described this:

“I toured my first sow facility, astonished as I observed a few thousand sows all lined up in rows, each confined to what seemed like a little prison.” The floors underneath, he wrote, “are slotted so that urine and feces slip through into vast cesspits” with the animals “immobilized above their own waste.”

McDonald’s Pledge:

McDonald’s announced it wants to see “the end” of gestation stalls in its U.S. supply chain. One press release, titled “McDonald’s USA Outlines 10-Year Plan for Ending Gestation Stall Use,” committed to reaching that goal by 2022.

McDonald’s Reporting:

In 2021, McDonald’s claimed to be tracking “at around 50%” of its “target.” McDonald’s also included that claim when reporting for the Sustainability Accounting Standards Board Index 2020, which asks for the percentage of pork produced “without the use of” gestation stalls.

Really?

The proponent is confident that, rather than eliminating the practice, McDonald’s is actually now just planning to *reduce* how long it lets suppliers lock gestating pigs in stalls. This is very different than its stated target of *ending* the confinement and would make McDonald’s reporting deceptive.

McDonald’s Pledge:

To help reach its target, McDonald’s also pledged that by 2017, it would only source pork from producers “who share its commitment to phase out gestation stalls.”

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McDonald’s Reporting:

“We achieved our 2017 milestone to source pork for our U.S. business only from producers who share our commitment to phase out gestation stalls,” McDonald’s claims.

Really?

The proponent is also confident that, actually, McDonald’s suppliers have *no* commitment to *ever* phase out (i.e. end) their confinement of gestating pigs in individual stalls, which would make this claim deceptive too.

How does this impact shareholders?

McDonald’s has said it “is committed to being a company that the public can trust.” So, if McDonald’s is failing to implement longstanding ESG promises – while misleading the public – shareholders deserve to know. Especially since it pertains to an issue McDonald’s says speaks to its very “ability to serve safe, quality food.”

RESOLVED: Shareholders request McDonald’s confirm that the confinement of gestating pigs in individual stalls will be ended in its U.S. pork supply chain by 2022. If McDonald’s cannot so confirm, shareholders request disclosure of: 1) the percentage of pork in its U.S. supply produced without locking gestating pigs in solitary confinement stalls, and 2) the risks McDonald’s may face over the disparity between its gestation stall pledges/reporting and the reality within its supply chain. This should occur within three months of the 2022 annual meeting, at reasonable cost, and omit proprietary information.

Our Board’s Statement in Opposition

Our Board recommends that you vote “AGAINST” the advisory proposal requesting additional disclosure regarding the use of confinement stalls in our U.S. pork supply chain. McDonald’s is known as an industry leader in driving and scaling animal welfare standards with our supply chain partners. We are aligned with the proponent’s aim of working with the U.S. pork industry to maximize the time that pregnant sows spend in group housing, away from gestation stalls, and we share the proponent’s focus on the importance of transparent reporting on ESG commitments and progress. As such, our shareholders are well-served by our vigilant focus on the robust science-based strategies, remaining goal achievement, cross-industry engagement and annual reporting processes currently underway.

McDonald’s is committed to animal health and welfare and, in 2012, we were the first Quick Service Restaurant to commit to phase out the use of gestation stalls for pregnant sows.

While we purchase approximately 1% of U.S. pork produced, and primarily from market hogs rather than sows, our longstanding commitment to animal health and welfare led to a ten-year goal—set in 2012—to source all pork for our U.S. business from producers that do not house pregnant sows in gestation stalls (i.e., individual confinement). In setting this goal, our intention was to influence producers to plan and transition from the use of gestation stalls to group housing for pregnant sows.

Our leadership on this issue has been widely recognized. In fact, when we set this goal, the proponent themselves shared with media that “[n]o other fast-food company has done what McDonald’s has done here.” In the years after we announced our goal, other Quick Service Restaurant brands and food retailers made similar commitments. We are proud of the positive impact we have had.

When we made our commitment in 2012, nearly all sows in the U.S. spent their entire lives in gestation stalls. Today, in contrast, an estimated 30-35% of U.S. pork is produced using group housing for pregnant sows. As the demand for group housed pork grows and as additional animal welfare legislation is passed, we expect the percentage of sows spending the majority of their lives in group housing to continue to grow.

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Despite this progress, the proponent has now asked for new commitments, including for us to require all of our U.S. suppliers to move to “crate free” pork. While we look forward to promoting further collaboration across the industry on this issue, the current pork supply in the U.S. would make this type of commitment impossible. Furthermore, it reflects a departure from the veterinary science used for large-scale production throughout the industry, and would harm our shared pursuit of providing customers with high quality products at accessible prices.

Despite unprecedented challenges across the pork industry, McDonald’s remains committed to sourcing all pork for our U.S. business from producers that do not house pregnant sows in gestation stalls.

The COVID-19 pandemic and the costly outbreak of African Swine Fever have caused unprecedent disruptions to global supply chains, and global pork production and trade in particular, over the last two years. In the U.S., this landscape has been exacerbated because the structure of the U.S. pork industry is highly fragmented, with limited vertical integration. Despite these challenges, we have worked closely with our supply chain partners to best position ourselves to honor our commitment. Significant progress was enabled when we achieved our stated 2017 milestone of sourcing pork for our U.S. business only from producers who share our commitment to phasing out gestation stalls for pregnant sows.

We expect that by the end of 2022, 85-90% of our U.S. pork will come from group housing systems, representing material progress in the original 10-year timeframe. We also expect that by the end of 2024, 100% of our U.S. pork volume will come from group housing systems.

McDonald’s commitment is backed by science and consistent with industry-endorsed definitions.

Our 2012 commitment was created with input from animal welfare advocates, including the proponent, agricultural experts and veterinary scientists. It was well understood then, and remains so today, that there is a period of a breeding sow’s life when it should not be housed in a group setting: during the insemination process and until a pregnancy is confirmed, which best promotes a successful pregnancy. At the time of our original commitment, most producers housed breeding sows in individual stalls after confirming pregnancy, during the gestation phase and through birth, a practice that led to the individual confinement of breeding sows throughout their entire lives.

To help address this animal welfare issue, several states have passed laws addressing the transition to group housed sow production, with varied criteria and implementation timing. For example, in 2010, the State of Ohio struck an agreement with the proponent to phase out the use of gestation stalls for pregnant sows within Ohio by the end of 2025. According to the agreement, which was signed by the proponent, “[i]t is understood that in all housing systems, sows may be housed in breeding/gestation stalls until they are confirmed pregnant.” This was codified by Rule 901:12-8-02 promulgated under the Ohio Administrative Code, which provides that breeding/gestation stalls may be used post-weaning for a period of time that seeks to maximize embryonic welfare and allows for the confirmation of pregnancy—a period that veterinary scientists estimate to be four to six weeks.

The definition of group housing for pregnant sows used by our Company has been endorsed by the National Pork Producers Council, the American Association of Swine Veterinarians (the “AASV”) and the National Pork Board (the “NPB”), whose Pork Quality Assurance guidelines outline industry standards for U.S. production.19

The proponent’s current position represents not only a significant departure from accepted science, but also from the proponent’s original position (as enshrined in Ohio law), and ignores the significant improvement in the welfare of U.S. sows resulting from the commitments of McDonald’s and many others.

McDonald’s has continued to transparently communicate our progress through our reporting platforms.

Consistent with our other ESG commitments, we have regularly communicated updates over the last 10 years—engaging partners across our value chain, noting key milestones and reporting progress transparently on our corporate website and in our annual Purpose & Impact report.

19The definition of group housing for pregnant sows, as used by McDonald’s, can be found in the NPB’s Pork Quality Assurance handbook at https://library.pork.org/media/?mediaId=3276699B-4AEE-4239-8A74CFAC7C6599E3, as well as on the AASV’s website at https://aasv.org/aasv/definition-grouphousing.php.
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Despite our regular reporting on progress against our 2012 commitment, the proponent is now taking fault with our original commitment in its tenth year of implementation and after much progress has been made.

McDonald’s U.S. group housed pork (“GHP”) purchases in recent years:

2018   2019   2020   2021   Projected
Year-End 2022
(Original Timeframe)		   Target
Year-End 2024
(Updated Timeframe)
26% GHP 28% GHP 36% GHP > 61% GHP 85–90% GHP 100% GHP

Looking to the future—New aims on McDonald’s journey with the U.S. pork industry.

As we look beyond 2024, we believe there are opportunities to better define and standardize current approaches to confirmation of pregnancy, managing embryonic welfare and the subsequent transition of pregnant sows into group housing during gestation, ideally creating greater consistency and synchronization beyond the varied state-by-state guidance and regulation on such matters in the U.S.

We recognize the value of informing our forward-looking strategies with input from credible third-party experts and with the intent to develop and drive scalable solutions. We further recognize that pork production practices will continue to evolve over time as producers balance consumer demand, animal welfare concerns, and land and resource constraints. At this time, a group housing environment is the most preferable, humane and efficient approach for pork production at the scale demanded in the U.S., and it is widely accepted among veterinary experts that some separation from a group environment during the early days of gestation is important for the health and safety of the sows. That said, we will continue to do our part in partnering with U.S. pork producers to maximize the time gestating sows are able to spend in group housing, while appropriately balancing negative impacts.

Further information regarding our strategy, governance and performance related to animal health and welfare is available on our website.20

Considering McDonald’s ongoing commitment to phasing out the use of gestation stalls for pregnant sows in the U.S. and our transparent annual reporting and alignment with industry standards and definitions, we believe the proposed request is unnecessary, is duplicative of ongoing Company efforts, and would divert management’s time and Company resources without providing any meaningful benefit to our Company, our shareholders or the animals within our supply chain.

Our Board recommends that you vote “AGAINST” this proposal.

20See https://corporate.mcdonalds.com/corpmcd/our-purpose-and-impact/food-quality-and-sourcing/animal-health-and-welfare.html.
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Advisory Vote on Third-Party Civil Rights Audit
   

Susan E. Arnold

  
 Our Board recommends that you vote “AGAINST” this proposal.

The SOC Investment Group has notified us that it intends to submit the following shareholder proposal at our 2022 Annual Shareholders’ Meeting. As explained below, our Board recommends that you vote “AGAINST” this proposal. The proponent beneficially owns at least $2,000 in market value of our common stock, and there were [●] shares of our common stock outstanding as of the record date.

The proponent is responsible, and neither we nor our Board accept any responsibility, for the content of the following proposal:

Shareholder Proposal

RESOLVED, that shareholders of McDonald’s urge the Board of Directors to oversee a third-party audit analyzing the adverse impact of McDonald’s policies and practices on the civil rights of company stakeholders, above and beyond legal and regulatory matters, and to provide recommendations for improving the company’s civil rights impact. Input from civil rights organizations, franchisees, corporate and franchise employees, suppliers, and customers should be considered in determining the specific matters to be analyzed. A report on the audit, prepared at reasonable cost and omitting confidential or proprietary information, should be publicly disclosed on McDonald’s website.

SUPPORTING STATEMENT

Recently, the racial justice movement and the disproportionate impacts of COVID-19 have focused the public’s and policy makers’ attention on civil rights and gender and racial equity. McDonald’s says diversity, inclusion and equal empowerment are deeply rooted in its brand and underpin its success. Following the 2020 racial justice protests, it committed to “fair treatment in access, opportunity and advancement for all”, and stated an aim to “dismantle barriers to economic opportunity.”

Yet, it is unclear how McDonald’s addresses racial inequality, as it reports diversity data only for US company-owned restaurants and staff, excluding an estimated 660,000 US franchise workers.21 McDonald’s states that 72% of company-owned restaurant workers belong to historically underrepresented groups, but members of these groups hold only 29.1% of US leadership roles. McDonald’s does not disclose the extent or impact of any advancement training for its low wage restaurant crew workers. Inadequate wages, wage theft, lack of comprehensive sick leave, and health and safety risks have led to strikes and lawsuits by McDonald’s workers. More than 50 complaints and lawsuits alleging sexual harassment at company-owned and franchised McDonald’s outlets have been filed since 2016.

Lawsuits by 238 current and former Black franchisees describe “systematic and covert racial discrimination” and denial of “equal opportunity to success” from practices steering them to high cost, low volume operations in Black neighborhoods. Black McDonald’s executives have sued the company alleging disparate treatment based on race. The cases are pending.

A pending lawsuit alleges that while approximately 40% of customers are Black, McDonald’s tiered advertising budget based on racial stereotypes produces lower spend with Black-owned media groups. McDonald’s states that diverse-owned media represents 4%, and Black-owned media 2%, respectively, of advertising spend.

21McDonald’s website states that at end 2020, “more than 2 million people worked at franchised McDonald’s restaurants globally.” McDonald’s reports 13,025 US franchises, or 33% of total restaurants systemwide. Attributing US franchise workers to global workers based on this same proportion implies 660,000 workers. See McDonald’s 2020 Form 10-K, p. 20.
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A civil rights audit will help McDonald’s identify, remedy, and avoid adverse impacts on its stakeholders. We urge McDonald’s to assess its behavior through a civil rights lens to obtain a complete picture of how it contributes to social and economic inequality.

Our Board’s Statement in Opposition

Our Board recommends that you vote “AGAINST” the advisory proposal requesting a third-party audit of the impact of the Company’s policies and practices on the civil rights of stakeholders.

McDonald’s is committed to civil rights and DEI, as reflected in our strategy and policies.

We are aligned with this proposal’s stated goal of identifying, remedying and avoiding adverse impacts on our stakeholders. However, after careful review of this proposal, our Board has determined that shareholders would be better served by our vigilant focus on the robust strategies, assessments and reporting processes that are currently underway, as well as our additional plans to better understand and address our impact on civil rights and gender and racial equity.

McDonald’s is a place of opportunity—where owner/operators build successful businesses, employees launch rewarding careers, suppliers find their goods on tables around the world, and anyone, anywhere, enjoys a delicious meal and a reliably great experience. Individuals from all backgrounds are welcomed and equal treatment and consideration is given to employees, applicants and business partners without regard to race, color, religion, sex, age, national origin, citizenship status, disability, sexual orientation, military status, veteran status, gender identity and expression, genetic information or any other basis protected by law.

We recognize our important role to proactively manage the impact we have on our communities and stakeholders globally, and we are on a journey to create equitable opportunity in every community we serve. This means using our influence and scale to accelerate meaningful and overdue societal change for our employees, franchisees, suppliers, customers and communities. Under our Accelerating the Arches strategy, we are committed to holding ourselves accountable for:

Representing the diverse communities in which we operate;
Accelerating cultures of inclusion and belonging; and
Dismantling barriers to economic opportunity.

Our human capital-related initiatives, including those relating to DEI and workplace health and safety, are reviewed and monitored by our Sustainability & Corporate Responsibility Committee. This Committee also has oversight of human capital risks, such as those relating to our workforce and workplace, and regularly reports to our Board on developing human capital risks and opportunities.

We know there is a lot of work ahead, but it is work we welcome.

All McDonald’s restaurants must adhere to our Global Brand Standards, with assessments to help hold them accountable in accordance with the applicable McDonald’s market’s business evaluation processes, starting this year.

We recognize that developing respectful workplaces—where everyone’s rights are recognized—is an ongoing process of continuous improvement. In 2021, we announced Global Brand Standards aimed at advancing a culture of safety for everyone working under the Arches and McDonald’s customers worldwide. Our Global Brand Standards were informed by input from perspectives across the System, a cross-functional global team and reviews of global market practices.

Our Global Brand Standards prioritize actions in four areas:

Harassment, discrimination and retaliation prevention. Procedures in place for reporting claims of harassment, as well as policy and training established to prevent harassment and discrimination.
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Workplace violence prevention. Procedures in place for incident reporting, as well as policy and training established to mitigate the risk of violence in the workplace.  
Restaurant employee feedback. At least one crew and manager survey completed each year in each restaurant, with an accompanying action plan.  
Health and safety. Annual health and safety audits with action plans to reinforce a culture of safety.

We are committed to supporting franchisees with their implementation of our Global Brand Standards through a suite of policies, tools, trainings and reporting mechanisms, as well as regularly assessing our approach, and engaging with relevant stakeholders to improve our monitoring, analysis and remediation of human rights impacts in order to be more transparent and effective in supporting people. All of the nearly 40,000 McDonald’s restaurants around the world, including both Company-owned and franchised locations, are required to adhere to our Global Brand Standards, with assessments to help hold them accountable in accordance with the applicable McDonald’s market’s business evaluation processes, starting this year.

Upholding human rights and cultivating respectful workplaces fuels McDonald’s success and strong, safe communities.

We are committed to respecting human rights wherever we do business and fostering safe workplaces built on dignity, inclusion and respect. In 2018, we created a global cross-functional Human Rights Working Group, which oversees implementation of our Human Rights Policy and works to improve our procedures and practices.22 Our Chief Global Impact Officer, in partnership with our Chief People Officer, is ultimately responsible for our corporate human rights efforts. Pursuant to its charter, our Sustainability & Corporate Responsibility Committee oversees our programs, progress and efforts related to human capital matters. We are also committed to engaging with relevant stakeholders to continue to advance our approach to human rights, and we participate in relevant forums to track and address emerging risks.

