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Board Leadership

Upon election of the Director nominees in Proposal 1:
Chairman of the Board and CEO: Christoper Kempczinski
Lead Independent Director: Miles White
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While Enrique Hernandez, Jr. will continue to serve as our independent Chairman through the 2024 Annual Shareholders’ Meeting, the Board has determined that the Chairman will be Mr. Kempczinski and the Lead Independent Director will be Mr. White after the Annual Shareholders’ Meeting.
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The Board periodically reviews its leadership structure and has determined that, following the retirement of Mr. Hernandez, a combined Chairman/Chief Executive Officer structure is in the best interests of the Company and shareholders at this time.

We believe that having strong leadership is essential for our Board to perform its primary oversight functions effectively. It is also important for the Board to retain flexibility to determine its leadership structure based on the particular composition of the Board, the individuals serving in leadership positions, and ~~qualifications~~:the needs and opportunities of the Company at any given time.
Mr. Hernandez has served as the independent Chairman of the Board since 2016 and informed the Board several months ago that he was considering retirement, as of the 2024 Annual Shareholders’ Meeting. Mr. Hernandez’ retirement is consistent with the Board’s on-going commitment to refresh its membership in service of shareholders. After thoughtful deliberation, the Board determined that our Chief Executive Officer, Mr. Kempczinski, who has served in that capacity since 2019, will assume the role of Chairman of the Board following our 2024 Annual Shareholders’ Meeting, and that Mr. White iswill serve as our Lead Independent Director.
Our Board believes that having a combined Chairman and Chief Executive Officer as well as a Lead Independent Director – a governance structure previously utilized successfully by the ~~chief executive officer~~Company – will allow Mr. Kempczinski to manage our business effectively; execute on our strategic growth plan; and lead the Board, while also empowering Mr. White to provide independent board leadership and oversight with a clearly defined role and set of responsibilities.
The Board engaged in a ~~large pharmaceutical, biotechnology and nutritional health products company. He has knowledge of strategy and business development, risk assessment, finance, leadership development~~robust, disciplined process in reaching this decision, as it does regularly with Board refreshment and succession ~~planning, and corporate governance.~~
~~McDonald’s Corporation 2012~~ 7
~~Executive compensation~~
~~COMPENSATION COMMITTEE REPORT~~
~~Dear Fellow Shareholders:~~
~~The Compensation~~planning. Prior to this leadership announcement, the Board, in collaboration with the leadership of the Governance Committee, reviewed and discussed the impending leadership transition on several occasions. The Board believes that the optimal board leadership structure depends on a variety of specific facts and circumstances relative to the Company, particularly within the context of the range of skills, qualifications, and experiences represented on the Board, as well as the opportunities and any challenges facing the Company at the time. In light of the Board’s current structure, where all but one Director is independent; all of the committees are comprised of independent Directors; and the Board has robust independent oversight, the Board determined that Mr. Kempczinski is best suited to be the Board’s Chairman. The Board believes that having the Chief Executive Officer also act as Chairman is optimal at this time in light of the critical nature of our unique business structure, with our Chief Executive Officer at the center of the three-legged stool between our franchisees, suppliers, and employees, as the proper balance of those constituencies is essential to our success. The Board believes that combining the roles will not create ambiguity about reporting relationships or inhibit the flow of information and interactions among the Board, management, and other Company personnel.
The Board considered the importance of the impact that the leadership structure has on the Company’s performance and the performance of the Board, including the effectiveness of the current Board composition in ensuring strong, independent Board oversight, as well as the pending retirement of the current Chairman. In light of that analysis, the Board determined that:
● Mr. Kempczinski’s leadership style, deep knowledge of the food industry, and the Company’s strong financial performance under his leadership, all make him uniquely qualified to lead discussions of the Board, foster constructive interaction between the Board and management, and promote alignment of the Company’s strategy with its operational execution.

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Mr. Kempczinski has worked closely over the past five years with the independent Directors to understand their insights and perspectives as he developed the McDonald’s long-term strategy. The guidance, oversight, and accountability provided by the Board to Mr. Kempczinski during his tenure as Chief Executive Officer has allowed him to navigate the Company successfully through multiple complex issues and align the strengths of a values-based leadership team to promote our core objectives. His success has been evidenced by the exceptional financial performance and strong growth of the Company throughout his tenure as Chief Executive Officer.

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Mr. White will bring to the Lead Independent Director role a career of leading global and complex organizations from his previous roles as chairman, chief executive officer and executive chairman of a large multinational corporation, as well as his former and current roles on public company boards that operate in a variety of industries and businesses. This expertise, combined with his extensive knowledge of our business and its strategic objectives, the challenges and opportunities facing our Company, and a deep commitment to serve as Lead Independent Director, all make Mr. White well positioned to guide the Board in its oversight of the Company’s strategy and risk management.

The Board recognizes that where the positions of Chairman and Chief Executive Officer are combined, it is imperative that the Board elect a strong Lead Independent Director with a clearly defined role and robust set of responsibilities, to encourage open dialogue and constructive feedback among our independent Directors and management. Prior to the appointment of Mr. White as our Lead Independent Director, the Governance Committee and Board engaged in a thoughtful process to ensure alignment with respect to clearly-defined duties for the Lead Independent Director, as outlined below.

Agenda Setting; Board Information; and Interactions with the Chairman/CEO

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Collaborating with the Chairman/CEO regarding the agenda and schedule for Board meetings

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Providing input on meeting materials shared with the Board

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Providing feedback to the Chairman/CEO on the presentations made to and discussions with the Board

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Providing feedback to the Chairman/CEO after executive sessions of the independent Directors

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Acting as the principal liaison between independent Directors and the Chairman/CEO

Board Leadership Responsibilities

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Presiding over all executive sessions of the Board

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Calling meetings of independent Directors

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Presiding at all meetings of the Board at which the Chairman/CEO is not present

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Together with the Compensation Committee, leading the annual CEO performance evaluation, considering performance as Chairman as well

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Overseeing the process for Chairman/CEO succession planning

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Liaising with Directors considering other public-board directorships

Interactions with Stakeholders

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Being available for consultation and direct communication, if requested by major shareholders

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Receives information regarding the Company's communications with shareholders and other stakeholders


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The Board will continue to monitor Board leadership in light of the foregoing, as well as the evolution of the Board and the Company’s business over time, determining the Board’s leadership structure that it believes is in the best interests of our Company and its shareholders.

Board Composition & Refreshment
Our Board is comprised of a diverse, highly-engaged group of individuals with a wide range of relevant qualifications, skills, and experiences, each of whom contributes to overall Board and Committee effectiveness. Each of our Directors is a dynamic leader whose experiences and perspectives are continually evolving as they navigate today’s fast-paced, ever-changing business environment, both as a Director of our Company and in their other professional roles.
Our Governance Committee is primarily responsible for maintaining a balanced and diverse Board through robust succession planning and refreshment 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 diverse characteristics, skills, and experiences for our Board as a whole, as well as the qualifications and attributes of individual Director candidates. When identifying, evaluating, and recommending new Director candidates, our Governance Committee considers the qualifications discussed on page 18.
In their approach to composition and refreshment, our Governance Committee and Board strive to achieve an appropriate balance of continuity and institutional knowledge, together with fresh perspectives, through a mix of newer-tenured and more seasoned Directors. Our Governance Committee and Board believe this balance best serves our shareholders’ interests and that the overlap of new and longer-tenured Directors provides new Directors with the opportunity to learn from the knowledge and experience of longer-tenured Directors, which helps to provide for orderly transitions of roles and responsibilities. While tenure is considered in evaluating the overall effectiveness of our Board, it is not viewed as a dispositive factor on an individual basis. Our Governance Committee and Board also consider each Director’s availability and willingness to serve on our Board, recognizing that it is a significant time commitment. See “Outside Board Service” on page 49 for more information.
Our Board’s succession planning efforts have resulted in significant Board refreshment, including the nomination of one new Director in 2024 and the election of four new independent Directors to our Board in 2022 – bringing fresh perspectives, diverse experiences, and new insights to enhance the effective oversight of our business. Following the changes summarized under “Board Composition & Refreshment” on page 11, seven of our current Directors have joined our Board within the last five years. This was complemented by meaningful Committee refreshment, including the appointment of new Chairs of our Audit & Finance, Compensation, Public Policy & Strategy, and Sustainability & Corporate Responsibility Committees within the last two years. These changes are consistent with our Board’s long-term strategy to refresh its composition to best position our Company for the future.
As our strategic priorities continue to evolve, our Governance Committee and Board will continue to proactively evaluate our Board’s composition and succession planning to facilitate smooth transitions and the continuity of skills, experiences, and diversity in the boardroom.
Director Independence
Our Corporate Governance Principles require all non-management Directors to 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 New York Stock Exchange (“NYSE”) listing standards, 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.


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Based on its review, our Board determined that none of our current non-management Directors (Anthony Capuano, Kareem Daniel, Lloyd Dean, Catherine Engelbert, Margaret Georgiadis, Enrique Hernandez, Jr., John Mulligan, Jennifer Taubert, Paul Walsh, Amy Weaver, and Miles White) or Director nominee Michael Hsu, have a material relationship with our Company, and that all non-management Director nominees are independent. Our Board determined that Christopher Kempczinski is not independent due to his role as our CEO.

Our Standards on Director Independence are available on the “Governance Resources” section of our website at https://corporate.mcdonalds.com/corpmcd/investors/corporate-governance/governance-resources.html.