McDonald’s leaders are directly responsible and accountable for making tangible progress on our DEI goals.

In February 2021, we disclosed our corporate employee representation and EEO-1 data for the first time, and set goals to increase representation of women and historically underrepresented groups in leadership roles (defined as Senior Director and above), including23:

Representation goals for leadership. Globally, we expect to increase representation of women in leadership roles (Senior Director and above), from 38% to 45% by the end of 2025, with a goal of reaching gender parity by the end of 2030.24 Also by the end of 2025, the Company aims to increase representation of historically underrepresented groups in U.S. leadership roles (Senior Director and above) from 29% to 35%.25 In setting these goals, we leveraged data to understand both where we are currently and where we want to be in the future. This included a review of internal and external data, including labor and census talent availability statistics, industry EEO-1 data, consumer insights, customer trends and expected demographic changes over the next decade. This data made clear that we have an opportunity to strengthen our representation to better reflect our current and future employee base.
22Our Human Rights Policy can be found at https://corporate.mcdonalds.com/content/dam/gwscorp/nfl/scale-for-good/McDonalds_Human_Rights_Policy.pdf. More information about our overall approach can be found at https://corporate.mcdonalds.com/corpmcd/our-purpose-and-impact/jobs-inclusion-and-empowerment/respectful-workplaces.html.
23Corporate employee representation can be found at https://corporate.mcdonalds.com/corpmcd/en-us/our-stories/article/OurStories.DEI-Accountability.html. EEO-1 data can be found at https://corporate.mcdonalds.com/content/dam/gwscorp/assets/jobs-inclusion/diversity-equity/McD_EEO1_Data_Table.pdf. “Historically Underrepresented Groups” refers to groups who have been denied access and/or suffered past institutional discrimination in the U.S. and, according to the U.S. Census and other federal measuring tools, includes Black Americans, Asian Americans, Hispanics or Chicanos/Latinos, and Native Americans. This is revealed by an imbalance in the representation of different groups in common pursuits such as education, jobs and housing, resulting in marginalization for some groups and individuals and not for others, relative to the number of individuals who are members of the population involved.
24The December 2020 baseline data shows women make up 37% of leadership roles. We define gender parity using the UN Women Training Centre definition as another term for equal representation of women and men in a given area.
25The December 2020 baseline data shows historically underrepresented groups make up 29% of leadership roles.
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Executive compensation. To reinforce the importance of our values and to hold executives accountable for making progress in the areas of DEI, our Board has incorporated quantitative human capital management metrics into the annual incentive compensation for our executives beginning in 2021. In addition to our financial performance, executives are now also 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 our Company.

McDonald’s is committed to ensuring equal pay for equal work and, in 2021, we substantially attained equal pay for woman globally and historically underrepresented groups in the U.S.

Through an annual analysis of our compensation data and appropriate remediation action, we are committed to help ensure equal pay for equal work. Our equal pay analysis compares employees in similar roles, while considering the many factors that legitimately drive differences in pay between employees, such as experience (general, Company-specific, job-specific), job level/grade, performance and location.

In 2019, we introduced the following Global Pay Principles to our owned markets to advance good pay practices that are understood, consistently implemented and executed across McDonald’s.

Competitive

  Pay opportunities are aligned with the external value of a job to optimally attract, engage and motivate talent.

  The competitiveness of our pay rates is reviewed regularly relative to peer companies that reflect our size, scale, performance and talent needs.

Non-discriminatory  Employees are compensated at a level commensurate with their role, responsibility, impact, location, experience, knowledge, skills and performance, irrespective of gender, race, ethnicity or any other similar protected personal characteristics.
Performance-based  Pay is focused on motivating high performance, recognizing achievement and reinforcing behaviors that align with our culture.
Understandable

  Pay programs are communicated regularly and transparently with compelling clarity.

  We strive for simplicity and focus in the design of our programs to ensure employees understand what determines their pay.

Compliant  We comply with all applicable legal and regulatory requirements and standards.

Our 2021 pay gap analysis showed that we have substantially attained equal pay for women globally (99.85%)26 and that there was no pay gap disfavoring historically underrepresented groups in the U.S.27

26Markets included in the analysis: Australia, Austria, Belgium, Canada, Czech Republic, France, Germany, Ireland, Italy, Netherlands, New Zealand, Poland, Portugal, Russia, Slovakia, Spain, Switzerland, Ukraine, the U.K. and the U.S., as well as our corporate offices in Dubai, Hong Kong and Singapore.
27The analysis was conducted on U.S. employees who disclosed race/ethnicity information.
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Our annual pay gap assessment will help ensure we are following our pay principles globally in our operated or owned markets, and identify any gaps based on gender (globally) and race/ethnicity (U.S.) for review. While 2021 was the first time we communicated our equal pay commitment publicly28, we believe that greater transparency is important to building trust with our people, living our values, and holding ourselves accountable.

As such, working toward equal pay is not a one-time project; it requires ongoing focus and effort. We are committed to running pay gap analyses annually and reporting on progress as we continue to advance our strategy.

McDonald’s is committed to promoting DEI progress across our System – within our own organization and with suppliers and franchisees globally.

Starting in July 2021, we extended our impact through our value chain by inviting our U.S.-based suppliers of goods and services to join McDonald’s Mutual Commitment to Diversity, Equity and Inclusion.29 Participating suppliers commit to taking action such as implementing a DEI strategy, increasing overall representation of underrepresented talent and usage of diverse suppliers, investing in innovation and creating a process for accountability. As our suppliers continue their own DEI journeys, we will offer access to resources and tools, including sharing of best practices.

In addition, in December 2021, we launched a franchisee recruitment initiative to help increase the number of new franchisees from all backgrounds, including historically underrepresented groups, in our operated markets around the world.30 We expect to expand the number of new franchisees around the world through efforts in three areas: recruitment, financing, and ongoing learning and development. Worldwide, the effort—tailored for each market—will seek to increase ownership opportunities for new talent, both in terms of the number of individual restaurants owned and the number of qualified franchisees overall. We made a five-year, $250 million commitment in the U.S. to provide alternatives to traditional financing in order to help candidates—who may face socio-economic barriers—join the McDonald’s System.

McDonald’s demonstrates its commitment to sharing DEI goals and progress.

We have disclosed our DEI goals, including on gender, race and ethnicity, as well as critical DEI data related to our Company and the broader System. We have committed to updating this information regularly. Internal and external stakeholders can monitor our progress and find the latest updates on our DEI-related strategy, goals and performance by visiting the Purpose & Impact section (and, notably, the Diversity, Equity & Inclusion page) of our website.

We continue to evolve our data collection processes across the organization to further support our DEI strategy. Since 2020, we have made progress and continue to enhance our processes for collecting data and reporting. As we continue our journey of accountability and transparency, we are publishing our consolidated data on employee, Board and franchisee representation, as well as supplier diversity, through our Diversity Snapshot.31 We know our actions are even more powerful when they are underpinned by clearly measuring and transparently reporting our progress, which is why we plan to regularly publish this data and continue to enhance our data collection processes.

McDonald’s is committed and taking action for the communities it serves around the world.

To recap, we understand the importance of, and are committed to, civil rights and DEI, as evidenced by:

Our strategy and policies, including our Global Brand Standards that apply to all Company-owned and franchised restaurants;
Our human rights oversight, policies and engagement for strong, safe communities wherever we do business;
Our ongoing initiatives to improve the representation of women and historically underrepresented groups in leadership roles;
28See https://corporate.mcdonalds.com/corpmcd/en-us/our-stories/article/ourstories.equal-pay.html.
29See https://corporate.mcdonalds.com/corpmcd/en-us/our-stories/article/ourstories.dei-diverse-supplier.html.
30See https://corporate.mcdonalds.com/corpmcd/en-us/our-stories/article/DiversityEquityAndInclusion.franchisee-diversity.html.
31See https://corporate.mcdonalds.com/content/dam/gwscorp/assets/jobs-inclusion/diversity-equity/McDs_DEI-Snapshot.pdf.
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Our incorporation of quantitative human capital metrics into the annual incentive compensation of our executives;
Our Global Pay Principles, which are aligned with our commitment to equal pay for equal work;
Our commitment to promoting DEI progress across the McDonald’s System, including our long-standing work designed to encourage suppliers to further DEI progress in their own organizations and our recruitment initiative to help increase the number of franchisees from all backgrounds, including historically underrepresented groups; and
Our commitment to accountable and transparent disclosure regarding progress.

We also understand that there is more to be done to combat racial injustice, and we are committed to that work. The proponent asserts that the best course of action is for our Board to oversee a third-party audit to obtain recommendations for improving our Company’s civil rights impact and identify, remedy, and avoid adverse impacts on stakeholders. The goals, initiatives and progress we have publicly reported over the last two years demonstrates we are already engaged in doing this work. Our data-driven public commitments related to employees, suppliers and franchisees, all past and future equal pay analyses to which we have committed, and the numerous other initiatives we already have underway are consistent with the objectives of this proposal and will help address many of the concerns raised in this proposal’s supporting statement.

Because McDonald’s is already proactively engaged in addressing these matters, we do not believe that the proposed third-party audit and formal report will provide meaningful additional benefit to our Company or shareholders. As a result, our Board recommends that you vote “AGAINST” this proposal.

Our Board recommends that you vote “AGAINST” this proposal.
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Advisory Vote on Report on Lobbying Activities and Expenditures
  

Robert A. Eckert

 Our Board recommends that you vote “AGAINST” this proposal.

National Legal and Policy Center (NLPC) has notified us that it intends to submit the following shareholder proposal at our 2022 Annual Shareholders’ Meeting. As explained below, our Board recommends that you vote “AGAINST” this proposal. The proponent beneficially owns 50 shares of our common stock, and there were [●] shares of our common stock outstanding as of the record date.

The proponent is responsible, and neither we nor our Board accept any responsibility, for the content of the following proposal:

Shareholder Proposal

RESOLVED:

The shareholders request that McDonald’s Corporation (“Company”) provide a full, detailed disclosure of our company’s direct and indirect lobbying activities and expenditures to assess whether our lobbying is consistent with Company’s expressed goals and in shareholders’ best interests.

Shareholders request the Board prepare a report, updated annually disclosing:

1.Company policy and procedures governing lobbying, both direct and indirect, and grassroots lobbying communications;
2.Payments by Company used for (a) direct or indirect lobbying or (b) grassroots lobbying communications, in each case including the amount of the payment and the recipient;
3.Description of the decision-making process and oversight by management and the Board for making payments described in section 2 above.

For purposes of this proposal, a “grassroots lobbying communication” is a communication directed to the general public that (a) refers to specific legislation or regulation; (b) reflects a view on the legislation or regulation; and (c) encourages the recipient of the communication to take action with respect to the legislation or regulation.

“Indirect lobbying” is lobbying engaged in by a trade association or other organization of which Company is a member.

Both “direct and indirect lobbying” and “grassroots lobbying communications” include lobbying at the local, state and federal levels.

The report shall be presented to the Audit Committee or other relevant oversight committees of the Board and full details posted on the company’s website.

Supporting Statement

As shareholders we encourage transparency and accountability regarding staff time and corporate funds to influence legislation and regulation, both directly and indirectly.

Company’s lobbying expenditures may not include grassroots lobbying to directly influence legislation by mobilizing public support or opposition, nor lobbying expenditures in states that do not require disclosure.

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Absent a system of transparency and accountability for lobbying expenditures, Company executives may use Company assets for objectives that are not shared by and may be inimical to the interests of the Company and its shareholders.

Current disclosure is insufficient to allow the Company’s Board, its shareholders, and its current and prospective customers to fully evaluate its lobbying priorities.

There is currently no single source providing shareholders the information sought by this resolution.

Our Board’s Statement in Opposition

Our Board recommends that you vote “AGAINST” the advisory proposal requesting a report on our lobbying activities and expenditures. We recognize that the use of Company resources in the political process is an important issue for shareholders. We are committed to the highest ethical standards when engaging in, and have strong governance practices and accountability related to, political activities, including lobbying. In this regard, we have developed effective policies for the appropriate oversight and disclosure of our political and lobbying activities. Further, we have demonstrated and continue to demonstrate transparency with respect to our political and lobbying activities, as required by applicable disclosure laws. We believe our robust disclosure standards and policies and practices relating to this subject appropriately address the concerns cited in this proposal.

McDonald’s has consistently been named a top company for political transparency and accountability.

The Center of Political Accountability Zicklin Index of Corporate Political Accountability and Disclosure ranked McDonald’s as a “Trendsetter” (its highest ranking) for political transparency and accountability in 2021.32 This index benchmarks the political disclosure and accountability policies and practices of leading U.S. public companies. We are proud that this is the third year in a row that we have received such recognition.

McDonald’s transparently discloses and reports our lobbying activities and expenditures.

Generally, we do not make contributions to political parties, candidates for public office or political organizations. However, because public policy issues have the potential to impact our business, employees, franchisees and the communities in which we operate, we believe that in certain cases it may be appropriate and in the best interests of our Company and shareholders to make political contributions and/or engage with public policymakers.

Our spending on federal lobbying activities is required to be reported to the federal government and is publicly available on websites maintained by the U.S. House of Representatives and the U.S. Senate.33 Our spending on state government relations efforts is also generally required to be reported to applicable state governments and is publicly available on those states’ websites, including those maintained by applicable Secretaries of State, state ethics and public disclosure commissions and state legislatures.

In addition, we comply with the Lobbying Disclosure Act, which includes filing quarterly reports that detail our total federal lobbying expenditures (including the identification of the legislation or subject matter covered), those individuals who lobbied on our behalf, and the legislative body or executive branch that was contacted. These reports include not only expenses associated with lobbying the federal government, but also the portion of any trade association dues associated therewith (see below for a further discussion of trade association dues). We file similar publicly available lobbying reports with state and local agencies as required by applicable law.

Finally, we semi-annually publish all corporate political contributions made in the U.S. pursuant to our Political Contribution Policy on our website.34

32See https://www.politicalaccountability.net.
33See https://lobbyingdisclosure.house.gov and lda.senate.gov.
34See https://corporate.mcdonalds.com/corpmcd/investors/corporate-governance/policital-contributions-and-policy.html.
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McDonald’s seeks to ensure that any trade association dues we pay are not used for political activities, including political contributions and electioneering.

From time to time, we engage with trade associations in the U.S. that represent a broad spectrum of views on industry and policy issues. It is our practice to require these trade associations to agree that no part of our dues will be used for political contributions, independent expenditures, electioneering communications or ballot initiatives, as those terms are defined by applicable law. In addition, no part of our dues may be deposited into any account used by any association required to report its contributions and expenditures under Section 527 of the Internal Revenue Code. We also publish a list of trade associations of which we are a member on our website.35

Our Board provides effective oversight of our lobbying and political activities, including through our Political Contribution Policy.

Our Board, with the assistance of our Public Policy & Strategy Committee, oversees our public policy processes and activities. This includes oversight of our policies and practices regarding lobbying and political contributions, such as our Political Contribution Policy, as well as the evaluation of potential contributions to political parties, candidates or organizations in a manner consistent with our core values. Our Chief Global Impact Officer also regularly briefs our Public Policy & Strategy Committee on corporate political giving and related matters.

We maintain a robust Political Contribution Policy36, which is designed to ensure that any corporate political contributions made by our Company are done so in a manner consistent with our core values and designed to protect and/or enhance shareholder value. It describes the policies and procedures for making corporate political contributions, how they are approved, who must approve them, how they are disclosed and how they are reported to and reviewed by our Public Policy & Strategy Committee. To this end, management reports semi-annually to our Public Policy & Strategy Committee regarding compliance with our Political Contribution Policy.

The additional lobbying disclosure requested by the proposal is unnecessary.

We participate in the political process in accordance with good corporate governance practices. Our Board believes that our lobbying activities are transparent, and this proposal’s request for additional disclosure is unnecessary given the information that is already publicly available. Adoption of this proposal would be substantively duplicative of existing reporting, an inefficient use of Company resources, divert management’s attention away from our primary business activities and only serve to benefit the limited interests of a small group of shareholders.

As a result of mandatory public disclosure requirements, as well as our robust policies and practices and existing disclosure, our Board has concluded that ample public information exists regarding McDonald’s political contributions and lobbying expenditures to appropriately address the concerns cited in this proposal.

Our Board recommends that you vote “AGAINST” this proposal.

35See https://corporate.mcdonalds.com/corpmcd/investors/corporate-governance/policital-contributions-and-policy.html.
36See https://corporate.mcdonalds.com/content/dam/gwscorp/nfl/corporate-governance-content/political-contributions-and-policy/POLITICAL_CONTRIBUTION_POLICY.pdf.
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Advisory Vote on Report on Global Public Policy and Political Influence
  15,000
 Our Board recommends that you vote “AGAINST” this proposal.

John C. Harrington has notified us that he intends to submit the following shareholder proposal at our 2022 Annual Shareholders’ Meeting. As explained below, our Board recommends that you vote “AGAINST” this proposal. The proponent beneficially owns at least $2,000 in market value of our common stock, and there were [●] shares of our common stock outstanding as of the record date.

The proponent is responsible, and neither we nor our Board accept any responsibility, for the content of the following proposal:

Shareholder Proposal

RESOLVED: Shareholders request the Company annually issue a transparency report on global public policy and political influence, disclosing company expenditures and activities outside of the United States. Such report should disclose company funding and in-kind support directed to candidates or electioneering, lobbying, and charitable donations for the preceding year including:

Recipients and amounts;
The Company’s membership in or payments to nongovernmental organizations including trade and business associations, scientific or academic organizations and charities;
The rationale for these activities.

The Board and management may, in its discretion, establish a de minimis threshold, such as contributions to an individual or organization totaling less than $250, below which itemized disclosures would not be required.

Supporting statement

In January 2021, international media reported that our Company “paused all of our political giving while we review our policies and procedures” and that moving forward our Company “will ensure that all contributions continue to align with our values and the purpose of our business.”37 This announcement raises significant concerns among investors regarding the global extent of our Company’s political activity given increased public scrutiny and intensifying demand for transparency.

As a truly global corporation, McDonald’s employs approximately 200,000 people and operates in 119 countries.38 While our Company discloses some information about U.S. political activities, spending to influence public policy internationally is not comprehensively disclosed. Currently shareholders receive minimum information on corporate funds expended globally to influence policies.

In March 2021, Vanguard cautioned that “poor governance of corporate political activity, coupled with misalignment to a company’s stated strategy or a lack of transparency about the activity, can manifest into financial, legal, and reputational risks that can affect long-term value.”39

37https://www.restaurantbusinessonline.com/financing/mcdonalds-says-it-pausing-its-political-donations
38https://corporate.mcdonalds.com/content/dam/gwscorp/assets/investors/financial-information/annual-reports/2020%20Annual%20Report.pdf
39https://about.vanguard.com/investment-stewardship/perspectives-and-commentary/INVSPOLS_032021.pdf
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Food industry support for scientific advocacy intended to shape policymaking is now seen critically. Our Company is listed as a member of the International Food Information Council (IFIC), a food and agrochemical industry group that conducts promotion and research to advance industry interests, often running counter to public health, such as IFIC’s messaging defending sugar, processed foods, artificial sweeteners, and pesticides.40

Similarly, our Company sponsors the International Food and Beverage Alliance (IFBA), which, in addition to lobbying against sugar reduction policies, has been exposed secretly lobbying through member-states to gain influence within the World Health Organization (WHO),41 and has opposed safeguarding of WHO’s nutrition policies from conflicts of interest.42

Our Company does not currently disclose these sponsorships on its website, raising transparency and credibility concerns regarding the controversies surrounding these bodies.43 Media and public scrutiny may quickly reveal corporate advocacy that seems at odds with a company’s stated values and brand image, which our business heavily depends on.

We urge you to vote in favor of this proposal and to encourage our company to disclose detailed data on its non-domestic contributions. Adopting this resolution would position the corporation globally to be a leader on political transparency.

Our Board’s Statement in Opposition

Our Board recommends that you vote “AGAINST” the advisory proposal requesting a report on global public policy and political influence. We recognize that the use of Company resources in the political process is an important issue for shareholders. We are committed to the highest ethical standards when engaging in, and have strong governance practices and accountability related to, political activities. In this regard, we have developed effective policies, applicable both within and outside the U.S., for the appropriate oversight and disclosure of our limited political and lobbying activities that occur outside the U.S. We believe these robust standards and policies and practices appropriately address the concerns cited in this proposal.

McDonald’s has consistently been named a top company for political transparency and accountability.

The Center of Political Accountability Zicklin Index of Corporate Political Accountability and Disclosure ranked McDonald’s as a “Trendsetter” (its highest ranking) for political transparency and accountability in 2021.44 This index benchmarks the political disclosure and accountability policies and practices of leading U.S. public companies. We are proud that this is the third year in a row that we have received such recognition.

McDonald’s limited public policy engagement outside the U.S. is focused on promoting shareholder value.

Generally, we do not make contributions to political parties, candidates for public office or political organizations. However, because public policy issues have the potential to impact our business, employees, franchisees and the communities in which we operate, we believe that in certain cases it may be appropriate and in the best interests of our Company and shareholders to make political contributions and/or engage with public policymakers outside the U.S. We participate in public policy dialogues and share our expertise on key issues that support our business strategy and where we believe we can contribute ideas to solve policy issues. We aim to make constructive contributions that will lead to policies that benefit our Company and shareholders, as well as consumers and society.

40https://usrtk.org/our-investigations/how-big-food-spins-bad-news/
41https://gh.bmj.com/content/6/6/e005216#ref-166
42https://globalizationandhealth.biomedcentral.com/articles/10.1186/s12992-020-00611-1
43https://corporate.mcdonalds.com/corpmcd/investors/corporate-governance/policital-contributions-and-policy.html#tradeAssociation
44See https://www.politicalaccountability.net.
  
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McDonald’s expenditures related to public policy and political influence outside the U.S. are limited.

Funding and in-kind support directed by our Company to candidates or electioneering, lobbying and charitable donations outside the U.S. are made in accordance with applicable local laws and comply with our Political Contribution Policy (as discussed below). Further, such expenditures are generally required to be disclosed by either the recipient or donor in accordance with applicable laws. For example, under the European Transparency Register, a voluntary interest representation register in the EU, we disclosed advocacy spending of less than €499.000 in 2020. We also publish a list of trade associations of which we are a member on our website.45

Our Board provides effective oversight of our lobbying and political activities, both within and outside the U.S.

Our Board, with the assistance of our Public Policy & Strategy Committee, oversees our public policy processes and activities, both within and outside the U.S. This includes oversight of our policies and practices regarding lobbying and political contributions, such as our Political Contribution Policy, as well as the evaluation of potential contributions to political parties, candidates or organizations in a manner consistent with our core values. Our Chief Global Impact Officer also regularly briefs our Public Policy & Strategy Committee on corporate political giving and related matters.

We maintain a robust Political Contribution Policy46, which applies to both U.S. and international markets and to both our Company and our majority-owned subsidiaries (other than any publicly traded subsidiary). Our Political Contribution Policy is designed to ensure that any corporate political contributions made by our Company are done so in a manner consistent with our core values and designed to protect and/or enhance shareholder value. It describes the policies and procedures for making corporate political contributions, how they are approved, who must approve them, how they are disclosed and how they are reported to and reviewed by our Public Policy & Strategy Committee. To this end, management reports semi-annually to our Public Policy & Strategy Committee regarding compliance with our Political Contribution Policy.

In addition, we have a strong Global Code of Conduct, which applies worldwide, and we abide by applicable local laws and regulations that govern interactions with public officials in the markets in which we operate.

The additional disclosure requested by the proposal is unnecessary.

We agree that transparency and accountability with respect to political activity are important. We already have an appropriate system of oversight in place, including our Political Contribution Policy, to help ensure that our limited political contributions outside the U.S. comply with applicable law and are in the best, long-term interests of our Company and shareholders.

Our Board believes that issuing the requested annual report on this topic is unnecessary and, if adopted, would not be meaningfully additive to the existing system of transparency and oversight McDonald’s has in place.

Our Board recommends that you vote “AGAINST” this proposal.

45See https://corporate.mcdonalds.com/corpmcd/investors/corporate-governance/policital-contributions-and-policy.html.

Enrique Hernandez, Jr.

46		See https://corporate.mcdonalds.com/content/dam/gwscorp/nfl/corporate-governance-content/political-contributions-and-policy/POLITICAL_CONTRIBUTION_POLICY.pdf.
        
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Jeanne P. Jackson

5,000

Richard H. Lenny

–

Walter E. Massey

–

Andrew J. McKenna

4,998

Cary D. McMillan

–

Sheila A. Penrose

–

John W. Rogers, Jr.

15,000

Roger W. Stone

15,000

Miles D. White

–

(4)Represents Company matching gifts of charitable contributions to tax-exempt organizations for participating non-management Directors. This program matches up to $10,000 of charitable contributions made to certain types of tax-exempt organizations. In 2011, total matching contributions were $115,000.Stock Ownership

(5)The amount reported in the “Stock awards” column represents the sum of (i) the $130,000 credit to Director McKenna’s account under the Directors’ Deferred Compensation Plan on December 31, 2011; and (ii) the aggregate grant date fair value of $765,438 computed in accordance with FASB ASC Topic 718 relating to the special award of 10,434 RSUs described above. These will be paid out on the later of one year from the date of grant or his retirement date.

Stock ownership

Ownership Guidelines and Stock Ownership and Retention Policy for Senior Officers

STOCK OWNERSHIP GUIDELINES

We have established stock ownership guidelines for Directors, which are regularly reviewed by our Governance Committee. Under the guidelines, Directors should own shares of our common stock at least equal in value to the lesser of (i) five times the annual cash Board member retainer or (ii) 10,000 shares within five years of joining our Board (of which 1,000 shares should be owned within the first year of joining the Board). All Directors currently meet the guidelines. Directors are prohibited from entering into any hedging or pledging arrangement with respect to shares of our common stock. We also impose stock ownership and retention requirements on senior officers through our Executive Stock Ownership and Retention Policy. The Company imposesrequirements for senior officers are discussed under “Compensation Discussion and Analysis” on page 61. Our stock ownership guidelines for Directors and senior officers. These guidelinesour Executive Stock Ownership and Retention Policy, as well as our policy with respect to the hedging and pledging of shares of our common stock, are available on the Company’sour website atwww.governance.mcdonalds.comhttps://corporate.mcdonalds.com/corpmcd/investors/corporate-governance/governance-resources.html, and the guidelines for senior officers are discussed in the Compensation Discussion and Analysis section, beginning on page [    ]..

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

The following table shows all beneficial ownersSecurity Ownership of more than five percent of the Company’s common stock outstanding as of December 31, 2011:

000000000000000000000000000000000000000000000

 

Name and address of

beneficial owner

  Amount and nature of
beneficial ownership		   Percent of
class (3)		     
 

 

BlackRock, Inc. (1)

40 East 52nd Street

New York, NY 10022

   57,153,070     5.59%    

 

 

FMR LLC (2)

82 Devonshire Street

Boston, MA 02109

   55,998,942     5.47%    

 

(1)Reflects shares deemed to be beneficially owned by BlackRock, Inc. (BlackRock), directly or through its subsidiaries, as of December 31, 2011, according to a statement on Schedule 13G/A filed with the SEC on February 13, 2012, which indicates that BlackRock, an investment adviser, has sole voting power and sole dispositive power with respect to all of the shares. The Schedule 13G/A certifies that the securities were acquired in the ordinary course and not with the purpose or with the effect of changing or influencing the control of the Company.

McDonald’s Corporation 2012        47

(2) Reflects aggregate shares deemed to be directly or indirectly beneficially owned by FMR LLC (FMR) and its Chairman, Edward C. Johnson III, as of December 31, 2011, according to a statement on Schedule 13G filed with the SEC on February 14, 2012. Members of the Johnson family, directly or through trusts, own approximately 49% of the voting power of FMR LLC and, due to their share ownership and entry into a voting agreement with certain other shareholders, may be deemed to form a controlling group with respect to FMR. Mr. Johnson and FMR, as the parent company to various investment advisors, managers and other institutions, have sole dispositive power with respect to all of the shares. FMR has sole voting power with respect to 1,180,502 of the shares. The Schedule 13G certifies that the securities were acquired in the ordinary course and not with the purpose or with the effect of changing or influencing the control of the Company.

(3) Based on the number of outstanding shares of common stock on December 31, 2011.

SECURITY OWNERSHIP OF MANAGEMENT

Management

The following table shows the ownership of theour common stock and common stock equivalent units for the named individuals and all Directors and executive officers as a group. Information reflected in the groupfollowing table is as of March 1, 2012, except as noted below.2022. Directors and executive officers as a group owned (directly, indirectly and through benefit plans) [lessless than 1.0%]1% of the Company’sour common stock:

Name Common
stock(1)		     Stock
equivalents(2)		     Total
Directors      
Lloyd Dean 0 9,797 9,797
Robert Eckert 5,000 63,611 68,611
Catherine Engelbert 2,041 1,641 3,682
Margaret Georgiadis 2,130 7,350 9,480
Enrique Hernandez, Jr. 12,354 86,690 99,044
Richard Lenny 2,288 37,878 40,166
John Mulligan 2,900 6,643 9,543
Sheila Penrose 3,000 29,724 32,724
John Rogers, Jr. 88,500 60,794 149,294
Paul Walsh 0 3,058 3,058
Miles White 5,000 18,613 23,613
Named Executive Officers      
Christopher Kempczinski 296,909 4,557 301,466
Kevin Ozan 339,775 2,500 342,275
Ian Borden 159,244 0 159,244
Joseph Erlinger 142,708 0 142,708
Desiree Ralls-Morrison 0 81 81
All Directors and executive officers as a group (22 persons) 1,262,441 333,553 1,595,994
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000000000000000000000000000000000000000000000000000000000000
Name  

 

Common stock
(1)(2)(3)(4)(5)

   Stock
equivalents (6)		   Total         

 

 

Susan E. Arnold

   -     6,872     6,872      

Peter J. Bensen

          

Robert A. Eckert

   25,000     35,517     60,517      

Timothy J. Fenton

          

Janice L. Fields

          

Enrique Hernandez, Jr.

   2,000     55,464     57,464      

Jeanne P. Jackson

   7,250     43,727     50,977      

Richard H. Lenny

   2,000     18,679     20,679      

Walter E. Massey

   5,750     26,446     32,196      

Andrew J. McKenna

   49,408     92,701     142,109      

Cary D. McMillan

   12,284     25,412     37,696      

Sheila A. Penrose

   3,000     12,534     15,534      

John W. Rogers, Jr.

   92,600     32,100     124,700      

James A. Skinner

          

Roger W. Stone

   33,000     92,918     125,918      

Donald Thompson

          

Miles D. White

   5,000     4,161     9,161      
Directors and executive officers as a group (the Group) (24 persons)          

 

Stock Ownership

(1)Beneficial ownership of shares that are owned by members of their immediate families directly or through trusts is disclaimed as follows: Directors McKenna, 640; and Rogers, 100.

(2)Includes unallocatedvested stock options for executive officers. Includes 7,854 restricted stock units granted to Mr. Hernandez in connection with his service as Chairman, which shall be payable in either shares held inof our common stock or cash at the Company’s Profit Sharingdiscretion, and Savings Plan as follows: Directors Skinner, [            ]; and Thompson, [            ]; Mr. Bensen, [            ]; Ms. Fields [            ] andshall vest upon his separation from the Group, [            ].

(3)Includes shares that could be purchased by exercise of stock options on or within 60 days after March 1, 2012 under the Company’s option plan as follows: Directors Eckert, 15,000; Jackson, 5,000; McKenna, 4,998; Rogers, 15,000; Skinner, 1,716,700; Stone, 15,000 (options are held by a trust, of which Director Stone is Trustee) and Thompson, 429,326; Messrs. Bensen, 225,453; Fenton, 208,581; and Ms. Fields, 218,476; and the Group, 3,571,471.

48        McDonald’s Corporation 2012

(4)Board. Directors and executive officers as a group have sole voting and investment power over the shares of common stock listed in the priorabove table except as follows: (i) shared voting and investment powers for shares held by Directors Eckert, 10,000; Hernandez, 2,000; Jackson, 2,250; Lenny, 2,000; Skinner, 96,203;Ms. Georgiadis: 2,130; Mr. Hernandez: 4,500; Mr. Lenny: 2,288; and Thompson, 253; Mr. Fenton, 35,944; and the Group, 185,454; (ii) for the benefit of children, shares held by Mr. Fenton, 3,159; and the Group, [             ]; (iii) for Mr. Skinner, 2,926 shares are held in a trust of which his spouse is a trustee; and (iv) 18,000 shares held by a family foundation as to which Director Stone maintains voting and/or transfer rights.Mulligan: 2,900.

(5)For Director Rogers, includes 77,500 shares of common stock held in a margin account.

(6)(2)Includes common stock equivalent units credited under the Company’s retirement plans andAmended & Restated Deferred Compensation Plan and/or the Directors’ Deferred Compensation Plan, which are payable in cash.

COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACTSecurity Ownership of Certain Beneficial Owners

Our executive officers and Directors and persons who ownThe following table shows all beneficial owners of more than 10%5% of our common stock (Reporting Persons)outstanding as of December 31, 2021:

Name and address of beneficial owner Amount and nature of
beneficial ownership		 Percent of
class
The Vanguard Group, 100 Vanguard Boulevard, Malvern, PA 19355(1) 65,964,993 8.83%
BlackRock, Inc., 55 East 52nd Street, New York, NY 10055(2) 52,918,755 7.10%
(1)Reflects shares deemed to be beneficially owned by The Vanguard Group, directly or through its subsidiaries, as of December 31, 2021, according to a Schedule 13G/A filed with the SEC on February 10, 2022, which indicates that (a) The Vanguard Group, an investment adviser, has sole voting power with respect to zero shares, shared voting power with respect to 1,193,424 shares, sole dispositive power with respect to 62,878,253 shares and shared dispositive power with respect to 3,086,740 shares and (b) such shares were acquired and are held in the ordinary course of business and not with the purpose or effect of changing or influencing the control of our Company.
(2)Reflects shares deemed to be beneficially owned by BlackRock, Inc., directly or through its subsidiaries, as of December 31, 2021, according to a Schedule 13G/A filed with the SEC on February 1, 2022, which indicates that (a) BlackRock, Inc., a parent holding company, has sole voting power with respect to 43,874,173 shares and sole dispositive power with respect to 52,918,755 shares and (b) such shares were acquired and are held in the ordinary course of business and not with the purpose or effect of changing or influencing the control of our Company.
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Communications with our Board

Persons wishing to communicate with our Directors, individually or as a group, may do so by sending an email to bod@us.mcd.com. Under our Board’s policy for communications addressed to our Board, the Office of the Corporate Secretary reviews correspondence, forwards correspondence addressed to an individual Director (including our Chairman) to that Director, and screens correspondence directed to multiple Directors or the full Board in order to forward it to the most appropriate person. Communications that relate to our accounting, internal accounting controls or auditing matters are referred to our Audit & Finance Committee Chair.

Information on our 2023 Annual Shareholders’ Meeting

The following table summarizes how shareholders may submit proposals, including Director nominations, for our 2023 Annual Shareholders’ Meeting. Any proposals, including Director nominations, should be delivered via email to corporatesecretary@us.mcd.com. Please review Rule 14a-8 under the Exchange Act and our By-Laws for all requirements.

Type of ProposalDescription / Information to be ProvidedWhen the Proposal Must be
Received by the Company
DirectorCandidatesNominated by aShareholderOur By-Laws permit shareholders to nominate Directors for election at an annual shareholders’ meeting. A nominating shareholder must provide the information required by our By-Laws and give timely notice of the nomination to the Office of the Corporate Secretary in accordance with our By-Laws, and each nominee must meet the qualifications required by our By-Laws.No earlier than 5:00 p.m. Central Time on [●], and no later than 5:00 p.m. Central Time on [●].
Proxy AccessCandidatesOur By-Laws also provide that, under certain circumstances, a shareholder or group of shareholders may seek to include Director candidates that they have nominated in our proxy statement. These proxy access provisions of our By-Laws provide, among other things, that a shareholder or group of up to 20 shareholders seeking to include Director candidates in our proxy statement must own 3% or more of our outstanding common stock continuously for at least the previous three years. The number of shareholder-nominated candidates appearing in any proxy statement cannot exceed the greater of two Directors and 20% of the number of Directors then serving on our Board. If 20% is not a whole number, the maximum number of shareholder-nominated candidates would be the greater of two and the largest whole number below 20%, and may be reduced under certain circumstances, as described in our By-Laws. The nominating shareholder or group of shareholders also must deliver the information required by our By-Laws and satisfy the other applicable requirements of our By-Laws, and each nominee must meet the qualifications required by our By-Laws.No earlier than 5:00 p.m. Central Time on [●], and no later than 5:00 p.m. Central Time on [●].
ShareholderProposals forour 2023 AnnualShareholders’ MeetingSEC rules permit shareholders to submit proposals for inclusion in our proxy statement by satisfying the requirements specified in Rule 14a-8 under the Exchange Act. To be considered for inclusion in our proxy statement for our 2023 Annual Shareholders’ Meeting, shareholder proposals must be emailed as described above, in addition to meeting the SEC’s other requirements.No later than 5:00 p.m. Central Time on [●].
Other Proposalsfor our 2023AnnualShareholders’ MeetingFor any proposal that is sought to be presented directly from the floor of our 2023 Annual Shareholders’ Meeting, our By-Laws require that timely notice must be given in writing to the Office of the Corporate Secretary. Our By-Laws also provide that the proposal, as determined by the Chairman of the meeting, must be a proper subject for shareholder action under Delaware law and satisfy certain other requirements set forth in our By-Laws.No earlier than 5:00 p.m. Central Time on [●], and no later than 5:00 p.m. Central Time on [●].
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Communications with our Board

We intend to file reportsa proxy statement and WHITE proxy card with the SEC about their ownershipin connection with the solicitation of proxies for our 2023 Annual Shareholders’ Meeting. Shareholders may obtain our proxy statement (and any amendments and transactions in our common stocksupplements thereto) and our securities related to our common stock. Reporting Persons must furnishother documents as and when filed by us with copiesthe SEC without charge from the SEC’s website at www.sec.gov.

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Table of these reports. Based on our review of those reports provided to usContents

Transactions with Related Persons

Policies and inquiries we have made, we believe that during the year ended December 31, 2011, all Reporting Persons timely filed all required reports.

Procedures for Related Person Transactions with related persons, promoters and certain control persons

POLICIES AND PROCEDURES FOR RELATED PERSON TRANSACTIONS

The McDonald’s System has over 33,000nearly 40,000 restaurants worldwide, most of which are independently owned and operated. Within this extensive System, it is not unusual for our business to touch many companies in many industries, including suppliers of food and other products and services. TheOur Board of Directors reviews and approves (or ratifies), as appropriate, transactions, relationships or arrangements in which theour Company is a participant and that involve Directors, Director nominees, executive officers, beneficial owners of more than 5% of our common stock, their immediate family members (including domestic partnerspartners) and companies in which they have a material interest.

TheOur Board has adopted a written policy that sets out procedures for the reporting, review and ratification of related person transactions. The policy operates in conjunction with other aspects of the Company’sour compliance program, including a requirement that Directors and employees report any circumstances that may create or appear to create a conflict, regardless of the amount involved. Directors and executive officers must also confirm information about related person transactions, and management reviews its books and records and makes other inquiries as appropriate.

Under the Board’s policy, the Audit Committeeour Board evaluates related person transactions for purposes of recommending to the disinterested members of the Board thatDirectors whether or not the transactions are fair, reasonable and within Company policies and should be approved or ratified. Related person transactions involving Directors are reviewed by our Board at least annually.

TheOur Board has considered certain types of potential related person transactions and pre-approved them as not presenting material conflicts of interest. Those transactions include (a)include: (i) compensation paid to Directors and executive officers that has been approved by theour Board or the Compensation Committee; (b)(ii) Company contributions to Ronald McDonald House Charities, Inc. and certain other contributions made in limited amounts to other charitable or not-for-profit organizations; and (c)(iii) transactions in which the related person’s interest arises solely from ownership of the Company’sour common stock and all holders of theour common stock receive the same benefit on a pro rata basis. The Audit CommitteeOur Board considers the appropriateness of any related person transaction not within thesethe pre-approved classes in light of all relevant factors, including:

>the terms of the transaction and whether they are arm’s-length and in the ordinary course of McDonald’sour business;

>the direct or indirect nature of the related person’s interest in the transaction;

>the size and expected duration of the transaction; and

>other facts and circumstances that bear on the materiality of the related person transaction under applicable law and stock exchange listing standards.

Related person transactions involving Directors are also subject to approval or ratification by the disinterested Directors when so required under Delaware law.

Since January 1, 2021, there were and are currently no reportable related person transactions, and there are currently no proposed transactions in excess of $120,000 in which our Company was or is to be a participant and in which any related person had or will have a direct or indirect material interest.

McDonald’s Corporation 2012        49

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RELATED PERSON TRANSACTIONSQuestions and Answers Regarding Proxy Materials and Voting Information

1.What is Included in the Proxy Materials?

The proxy materials for our 2022 Annual Shareholders’ Meeting include this Proxy Statement, our 2021 Annual Report on Form 10-K, and a WHITE proxy card or WHITE voting instruction form. Some shareholders may have received a Notice of Internet Availability of Proxy Materials instead.

2.What is the Record Date?

Our Board set [●], 2022 as the record date for our 2022 Annual Shareholders’ Meeting. Shareholders owning shares of our common stock at the close of business on that date may vote at the meeting. On that date, there were [●] shares of our common stock outstanding held by approximately [●] million shareholders. Each share of our common stock is entitled to one vote for each Director nominee and one vote for each other matter to be voted upon at the meeting.

3.What are the Proposals to be Voted on, and What are the Voting Standards?

 

ProposalOur Board’s Voting
Recommendation		Voting StandardEffect of
Abstentions		Discretionary Vote
Allowed
1Election of the 12 Directors named in this Proxy Statement, each for a one-year term expiring in 2023“FOR ALL”OF OUR
BOARD’S DIRECTOR
NOMINEES		Plurality of votes castNoneNo
2Advisory vote to approve executive compensation“FOR”Majority of votes represented at the meeting and entitled to vote thereonVote againstNo
3Ratification of the appointment of Ernst & Young LLP as our independent auditor for 2022“FOR”Majority of votes represented at the meeting and entitled to vote thereonVote againstYes (unless your broker has provided you with competing proxy materials from the Icahn Group)
4–10Advisory votes on seven shareholder proposals, each only if properly presented“AGAINST” EACH
SHAREHOLDERPROPOSAL		Majority of votes represented at the meeting and entitled to vote on each shareholder proposalVote againstNo

In 2011,The Icahn Group has notified us that it intends to nominate two candidates for election to our Board at our 2022 Annual Shareholders’ Meeting, and such nominations were not withdrawn on or prior to the Company and its subsidiaries purchased approximately $750,000 worth10th day before the date we first mailed the notice of paper and other printed products (principally food product liners, trayliners, french fry bags, hash brown bags and bag stuffers) from Schwarz Supply Source.the meeting to our shareholders. As a result, plurality voting, instead of majority voting, will apply to the election of Directors. The 12 Director McKenna is Chairmannominees who receive the greatest number of Schwarz, as wellvotes will be elected to our Board for the following year. Any shares not voted “FOR” a particular Director nominee, whether as a 40.46 % shareholder. Membersresult of a withhold vote or a broker non-vote (if applicable), will not be counted in that Director McKenna’s family are also shareholdersnominee’s favor and will not otherwise affect the outcome of Schwarz. Schwarz’s business with the Company and its subsidiaries represents less than 1%election. If you hold your shares through an intermediary, such as a bank, broker or other nominee, you must give the intermediary specific instructions to vote your shares in the election of Schwarz’s total revenues. The Company believes that these purchases were madeour Directors by following the directions on terms at least as favorable as would have been available from other parties. [The disinterested Directors ratified this transaction for 2011 and approved the continuation of this arrangement under similar terms for 2012.]

In 2011, Inter-Con Security Systems, Inc., provided physical security servicesyour WHITE voting instruction form. If you do not give your intermediary instructions on how to vote your shares, then your shares will not be voted for the Company’s home office campus.election of our Directors.

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Questions and Answers Regarding Proxy Materials and Voting Information

With respect to each of the other proposals set forth above, shareholders may vote FOR, vote AGAINST or abstain from voting. Pursuant to our By-Laws, in order to be approved by our shareholders, these proposals must receive the affirmative vote of a majority of the voting power of the shares of our common stock represented at the meeting and entitled to vote thereon.

Abstentions on any one or more of the proposals submitted for shareholder action are shares present for purposes of determining a quorum, but an abstention on any proposal (other than the election of Directors) will have the effect of a vote against that proposal. Withhold votes on the election of any Director Hernandez isnominee have no effect (except to the President and Chief Executive Officer, as well as a 54.44% shareholderextent they reduce the number of Inter-Con. Payments by the Company to Inter-Con for 2011“FOR” votes for such services totaled approximately $1.1 million. The Company believes that these services, which represent less than 1% ofDirector nominee).

If any other business properly comes before shareholders for a vote at the revenues of Inter-Con, were made on terms at least as favorable as would have been available from other parties. [The disinterested Directors ratified this transaction for 2011 and approved the continuation of this arrangement under similar terms for 2012.]

During 2011, Mr. Stephen Stratton, a former employee of the Company and the brother of Mr. Jeffrey Stratton, Corporate Executive Vice President and Chief Restaurant Officer, owned and operated three U.S. McDonald’s restaurants. Mr. Stephen Stratton paid rent and service fees under the terms of standard franchise agreements with McDonald’s USA, LLC, a subsidiary of the Company, for the restaurants. These payments totaled $1,125,409 in 2011, and were net of refunds that are associated with participation in various initiatives and promotions, which are generally available to all U.S. owner-operators.

Mr. Jeffrey Stratton’s son-in-law, Jeff Ringel, is employed as a Vice President, Graphic Services of the Perseco business unit of HAVI Global Solutions (HGS). HGS and its business units have been significant suppliers of products and services to the McDonald’s System. Mr. Ringel is employed by HGS on an at-will basis, and his compensation is determinedmeeting, your shares will be voted at the discretion of HGS. In 2011, the Company and its subsidiaries made aggregate payments to HGS of approximately $570 million.

Communications

COMMUNICATIONS WITH THE BOARD OF DIRECTORS AND NON-MANAGEMENT DIRECTORS

Interested persons wishing to communicate directly with the Board or the non-management Directors, individually ornamed as a group, may do so by sending written communications addressed to them at McDonald’s Corporation, P.O. Box 4953, Oak Brook, IL 60522-4953 or by e-mail atmcdbod@us.mcd.com. Under the Board’s policy for communications addressedyour proxies on such matters to the extent authorized by Rule 14-4(c) under the Exchange Act. Our Board knows of no matters, other than those described in this Proxy Statement, to be presented for consideration at the Officemeeting.

4.Who is the Icahn Group? How are they involved in the 2022 Annual Shareholders’ Meeting?

The Icahn Group refers to Barberry Corp., an activist investment firm affiliated with Carl Icahn, together with their affiliates. Currently, the Icahn Group collectively holds 200 shares of our common stock. On February 19, 2022, the Icahn Group notified us that it intends to nominate two candidates for election to our Board at our 2022 Annual Shareholders’ Meeting. You may receive proxy solicitation materials, including a [●] proxy card, from the Icahn Group.

Our Board does NOT endorse any of the Corporate Secretary collects mail fromIcahn Group’s nominees. Our Board unanimously recommends that you vote “FOR ALL” of our Board’s Director nominees and in accordance with our Board’s recommendation on each other proposal properly presented at the Directors’ post office boxmeeting using the WHITE proxy card or WHITE voting instruction form.

Our Board urges you to disregard any materials, including any [●] proxy card, that may be sent to you by the Icahn Group. Importantly, voting on a [●] proxy card to “withhold” with respect to any of the Icahn Group’s nominees is NOT the same as voting FOR our Board’s Director nominees. This is because a vote on a [●] proxy card to “withhold” with respect to any of the Icahn Group’s nominees will revoke any WHITE proxy card or WHITE voting instruction form you may have previously submitted. To support our Board’s Director nominees, you should vote “FOR ALL” of our Board’s Director nominees on your WHITE proxy card or WHITE voting instruction form.

If you have already voted using a [●] proxy card, you can revoke that proxy any time before it is exercised at the meeting by (i) following the instructions on your WHITE proxy card or WHITE voting instruction form to vote by internet or telephone, (ii) marking, dating, signing and e-mail box, forwards correspondence directedreturning your WHITE proxy card or WHITE voting instruction form in the postage-paid envelope provided or (iii) voting at the meeting. Only your latest dated, validly executed proxy counts.

5.Why Have I Received Different Color Proxy Cards?

As discussed above, the Icahn Group has notified us that it intends to an individualnominate two candidates for election to our Board at our 2022 Annual Shareholders’ Meeting. We have provided you with a WHITE proxy card or WHITE voting instruction form. The Icahn Group may send you a [●] proxy card. Our Board unanimously recommends only using the WHITE proxy card or WHITE voting instruction form to vote “FOR ALL” of our Board’s Director nominees. Our Board urges you to disregard any materials, including any [●] proxy card, that may be sent to you by the Icahn Group.

Your shares may be owned through more than one brokerage or other share ownership account. In order to vote all of the shares that you own in support of our Board’s Director and screens correspondence directed to multiple Directorsnominees, you must use each WHITE proxy card or the full BoardWHITE voting instruction form you receive in order to forward itvote with respect to each account.

If the Icahn Group proceeds with its previously announced nominations, we will likely conduct multiple mailings prior to the most appropriate person. Communications to the Board, the non-management Directors or to any individual Director that relate to the Company’s accounting, internal accounting controls or auditing matters are referred to the Chairmandate of the Audit Committee.meeting to ensure that shareholders have our latest proxy information and materials to vote. We will send you a new WHITE proxy card with each mailing, regardless of whether you have previously voted. We encourage you to vote every WHITE proxy card you receive. The latest dated proxy you submit will be counted, and, if you wish to vote as recommended by our Board, then you should only submit WHITE proxy cards.