Board Diversity
Due to the global and complex nature of our business, our Board believes it is imperative that its composition embodies a diverse set of viewpoints, perspectives, and experiences to most effectively discharge its business oversight responsibility. Our Board also believes having Directors of different genders, races and ethnicities contributes positively to its balance and effectiveness. When seeking new Director candidates, our Governance Committee actively endeavors to include women, racial/ethnic minorities, and geographically diverse persons, as well as individuals with other diverse attributes, experiences, skills, and perspectives, in the candidate pool. We believe this best provides our Board with the skills and backgrounds that are important to drive our strategy and support our values.
As shown in the following matrix, more than half of our Board is comprised of Directors who are women or racially/ethnically diverse, and more than 30% of our Board is comprised of female Directors. See “New Director Candidate Selection Process” on page 35 for more information on how our Governance Committee and Board consider diversity in the Director identification and nomination process.
CAPUANO
DANIEL
DEAN
ENGELBERT
GEORGIADIS
HSU
KEMPCZINSKI
MULLIGAN
TAUBERT
WALSH
WEAVER
WHITE
SELF-IDENTIFIED RACE / ETHNICITY

African American or Black

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Asian American

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White or Caucasian
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SELF-IDENTIFIED GENDER

Female

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Male
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New Director Candidate Selection Process
We maintain robust Director Selection Process guidelines for the consideration of potential Director candidates. Our Governance Committee is responsible for establishing criteria, screening, and interviewing candidates and evaluating the qualifications of persons who may be considered for service as a Director, including candidates recommended 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 guidelines affirm our commitment to inclusiveness by setting forth our policy of considering diversity in the Director identification and nomination process. Specific weights are not assigned 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 potential Director nominees, our Governance Committee assesses the effectiveness of its approach to diversity. See “Board Diversity” on page 35 for more information on our Board’s commitment to embodying a diverse set of viewpoints, perspectives, and experiences.
We followed our Director Selection Process guidelines in connection with Mr. Hsu’s nomination, including using a third-party search firm to identify Mr. Hsu as a candidate.


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Our Governance Committee reviews our Director Selection Process guidelines annually and most recently updated them in 2020 to more closely align with our values and the strategic drivers associated with our Accelerating the Arches growth strategy. These updates identified important areas of focus for our Company and stakeholders, such as cybersecurity, digital business models, sustainability, human capital management and our commitment to inclusion. The following graphic more fully describes our Director candidate selection process:

			Ongoing Succession Planning & Candidate Identification Our Governance Committee continuously 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 then-existing Board composition. It conducts a search process to identify qualified Director candidates, which includes the use of an independent third-party search firm to assess the alignment of potential candidates’ skills, experiences and backgrounds with our business strategy and values. Among other attributes, it considers the qualifications and skills described under “Director Qualifications” on page 18 and “Board Diversity” on page 35.


			Meeting with Candidates Potential Director candidates are interviewed by our Chairman, CEO, and members of the Governance Committee. Candidates undergo a rigorous screening process and are assessed on their ability to meaningfully contribute to our Board’s oversight of an array of issues in light of the diverse demands of our global business.


			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.


			Election Shareholders 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 at the next Annual Shareholders’ Meeting.

Shareholders may recommend Director candidates for consideration by our Governance Committee by sending such nomination via email to corporatesecretary@us.mcd.com and providing the candidate’s name, biographical data, qualifications, and written consent to being considered as a Director nominee and to serving as a Director if elected. Shareholders who wish to nominate Director candidates for election by shareholders must follow the nomination provisions set forth in our By-Laws.

Our Director Selection Process guidelines are available on the “Governance Resources” section of 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 NYSE listing standards and our Standards on Director Independence. In addition, Directors who serve on our Audit & Finance and Compensation Committees 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 the “Governance Resources” section of our website at https://corporate.mcdonalds.com/corpmcd/investors/corporate-governance/governance-resources.html.


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The current membership and primary responsibilities of each standing Committee are summarized on the following pages. Each standing Committee establishes its meeting calendar for the following year during the fourth quarter and has risk oversight within its respective areas of accountability as discussed under “Board Oversight” beginning on page 40.

Audit & Finance Committee

Meetings in 2023: 8

Our Audit & Finance Committee addresses the areas of focus set forth below.
Relevant Areas of Focus:

Committee Members:
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Oversee financial reporting, accounting, control, and compliance matters
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Appoint, retain, compensate, and evaluate our independent auditors
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Review audit scope and results with independent and internal auditors
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Review material financial disclosures, disclosure controls and procedures and internal controls over financial reporting
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Pre-approve all audit and permitted non-audit services
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Evaluate management’s processes to assess and manage risk
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Oversee global compliance program, including Sarbanes-Oxley and tax compliance
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Oversee financial risk and financial risk management
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Oversee our financial policies and strategies, including those relating to our capital structure, dividend policy, share repurchase plans and other treasury-related matters
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Oversee any investigations related to specific cybersecurity or technology incidents

Catherine Engelbert (Chair)

Margaret Georgiadis

John Mulligan

Amy Weaver

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

Compensation Committee

Meetings in 2023: 4

Our Compensation Committee addresses the areas of focus set forth below.
Relevant Areas of Focus:

Committee Members:
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Oversee the design and administration of our executive compensation programs and policies
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Approve business goals and objectives in compensation programs, evaluate performance and approve executive compensation
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Establish, amend, review, and administer our incentive plans
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Review the use of compensation programs to motivate and retain executives
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Assess risk associated with our executive compensation programs and corporate incentive plans
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Oversight of compensation-related shareholder proposals
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Establish, amend, and administer our “clawback” policy
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See “Compensation Discussion and Analysis” beginning on page53for more information

Lloyd Dean (Chair)*

Anthony Capuano

Kareem Daniel

Jennifer Taubert

* Became Chair in 2023


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Governance Committee	Meetings in 2023: 6
Our Governance Committee addresses the areas of focus set forth below.
Relevant Areas of Focus:	Committee Members:
● Advise as to Board structure (including composition and size), leadership and operations, as well as Committee structure and membership ● Establish criteria for Board membership ● Develop Board succession plans and make recommendations to our Board on succession matters ● Consider and recommend Director nominees to our Board for election, re-election or to fill vacancies ● Oversee shareholder engagement ● Review Corporate Governance Principles, consider governance trends and present recommendations to our Board, as appropriate ● Recommend non-management Directors’ compensation and stock ownership guidelines ● Evaluate Director and Board performance ● Review risks related to governance matters ● Manage responses to shareholder proposals (including oversight of governance-related proposals)	Miles White (Chair)
		Lloyd Dean
		Enrique Hernandez, Jr.
		Paul Walsh
		Amy Weaver

Public Policy & Strategy Committee	Meetings in 2023: 4
Our Public Policy & Strategy Committee addresses the areas of focus set forth below.
Relevant Areas of Focus:	Committee Members:
● Monitor our long-term strategy development and implementation ● Monitor trends, regulatory matters and other items that do or could materially affect our business, performance, reputation and image ● Monitor government affairs, strategies, and priorities, as well as compliance with our Political Contributions Policy ● Review adequacy and appropriateness of our compliance programs, including employees’ compliance with our Standards of Business Conduct ● Monitor our global tax strategy ● Oversee labor matters, including franchisee relations ● Monitor our strategy and processes relating to cybersecurity and other technology risks ● Consider potential remedies to strategic or process gaps identified by our Audit & Finance Committee as a result of its review of any specific cybersecurity or technology incident ● Review risks related to public policy and strategy matters ● Oversight of public policy and strategy-related shareholder proposals	John Mulligan (Chair)
		Anthony Capuano
		Enrique Hernandez, Jr.
		Jennifer Taubert
		Miles White


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Sustainability & Corporate Responsibility Committee	Meetings in 2023: 4
Our Sustainability & Corporate Responsibility Committee addresses the areas of focus set forth below.
Relevant Areas of Focus:	Committee Members:
● Monitor our strategies and efforts to address brand trust opportunities and brand leadership priorities (e.g., food, sourcing, the environment, human rights, community engagement, philanthropy, and DEI) ● Monitor the development and implementation of our sustainability-related goals and initiatives, and the progress against such goals ● Review global sustainability communication plans and reporting ● Monitor Company culture, employee satisfaction, human capital management and human rights matters (e.g., workplace health and safety, safe and respectful workplaces, and DEI) ● Review risks related to sustainability and corporate responsibility matters, including those related to climate ● Oversight of sustainability and corporate responsibility-related shareholder proposals	Paul Walsh (Chair)
		Kareem Daniel
		Catherine Engelbert
		Margaret Georgiadis

Executive Committee

Our Executive Committee may exercise most Board powers during the periods between Board meetings. The members of our Executive Committee are Christopher Kempczinski (Chair), Catherine Engelbert, Enrique Hernandez, Jr., John Mulligan, Paul Walsh and Miles White. Our Executive Committee did not meet during 2023.

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 carries out these self-evaluations, including over the past year:

Annual Board Self-Evaluation
The self-evaluation process seeks 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 the evaluation process, an independent third-party compiles evaluation responses and shares the results with the Governance Committee Chair.

Discussion of Results
Our Governance Committee Chair presents the results of the self-evaluation to our Board.

Incorporation of Feedback
Our Board assesses progress in the areas targeted for improvement from the prior evaluation and develops action plans aimed at enhancing 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.


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Board Oversight
Risk Oversight
Under our Corporate Governance Principles, our 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 material 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 our Accelerating the Arches growth strategy, 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 this oversight is 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 evolving strategic and enterprise risks, including those related to ESG matters, cybersecurity, human capital management and geopolitical issues. As part of this review, the Board considers, among other items, our mitigation and overall business strategy, competitive landscape, capital structure and management succession planning. The Board believes its approach to risk oversight ensures that the Board can choose many leadership structures while continuing to effectively oversee risk.


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Our Board’s risk oversight process is further depicted below:


BOARD OF DIRECTORS
ANNUAL REVIEW OF STRATEGIC RISKS
	Strategy	Capital structure	Competitive landscape	Management succession planning

MANAGEMENT
KEY RISK RESPONSIBILITIES
	Design and execute risk management programs	Identify, analyze, mitigate, and escalate risks	Evaluate and prioritize risks into tiers, further escalating to our CEO, Board and/or Committees, as appropriate	Ongoing engagement with Committee Chairs on respective areas of primary risk oversight


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As depicted above, 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 their respective charters, each Committee has resources and access to outside advisors. Our 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 ESG matters and human capital management.

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

Strategy Oversight
Our Board believes 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 regularly discusses our Company's strategy with our senior leadership team and other members of management, who present important information about our strategic priorities. In January 2023, our Board approved an evolved Accelerating the Arches growth strategy, which continues to encompass all aspects of our business as the leading global omni-channel restaurant brand. See “Accelerating the Arches” on page 8 for more information.
Our Board’s engagement in our business and oversight of our strategy provides it with important perspectives for the ever-changing business environment.
ESG Oversight
We have a long history of commitment to incorporating sustainable and socially responsible practices into our business operations. Our Sustainability & Corporate Responsibility Committee monitors and oversees the development and implementation of our sustainability goals and metrics, as well as monitors company culture, and human rights management, including workplace safety, and diversity, equity, and inclusion progress. Our Public Policy & Strategy Committee monitors and oversees our strategies and efforts to address matters that could materially affect our performance, reputation, and image, as well as our government affairs strategies and priorities. Our Governance Committee recommends to our Board corporate governance principles addressing, among other matters, the size, composition and responsibilities of our Board and its Committees. These Committees regularly report to our Board regarding their activities. In addition, from time to time as circumstances warrant, other Committees and/or our full Board receive reports and updates on our management of ESG-related matters.
Our Purpose & Impact
We drive impact by living our purpose, which is to feed and foster communities. We are proud of the work we do to help make a difference, and we will continue working to deliver progress in the communities in which we operate. The actions we take today help ensure we are building a better business and a more trusted brand for generations to come. Our impact strategy is centered around four areas: Our Planet; Food Quality & Sourcing; Jobs, Inclusion & Empowerment; and Community Connection. As summarized below, we have established strategies, goals, policies, and performance indicators to manage our progress across each of these areas.
More information can be found on the “Our Purpose & Impact” section of our website at https://corporate.mcdonalds.com/corpmcd/our-purpose-and-impact.html and in our 2022–2023 Purpose & Impact and Global Diversity, Equity & Inclusion Reports, available on the website.


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Our Planet

We recognize that our success is inherently connected to the health of our shared natural resources, and we know we need to take steps to help protect our planet so that we can continue to feed the communities we serve for generations to come. We have prioritized action across the following areas:


	Recent higHlights
	The Science Based Targets initiative (SBTi) has validated our global 2050 net-zero emission reduction target, aligning our 2030 global emissions target to help keep global temperature rises below 1.5°C
	Continued to substantially achieve a deforestation-free supply chain across our primary commodities, such as beef, soy (for chicken feed), palm oil, coffee, and fiber (used in guest packaging), with over 99% of sourced volumes supporting a deforestation-free supply chain in 2022

Climate Action. We believe climate change is one of the biggest challenges of our time, and reducing emissions and adapting to climate change is critical to the success of the McDonald’s System. We are working to reduce emissions in our restaurant operations and help transform our food systems to be more resilient for the future. In 2018, we set 2030 targets, validated by the Science Based Targets initiative (“SBTi”), aligned with a 2°C scenario. In 2021, we committed to adapting our climate target to help keep global temperature rises below 1.5°C and reach net-zero emissions by 2050. Since then, we have worked to evolve our 2030 target and establish our 2050 target. This process included updating both our restaurants and offices target, as well as our supply chain target, based on the latest science and guidance from external experts. As of 2023, our targets aligned with the latest guidance and were validated by the SBTi.

Packaging, Toys & Waste. We are committed to helping accelerate solutions that help reduce waste while also transitioning to more sustainable packaging and toy materials. To achieve this, our priorities include eliminating unnecessary packaging and streamlining materials for easier recovery, transitioning away from virgin fossil fuel-based plastics in our primary guest packaging, advancing a circular economy, and engaging with other brands and non-governmental organizations to help increase the adoption of circularity across our industry.

Nature, Forests & Water. We are taking a holistic approach to protecting natural resources. We aim to help manage nature-related risks and build resilience by working with farmers to preserve and regenerate nature, and support biodiversity. Our Commitment on Forests sets forth our aim to eliminate deforestation from our global supply chain by the end of 2030 for the products we use in the greatest volumes and with the potential to have the greatest impact on forests. We continue to focus on supporting deforestation-free supply chains for our primary commodities, such as beef, soy (for chicken feed), palm oil, coffee, and fiber (used in guest packaging).


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Food Quality & 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. 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 the delicious meals they know and love. We have prioritized action across the following areas:


	Recent higHlights
	As of December 2022, we have established market-specific targets for responsible antibiotic use in our global beef supply chain for our 10 in-scope markets
	By the end of 2022, we made significant progress across all five Global Happy Meal Goals in our 20 major markets
	As of the end of 2023, McDonald’s USA has achieved its commitment to sourcing 100% cage-free eggs by 2025 in the US market – two years ahead of schedule

Food Safety. We have a long-standing commitment to source and serve safe food and beverages every day, to every customer, in every McDonald’s restaurant. Strict food safety standards and protocols are embedded in everything we do, including food and product sourcing, menu development, packaging, distribution, and the running of our restaurants. Our food safety systems and standards are science-based and third-party validated. In 2022, we continued to advance food safety risk management (FSRM) practices with the development and deployment of an FSRM dashboard that provides our Food Safety and Quality teams with data and information to help develop plans for mitigating food safety related risks. By the end of 2022, as part of our Digital Food Safety (DFS) initiative, 88% of our restaurants had fully implemented the move from paper-based to digital food safety checklists. Our ongoing strategy includes strengthening our food safety culture and proactively managing food safety risks through continuous improvement of our standards and policies.

Nutrition & Marketing Practices. We listen to our customers and evaluate our menu to identify ways to evolve our offerings while maintaining the great taste people know and love. We believe focusing on kids and families is where we can have the biggest impact, which is why our strategy is grounded in goals relating to nutrition in our Happy Meals. From 2018 to 2022, we made significant progress to offer and promote more fruit, vegetables, low-fat dairy, whole grains, lean protein, and water in Happy Meals across 20 major markets. As we look to the future, we will assess potential new opportunities to build on the progress we have made so far.

Responsible Sourcing. We approach responsible sourcing holistically, as we understand that our work impacts the livelihoods of people, the well-being of animals and the health of our planet. We set standards for sourcing, including in our Supplier Code of Conduct, and engage closely with our supply chain to ensure these standards are upheld. Our aim is to deliver sustainable sourcing programs that 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 is reliant upon sourcing animals that are properly cared for throughout their lives, we have a long-standing commitment to improving the health and welfare outcomes of food producing animals in our supply chain. To achieve our goal of sourcing chickens raised with improved welfare outcomes, we have outlined eight specific commitments for our in-scope markets, which are expected to be fully implemented by the end of 2024. As of the end of 2023, McDonald’s USA has achieved its commitment to sourcing 100% cage-free eggs by 2025 in the US market – two years ahead of our 2025 goal. In the U.S., we are also working with pork suppliers to phase out the use of gestation stalls (small, enclosed pens) for housing pregnant sows by the end of 2024, and as of the end of 2022, more than 91% of our pork purchased in the U.S. comes from suppliers who have phased out the use of gestation stalls.We remain focused on the positive impact we can have by working with suppliers and promoting responsible practices.

Responsible Antibiotic Use. We are committed to promoting the responsible use of antibiotics in food producing animals in our supply chain. In December 2022, we established market-specific targets for the responsible use of antibiotics in our beef supply chain for our 10 in-scope markets (representing over 80% of our global beef supply chain as of the end of 2022). Our targets focus on the responsible use of medically important antibiotics and are aligned with World Health Organization Guidelines. In 2023, we worked with supply chain partners to deploy data collection processes and begin building access to use data that will help enable future measurement of antibiotic use and trends over time in our supply chain. Through collaboration, we have identified a number of opportunities, as well as challenges, in continuing to improve data and measurement capabilities in this space. Through our continued commitment to responsible antibiotic use we believe that we are doing our part to help preserve the effectiveness of antibiotics for future generations.


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Jobs, Inclusion & Empowerment

McDonald’s has always been a people business. We are committed to fostering workplaces where people feel supported, have equitable access to opportunity and feel empowered to realize their full potential through differentiated development opportunities and benefits. Regardless of cultural, social, or economic context, we operate in a way that respects the dignity of each person, using fair and humane practices. We prioritize safety and respect in our offices and Company-owned restaurants, and we support franchisees and suppliers in doing the same in their operations. Guided by our values, we are working on becoming better allies, sponsors, and leaders in order to help empower the people and communities we serve. We have prioritized action across the following areas:

		Recent higHlights
	As of the end of 2022, 43% of leadership roles (Senior Director and above) globally were held by women
	As of the end of 2022, our U.S. systemwide spend with diverse-owned suppliers was 25%, resulting in McDonald’s reaching its diverse-owned supplier spend goal for the second year in a row
	In 2022, we raised hourly wages at over 90% of our U.S. Company-operated restaurants, impacting more than 44,000 employees and resulting in an 8% increase to the average hourly pay rate

Human Rights. We believe that businesses like ours have a responsibility to respect human rights within their sphere of influence. To maintain relevant policies and practices, we work to identify and understand the human rights issues most salient to our business. Our commitment to respecting people and their rights throughout our value chain is set forth in several of our policies, including our Human Rights Policy, Standards of Business Conduct, Responsible and Ethical Recruitment Principles, Global Brand Standards and Supplier Code of Conduct. Our Human Rights Policy is guided by the United Nations Guiding Principles on Business and Human Rights, the International Bill of Human Rights and the principles set out in the International Labour Organization’s Declaration on Fundamental Principles and Rights at Work.