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Questions and Answers Regarding Proxy Materials and Voting Information

CONSIDERATION OF DIRECTOR NOMINATIONS FOR THE 2013 ANNUAL SHAREHOLDERS’ MEETING

DIRECTOR CANDIDATES NOMINATED BY THE BOARD

Shareholders can suggestImportantly, it will NOT help elect our Board’s Director candidates for consideration for nominationnominees if you sign and return a [●] proxy card sent by the Board by writingIcahn Group, even if you vote to the Governance Committee, c/o Office of the Corporate Secretary, McDonald’s Corporation, Department 010, One McDonald’s Plaza, Oak Brook, IL 60523-1928 or by e-mail tocorporatesecretary@us.mcd.com. Shareholders should provide the candidate’s name, biographical data, qualifications and the candidate’s written consent to being named as a nominee in the Company’s Proxy Statement and to serve as a Director, if elected.

50        McDonald’s Corporation 2012

DIRECTOR CANDIDATES NOMINATED BY A SHAREHOLDER

For Director nominations to be properly brought before the 2013 Annual Shareholders’ Meeting by a shareholder, timely notice in writing must be given by the shareholder to the Office of the Corporate Secretary. With“withhold” with respect to the 2013 Annual Shareholders’ Meeting, noticeIcahn Group’s nominees. Doing so will be timely if itrevoke any WHITE proxy card or WHITE voting instruction form you may have previously submitted. The only way to support our Board’s Director nominees is sent to the Officevote “FOR ALL” of the Corporate Secretary at McDonald’s Corporation, Department 010, One McDonald’s Plaza, Oak Brook, IL 60523-1928 or by e-mailthem on our WHITE proxy card and tocorporatesecretary@us.mcd.com, DISREGARD, and delivered on or after 5:00 p.m. Central Time on January 24, 2013 and on or before 5:00 p.m. Central Time on February 23, 2013. A shareholder presenting a nominee for Director must satisfy certain other requirements set forth in the Company’s Amended and Restated By-Laws, which are available on the Company’s website atwww.governance.mcdonalds.com and summarized in the next section.

QUALIFICATIONS FOR DIRECTORS

Article II, Section 6 of the Company’s Amended and Restated By-Laws providenot return, any proxy card that in order to be eligible for election as a Director, a candidate must deliver to the Corporate Secretary statements indicating whether the candidate: (a) will, if elected or re-elected as a Director, deliver following such person’s election or re-election a resignation effective upon (i) failure toyou receive the required vote for re-election at the next annual meeting at which such person faces re-election and (ii) Board acceptance of such resignation; (b) is a party to any voting commitment that could limit the nominee’s ability to carry out his/her fiduciary duties; (c) intends to refrain from entering into certain voting commitments; (d) is a party to any arrangements for compensation, reimbursement or indemnification in connection with service as a Director, or intends to enter into any such arrangement; and (e) intends to comply with the Company’s publicly disclosed policies and guidelines. The foregoing is a summary of the requirements of Article II, Section 6 of the Company’s Amended and Restated By-Laws and is qualified in its entirety by reference to the actual provisions of Article II, Section 6.

In addition, a Director candidate nominated by a shareholder for election at the 2013 Annual Shareholders’ Meeting will not be eligible for election unless the shareholder proposing the nominee has provided timely notice of the nomination in accordance with the deadlines specified under the section entitled “Director candidates nominated by a shareholder” and has otherwise complied with the other applicable requirements set forth in the Amended and Restated By-Laws. Shareholders should also consider the Company’s Director selection process which is described on page [     ].

SHAREHOLDER PROPOSALS FOR INCLUSION IN NEXT YEAR’S PROXY STATEMENT

To be considered for inclusion in the Company’s Proxy Statement for the 2013 Annual Shareholders’ Meeting, shareholder proposals must be received by the Office of the Corporate Secretary no later than 5:00 p.m. Central Time on December 14, 2012. These proposals must be sent to the Office of the Corporate Secretary, McDonald’s Corporation, Department 010, One McDonald’s Plaza, Oak Brook, IL 60523-1928 or by e-mail tocorporatesecretary@us.mcd.com. This notice requirement is in addition to the SEC’s requirements that a shareholder must meet in order to have a shareholder proposal included in the Company’s Proxy Statement.

OTHER SHAREHOLDER PROPOSALS FOR PRESENTATION AT THE 2013 ANNUAL SHAREHOLDERS’ MEETING

For any proposal not properly submitted for inclusion in the Proxy Statement for the 2013 Annual Shareholders’ Meeting under SEC rules and that is sought to be presented directlynot a WHITE proxy card (including any [●] proxy card that you receive from the floor of the 2013 Annual Shareholders’ Meeting, the Company’s Amended and Restated By-Laws require that timely notice must be given in writing to the Office of the Corporate Secretary. To be timely, the notice must be delivered to the Office of the Corporate Secretary at McDonald’s Corporation, Department 010, One McDonald’s Plaza, Oak Brook, IL 60523-1928 or by e-mail tocorporatesecretary@us.mcd.com on or after 5:00 p.m. Central Time on January 24, 2013 and on or before 5:00 p.m. Central Time on February 23, 2013. The Amended and Restated By-Laws also provide that the proposal, as determined by the Chairman of the meeting, must be a proper subject for shareholder action under Delaware law, and the proposal must satisfy certain other requirements set forth in the Company’s Amended and Restated By Laws.Icahn Group).

6.Why Did I Receive a Notice of Internet Availability of Proxy Materials?

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Solicitation of proxies and voting

NOTICE AND ACCESS

WeFor some shareholders, we follow the SEC’s “Notice and Access” rule. Most shareholders will receiverule and have sent a noticeNotice of Internet availabilityAvailability of proxy materials (Notice)Proxy Materials in lieu of a paper copy of the Proxy Statement and the Company’s Annual Report.proxy materials. The Notice of Internet Availability provides instructions ason how to how shareholders can access the proxy materials online, describes matters to be considered at theour 2022 Annual Shareholders’ Meeting and givesprovides instructions ason how to how shares can be voted. Shareholders receiving thevote your shares. If you receive a Notice of Internet Availability, you can request a paper copy of the proxy materials by following the instructions set forthincluded therein.

7.How Can I Attend the 2022 Annual Shareholders’ Meeting?

We will have a virtual-only 2022 Annual Shareholders’ Meeting. Shareholders must register in the Notice.

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS

THE PROXY STATEMENT AND OUR 2011 ANNUAL REPORT TO SHAREHOLDERS ARE AVAILABLE AT:

WWW.INVESTOR.MCDONALDS.COM

RECORD DATE

Shareholders owning McDonald’s common stock at the close of business on March 27, 2012 (the record date), mayadvance to ask questions or vote at the 2012meeting by using the control number located on their Notice of Internet Availability, proxy card, voting instruction form or other communication. Detailed instructions for both registered and beneficial shareholders are set forth under “Meeting Information” on page 127. Beneficial shareholders must obtain a legal proxy in advance of the meeting in order to vote. Only shareholders as of the record date may attend the virtual meeting.

8.How Can I Vote Before the 2022 Annual Shareholders’ Meeting?

We encourage shareholders to vote before our 2022 Annual Shareholders’ Meeting. On that date, [         ] shares of common stock were outstanding and there were approximately [         ] shareholders of McDonald’s common stock. Each share is entitled to one vote on each matter to be voted upon at the Annual Shareholders’ Meeting.

VOTING PRIOR TO THE ANNUAL SHAREHOLDERS’ MEETING

Most shareholders have a choice of voting prior toby proxy before the meeting by proxy over the Internet, byinternet or telephone, or by usingmailing a traditional WHITE proxy card. Refer to the Noticecard or your proxy orWHITE voting instruction card to see which options are available to you and how to use them.

form in the postage-paid envelope provided. The Internetinternet and telephone voting procedures are designed to authenticate shareholders’ identities and to confirm that their instructions have been properly recorded.

VOTING AT THE ANNUAL SHAREHOLDERS’ MEETING

Ballots will Multiple legal proxies must be availablecombined into one document for shareholderspurposes of uploading them to the meeting website. 401(k) Plan participants, please see your proxy card for voting instructions and note that your votes must be cast by [●] Central Time on [●], 2022.

9.Can I Vote at the 2022 Annual Shareholders’ Meeting?

We encourage you to vote before our 2022 Annual Shareholders’ Meeting, but registered shareholders may also vote your shares during the meeting by attending the meeting as described above. Voting at the meeting will revoke any prior votes cast. In order for a beneficial shareholder to vote by ballot at the meeting, such holder will need to obtain and submit a legal proxy from his or her bank, broker or other nominee. 401(k) Plan participants may not vote by ballot at the meeting. Shareholders who listen to the webcast will not be able to vote their shares unless they vote by proxy prior to the meeting.

QUORUM

10.What is a Quorum?

A quorum will be present if the holders of a majority of the shares of our common stock entitled to vote are present in personat our 2022 Annual Shareholders’ Meeting or represented by proxy atproxy. Under Delaware law, abstentions and broker non-votes are counted as present in determining whether the quorum requirement is satisfied.

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Questions and Answers Regarding Proxy Materials and Voting Information

11.How are Votes Tabulated?

We have appointed [●] as the independent Inspector of Election for our 2022 Annual Shareholders’ Meeting. Our independent inspector of election, Broadridge Financial Solutions, Inc. (Broadridge),[●] will determine whether or not a quorum is present.

VOTING TABULATION

Alltabulate all votes cast at the Annual Shareholders’ Meeting will be tabulated by Broadridge.meeting.

12.What is the Difference Between Holding Shares as a Registered Shareholder or a Beneficial Holder?

Directors will be elected by majority vote, which means thatIf your shares are registered directly in your name with our transfer agent, Computershare, then you are considered a nominee is elected only if the votes cast “for” his/her election exceed the votes cast “against” his/her election (with abstentions and broker non-votes having no effect on the outcome of the election).

Withregistered shareholder with respect to those shares. If you hold your shares through an intermediary, such as a bank or broker, then you are considered the advisory vote to approve executive compensation, the vote to approve the 2012 Omnibus Stock Ownership Plan, the vote to approve the declassificationbeneficial holder of the Board, the vote to approve shareholders’ right to call special meetings, the advisory vote to approve the appointment of Ernst & Young LLP as independent auditor for 2012, and the advisory vote on the shareholder proposal, shareholders may (a) vote in favor; (b) vote against; or (c) abstain from voting.those shares.

Under our Amended and Restated By-Laws, to be approved, the proposals to approve executive compensation, to approve the 2012 Omnibus Stock Ownership Plan, to approve the appointment of the independent auditor for 2012, and to approve the shareholder proposal must receive the affirmative vote of a majority of the voting power of the shares represented at the Annual Shareholders’ Meeting and entitled to vote thereon.

52        McDonald’s Corporation 2012

Under our Restated Certificate of Incorporation, to be approved, the proposals to approve the declassification of the Board and to approve shareholders’ right to call special meetings each require the affirmative vote of the holders of a majority of the Company’s outstanding capital stock.

Broadridge will treat abstentions on any one or more of the proposals submitted for shareholder action as shares present for purposes of determining a quorum, but an abstention on any proposal (other than director elections) will have the effect of a vote against the approval of that proposal.

REGISTERED SHAREHOLDERS

13.What if I am a Registered Shareholder and Do Not Specify a Choice When Returning a Proxy?

All valid proxies properly executed and received by the Company prior to theus before our 2022 Annual Shareholders’ Meeting will be voted as directed by shareholders.

Registered shareholders who submit ana validly executed WHITE proxy, but do not specify how they want their shares voted, will have their shares voted as follows:FOR the election

“FOR ALL” of our Board’s 12 Director nominees named in this Proxy Statement;
“FOR” the approval, on an advisory basis, of executive compensation;
“FOR” the ratification of the appointment of Ernst & Young LLP as our independent auditor for 2022; and
“AGAINST” each of the shareholder proposals.
14.What if I am a Beneficial Holder and Do Not Give Instructions on How to Vote? What is a Broker Non-Vote?

Each intermediary holding shares on behalf of the Board’s nominees for Director as set forth under “Election of Directors,”FOR the approval of executive compensation,FOR the approval of the 2012 Omnibus Stock Ownership Plan,FOR the approval of the declassification of the Board,FOR the approval of shareholders’ right to call special meetings,FOR the approval of the appointment of Ernst & Young LLP as independent auditor for 2012, andAGAINST the shareholder proposal.

Registered shareholders may revoke their proxy and change their vote at any time before the Annual Shareholders’ Meeting by submitting written notice to the Corporate Secretary, by submitting a later dated and properly executed proxy (by Internet, telephone or mail) or by voting in person at the Annual Shareholders’ Meeting.

BENEFICIAL HOLDERS

Shareholders who hold their shares through an intermediary, such as a bank or broker, are deemed to be beneficial holders and will receive a voting instruction form from their intermediary. Each intermediaryholder is subject to certain NYSE rules regarding voting and votes according to its own procedures.

Under NYSE rules, the proposal to approveratify the appointment of Ernst & Young LLP as our independent auditorsauditor is usually considered a “discretionary”discretionary item. ThisGenerally, this means that brokerage firms may vote in their discretion on behalf of clients who have not furnished voting instructions at least 15 days before the date of theour 2022 Annual Shareholders’ Meeting. In contrast, all of the other proposals set forth in this Proxy Statement are “non-discretionary”non-discretionary items. BrokerageThis means that brokerage firms that have not received voting instructions from their clients on these matters may not vote on these proposals.proposals, resulting in a broker non-vote. These so-called “broker non-votes”broker non-votes will not be considered in determining the number of votes necessary for approval and, therefore, will have no effect on the outcome of the votes for these proposals, except forproposals.

However, because the proposalsIcahn Group has initiated a proxy contest and indicated its intention to approve the declassification of the Board and the shareholders’ rightdeliver proxy materials to call special meetings. For these two proposals, a broker non-vote will have the same effectan intermediary (such as a vote against the proposal. Broker non-votesbank or broker) to forward to you on its behalf, with respect to accounts to which the Icahn Group mails its proxy materials, such intermediaries will not have discretion to vote on any proposal willof the proposals. As a result, if you do not instruct your bank or broker on how to vote your shares, then your shares may not be treatedvoted at the meeting. Accordingly, we urge you to give instructions to your bank or broker as to how you wish your shares present for purposes of determiningto be voted so that you may participate in voting on these important matters.

15.What if I Want to Change My Vote?

Registered shareholders may revoke their proxy and change their vote before it is exercised at our 2022 Annual Shareholders’ Meeting by submitting written notice to our Corporate Secretary, or may revoke their proxy and change their vote by submitting a quorumlater dated and properly executed proxy (by internet, telephone or mail), which must be received by us before [●] Central Time on [●], 2022, or by attending the meeting and voting, as indicated above under “How Can I Vote at the Annual Shareholders’ Meeting.”

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PROXY SOLICITATIONQuestions and Answers Regarding Proxy Materials and Voting Information

Beneficial holders may change or revoke their voting instructions before they are exercised at our 2022 Annual Shareholders’ Meeting by providing instructions again through the means specified on their voting instruction form (with most having the option of doing so by internet, telephone or mail), which must be received before [●] Central Time on [●], 2022, or by attending the meeting and voting by ballot, as indicated above under “How Can I Vote at the Annual Shareholders’ Meeting.” Note that beneficial holders must obtain and submit a legal proxy from their bank, broker or other nominee in order to vote by ballot at the meeting.

The CompanyIf you have already voted using a [●] proxy card, you can revoke that proxy any time before it is exercised at the meeting by (i) following the instructions on your WHITE proxy card or WHITE voting instruction form to vote by internet, smartphone or telephone, (ii) marking, dating, signing and returning your WHITE proxy card or WHITE voting instruction form in the postage-paid envelope provided or (iii) voting at the meeting. Only your latest dated, validly executed proxy counts.

16.How are Proxies Solicited, and What is the Cost?

We will provide the Notice electronic delivery of Internet Availability, or electronically deliver or mail the proxy materials, or mail the 2012 Proxy Statement, the 2011 Annual Report and a proxy card to shareholders beginning on or about April 13, 2012,[●], 2022 in connection with the solicitation of proxies by theour Board of Directorson our behalf to be used at the 2012our 2022 Annual Shareholders’ Meeting. The cost of soliciting proxies will be paid by the Company. The Company has retained Georgeson Inc. to aid in the solicitation at a fee of approximately $26,000 plus reasonable out-of-pocket expenses. Proxies also may be solicited by our Directors and employees and Directorson our behalf by mail, by telephone, by facsimile, via the internet, by email or in person. Those individuals will not receive additional compensation for their work.

We will pay the cost of soliciting proxies. As a result of the Company by mail, telephone, facsimile, e-mail orproxy solicitation of the Icahn Group, we will incur additional costs in person.