Safe & Respectful Workplaces. We are working together with our franchisees to cultivate respectful workplaces where people can be themselves without fear of harassment, discrimination, retaliation, or violence. Our Global Brand Standards are focused on four key areas: (i) protecting employee health and safety; (ii) preventing workplace violence; (iii) preventing harassment, discrimination, and retaliation; and (iv) listening through restaurant employee feedback. All McDonald’s restaurants must implement these standards and are assessed on each criterion in accordance with the applicable market’s business evaluation processes. We remain committed to supporting markets and franchised restaurants by providing implementation support, including a suite of policies, tools, training and listening survey strategies for restaurant employees.

Our Commitment to Inclusion. We are committed to actively fostering an inclusive environment, where diversity is embraced as a business imperative. Our strategy is designed to drive efforts across our System to better represent the diverse communities in which we operate, to accelerate cultures of inclusion and belonging, upholding human rights, and cultivating a respectful workplace that is ethical, truthful, and dependable, and to further dismantle barriers to economic opportunity. Our goals include improving the representation of women globally and underrepresented groups in the U.S., a commitment to equal pay among Company employees with comparable job responsibilities, experience, performance, and contributions, and our Mutual Commitment to Diversity, Equity and Inclusion, a pledge that invites our U.S.-based suppliers to commit to efforts toward similar progress within their own organizations.

Talent & Benefits. Providing a best-in-class employee experience – where people are given opportunities to learn and develop – is a business imperative. Working to build and recognize high-performing teams, providing support for continuing education, and offering competitive compensation and benefits are just some examples of how we demonstrate our commitment to helping both Company-owned and franchised restaurant employees continue their path forward. Additionally, we embrace the opportunity to offer guidance, resources, tools and strategic partnerships to franchisees as they aim to support and empower their own employees. To attract and retain talent at all levels of the business, we also evaluate data and market trends to determine competitive wages and benefits.


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	Community Connection

Our business thrives when our communities thrive. With our size and scale, we are uniquely positioned to give back to the communities we serve in meaningful ways. We think globally and act locally to better connect with our customers, employees, and wider society to help meet their needs. We have prioritized action across the following areas:


	RECENT HIGHLIGHTS
	In 2022 the U.S. business provided over $850,000 in community grants and sponsorships within the United States.
	Supported approximately 1.7 million young people with training programs and job opportunities since launching our Youth Opportunity Program in 2018.
	Continued the five-year, $100 million commitment to RMHC^® that we set in 2020 to help RMHC^® continue offering programs that ensure families have access to the medical care their child needs.
	In total, McDonald’s, our Franchisees and customers donated over $182 million to RMHC^® in 2022, helping the charity provide more than 2.2 million overnight stays for RMHC^® families around the world.

Community Impact & Philanthropy. We have deep roots in communities, in part because most McDonald’s restaurants are run locally by independent franchisees. We have also established impactful relationships with community-based organizations around the world, which help provide us with direct insights into issues and challenges facing our communities – where franchisees are both neighbors and business owners. Our strategy is focused on three key areas: families and their well-being (including our support of Ronald McDonald House Charities®), providing support during times of need (such as through our partnerships with the Red Cross), and philanthropic investments and opportunity employment (including our Global Volunteer and Youth Opportunity Programs).

Ronald McDonald House Charities®. Through a network of over 260 chapters in more than 60 countries and regions, Ronald McDonald House Charities® (“RMHC®”) helps families stay together near world-class care facilities when a child is sick or injured. Our franchisees, employees, suppliers, and customers have supported RMHC® since 1974.


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Shareholder Engagement
We understand the importance of engaging with our shareholders and are committed to regularly discussing their perspectives on significant issues. Our Board and management team have developed and maintained a robust annual shareholder engagement program, highlights of which are described under “Shareholder Engagement” on page 9. In addition, the following graphic illustrates elements of our shareholder outreach and engagement efforts, with a specific focus on activities that take place before, during and after our Annual Shareholders’ Meeting:

Before Annual
Shareholders’ Meeting

Annual Shareholders’
Meeting

After Annual
Shareholders’ Meeting

Off-Season Engagement &
Evaluation of Practices

Q1►Q2

Q2

Q3

Q4►Q1

Offer discussions with all shareholder proposal proponents

Publish Proxy Statement and Annual Report

Discuss voting results from the meeting, as well as shareholder feedback, and determine if any follow-up actions are appropriate

Engage with shareholders and other stakeholders to better understand their viewpoints on key issues and inform Board and management discussions

Engage with shareholders on items related to voting matters at the Annual Meeting

Engage with shareholders in attendance at the meeting

Consider focus areas for off-season engagement with shareholders and other stakeholders

Attend and participate in investor and governance-related events to better understand emerging trends and further engage with shareholders and other stakeholders

Report on shareholder engagement feedback to Governance Committee

Receive voting results

Review corporate governance trends, regulatory developments, and our corporate governance documents, policies, and practices

Evaluate potential changes to policies and practices considering feedback received from our shareholders and other stakeholders and our existing practices

Board’s Response to Shareholder Proposals
As discussed under “Shareholder Engagement” above, accountability to our shareholders is a critical component of our success. Following each Annual Shareholders’ Meeting, our Governance Committee analyzes the voting outcomes of shareholder proposals and, together with other Committees, as appropriate, considers proposed courses of action.
At our 2023 Annual Shareholders’ Meeting:
● An advisory shareholder proposal requesting that we issue an annual report on our lobbying activities and expenditures received the support of approximately 49.75% of shares voted. Although the majority of our shareholders rejected the proposal, our Board, together with our Public Policy & Strategy Committee, carefully considered the voting results and continued to seek investor feedback on this important topic. We believe our policies and disclosures in this area are robust, and we have consistently been recognized for political transparency and accountability. Building on our strong record in this area, and following investor feedback, we are planning several enhancements to our public policy and engagement disclosures, including for example:
o Additional disclosure on our policy engagement philosophy on key issues;
o Enhanced disclosure regarding our U.S. federal government lobbying activities and expenses, as well as state lobbying activities;
o Publishing a list of contributions made by the McDonald’s-affiliated Political Action Committee (“PAC”); and
o Detailed corporate political contributions, as well as trade association membership information.
We intend to make these enhanced disclosures for 2024 available this summer and will update them on a regular basis.


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●

An advisory shareholder proposal requesting that we disclose the “15 key welfare indicators” used for the Company’s animal welfare program received the support of approximately 38% of shares voted. Although the majority of our shareholders rejected the proposal, we recognize this is an area of increasing focus for our stakeholders. We continue to make significant progress in implementing our chicken welfare strategy, which is overseen by our Board and Sustainability & Corporate Responsibility Committee. Further, we continue to transparently communicate this progress, including in July 2023, when we disclosed progress on all eight of our Broiler Welfare Commitments through our 2022-2023 Purpose & Impact Report. Some highlights include:

We initiated a process to define, then implement, our third-party on farm auditing protocol by the end of 2024. This third-party verification will enable continuous improvement;

We invested nearly $2 million (which enabled an additional $2.6 million in matching funds) into technology to automate gathering animal health and welfare indicators. These state-of-the-art welfare technologies will be among the first of their kind proposed for commercial availability; and

We developed our target-setting approach for KWIs, which consists of ranking suppliers in performance peer groups with timebound goals to advance to the next highest peer group, in a way that encourages innovative and thoughtful action.

In 2024, we will continue our partnership with suppliers, farmers, researchers, and welfare experts, assessing opportunities to build on the progress we have made so far and working together to drive positive outcomes.

Update on Civil Rights Audit

As discussed in our 2023 Proxy Statement, an advisory shareholder proposal requesting a third-party audit of the impact of our policies and practices on the civil rights of stakeholders received the support of approximately 55% of shares voted at our 2022 Annual Shareholders Meeting. Following the vote, we engaged Wilmer Cutler Pickering Hale and Dorr LLP (“WilmerHale”), a law firm with substantial civil rights expertise, to conduct a civil rights audit. We engaged with our shareholders, including the shareholder proponent, to discuss the parameters of the audit.

The scope of the audit is broad, covering McDonald’s civil rights impact across the McDonald’s System, with a focus on the United States, including our impact on McDonald’s employees (corporate employees and employees in Company-owned restaurants), franchisees, suppliers, and the broader community. WilmerHale is assessing relevant policies, practices, and initiatives, as well as the governance, accountability structures, and resources in place to support the Company’s efforts.

Over the course of 18 months, WilmerHale has conducted more than 100 interviews of McDonald’s employees across the Company’s major functions and reviewed thousands of documents. In addition, to ensure that the audit is informed by perspectives from across the System, WilmerHale has solicited the feedback of key stakeholders in various ways, including from corporate leaders and employees, managers and crew members in Company-owned restaurants, and franchisees representing varied demographic backgrounds and geographic regions. WilmerHale has also met with several McDonald’s suppliers and members of the Company’s Diverse Marketing Advisory Council, which advises McDonald’s on its marketing initiatives; national and local civil rights organizations, advocacy groups, and chambers of commerce representing a range of constituencies; and academics with varying viewpoints on the role of DEI in organizations.

WilmerHale has substantially completed its fact-finding work on the civil rights audit. Below is an overview from WilmerHale, which is preparing a public report that we expect to release later this year.

“The audit made clear that McDonald’s, as one of the world’s most recognizable brands, appreciates that it has an opportunity to lead by example in fostering diversity, equity, and inclusion across its System. Its commitment is well reflected in the thoughtfully crafted initiatives it has voluntarily undertaken. In response to a shareholder proposal, McDonald’s commissioned a broad civil rights audit to assess, refine, and strengthen its approach, which involved a deep dive into the Company’s domestic business, from its workplace policies and practices to its relationships with franchisees, suppliers, and community stakeholders. The audit found that, consistent with the Company’s stated values, McDonald’s has demonstrated an ongoing commitment to the principles of diversity, equity, and inclusion and has invested significant resources toward its goals. The Company’s sustained efforts have resulted in demonstrable progress on many of its top priorities and initiatives, including developing strong policies and guidance for its workforce and designing innovative initiatives to reduce economic barriers to opportunity that exist among its franchisees and suppliers. As part of our review, we also identified areas of opportunity. In our audit report, we will discuss our findings and provide recommendations for refining and enhancing McDonald’s approach, as well as for achieving greater alignment of its practices across its organization.”


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Other Governance Policies & 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 the “Governance Resources” section of 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 scheduling conflict between our Board and any other board that a Director may subsequently join, such Director will commit to prioritizing his or her 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. If an independent Director does not provide such notice, he or she will offer to submit his or her resignation from our Board to our Governance Committee Chair, and our Governance Committee will 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 documents are available on the “Governance Resources” section of our website at https://corporate.mcdonalds.com/‌corpmcd/investors/corporate-governance/governance-resources.html. If we make certain amendments to these documents (other than technical, administrative or other non-substantive amendments), or grant certain waivers, including an implicit waiver, from a provision thereof to our chief executive officer, chief financial officer, 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 Current Report on Form 8-K filed with the SEC.
Meeting Attendance
Pursuant to our Corporate Governance Principles, Directors are expected to attend all or substantially 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 2023, and our Committees met the number of times set forth on pages 37–39.
On average, our Directors attended 99% of the total number of meetings of our Board and the respective Committees on which they served in 2023, meaning each Director attended at least 75% of such meetings. In addition, all of our Directors who were elected at the 2023 meeting attended our virtual 2023 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. Currently, 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.


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Director Orientation & 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 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 customers. For more information on how Directors oversee and remain informed on Company strategy, see “Strategy Oversight” on page 42.

Communications With Our Board
Persons wishing to communicate with our Directors, individually or as a group, may do so by emailing bod@us.mcd.com. Under our Board’s policy for public communications addressed to our Board, our Corporate Secretary reviews correspondence, forwards correspondence addressed to an individual Director to that Director, and screens correspondence addressed to multiple Directors or our full Board in order to forward it to the most appropriate person. Communications relating to our accounting, internal accounting controls or auditing matters are referred to our Audit & Finance Committee Chair, while certain communications that are unrelated to the duties and responsibilities of our Board (e.g., business solicitations, junk mail, mass mailings and employment inquiries) are excluded.
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 our Directors. Consistent with this practice, in Spring 2023 our Board’s independent compensation consulting firm Semler Brossy Consulting Group LLC (“Semler Brossy”) performed a comprehensive review of both the structure of our non-management Director compensation program and amount of compensation, including benchmarking director compensation using the same peer group as is used for executive compensation review and described under “Compensation Discussion and ~~Analysis~~Analysis” beginning on page 53. Informed by the results of this review and the base salary increase budget for employees, upon recommendation of the Governance Committee, the Board approved a $5,000 increase to the cash retainer component of the Director compensation package, effective May 25, 2023. No other changes were made to our Director compensation program in 2023.
Our Director compensation program consists of: (i) an annual cash retainer of $120,000; (ii) an annual grant of common stock equivalent units with a value of $200,000 under our Board of 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 the Chairs of our Compensation, Governance, Public Policy & Strategy, and Sustainability & Corporate Responsibility Committees. We also match up to $10,000 of charitable contributions made annually by Directors to certain types of tax-exempt organizations.
In recognition of his leadership as our independent Chairman, our disinterested Directors awarded Enrique Hernandez, Jr.: (i) an additional $250,000 cash retainer; and (ii) restricted stock units (“RSUs”) with a targeted grant date fair value of $250,000 in 2023. The amount of compensation for Mr. Hernandez’s service as our independent Chairman has remained unchanged since 2016 and was set at a level to reflect the significance of such role at our Company as well as his qualifications. The RSUs awarded to Mr. Hernandez are payable in either shares of our common stock or cash, at our discretion, and are scheduled to vest on the later of his retirement from our Board or the first anniversary of the grant date.
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 and are settled following the Director leaving the Board. 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. In addition, Directors may elect to defer all or a portion of their cash retainers in the form of additional common stock equivalent units under the Directors’ Plan. Amounts Directors choose to defer from their retainer are deferred until a specified payment date, as determined by the Director in accordance with the Directors’ Plan. 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. Elections under the Directors’ Plan are irrevocable. 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 who served in 2023:

FEES EARNED OR

STOCK

ALL OTHER


NAME

PAID IN CASH ($)⁽¹⁾

AWARDS ($)⁽²⁾

COMPENSATION ($)⁽³⁾

TOTAL ($)
Anthony Capuano

117,928

200,000

10,000

327,928
Kareem Daniel

117,928

200,000

10,000

327,928
Lloyd Dean

122,072

200,000

10,000

332,072
Robert Eckert⁽⁴⁾

46,092

79,452

10,000

135,544
Catherine Engelbert

147,928

200,000

10,000

357,928
Margaret Georgiadis

117,928

200,000

10,000

327,928
Enrique Hernandez, Jr.

367,928

450,000

10,000

827,928
Richard Lenny⁽⁴⁾

118,893

166,575

10,000

295,468
John Mulligan

142,928

200,000

10,000

352,928
John Rogers, Jr.⁽⁴⁾

46,092

79,452

10,000

135,544
Jennifer Taubert

117,928

200,000

10,000

327,928
Paul Walsh

142,928

200,000

10,000

352,928
Amy Weaver

117,928

200,000

10,000

327,928
Miles White

142,928

200,000

10,000

352,928

(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) These amounts represent the aggregate grant date fair value of common stock equivalent units computed in accordance with ASC 718 that were granted to each Director who served during 2023. As discussed above, this also includes 876 RSUs with an aggregate grant date fair value of $250,000 granted to Mr. Hernandez in 2023 in connection with his service as Chairman. The grant date fair value was determined based on our closing stock price on the date of grant.
(3) Represents the amount of charitable contributions to tax-exempt organizations that the Company matched for Directors in 2023. No Director received perquisites or personal benefits in excess of $10,000 in the aggregate in 2023.
(4) Messrs. Eckert and Rogers, who retired from our Board on May 25, 2023, and Mr. Lenny, who retired from our Board on October 31, 2023, received prorated compensation to reflect their respective service in 2023.
Cumulative Outstanding Stock Awards as of December 31, 2023

OUTSTANDING
NAME

STOCK AWARDS
Anthony Capuano

982
Kareem Daniel
870
Lloyd Dean
12,577
Robert Eckert⁽¹⁾
66,522
Catherine Engelbert
3,134
Margaret Georgiadis
9,103
Enrique Hernandez, Jr.
92,075
Richard Lenny⁽¹⁾
39,612
John Mulligan
8,364
John Rogers, Jr.⁽¹⁾
63,577
Jennifer Taubert
1,401
Paul Walsh
4,615
Amy Weaver
870
Miles White
20,882
(1) Messrs. Eckert and Rogers retired from our Board on May 25, 2023, and Mr. Lenny retired from our Board on October 31, 2023.


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PROPOSAL 2
Advisory Vote to Approve Executive Compensation
Pursuant to Section 14A of the Exchange Act of 1934, as amended (the “Exchange Act”), we are asking shareholders to approve, on an advisory basis, the compensation of our named executive officers for 2023, including the Compensation Discussion and Analysis (the “CD&A”), compensation tables and related material disclosed in this Proxy Statement.
Our Board unanimously recommends that you vote FOR Proposal 2.

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 financial performance targets designed to be challenging, and payouts under our incentive plans can vary significantly based on Company performance.
We delivered strong growth in 2023 despite a challenging macroeconomic operating environment around the world. Our ongoing momentum produced a global comparable sales increase of 9% and operating income growth of 24%. These results highlight our continued business momentum, building upon the significant growth in prior years. This strong multi-year performance demonstrates the success of our M-C-D growth pillars under our Accelerating the Arches strategy as McDonald’s continues to satisfy the evolving needs of our customers.
Our broad-based momentum produced strong 2023 Systemwide sales and operating income performance resulting in a Corporate Short-Term Incentive Plan (“STIP”) payout factor for named executive officers (“NEOs”) of 141.3%. Further, this ongoing momentum produced strong, multi-year performance, resulting in a 187.5% payout factor for the performance-based restricted stock units (“PRSUs”) awarded to our executives in 2021. Our Compensation Committee’s commitment to align payouts with Company performance over different time periods has helped to drive long-term value creation for our shareholders.
For the reasons expressed above and discussed in more detail in the CD&A, our Board believes that our executive compensation program effectively motivates strong performance while balancing risk, thereby aligning the interests of our executives with those of our shareholders. Although this vote is advisory and non-binding, our Compensation Committee and Board value the opinions of shareholders and will consider the outcome of the vote, along with our ongoing dialogue with shareholders and other relevant factors, when considering future executive compensation decisions.
We currently hold our advisory vote on executive compensation annually, and the next such vote is expected to occur at our 2025 Annual Shareholders’ Meeting.