CONFIDENTIAL VOTING

It isconnection with the Company’s policy to protectsolicitation of proxies. We have retained Innisfree M&A Incorporated and Kingsdale Advisors for certain advisory and solicitation services for an aggregate fee of approximately $[●], and they expect that approximately [●] of their employees will assist in the confidentialitysolicitation. Excluding amounts that we would have expended for a solicitation in an election of shareholder votes. ThroughoutDirectors in the voting process, your vote will not be disclosed to the Company, its Directors, officers or employees, except to meet legal requirements or to assert or defend claims for or against the Company or except in those limited circumstances where (1)absence of a proxy contest, and excluding the compensation of our Directors and employees involved in the solicitation, is contested; or (2) you authorize disclosure. Thethe aggregate expenses are estimated to be approximately $[●], approximately $[●] of which has been incurred to date. These expenses include the fees of Innisfree M&A Incorporated, Kingsdale Advisors, outside counsel and other advisors, as well as retaining an independent inspector of election has been and will remain independent of the Company. Nothing in this policy prohibits you from disclosing the nature of your vote to the Company, its Directors, officers or employees, or impairs voluntary communication between you and the Company; nor does this policy prevent the Company from ascertaining which shareholders have voted or from making efforts to encourage shareholders to vote.election.

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Additional information

EXECUTIVE OFFICERS

The following list sets forth the names of our current executive officers, their ages and their positions. (Ages are as of April 13, 2012.)

Jose ArmarioAge: 52.  Corporate Executive Vice President–Global Supply Chain, Development and Franchising

Peter J. BensenAge: 49.  Corporate Executive Vice President and Chief Financial Officer

Timothy J. FentonAge: 54.  President, McDonald’s Asia/Pacific, Middle East and Africa

Janice L. FieldsAge: 56.  President, McDonald’s USA

Richard FloerschAge: 54.  Corporate Executive Vice President and Chief Human Resources Officer

Douglas M. GoareAge: 59.  President, McDonald’s Europe

Kevin L. NewellAge: 55.  Corporate Executive Vice President and Global Chief Brand Officer

Kevin M. OzanAge: 48.  Corporate Senior Vice President–Controller

Gloria SantonaAge: 61.  Corporate Executive Vice President, General Counsel and Secretary

James A. SkinnerAge: 67.  Vice Chairman and Chief Executive Officer

Jeffrey P. StrattonAge: 56.  Corporate Executive Vice President–Chief Restaurant Officer

Donald ThompsonAge: 49.  President and Chief Operating Officer

McDONALD’S CORPORATION ANNUAL REPORT ON FORM 10-K, OTHER REPORTS AND POLICIES

17.How Can I View or Request Copies of Corporate Documents and SEC Filings?

Shareholders may access financial and other information on the investor section of the Company’sour website atwww.investor.mcdonalds.com.www.investor.mcdonalds.com. Copies of these documents and other information are also available free of charge by sending a request to shareholder.services@us.mcd.com. Also available on our website or upon request, free of charge, are copies of the Company’sfollowing documents:

Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K (and any amendments thereto) filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act;
Certificate of Incorporation and By-Laws;
Committee charters;
Corporate Governance Principles;
Standards on Director Independence;
Standards of Business Conduct, which apply to all of our employees (including our executive officers);
Code of Conduct for the Board of Directors, which applies to all of our non-employee Directors;
Policy for Pre-Approval of Audit and Non-Audit Services; and
Political Contribution Policy.
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Questions and Answers Regarding Proxy Materials and Voting Information

A list of registered shareholders entitled to vote at our 2022 Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports filed or furnished pursuant to section 13(a) or 15(d) of the Securities Exchange Act of 1934 as soon as reasonably practicable after filing such material electronically or otherwise furnishing itShareholders’ Meeting will be available for inspection by any shareholder, for any purpose related to the SEC. Also posted on McDonald’smeeting, for 10 days before the meeting during ordinary business hours at our principal executive offices at 110 North Carpenter Street, Chicago, Illinois 60607. Please contact corporatesecretary@us.mcd.com to schedule an appointment to review the list. The list will also be available electronically during the meeting through the meeting website are the Company’s Corporate Governance Principles; the charters of the Board’s Committees, the Standards on Director Independence; the Standards of Business Conduct; the Code of Ethics for the Chief Executive Officer and Senior Financial Officers; the Code of Conduct for the Board of Directors; the Policy for Pre-Approval of Audit and Permitted Non-Audit Services, the Political Contribution Policy and the Company’s Restated Certificate of Incorporation and Amended and Restated By-Laws. Copies of these documents and other information also available free of charge by calling 1-800-228-9623 or by sending a request to McDonald’s Corporation, Shareholder Services, Department 720, One McDonald’s Plaza, Oak Brook, IL 60523.at [●].

HOUSEHOLDING OF ANNUAL SHAREHOLDERS’ MEETING MATERIALS

18.What is Householding?

Shareholders who share the same last name and address will receive one package containing a separate Notice of Internet Availability of Proxy Materials for each individual shareholder at that address. Shareholders who have elected to receive paper copies and who share the same last name and address will receive only one setcopy of the Company’s Annual Report and Proxy Statement,our proxy materials unless theysuch shareholders have notified us that they wish to continue receiving multiple copies. This method of delivery, known as “householding,” will help ensure that shareholder households do not receive multiple copies of the same document, helping to reduce our printing and postage costs, as well as saving natural resources.

If you are a MCDirect Shares participant, hold McDonald’sour stock certificates or have book-entry shares at Computershare, you can opt out of the householding practice and receive prompt delivery of a separate copy of the materials by calling 1-800-621-7825 (toll-free) from the U.S. and Canada, or 1-312-360-5129 from other countries, or by writing to McDonald’s Shareholder Services, c/o Computershare Trust Company, N.A., P.O. Box 43078, Providence, RI 02940-3078.505000, Louisville, Kentucky 40233. If you would like to opt out of this practice and your sharesyou are held in street name,a beneficial holder, please contact your bank or broker.

If you are receiving multiple copies of proxy materials at your household and would prefer to receive a single copy, of these materials, please contact McDonald’s Shareholder Services, c/o Computershare Trust Company, N.A., at the above numbers or address. If your sharesyou are held in street name,a beneficial holder, please contact your bank or broker.

19.Who Should I Contact if I Have Questions About the Meeting?

If you have any questions or require assistance with voting your WHITE proxy card, please contact our proxy solicitation firms at:

Innisfree M&A Incorporated
501 Madison Avenue, 20th Floor
New York, New York 10022
Shareholders: (877) 456-3463 (toll-free from the U.S. and Canada) or
(412) 232-3651 (from other countries)
Banks and brokers: (212) 750-5833		Kingsdale Advisors
745 5th Avenue, Suite 500
New York, New York 10151
855-683-3113 (toll-free in North America)
416-867-2272 (outside of North America)
contactus@kingsdaleadvisors.com
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Meeting Information

54        McDonald’s Corporation 2012

Information about registering for and attending theAttendance at our 2022 Annual Shareholders’ Meeting

Only shareholders as of the record date may attend the virtual meeting, or any adjournment or postponement thereof, through the meeting website at [●]. You will not be able to attend the meeting in person at a physical location. To attend the virtual meeting as a shareholder and have the ability to vote and/or submit a comment or question, you will need to pre-register no later than [●] Central Time on [●], 2022 using the instructions described below.

Date: Thursday, May 24, 2012

Time: 9:00 a.m. Central Time

Place: McDonald’s Office Campus, The Lodge, Prairie Ballroom,
2815 Jorie Blvd., Oak Brook, Illinois 60523

Directions: Available atwww.investor.mcdonalds.com

Parking: Limited parking is available on Campus.

webcast: To listen to a live webcast of the Annual Shareholders’ Meeting, go towww.investor.mcdonalds.com on May 24 just prior to 9:00 a.m. Central Time, select the “Webcasts and Podcasts” icon and click on the appropriate link. The Annual Shareholders’ Meeting webcast will be available for a limited time after the meeting.

PRE-REGISTRATION AND ADMISSION POLICYPre-Registration for Registered Shareholders

As seatingRegistered shareholders must use the control number on the Notice of Internet Availability, proxy card, email or other communication received from [●]. To pre-register to participate in the Prairie Ballroom is very limited, we encourage shareholdersmeeting remotely, visit the website [●]. Please have your Notice of Internet Availability, proxy card, email or other communication containing your control number available and follow the instructions to listen tocomplete your registration request.

After registering, you will receive a confirmation email with a link and instructions for accessing the meeting. Please verify that you have received the confirmation email in advance of the meeting, viaincluding the live webcast.possibility that it may be in your spam or junk email folder.

If you decideRequests to attendregister to participate in person, please send the pre-registration form below to McDonald’s Shareholder Services by

U.S. mail or e-mail as described below.

—If you are a registered shareholder (i.e., you hold your shares through McDonald’s transfer agent, Computershare), you may reserve your ticket by sending the completed form below, as well as proof of share ownership, such as a copy of your meeting notice or your proxy card, by U.S. mail or by scanning and attaching the documents to an e-mail.

—If you hold your shares through an intermediary, such as a bank or broker, you must send us the completed form below, as well as proof of share ownership, such as a copy of your meeting notice, your voting instruction form or your brokerage statement reflecting your McDonald’s holdings and your name, by U.S. mail or by scanning and attaching the documents to an e-mail. Please note that requesting a legal proxy from your intermediary does not constitute pre-registering with McDonald’s. If you wish to attend the meeting, you must pre-register directly with McDonald’s.

—If you are a duly appointed proxy for a shareholder, you must send the completed form below, as well as proof of your proxy power and proof of share ownership for the shareholder for whom you are a proxy, by U.S. mail or by scanning and attaching the documents to an e-mail.

Requests for tickets must be sent by U.S. mail to McDonald’s Corporation, Shareholder Services, Department 720, One McDonald’s Plaza, Oak Brook, IL 60523 or by e-mail toshareholder.services@us.mcd.com. Requests for ticketsmeeting remotely must be received no later than 5:00 p.m. Central Time[●], 2022. You must pre-register and receive a confirmation email in order to vote and/or submit a comment or question during the meeting.

Pre-Registration for Beneficial Shareholders and Obtaining a Legal Proxy to Vote

Beneficial shareholders who hold shares through an intermediary, such as a brokerage firm or bank, must use the control number on May 17, 2012.the Notice of Internet Availability, voting instruction form or other instructions received from their bank, brokerage firm or other intermediary. To pre-register to participate in the meeting remotely, visit the website [●]. Please have your Notice of Internet Availability, voting instruction form or other communication containing your control number available and follow the instructions to complete your registration request.

YouAfter registering, you will receive a confirmation letteremail with a link and instructions for accessing the meeting. Please verify that you have received the confirmation email in advance of the meeting, including the possibility that it may be in your spam or junk email folder.

We encourage you to vote in advance of the meeting. If you intend to vote during the meeting, as a beneficial shareholder you must obtain a legal proxy from your brokerage firm or bank. Most brokerage firms or banks allow a shareholder to obtain a legal proxy either online or by U.S.mail. Follow the instructions provided by your brokerage firm or bank. If you have requested a legal proxy online, and you have not received an email with your legal proxy within two business days of your request, contact your brokerage firm or bank. If you have requested a legal proxy by mail, afterand you have not received it within five business days of your request, contact your brokerage firm or bank.

You may submit your legal proxy either (i) in advance of the meeting by attaching the legal proxy (or an image thereof in PDF, JPEG, GIF or PNG file format) in an email to [●] or (ii) along with your voting ballot during the meeting. We must have your legal proxy in order for your vote submitted during the meeting to be valid. To avoid any technical difficulties on the day of the meeting, we receiveencourage you to submit your pre-registration materials. Your ticketlegal proxy in advance by email to [●] to ensure that your vote is counted, rather than wait to upload the legal proxy during the meeting. Multiple legal proxies must be combined into one document for purposes of uploading them to the meeting website.

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Meeting Information

Voting at the Meeting

Shareholders that pre-register for the meeting may also vote during the meeting by clicking on the “Shareholder Ballot” link that will be available aton the meeting registration desk,website during the meeting.

Registered shareholders may vote directly by simply accessing the available ballot on the meeting website. Beneficial shareholders who have previously submitted a legal proxy by email to [●] as described above may also vote directly using the available ballot on the meeting website.

If you are a beneficial shareholder and you did not previously email your legal proxy in advance of the meeting, you must showupload an image of the legal proxy (in PDF, JPEG, GIF or PNG file format) during the meeting when completing the ballot. See “Pre-Registration for Beneficial Shareholders and Obtaining a government issued photo identification,Legal Proxy to Vote” above for information on obtaining a legal proxy from your brokerage firm or bank. Instructions for presenting the legal proxy (if necessary) along with the online ballot will be provided during the meeting. Please prepare in advance by obtaining a legal proxy as soon as possible.

Submitting a Question to the Meeting

Meeting attendees may submit written comments or questions during the meeting by typing in the “Ask a Question” box and clicking the “Send” button that will be available on the meeting website during the meeting.

Questions received during the meeting will be answered as the allotted meeting time permits. If we receive substantially similar questions, we will group such questions together and provide a single response to avoid repetition. In light of the number of business items on this year’s agenda and the need to conclude the meeting within a reasonable period of time, we cannot ensure that every shareholder who wishes to have a question or comment addressed during the meeting will be able to do so. We reserve the right to exclude questions that relate to personal matters or are not relevant to meeting matters, as well as to edit profanity or other inappropriate language. Questions relevant to meeting matters that we do not have time to answer during the meeting will be posted to our website following the meeting.

Virtual Meeting Technical Assistance

If you encounter any technical difficulties accessing the meeting, the registration confirmation letter, to pick-up your ticket. As admission tickets are limited, only those shareholders who have pre-registeredemail will receive tickets, oninclude technical support contact information, including a first-come, first served basis. Overflow roomstelephone number and email address. Technical support will be available for viewing the meeting. Each shareholder may bring only one guest, who also must be listed on the registration form below. The registration desk will openbeginning at 7:30 a.m.[●] Central Time on May 24, 2012. All tickets[●], 2022 and will remain available until the meeting has ended.

Questions

If you have any questions or require assistance with pre-registering for the Prairie Ballroom must be picked upmeeting, please contact our proxy solicitation firms at:

Innisfree M&A Incorporated
501 Madison Avenue, 20th Floor
New York, New York 10022
Shareholders: (877) 456-3463 (toll-free from the U.S. and Canada) or
(412) 232-3651 (from other countries)
Banks and brokers: (212) 750-5833		Kingsdale Advisors
745 5th Avenue, Suite 500
New York, New York 10151
855-683-3113 (toll-free in North America)
416-867-2272 (outside of North America)
contactus@kingsdaleadvisors.com
128McDonald’s
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Exhibit A

Supplemental Information Regarding Participants in the Solicitation

Under applicable SEC rules and regulations, members of our Board, our Board’s Director nominees, and certain officers and other employees of our Company are “participants” with respect to our Company’s solicitation of proxies in connection with our 2022 Annual Shareholders’ Meeting. The following sets forth certain information about the persons who are “participants.”

Directors and Director Nominees

The names of our Directors and Director nominees are set forth below. The principal occupations of our Directors and Director nominees are set forth under “Proposal 1: Election of Directors” on page 22.

NameRoleBusiness Address
Enrique Hernandez, Jr.Director NomineeMcDonald’s Corporation
110 North Carpenter Street
Chicago, Illinois 60607
Lloyd H. DeanDirector Nominee
Robert A. EckertDirector Nominee
Catherine M. EngelbertDirector Nominee
Margaret H. GeorgiadisDirector Nominee
Christopher KempczinskiDirector Nominee
Richard H. LennyDirector Nominee
John J. MulliganDirector Nominee
Sheila A. PenroseDirector Nominee
John W. Rogers, Jr.Director Nominee
Paul S. WalshDirector Nominee
Miles D. WhiteDirector Nominee
2022 Proxy Statement129

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Exhibit A

Certain Officers and Other Employees

The following table sets forth the name and principal occupation of our Company’s officers and employees who are “participants.” The principal occupation refers to such person’s position with our Company.

Participant(a)RoleBusiness Address
Christopher KempczinskiPresident and Chief Executive OfficerMcDonald’s Corporation
110 North Carpenter Street
Chicago, Illinois 60607
Kevin OzanCorporate Executive Vice President and Chief Financial Officer
Desiree Ralls-MorrisonExecutive Vice President, General Counsel and Corporate Secretary
Francesca DeBiaseExecutive Vice President and Chief Supply Chain Officer
Katie Beirne FallonExecutive Vice President and Chief Global Impact Officer
Mike CieplakSenior Vice President – Treasurer & Investor Relations Officer
Marion GrossSenior Vice President and Chief Supply Chain Officer, North America
Jennifer McCollochVice President and Chief Sustainability Officer
Jeffrey J. PochowiczSenior Director – Corporate Governance & Assistant Secretary
(a)“Participant” is defined to include: (i) any Director and any Director nominee for whose election proxies are solicited; (ii) any committee or group which solicits proxies, any of their respective members, and any person whether or not named as a member who, acting alone or with one or more other persons, directly or indirectly, takes the initiative, or engages, in organizing, directing or arranging for the financing of any such committee or group; (iii) any person who finances or joins with another to finance the solicitation of proxies, except persons who contribute not more than $500 and who are not otherwise participants; (iv) any person who lends money or furnishes credit or enters into any other arrangements, pursuant to any contract or understanding with a participant, for the purpose of financing or otherwise inducing the purchase, sale, holding or voting of our Company’s securities by any participant or other persons, in support of or in opposition to a participant; except that such terms do not include a bank, broker or dealer who, in the ordinary course of business, lends money or executes orders for the purchase or sale of securities and who is not otherwise a participant; and (v) any person who solicits proxies.