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Executive Compensation

Compensation Committee Report
Our Compensation Committee (the “Committee”) has reviewed and discussed the CD&A with management. Based on this review and discussion, the ~~Compensation~~ Committee recommended to ~~the~~our Board ~~of Directors~~ that the ~~Compensation Discussion and Analysis~~CD&A be included in this Proxy Statement and ~~the Company’s~~our Annual Report on Form 10-K for the ~~fiscal~~ year ended December 31, ~~2011.~~2023.
Respectfully submitted,
The Compensation Committee
~~Robert A. Eckert,~~~~Chairman~~Lloyd Dean, Chair
~~Susan E. Arnold~~Anthony Capuano
Kareem Daniel
Jennifer Taubert
Compensation Discussion and Analysis
~~Richard H. Lenny~~This CD&A describes our executive compensation program and provides insights into the Committee’s process and rationale for reviewing and implementing such program. To enable easier navigation, we have organized the disclosure into the following sections:
table of contents

1Our 2023 Year in Review
54

2Named Executive Officers
55

3Compensation Guiding Principles
55

4Aligning Compensation with Business Strategy
56

5Compensation Setting Process
57

6Performance-Based Compensation Metrics
59

72023 Direct Compensation Elements
60

8Adjustments to Reported Results
64

9Other Compensation Elements
65

10New Hire Compensation
66

11Compensation Policies and Practices
67

12Mitigating Risk in Executive Compensation
68

~~John W. Rogers, Jr.~~


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~~Miles D. White~~Executive Compensation

1. Our 2023 Year in Review
Business Performance
The Company’s Accelerating the Arches strategy continued to drive significant growth in 2023 despite ongoing macroeconomic pressures. In 2023, the Company achieved a global comparable sales increase of 9% and operating income growth of 24%. Further the Company has produced over 30% global comparable sales growth since 2019. This strong multi-year performance is evidence that the Company’s M-C-D strategic growth pillars have enabled the Company to continue to meet the evolving needs of our customers around the world.

Compensation
Our broad-based momentum produced strong 2023 operating income and Systemwide sales performance resulting in a Corporate STIP payout factor for NEOs of 141.3% (inclusive of financial metrics, new restaurant openings and human capital metrics). Further, the execution of our Accelerating the Arches growth strategy produced strong, multi-year performance, resulting in a 187.5% payout factor for the PRSUs awarded to our executives in 2021 that vested in early 2024 based on performance over the 2021-2023 performance period. Since the introduction of our Accelerating the Arches growth strategy in 2020, and consistent with our pay for performance philosophy, our incentive programs have yielded Corporate STIP payouts ranging from 0 to 185% of target depending upon the Company’s performance against rigorous, pre-established, quantitative targets.
As highlighted in the following graphics, the strong 2023 STIP and 2021-2023 PRSU payout factors are a result of the Company significantly exceeding its targets for the key financial metrics included in our incentive designs for both the one and three-year performance periods, emphasizing the Company’s steadfast commitment to pay for performance.
2023 STIP FINANCIAL PERFORMANCE VS TARGETS

2021–2023 PRSUs VS TARGETS

For more detailed information on our incentive plans and the calculation of our payout factors, see “Performance-Based Compensation Metrics” and “2023 Direct Compensation Elements” beginning on pages 59 and 60, respectively.


542024 proxy statement

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Executive Compensation

~~COMPENSATION DISCUSSION AND ANALYSIS~~

2. Named Executive Officers


	Our NEOs for 2023 are listed below:

	Christopher Kempczinski			Jonathan Banner
	President and Chief Executive Officer (“CEO”)			Executive Vice President and Chief Global Impact Officer

	Ian Borden			Joseph Erlinger
	Executive Vice President and Global Chief Financial Officer (“CFO”)			President, McDonald’s USA

	Gillian McDonald
	President, International Operated Markets

~~EXECUTIVE SUMMARY~~3. Compensation Guiding Principles

The Company follows three long-standing principles in designing our executive compensation program: (i) pay for performance; (ii) drive business results with a focus on creating long-term shareholder value; and (iii) pay competitively. These principles inform the design, operation, and risk profile of our executive compensation program.

First Principle: Pay for Performance

Our executives’ compensation opportunity is predominantly performance-based. As detailed in the below graphic, which shows target total direct compensation for 2023, using salary, target STIP payout and grant date fair values for long-term incentive awards granted in 2023, 92% of our CEO’s target total direct compensation opportunity for 2023 was performance-based. For our NEOs other than Mr. Kempczinski, approximately 83% of the target total direct compensation opportunity for 2023 was performance-based (excluding certain long-term incentive awards granted to Ms. McDonald and Mr. Banner in connection with replacing forfeited compensation from their prior employers upon joining McDonald’s, as more fully described under “New Hire Compensation” on page 66).

92%

CEO’s total direct compensation opportunity is performance-based.

~~McDonald’s executive~~Our incentive plans are based on a variety of strategic financial metrics that are aligned with our key measures of long-term sustainable growth. In addition, the STIP includes a new restaurant opening metric given the importance of restaurant development in driving top-line growth, and human capital metrics that hold executives accountable for the Company’s diversity, equity & inclusion (“DEI”) ambitions. The Committee establishes performance targets that are designed to be challenging, and payouts under our incentive plans can vary significantly based on performance.

	Key 2023 Metrics
	STIP			PRSUs
	Operating Income Growth			Earnings Per Share (“EPS”) Growth
	Systemwide Sales Growth			Return on Invested Capital (“ROIC”)
	New Restaurant Openings			Total Shareholder Return (“TSR”)
	Human Capital Metrics


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Executive Compensation

Second Principle: Drive Business Results & 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 our compensation program supports our current business strategy, as described below. In order to incentivize long-term value creation, we have generally delivered approximately 75% of our CEO’s compensation opportunity in the form of long-term incentive awards that vest over several years.

Third Principle: Pay Competitively

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

4. Aligning Compensation with Business Strategy

The Committee annually reviews our executive compensation program to evaluate whether the program and performance metrics are designed to help drive execution of our business ~~plan,~~strategy. As part of this review, the ~~Plan~~Committee may modify the design and/or performance metrics to ~~Win, which is customer-focused and concentrates on being better, not just bigger.~~ reflect the most significant priorities of our business strategy in a given year.

2023 Short-Term Cash Incentive (STIP)

The ~~key objectives~~design of our executive compensation program ~~are to motivate~~for 2023 is generally consistent with 2022, which the Committee believes is closely aligned with the Company’s strategic priorities and motivates our executives to ~~increase profitability~~produce strong business results. For the 2023 STIP, the Committee retained operating income and Systemwide sales (which together account for 70% of the award) as core metrics and added new restaurant openings as a core metric given the importance of restaurant development in driving top line growth as part of the evolution of the Company’s Accelerating the Arches growth strategy. In addition, our human capital metrics were streamlined to focus executives’ efforts towards established DEI ambitions. Further, the Committee retained the quantitative performance modifier that was introduced in 2022 and focused on converting applicants in our franchisee program into new restaurant owners and the diversity of such new restaurant owners, which was only applicable to business leaders with direct oversight of this process, including Ms. McDonald and Mr. Erlinger. The Committee believes this combination of metrics reflects the appropriate balance of driving both top- and bottom-line growth and motivating leaders to achieve key business objectives that are deemed critical to our Accelerating the Arches growth strategy. Refer to “Short-Term Cash Incentive (STIP)” on page 60 for more information on the details.

2023 Performance-Based Restricted Stock Units (PRSUs)

The Company’s 2023 PRSU design is also closely tied to the Accelerating the Arches growth strategy and drives long-term, sustainable growth. The 2023 PRSU design, which includes EPS growth and ROIC as core metrics, as well as a TSR modifier, is the same as the 2022 PRSU design. The Committee believes the program appropriately incentivizes executives to drive long-term shareholder ~~returns,~~value. Refer to ~~pay compensation that varies~~“Long-Term Incentive Compensation” on page 62 for more information on the details of our PRSU awards.

Weightings of Performance Metrics

*If EPS and ROIC performance results in a payout, a +/-25 point modifier based on TSR over the performance ~~and to compete for and retain managerial talent.~~period is triggered

~~PERFORMANCE HIGHLIGHTS~~

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 reinvestment of all dividends).


562024 proxy statement

~~Source: S&P Capital IQ~~

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8 ~~McDonald’s Corporation 2012~~

Executive Compensation

~~We performed well~~2024 Program Design

Our program design for 2024 will be largely consistent with the 2023 design, as the metrics included in our 2023 design continue to be closely aligned with our Accelerating the ~~primary measures that we use to determine executive compensation:~~Arches

>	~~Operating income increased by 14% (10% in constant currencies)* to $8.5 billion.~~

>	Earnings per share was $5.27, an increase of 15% (11% in constant currencies).*

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

~~Further highlights of our 2011 performance:~~

>	~~2011 was McDonald’s eighth consecutive year of positive comparable 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~~ growth strategy. The 2024 STIP design will retain the ~~last five years, we have produced consistent year-over-year growth in~~core metrics of operating income ~~(excluding one-time charges in 2007 associated~~growth, Systemwide sales growth and new restaurant openings, with the ~~sale~~weightings consistent with the 2023 design. The 2024 design will also introduce a strategic scorecard that will represent 15% of the STIP and will reflect management’s efforts towards key strategic initiatives, including the Company’s franchising strategy, employee engagement and established DEI ambitions. The design of the 2024-2026 PRSUs will remain the same as the prior year design.

5. Compensation Setting Process
The Committee reviews our ~~Latin American business) despite an exceptionally challenging global economic~~overall executive compensation program to evaluate whether it remains aligned with current business objectives and ~~operating environment. During this period,~~evolving best practices, including seeking feedback from 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 and restricted stock units, each as described in more detail below. The following highlights the Committee’s annual review process.
Input from our compensation consultant
The Committee’s independent compensation consultant reviews and provides input on overall compensation design and NEO target compensation opportunities.
Market considerations
The Committee considers peer data and market benchmarking pay data obtained from various sources.
Role of management
Management provides the Committee with its perspectives on compensation matters. No member of management is involved in decisions regarding their own compensation.
In determining the compensation for NEOs other than himself, Mr. Kempczinski provides input and recommendations on the performance of each NEO. The Committee Chair, along with our independent Chairman, leads the independent directors in the evaluation of Mr. Kempczinski’s performance. Based upon the results of this performance evaluation and informed by input from the Committee’s independent compensation consultant, the Committee reviews and approves the NEOs compensation, including Mr. Kempczinski. The Committee Chair regularly reports to our Board following Committee meetings.
Shareholder Engagement

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 “Proxy Summary” beginning on page 7). The Committee considers feedback received through these direct discussions with investors in addition to prior “Say-on-Pay” results. In 2023, the Company received approximately 92% approval of our “Say on Pay” vote. The Committee considered the voting results as part of its annual review of the program and determined that our compensation guiding principles and compensation elements continued to be appropriate and aligned with our strategy.

92%
Strong support for our executive compensation program at our 2023 Annual Shareholders’ Meeting.


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Executive Compensation

Internal Pay Equity

The Committee considers the following in determining our executives’ direct compensation opportunities: competitive pay levels; 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 long-term incentive awards received by Ms. McDonald and Mr. Banner). This approach permits us to meet specific business objectives without distorting pay equity. In line with our core values, our global pay principles emphasize the importance of compensation that is competitive, non-discriminatory, performance-based, transparent, and compliant with legal and regulatory standards.

Independent Compensation Consultant

The Committee has the sole authority to retain and dismiss an independent compensation consultant. The Committee has engaged Semler Brossy Consulting Group LLC (“Semler Brossy”) as its independent compensation consultant. Consistent with its Charter, the Committee regularly considers its compensation consultant’s independence. In October 2023, the Committee concluded that Semler Brossy 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.

Peer Companies

Consistent with our goal of providing competitive compensation to motivate and retain executive talent, we review compensation practices and levels for a group of peer companies that we believe best reflect our business. In setting target compensation levels for our executives, 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 Semler Brossy 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, based on the following screens:

The following table ~~lists~~sets forth our 2023 peer group, which was the ~~quantitative performance measures the Company uses in its~~same peer group used to evaluate executive compensation ~~program.~~decisions for 2022. The ~~rationale for~~graphic below compares the ~~use~~market capitalization of ~~each primary measure is explained below in the detailed discussions of each element of compensation.~~

these companies to McDonald’s.

●

The Coca-Cola Company

●

Colgate Palmolive Company

●

Johnson & Johnson

●

The Kraft-Heinz Company

●

Marriott International, Inc.

●

Mastercard Incorporated

●

Mondelēz International,Inc.

●

NIKE, Inc.

●

PepsiCo, Inc.

●

The Procter & Gamble Company

●

Starbucks Corporation

●

Target Corporation

●

Visa Inc.

●

Walgreens-Boots Alliance, Inc.

●

Wal-Mart Inc.

●

Yum! Brands Inc.

~~TIP~~

~~CPUP~~

~~Stock options~~

~~RSUs~~

~~Primary performance measure~~

~~Operating Income~~

~~ROTA~~

~~EPS~~

~~Share price~~

582024 proxy statement

~~Secondary performance measure~~

~~Comparable Guest Counts~~

~~Customer Satisfaction Opportunity~~

~~G&A Expense Control~~

~~TSR~~

~~We believe that our executive~~

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Executive Compensation

6. Performance-Based Compensation Metrics
Our 2023 compensation program ~~has been effective at incentivizing strong results by appropriately aligning pay~~included both annual and ~~performance. We seek to utilize~~long-term incentive awards, based on objective performance metrics (both absolute 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~~relative), as well as ~~potential for future performance. For example, Mr. Skinner’s individual~~our stock price 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 onas reflected in 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.

~~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:~~

graphic:

~~Pay~~

●

The Committee takes a holistic approach to establishing performance targets under our incentive compensation plans.

●

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

●

The ~~vast majority of total direct compensation is tied~~Committee focuses on the need to ~~performance.~~motivate and retain executives, without encouraging excessive risk taking.

●

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

~~Stock Ownership~~~~. We have stock ownership requirements for~~

In addition to the above metrics, a 15% performance modifier that is focused on converting registered applicants to our ~~senior management, including requiring our CEO~~franchisee program into new restaurant owners and the diversity of such new restaurant owners applies only to ~~own stock equal in value to at least six times his annual base salary.~~Ms. McDonald and Mr. Erlinger.

>	~~Bonuses~~~~. TIP and CPUP both require growth in operating income to yield a payout and utilize caps on potential payments.~~

>	~~Clawbacks~~~~. TIP and CPUP contain clawback provisions.~~

>	~~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.~~corporate.mcdonalds.com59

>	~~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~~Table of Contents

>	~~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).~~

—

~~James A. Skinner, Vice Chairman and Chief~~ Executive ~~Officer or CEO~~

—

~~Peter J. Bensen, Chief Financial Officer or CFO~~

—

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

—

~~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.~~

>	~~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 PROGRAM~~

~~ELEMENTS OF McDONALD’S EXECUTIVE COMPENSATION~~

~~ALLOCATION OF TOTAL DIRECT COMPENSATION AMONG THE ELEMENTS~~

Approximately 81% 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.

7. 2023 Direct Compensation Elements
Annual Compensation
~~McDonald’s Corporation 2012~~        11Base Salary
~~DETAILED INFORMATION ABOUT ELEMENTS OF COMPENSATION~~
> ~~Annual salary~~
In ~~setting~~determining annual base salary ~~levels, we take into account competitive considerations,~~and any adjustments, the Committee considers a variety of factors, including market competitiveness, scope of responsibilities, individual performance, tenure in position, internal pay equity and the effect on our general and administrative expenses. ~~For 2011, decisions regarding executive salaries were initially informed by~~Taking into consideration all of these factors, the Committee increased the 2023 base salary for Mr. Kempczinski to more closely align to the market median. The Committee did not increase the base salary for any other NEO.

NAMED EXECUTIVE OFFICER

2022 SALARY ($)*

2023 SALARY ($)*
Christopher Kempczinski

1,380,000

1,425,000
Ian Borden

900,000

900,000
Gillian McDonald**

804,000

808,365
Jonathan Banner

700,000

700,000
Joseph Erlinger

840,000

840,000

*
Salary information is annualized and amounts are effective March 1 of applicable year (except Ms. McDonald and Mr. Banner’s 2022 salary amounts, as each commenced employment with the Company in September 2022).
**
Ms. McDonald’s base salary is paid in British Pounds (“GBP”), with an annualized salary of 650,000 GBP for 2022 and 2023. The amounts reflected in the table above are based on the average monthly exchange rate for 2022 of 1 GBP = 1.237512 USD and for 2023 of 1 GBP = 1.243639 USD.
Short-Term Cash Incentive (STIP)
In setting individual STIP targets, the Committee considers a ~~review~~variety of ~~external salary information at our stated objective~~factors, including individual performance, experience, market competitiveness, retention, succession, and internal equity considerations. Taking into consideration all of these factors, the Committee increased the 2023 STIP targets for each of the ~~50th percentile~~NEOs other than Mr. Kempczinski, reflecting an increase in peer group market median short-term incentive targets and the Company’s commitment to a pay for performance philosophy. These increases are detailed in the chart below, which shows the target STIP payment as a percent of ~~our peer group. However, executives’ salaries vary based on individual circumstances~~salary for all NEOs in 2022 and may be above or below the 50th percentile. For example, in 2011, our CEO’s salary was at approximately the 70th percentile due to his long tenure and strong contributions to the success of the Company. In 2011, NEOs’ salaries were increased by between 2.8% and 4.4% over 2010 levels.2023.
NAMED EXECUTIVE OFFICER

2022 STIP (%)

2023 STIP (%)
Christopher Kempczinski

200

200
Ian Borden

120

125
Gillian McDonald

100

120
Jonathan Banner

80

90
Joseph Erlinger

110

120

>
~~TIP~~
602024 proxy statement
~~Our TIP is designed primarily to reward growth in annual operating income, which~~

Table of Contents

Executive Compensation

For 2023, the STIP design was aligned with our Accelerating the Arches strategy and rewarded growth in operating income, Systemwide sales, new restaurant openings and performance against human capital metrics. Operating income growth requires us to balance increases in revenue with financial discipline to produce strong margins and cash flow. Systemwide sales is an important metric in a franchise business as income generation is closely correlated to sales growth and it is a measure of the financial health of our franchisees.New restaurant openings was introduced as a new metric for 2023 given the importance of restaurant development in driving top-line growth as part of the evolution of our Accelerating the Arches strategy. The new restaurant openings metric measures restaurants opened in our U.S. and International Operated Markets (“IOM”) segments. Human capital metrics align with our strategic aspirations and hold executives accountable for efforts towards the Company’s DEI ambitions. To further our franchising strategy, the STIP design includes a modifier that is focused on converting registered applicants to our franchisee program into new restaurant owners and the diversity of such new restaurant owners, as detailed below.