Information Regarding Ownership of Company Securities by 8:45 a.m. Central Time.Participants

Please do not bring items suchThe number of Company securities beneficially owned by Directors and named executive officers as bagsof March 1, 2022 is set forth under “Stock Ownership—Security Ownership of Management” on page 116. The number of shares of our common stock beneficially owned as of March 1, 2022 by our Company’s other officers and briefcasesemployees who are “participants” is set forth below. Indirect ownership includes shares owned by a spouse, dependent child or family trust. Except as otherwise noted in the footnotes below, each person or entity identified in the table below, to our knowledge, has sole voting and investment power with respect to the meeting. Only small pursessecurities they hold, other than property rights of spouses.

Participant     Common Stock(a)     Stock Equivalents(b)     Total
Francesca DeBiase 81,818 0 81,818
Katie Beirne Fallon 7,054 0 7,054
Mike Cieplak 15,283 0 15,283
Marion Gross 93,318 10,495 103,813
Jennifer McColloch 6,439 0 6,439
Jeffrey J. Pochowicz 603 0 603
(a)Includes common shares, vested stock options and shares credited under the Company’s 401(k) Plan.
(b)Includes common stock equivalent units credited under certain of the Company’s Amended & Restated Deferred Compensation Plan and Supplemental Profit Sharing and Savings Plan.
130McDonald’s
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Exhibit A

Information Regarding Transactions of Company Securities by Participants

The following tables set forth purchases and sales of our common stock during the period from March 1, 2020 to March 1, 2022 by the persons listed above under “Directors and Director Nominees” and “Certain Officers and Other Employees.” None of the purchase price or market value of the securities listed below is represented by funds borrowed or otherwise obtained for the purpose of acquiring or holding such securities.

Name     Transaction Date     Number of Direct
Shares		     Number of Indirect
Shares		     Transaction
Description
Enrique Hernandez, Jr. 5/28/2020 1,325   2
  12/31/2020 862.15   4
  5/20/2021 1,077   2
  12/31/2021 690.12   4
         
Name Transaction Date Number of Direct
Shares		 Number of Indirect
Shares		 Transaction
Description
Lloyd H. Dean 3/31/2020 173.87   6
  6/30/2020 122.88   6
  9/30/2020 98.24   6
  12/31/2020 996.13   4
  3/31/2021 128.27   6
  6/30/2021 124.46   6
  9/30/2021 119.24   6
  12/31/2021 797.37   4
         
Name Transaction Date Number of Direct
Shares		 Number of Indirect
Shares		 Transaction
Description
Robert A. Eckert 12/31/2020 862.15   4
  12/31/2021 690.12   4
         
Name Transaction Date Number of Direct
Shares		 Number of Indirect
Shares		 Transaction
Description
Catherine M. Engelbert 6/15/2020 6.76   15
  9/15/2020 5.67   15
  12/15/2020 6.13   15
  12/31/2020 862.15   4
  3/15/2021 6.13   15
  6/15/2021 5.56   15
  9/15/2021 5.53   15
  12/15/2021 5.46   15
  12/31/2021 690.12   4
  2/28/2022 1,000   13
         
Name Transaction Date Number of Direct
Shares		 Number of Indirect
Shares		 Transaction
Description
Margaret H. Georgiadis 12/31/2020 862.15   4
  12/31/2021 690.12   4
2022 Proxy Statement131

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Exhibit A

Name     Transaction Date     Number of Direct
Shares		     Number of Indirect
Shares		     Transaction
Description
Christopher Kempczinski 3/8/2020 11,055   9
  3/8/2020 (4,401)   12
  2/16/2021 226,464   1
  2/16/2021 32,247   3
  2/19/2021 (6,312)   11
  2/19/2021 10,250   8, 10
  2/19/2021 (3,833)   12
  4/30/2021 4,235.85   5
  2/14/2022 5,000   9, 10
  2/14/2022 (1,624)   12
  2/14/2022 136,515   1
  2/14/2022 21,167   3
         
Name Transaction Date Number of Direct
Shares		 Number of Indirect
Shares		 Transaction
Description
Richard H. Lenny 12/31/2020 862.15   4
  12/31/2021 690.12   4
 
Name Transaction Date Number of Direct
Shares		 Number of Indirect
Shares		 Transaction
Description
John J. Mulligan 12/31/2020 862.15   4
  12/31/2021 690.12   4
         
Name Transaction Date Number of Direct Shares Number of Indirect Shares Transaction Description
Sheila A. Penrose 12/31/2020 862.15   4
  12/31/2021 690.12   4
         
Name Transaction Date Number of Direct
Shares		 Number of Indirect
Shares		 Transaction
Description
John W. Rogers, Jr. 3/31/2020 173.87   6
  6/30/2020 122.88   6
  9/30/2020 98.24   6
  12/31/2020 996.13   4
  12/31/2021 690.12   4
         
Name Transaction Date Number of Direct
Shares		 Number of Indirect
Shares		 Transaction
Description
Paul S. Walsh 12/31/2020 862.15   4
  12/31/2021 690.12   4
132McDonald’s
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Exhibit A

Name Transaction Date Number of Direct
Shares		 Number of Indirect
Shares		 Transaction
Description
Miles D. White     12/31/2020     862.15           4
  12/31/2021 690.12   4
         
Name Transaction Date Number of Direct
Shares		 Number of Indirect
Shares		 Transaction
Description
Kevin Ozan 3/8/2020 15,791   9
  3/8/2020 (6,993)   12
  2/16/2021 113,232   1
  2/16/2021 16,124   3
  2/19/2021 (9,152)   11
  7/29/2021 (47,649)   7
  7/29/2021 (3,400)   16
  2/14/2022 51,045   1
  2/14/2022 7,915   3
  2/14/2022 6,500   9, 10
  2/14/2022 (2,286)   12
         
Name Transaction Date Number of Direct
Shares		 Number of Indirect
Shares		 Transaction
Description
Desiree Ralls-Morrison 5/17/2021 16,892   1
  5/17/2021 10,791   2
  5/17/2021 2,428   2
  5/17/2021 4,810   3
  2/14/2022 28,491   1
  2/14/2022 4,418   3
         
Name Transaction Date Number of Direct
Shares		 Number of Indirect
Shares		 Transaction
Description
Francesca DeBiase 3/8/2020 2,783   9
  3/8/2020 (1,233)   12
  11/16/2020 12,850   7
  11/16/2020 9,080   7
  2/16/2021 21,838   1
  2/16/2021 3,110   3
  2/19/2021 6,833   8, 10
  2/19/2021 (2,421)   12
  2/19/2021 936   9, 10
  2/19/2021 (330)   12
  2/14/2022 16,026   1
  2/14/2022 2,485   3
  2/14/2022 2,501   9, 10
  2/14/2022 (742)   12
2022 Proxy Statement133

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Exhibit A

Name     Transaction Date     Number of Direct
Shares		     Number of Indirect
Shares		     Transaction
Description
Katie Beirne Fallon 11/18/2020 5,800   2
  2/16/2021 20,220   1
  2/16/2021 2,880   3
  11/18/2021 2,966   8, 10
  11/18/2021 (967)   12
  2/14/2022 16,026   1
  2/14/2022 2,485   3
         
Name Transaction Date Number of Direct
Shares		 Number of Indirect
Shares		 Transaction
Description
Mike Cieplak 3/8/2020 371   8
  3/8/2020 (109)   12
  2/16/2021 4,449   1
  2/16/2021 634   3
  2/19/2021 341   8, 10
  2/19/2021 (112)   12
  7/29/2021 464   7
  7/29/2021 988   7
  2/14/2022 361   9, 10
  2/14/2022 (125)   12
  2/14/2022 5,342   1
  2/14/2022 829   3
         
Name Transaction Date Number of Direct
Shares		 Number of Indirect
Shares		 Transaction
Description
Marion Gross 3/8/2020 2,900   9
  3/8/2020 (867)   12
  8/6/2020 1,592   7
  8/18/2020 1,590   7
  11/17/2020 1,590   7
  11/24/2020 1,590   7
  2/16/2021 9,706   1
  2/16/2021 1,382   3
  2/19/2021 6,833   8, 10
  2/19/2021 (2,425)   12
  2/19/2021 851   9, 10
  2/19/2021 (302)   12
  5/10/2021 1,785   7
  11/1/2021 1,785   7
  11/5/2021 1,784   7
  11/22/2021 1,783   7
  2/2/2022 1,398   7
  2/14/2022 1,000   9, 10
  2/14/2022 (294)   12
  2/14/2022 6,233   1
  2/14/2022 967   3
134McDonald’s
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Exhibit A

Name     Transaction Date     Number of Direct
Shares		     Number of Indirect
Shares		     Transaction
Description
Jennifer McColloch 3/8/2020 157   8
  3/8/2020 (55)   12
  2/16/2021 4,044   1
  2/16/2021 576   3
  2/19/2021 683   8, 10
  2/19/2021 (218)   12
  2/19/2021 140   8, 10
  2/19/2021 (42)   12
  2/13/2022 463   8, 10
  2/13/2022 (157)   12
  2/14/2022 2,591   2
  2/14/2022 576   3
         
Name Transaction Date Number of Direct
Shares		 Number of Indirect
Shares		 Transaction
Description
Jeffrey J. Pochowicz 5/22/2020 206   8, 10
  5/22/2020 (60)   12
  8/10/2020 100   14
  8/18/2020 46   14
  2/16/2021 2,265   1
  2/16/2021 326   2
  5/22/2021 210   8, 10
  5/22/2021 (64)   12
  8/23/2021 73   14
  11/16/2021 37   14
  2/14/2022 1,283   2
  2/14/2022 1,781   1
Transaction Descriptions
(1)Grant of stock options
(2)Grant of restricted stock units (“RSUs”)
(3)Grant of performance-based restricted stock units (“PRSUs”)
(4)Grant of phantom stock pursuant to Directors’ Deferred Compensation Plan
(5)Purchase of phantom stock pursuant to Non-Qualified Benefit Plan
(6)Purchase of McDonald’s phantom stock units in the Directors’ Deferred Compensation Plan through deferral of cash retainer
(7)Cashless exercise and sale of stock options
(8)Vesting of RSUs
(9)Vesting of PRSUs
(10)Vesting of dividend equivalents, if any, on RSUs and PRSUs
(11)Forfeiture of PRSUs
(12)Shares withheld for tax
(13)Open market purchase
(14)Open market sale
(15)Shares acquired through dividend reinvestment
(16)Gift
2022 Proxy Statement135

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Exhibit A

Miscellaneous Information Regarding Participants

Except as described in this Exhibit A or this Proxy Statement, neither any participant nor any of their respective associates or affiliates (together, the “Participant Affiliates”) is either a party to any transaction or series of transactions since January 1, 2021 or has knowledge of any current proposed transaction (i) to which our Company or any of its subsidiaries was or is to be a participant, (ii) in which the amount involved exceeds $120,000 and (iii) in which any participant or Participant Affiliate had, or will have, a direct or indirect material interest. Furthermore, except as described in this Exhibit A or this Proxy Statement, (a) no participant or Participant Affiliate, directly or indirectly, beneficially owns any securities of our Company or any securities of any subsidiary of our Company and (b) no participant owns any securities of our Company of record but not beneficially.

Except as described in this Exhibit A or this Proxy Statement, no participant or Participant Affiliate has entered into any agreement or understanding with any person with respect to any future employment by our Company or any of its affiliates or any future transactions to which our Company or any of its affiliates will or may be permitteda party.

Except as described in the Prairie Ballroom and the overflow rooms, and these will be subjectthis Exhibit A or this Proxy Statement, there are no contracts, arrangements or understandings by any participant or Participant Affiliate since January 1, 2021 with any person with respect to inspection prior to admission to the meeting. Individuals attending the meeting must wear appropriate attire and will not be allowed to enter the meeting wearing any attire that could be construed as intended to conceal one’s identity (including,securities of our Company, including, but not limited to, hatsjoint ventures, loan or costumes). Camerasoption arrangements, puts or calls, guarantees against loss or guarantees of profit, division of losses or profits, or the giving or withholding of proxies.

Except as described in this Exhibit A or this Proxy Statement, and other recording devices will notexcluding any Director or executive officer of our Company acting solely in that capacity, no person who is a party to an arrangement or understanding pursuant to which a nominee for election as Director is proposed to be permittedelected has any substantial interest, direct or indirect, by security holdings or otherwise, in the ballroom and the overflow rooms. Cellular phones and all other electronic devices mustany matter to be turned off and put away during the meeting.acted upon at our 2022 Annual Shareholders’ Meeting.

Except as described in this Exhibit A or this Proxy Statement, there are no material legal proceedings to which any participant or Participant Affiliate or any of their associates is a party adverse to, or has a material interest adverse to, our Company or any of its subsidiaries.

136McDonald’s
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All trademarks used herein are the property of their respective owners.

© 2022 McDonald’s
MCD15-4858

Table of Contents

PRELIMINARY PROXY CARD DATED MARCH 28, 2022, SUBJECT TO COMPLETION








PLEASE VOTE TODAY!

SEE REVERSE SIDE

FOR THREE EASY WAYS TO VOTE.













TO VOTE BY MAIL, PLEASE DETACH HERE, SIGN AND DATE PROXY CARD, AND RETURN IN THE POSTAGE-PAID ENVELOPE PROVIDED

McDONALD’S CORPORATION

2022 Annual Shareholders’ Meeting

This proxy is solicited by the Board of Directors

  

W

H

I

T

E

 

P

R

O

X

Y

Pre-registration form for 2012The undersigned hereby acknowledges receipt of the Notice of Annual Shareholders’ Meeting and Proxy Statement of McDonald’s Corporation and hereby appoints Christopher Kempczinski, Kevin Ozan and Desiree Ralls-Morrison and each of them, acting individually, with full power of substitution in each, as proxies of the undersigned, to represent the undersigned and vote all shares of McDonald’s Corporation’s common stock that the undersigned may be entitled to vote at the 2022 Annual Shareholders’ Meeting to be held on [•], 2022, and at any adjournment or postponement thereof, as indicated on the reverse side.

This proxy, when properly executed, will be voted in the manner directed herein by the undersigned shareholder. If no direction is given, this proxy will be voted FOR ALL of the nominees listed in proposal 1, FOR proposals 2 and 3, and Against proposals 4 through 10. This proxy also delegates discretionary authority to vote upon such other matters as may properly come before the 2022 Annual Shareholders’ Meeting and at any adjournment or postponement thereof.

YOUR VOTE IS VERY IMPORTANT – PLEASE SUBMIT YOUR PROXY TODAY



(continued on the reverse side)


Table of Contents


McDONALD’S CORPORATION

YOUR VOTE IS IMPORTANT

DUE TO CONTINUING DELAYS IN THE POSTAL SYSTEM, WE ENCOURAGE ALL SHAREHOLDERS TO VOTE ELECTRONICALLY IF POSSIBLE − BY INTERNET OR TELEPHONE − TODAY.

YOU CAN VOTE TODAY USING ANY OF THE FOLLOWING METHODS:

Submit your proxy by Internet
Please access www.proxyvotenow.com/mcd. Then, simply follow the easy instructions on the voting site. You will be required to provide the unique Control Number printed below.
Submit your proxy by Telephone
Please call toll-free in the U.S. or Canada at 855-457-3848 on a touch-tone telephone. (If outside the U.S. or Canada, call 575-415-3624.) Then, simply follow the easy voice prompts. You will be required to provide the unique Control Number printed below.
CONTROL NUMBER:

You may submit your proxy by telephone or Internet 24 hours a day, 7 days a week.

Your telephone or Internet vote authorizes the Proxyholder(s) to vote your shares in the same manner as if you had marked, signed and returned a proxy card.


Submit your proxy by Mail
If you do not have access to a touch-tone telephone or to the internet, please complete, sign, date and return the proxy card in the postage paid envelope provided to: McDonald’s Corporation, c/o First Coast Results, Inc., 200 Business Park Circle, Suite 112, Saint Augustine, FL 32095.

TO VOTE BY MAIL, PLEASE DETACH HERE, SIGN AND DATE PROXY CARD, AND RETURN IN THE POSTAGE-PAID ENVELOPE PROVIDED

XPlease mark
vote as in
this sample		  
  

I am a shareholder (or duly appointed proxy for a shareholder) of McDonald’s Corporation and plan to attend the Annual Shareholders’ Meeting to be held on May 24, 2012.

THE BOARD OF DIRECTORS RECOMMENDS YOU VOTE FOR ALL OF THE NOMINEES IN PROPOSAL 1, FOR PROPOSALS 2 AND 3, AND AGAINST PROPOSALS 4 THROUGH 10.
  
1.Election of Directors (each for a one-year term expiring in 2023):
01. Lloyd Dean07. Richard Lenny
02. Robert Eckert08. John Mulligan
03. Catherine Engelbert09. Sheila Penrose
04. Margaret Georgiadis10. John Rogers, Jr.
05. Enrique Hernandez, Jr.11. Paul Walsh
06. Christopher Kempczinski12. Miles White
  

Name (please print)                                                                                      Phone number

  
FOR ALLAddressWITHHOLD ALL*FOR ALL EXCEPT
 CityStateZip
Name*NOTE: If you do not wish for your shares to be voted “FOR” one or more of guest (only shareholders may bring a guest)

Room preference:  ¨Prairie Ballroom¨Overflow room (for viewing only)Room preference will be accommodated on a first come, first served basis.

A shareholder must accompany his or her guest in orderthe Nominees, mark the “FOR ALL EXCEPT” box and write the name of the Nominee(s) that you do not wish to vote for a guest to gain admission to the meeting. A duly appointed proxy for a shareholder will not be allowed to bring a guest to the meeting. All shareholders and proxies must provide proof of share ownership.

To avoid delay in the receipt of your confirmation letter, please do not return this form with your proxy card or mail it in the business envelope that you may have received with your proxy materials.

space provided below.

 

This form along with proof of ownership must be returned by mail to McDonald’s Corporation, Shareholder Services, Department 720, One McDonald’s Plaza, Oak Brook, IL 60523 or by e-mail toshareholder.services@us.mcd.com no later than 5:00 p.m. Central Time on May 17, 2012.

Please contact McDonald’s Shareholder Services with any questions at 630-623-7428.

McDonald’s Corporation 2012        55

Exhibits

EXHIBIT A

REVISED ARTICLE TWELFTH

TWELFTH: Board of Directors.

(a)    Number, Election and Terms. The business and affairs of the Corporation shall be managed by or under the direction of a Board of Directors consisting of not less than 11 nor more than 24 persons. The exact number

of directors within the minimum and maximum limitations specified in the preceding sentence shall be fixed from time to time by the Board of Directors pursuant to a resolution adopted by a majority of the entire Board of Directors.

At the 1983 Annual Meeting of Stockholders, the directors shall be divided into three classes, as nearly equal in number as possible, with the term of office of the first class to expire at the 1984 annual meeting of stockholders, the term of office of the second class to expire at the 1985 annual meeting of stockholders and the term of office of the third class to expire at the 1986 annual meeting of stockholders.

At each annual meeting of stockholders following such initial classification and election, directors elected to succeed those whose terms then expire shall be elected for a term of office expiring at the third succeeding annual meeting of stockholders after their election.

The directors, other than directors elected separately as a class by the holders of any one or more series of Preferred Stock, shall be and are divided into classes, with the terms of the classes elected at the annual meetings of stockholders held in 2010, 2011 and 2012, respectively, expiring at the third annual meeting of stockholders held after the election of such class of directors; provided that such division shall terminate at the third annual meeting of stockholders held after the 2012 annual meeting of stockholders. Notwithstanding the preceding sentence, but subject to the rights of the holders of any one or more series of Preferred Stock to elect directors separately as a class, each director elected by the stockholders after the 2012 annual meeting of stockholders shall serve for a term expiring at the first annual meeting of stockholders held after such director’s election.

(b)    Newly Created Directorships and Vacancies. Subject to the rights of the holders of anyone or more series of Preferred Stock then outstanding, newly created directorships resulting from any increase in the authorized number of directors or any vacancies in the Board of Directors resulting from death, resignation, retirement, disqualification, removal from office or other cause shall be filled by a majority vote of the directors then in office. Directors so chosen shall hold office for a term expiring at the annual meeting of stockholders at which the term of the class to which they have been elected expiresor, following the termination of the division of directors into three classes, directors so chosen shall hold office for a term expiring at the next annual meeting of stockholders held after their appointment as directors. No decrease in the number of directors constituting the Board of Directors shall shorten the term of any incumbent director.

(c)    Removal. Subject to the rights of the holders of anyseries of Preferred Stock then outstanding, any director, or the entire Board of Directors, may be removed from office at any time, butone or more series of Preferred Stock to elect additional directors under specific circumstances, (i) any director serving in a class of directors elected for a term expiring at the third annual meeting of stockholders following the election of such class shall be removable only for cause andonly byall other directors shall be removable either with or without cause, and (ii) the removalof any director, whether with or without cause, shall require the affirmative votes of the holders of a majority of the voting power of the capital stock of the Corporation outstanding and entitled to vote thereon.

(d)—Amendment, Repeal, Etc. Notwithstanding anything to the contrary contained in this Restated Certificate of Incorporation, the affirmative vote of the holders of a majority of the voting power of the capital stock of the Corporation outstanding and entitled to vote thereon shall be required to amend, alter or repeal, or to adopt any provision inconsistent with, this Article Twelfth.

56        McDonald’s Corporation 2012

EXHIBIT B

REVISED ARTICLE THIRTEENTH

THIRTEENTH: Stockholder Action. Any action required or permitted to be taken by the stockholders of the Corporation must be effected at a duly called annual or special meeting of stockholders of the Corporation and may not be effected by any consent in writing by such stockholders. Special meetings of stockholders of the Corporation may be called upon not less than 10 nor more than 60 days’ written notice only by the Board of Directors pursuant to a resolution approved by a majority of the Board of Directors.Notwithstanding anything contained in this Restated Certificate of Incorporation to the contrary, the affirmative vote of the holders of a majority of the voting power of the capital stock of the Corporation outstanding and entitled to vote thereon shall be required to amend, alter or repeal, or to adopt any provision inconsistent with, this Article Thirteenth.or by the Secretary of the Corporation at the written request of stockholders who have, or who are acting on behalf of beneficial owners who have, an aggregate “net long position” of not less than 25% of the outstanding shares of Common Stock as of the record date fixed in accordance with the By-Laws (as amended from time to time) to determine who may deliver a written request to call such special meeting; provided that each such stockholder, or beneficial owner directing such stockholder, must have held such “net long position” included in such aggregate amount continuously for the one-year period ending on such record date and must continue to hold such “net long position” through the date of the conclusion of the special meeting. “Net long position” shall be determined with respect to each stockholder requesting a special meeting and each beneficial owner who is directing a stockholder to act on such owner’s behalf (each stockholder and owner, a “party”) in accordance with the definition thereof set forth in Rule 14e-4 under the Securities Exchange Act of 1934, as amended from time to time, provided that (x) for purposes of such definition, in determining such party’s “short position,” the reference in Rule 14e-4 to “the date that a tender offer is first publicly announced or otherwise made known by the bidder to holders of the security to be acquired” shall be the record date fixed to determine the stockholders entitled to deliver a written request for a special meeting, and the reference to the “highest tender offer price or stated amount of the consideration offered for the subject security” shall refer to the closing sales price of the Corporation’s Common Stock on the New York Stock Exchange (or such other securities exchange designated by the Board of Directors if the Common Stock is not listed for trading on the New York Stock Exchange) on such record date (or, if such date is not a trading day, the next succeeding trading day) and (y) the net long position of such party shall be reduced by the number of shares as to which the Board of Directors determines that such party does not, or will not, have the right to vote or direct the vote at the special meeting or as to which the Board of Directors determines that such party has entered into any derivative or other agreement, arrangement or understanding that hedges or transfers, in whole or in part, directly or indirectly, any of the economic consequences of ownership of such shares.

The foregoing provisions of this Article Thirteenth (other than the first sentence of this Article Thirteenth) shall be subject to the provisions of the By-Laws (as amended from time to time) that limit the ability to make a request for a special meeting and that specify the circumstances pursuant to which a request for a special meeting will be deemed to be revoked. The Board of Directors shall have the authority to interpret the provisions of this Article Thirteenth and the By-Laws relating to special meetings of stockholders and to determine whether a party has complied with such provisions. Each such interpretation and determination shall be set forth in a written resolution filed with the Secretary of the Corporation and shall be binding on the Corporation and its stockholders.

McDonald’s Corporation 2012        57

HOME OFFICE

McDonald’s Corporation

One McDonald’s Plaza

Oak Brook, IL 60523

630-623-3000

www.aboutmcdonalds.com

All trademarks used herein

are the property of their respective

owners.

© 2012 McDonald’s

MCD12-4713

58        McDonald’s Corporation 2012

[Back cover to come]

LOGO

C/O McDONALD’S CORPORATION

POST OFFICE BOX 9112

FARMINGDALE, NY 11735-9544

3 Ways To Vote

VOTE BY INTERNET -www.proxyvote.com

Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the meeting date. Have your proxy card in hand when you access the web site and follow the instructions to vote the shares.

VOTE BY PHONE - 1-800-690-6903

Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the meeting date. Have your proxy card in hand when you call and then follow the instructions.

VOTE BY MAIL

Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.

ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS

If you would like to reduce the costs incurred by our company for mailing proxy materials, you can consent to receive all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to VOTE BY INTERNET and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years.

TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.

McDONALD’S CORPORATION

    
2.Advisory vote to approve executive compensation.FORAGAINSTABSTAIN
     
3.

AProposals
This proxy is solicited on behalf of the Board of Directors of McDonald’s Corporation. If this signed card contains no specific voting instructions, the shares will be voted with the Board’s recommendations, except for Profit Sharing Plan participants (see reverse side).

The Board of Directors recommends a voteFOR the nominees identified on this proxy.

1.

Election of Directors: (5 Nominees)

For

 Against 

Abstain

For

 Against 

Abstain

1a.      Robert A. Eckert

¨¨¨

4.        Approval of the declassification of the Board of Directors.

¨¨¨

1b.      Enrique Hernandez, Jr.

¨¨¨

5.        Approval of the shareholders’ right to call special meetings.

¨¨¨

1c.       Jeanne P. Jackson

¨¨¨

6.        Advisory vote to approveratify the appointment of Ernst & Young LLP as independent auditor for 2012.

2022.		FORAGAINSTABSTAIN

 ¨¨¨  
4.Advisory vote on a shareholder proposal requesting to modify the threshold to call special shareholders’ meetings, if properly presented.FORAGAINSTABSTAIN
  

1d.      Andrew J. McKenna

¨¨¨

The Board of Directors recommends a voteAGAINST proposal 7.

  
5.

1e.      Donald Thompson

¨¨¨

7.        Advisory vote on a shareholder proposal requesting a nutrition report.

��report on reducing plastics use, if properly presented.¨FORAGAINST¨¨

The Board of Directors recommends a voteFOR proposals 2, 3, 4, 5, and 6.

2.

Advisory vote to approve executive compensation.¨¨¨

3.

Approval of the 2012 Omnibus Stock Ownership Plan.¨¨¨

If you have comments, please check this box and write them on the back where indicated

¨

LOGO   

BAuthorized Signatures — This section MUST be completed for your vote to be counted. — Date and Sign BelowABSTAIN

I (we) hereby revoke any proxy previously given, and appoint James A. Skinner, Gloria Santona and Peter J. Bensen, and each of them, as proxies with full power of substitution to vote in the manner provided above, all shares the undersigned is entitled to vote at the McDonald’s Corporation 2012 Annual Shareholders’ Meeting, or any postponement or adjournment thereof, and further authorize each such proxy to vote at his or her discretion on any other matter that may properly come before the meeting or any adjournment or postponement thereof, including without limitation to vote for the election of such substitute nominee(s) for director as such proxies may select in the event that any nominee(s) named above become(s) unable to serve. (Plan participants are appointing Plan trustees – see reverse side.)

Please sign as your name(s) appear(s) above and return the card promptly. If signing for a corporation or partnership, or as agent, attorney or fiduciary, indicate the capacity in which you are signing. If you attend the meeting and decide to vote in person by ballot, such vote will supersede this proxy.

Signature [PLEASE SIGN WITHIN BOX]      DateSignature (PLEASE SIGN WITHIN BOX)      

Date

     

6.Advisory vote on a shareholder proposal requesting a report on antibiotics and public health costs, if properly presented.FORAGAINSTABSTAIN

McDonald’s Annual Shareholders’ Meeting Information

Thursday, May 24, 2012

9:00 a.m. Central Time

Prairie Ballroom at The Lodge

McDonald’s Office Campus

2815 Jorie Boulevard

Oak Brook, Illinois 60523

Admission: Please review the Pre-registration and Admission Policy regarding meeting attendance in the Proxy Statement.You will need to pre-register with McDonald’s to attend the meeting. As admission tickets are limited, only those shareholders who have pre-registered will receive tickets, and on a first-come, first served basis. Each shareholder may bring only one guest, who also must be pre-registered for the meeting. The registration desk will open at 7:30 a.m. Central Time. Overflow rooms will be available for viewing the meeting.

Please do not bring items such as bags and briefcases to the meeting. Only small purses will be permitted in the Prairie Ballroom and the overflow rooms, and these will be subject to inspection prior to admission to the meeting. Individuals attending the meeting must wear appropriate attire and will not be allowed to enter the meeting wearing any attire that could be construed as intended to conceal one’s identity (including, but not limited to, hats or costumes). Cameras and other recording devices will not be permitted in the ballroom and the overflow rooms. Cellular phones and all other electronic devices must be turned off and put away during the meeting.

Voting at the Meeting: Shareholders attending the live meeting may submit this proxy card or complete a ballot at the meeting.

Directions: Directions to McDonald’s Annual Shareholders’ Meeting can be viewed online atwww.investor.mcdonalds.com.

Webcast: To listen to a live webcast of McDonald’s Annual Shareholders’ Meeting, go towww.investor.mcdonalds.com, click on the “Webcasts and Podcasts” icon and then select the appropriate link. After the meeting, this webcast will be available on demand for a limited time. Please note that if you participate in the meeting by live webcast, the shares of stock will not be voted or deemed present at the meeting unless you submitted a proxy via mail, the Internet or telephone before the meeting.

Important Notice Regarding the Availability of Proxy Materials for

McDonald’s Annual Shareholders’ Meeting to be Held on May 24, 2012:

The Proxy Statement and the 2011 Annual Report to Shareholders are available atwww.proxyvote.com.

LOGO

 
 

7.Advisory vote on a shareholder proposal requesting disclosure regarding confinement stall use in the Company’s U.S. pork supply chain, if properly presented.Proxy — McDONALD’S CORPORATIONFOR

AGAINSTABSTAIN
 
 

8.Advisory vote on a shareholder proposal requesting a third-party civil rights audit, if properly presented.FORAGAINSTABSTAIN
 

Voting Instructions for McDonald’s Corporation Profit Sharing and Savings Plan Participants

When casting your vote, you are directing the trustees of the McDonald’s Corporation Profit Sharing and Savings Plan Trust to vote the McDonald’s shares credited to the accounts under the McDonald’s Corporation Profit Sharing and Savings Plan (the “Plan”). When you vote these shares, you should consider your own long-term best interests as a Plan participant. In addition, you are directing the trustees to vote shares held in the Plan that have not been voted by other participants and Plan shares that have not yet been credited to participants’ accounts. When you direct the vote of these shares, you have a special responsibility to consider the long-term best interests of other Plan participants.

Your vote on the reverse side will apply to:

• Shares credited to the account(s) under the Plan;

• Shares not voted and shares that have not yet been credited to Plan participants’ accounts, on a pro-rata basis; and

• Shares you hold at Computershare (MCDirect Shares, certificate and book-entry).

If you wish to vote all the shares in the same manner, including shares in the Plan, simply mark your voting instructions on the reverse side.

If you do NOT want to vote all shares in the same way, please contact Broadridge via email at mcdonalds@broadridge.com, or indicate that you want to vote your Plan shares and registered shares separately in theComments area below and check the corresponding box on the reverse side of the proxy card. If you elect to vote Plan shares separately, we will mail you new proxy cards. Your directions to vote shares will be kept confidential by Broadridge, the independent inspector of election.

 

9.

Advisory vote on a shareholder proposal requesting a report on lobbying activities and expenditures, if properly presented.Comments:FOR

AGAINSTABSTAIN
 
10.Advisory vote on a shareholder proposal requesting a report on global public policy and political influence, if properly presented.FORAGAINSTABSTAIN

Date: ___________________________, 2022
Signature
Signature (if jointly held)

Title(s)

Please sign EXACTLY as name appears at the left. Joint owners each should sign. When signing as attorney, executor, administrator, trustee or guardian, please give full related title. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer.

(If you noted any comments above, please mark the corresponding box on the reverse side.)

M41001-P20927-Z57186