The chart below provides 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 (referred~~Systemwide sales growth, and new restaurant openings necessary to ~~as Corporate) basis or an AOW basis, or a combination of~~achieve threshold, target, and maximum payouts under the ~~two, depending on~~2023 STIP for the ~~executive’s responsibilities. In addition to~~Corporate segment:

2023*

THRESHOLD

TARGET*

MAXIMUM
Operating income growth

0%

9.5%

19.7%
Systemwide sales growth

0%

8.3%

16.2%
New restaurant openings

382

449

477

*
Payout percentage interpolated for results that fall between each of the performance levels specifically identified. The maximum payout as a percentage of target was 240% for the operating income growth and Systemwide sales growth metrics and 133% for the new restaurant openings metric.

Performance vs. 2023 STIP Targets
The following table shows the operating income, growth, final TIP 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 improvementsSystemwide sales, 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 TIP 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.
~~The operating income~~new restaurant opening targets and results under the ~~2011 TIP~~2023 STIP for the Corporate, U.S. and IOM segments. STIP payouts are ~~shown~~capped at 200% of the target award.


OPERATING INCOME (“OI”)*
(40% WEIGHTING)

SYSTEMWIDE SALES (“SWS”)
(30% WEIGHTING)

NEW RESTAURANT OPENINGS (“NRO”)
(15% WEIGHTING)

















TARGET 2023

2023

TARGET 2023

2023

OI GROWTH

2023

ADJUSTED

SWS GROWTH

2023

ADJUSTED

TARGET

OVER

ADJUSTED

OI GROWTH

TARGET

OVER

ADJUSTED

SWS GROWTH

TARGET


2023 OI

2022

OI

OVER 2022

2023 SWS

2022

SWS

OVER 2022

2023 NRO

2023 NRO

($B)

(%)

($B)

(%)

($B)

(%)

($B)

(%)

(#)

(#)
Corporate

11.4

9.5

12.0

16.0

128.0

8.3

131.5

11.2

449

410
U.S.

5.4

5.6

5.8

12.3

51.0

4.7

53.1

9.0

120

112
IOM

5.6

7.7

5.9

12.8

42.9

8.0

43.6

9.8

329

298

*
The 2023 operating income target and results above have been adjusted in accordance with the Committee’s pre-established guidelines. See page 64 for further information on the Committee’s guidelines as well as 2023 STIP adjustments.


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For 2023, our human capital metrics focused on the diversity of women and underrepresented groups in leadership roles and represented 15% weighting in the STIP at target, with the opportunity to earn from 0 to 20 STIP points. In early 2024, the Committee reviewed our performance with respect to the human capital metrics under the 2023 STIP and determined that we continued to make progress in this area. The following ~~table:~~was awarded for our achievements against these metrics:

HUMAN CAPITAL METRICS

STIP Points Awarded

Performance Factor (%)
Diverse representation in leadership roles

13.9

92.7
With respect to the modifier applicable to certain NEOs’ 2023 STIP payouts, the Committee established metrics to measure the conversion of registered applicants into new restaurant owners, and the diversity of such new restaurant owners. This modifier applied to the IOM segment results for Ms. McDonald and the U.S. segment results for Mr. Erlinger. Target-level achievement has a neutral impact on STIP results, with upside and downside opportunity ranging from +/- 15 STIP points, which impacts the IOM segment results for Ms. McDonald and the U.S. segment results for Mr. Erlinger. In early 2024, the Committee reviewed the performance of each of the IOM and U.S. segments relative to the pre-established goals, with the performance detailed below:

MODIFIER

Segment

STIP Points Applied
to Segment Results
Conversion of registered applicants into new restaurant owners and diversity of such new owners

IOM

4.4

U.S.

(6.4)

Individual 2023 STIP Payouts

(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 [     ].
~~In addition (as reflected in the table on page [     ]), the IPF for each NEO was above 100%.~~
~~Consistent with our 2011 results~~The 2023 STIP target and ~~our executives’ individual performance, TIP awards were above target. The target awards and final TIP~~actual payouts for ~~the~~our NEOs are shown in the following ~~table:~~table.

TARGET

2023 STIP

2023 STIP

PAYMENT AS

2023

PAYMENT AS

APPLICABLE TEAM

PERFORMANCE

PERCENT OF

TARGET STIP

2023 STIP

PERCENT OF
NAMED EXECUTIVE OFFICER

FACTORS

FACTORS (%)⁽¹⁾

SALARY (%)

PAYOUT ($)

PAYOUT ($)⁽¹⁾

TARGET (%)⁽¹⁾
Christopher Kempczinski

Corporate (85%)

149.9

200

2,850,000

4,027,620

141.3

Human Capital (15%)

92.7

Ian Borden

Corporate (85%)

149.9

125

1,125,000

1,589,850

141.3

Human Capital (15%)

92.7

Gillian McDonald⁽²⁾

IOM (63.75%)

137.9

120

970,038

1,296,651

133.7

Corporate (21.25%)

149.9

Human Capital (15%)

92.7

Jonathan Banner

Corporate (85%)

149.9

90

630,000

890,316

141.3

Human Capital (15%)

92.7

Joseph Erlinger

U.S. (63.75%)

183.2

120

1,008,000

1,638,492

162.5

Corporate (21.25%)

149.9

Human Capital (15%)

92.7

(1)
The Performance Factors, the 2023 STIP Payout and 2023 STIP Payment as Percent of Target each include the impact of the modifier that is focused on converting registered applicants to our franchisee program into new restaurant owners and the diversity of such restaurant owners for Ms. McDonald for the IOM segment and Mr. Erlinger for the U.S. segment, as further described in the Performance vs. 2023 STIP Target section starting on page 61. The final performance factor for the IOM segment was 133.5%, and the performance factor for Ms. McDonald for the IOM segment reflects the increase of 4.4 STIP points, based on the modifier. The final performance factor for the U.S. segment was 189.6%, and the performance factor for Mr. Erlinger for the U.S. segment reflects the decrease of 6.4 STIP points, based on the modifier.
(2)
Ms. McDonald’s 2023 target STIP payout has been converted to USD based on the average monthly exchange rate for 2023 of 1 GBP = 1.243639 USD.
Long-Term Incentive Compensation
000000.0000000000.0 000000.0000000000.0 000000.0000000000.0 000000.0000000000.0
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~~Consistent with prior years, our long-term incentive compensation in 2023 consisted 50% of PRSUs and 50% of stock options. The Committee believes this mix of awards supports our pay-for-performance philosophy. Executives are motivated by PRSUs to achieve robust financial performance targets over a three-year period, and stock options focus executives on actions that create shareholder value over the ~~NEOs’ 2011 TIP awards begins on page [     ].~~long term.


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12 ~~McDonald’s Corporation 2012~~

Executive Compensation

Setting 2023 lONG-tERM iNCENTIVE Award Values

In determining the long-term incentive awards, the Committee considers several factors, including market practices, scope of responsibilities, individual performance, tenure in position, internal pay equity and the effect on our general and administrative expenses. In the case of Mr. Kempczinski, to further align his interests with the Company’s shareholders, the Committee elected to deliver the majority of Mr. Kempczinski’s 2023 total compensation increase in the form of additional long-term incentive awards rather than cash compensation. Additionally, Mr. Kempczinski’s increase was intended to further the Committee’s goal of aligning his compensation more competitively within our peer group. The Committee approved an increase for Mr. Borden in connection with his promotion to CFO. In the case of Mr. Erlinger, the Committee approved an increase to better reflect market competitiveness.

The following table illustrates the 2022 and 2023 target annual long-term incentive award values for our NEOs, including the approved increases as described above. This table does not reflect sign-on long-term incentive awards approved for Ms. McDonald and Mr. Banner in connection with the commencement of their employment with the Company in 2022, but which were granted in 2023. Please refer to the New Hire Compensation section below for more details on these sign-on awards.

NAMED EXECUTIVE OFFICER

2022 AWARD VALUE ($)

2023 AWARD VALUE ($)
Christopher Kempczinski

11,500,000

13,000,000
Ian Borden

3,250,000

4,000,000
Gillian McDonald

-

2,750,000
Jonathan Banner

-

2,000,000
Joseph Erlinger

3,500,000

3,750,000

Performance-Based Restricted Stock Units (PRSUs)
2023 PRSUs
Consistent with prior years, 50% of the target annual long-term incentive award values for our NEOs were granted in the form of PRSUs. PRSUs provide the right to receive a share of our common stock, 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 our common stock.
PRSUs granted in 2023 will vest on the third anniversary of the grant date, subject to our achievement of two key financial metrics, EPS growth (weighted 75%) and ROIC (weighted 25%). The Committee incorporated the planned level of share repurchases in setting the EPS targets. The PRSUs are also subject to a modifier based on our relative TSR measured over the three-year performance period vs. the S&P 500 Index. 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 our 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 (subject to a modifier of up to an additional 25 percentage points based on our relative TSR vs. the S&P 500 Index over the performance period), plus any dividend equivalents earned on the PRSUs.

>	~~CPUP~~
	corporate.mcdonalds.com63

~~We believe it is important~~

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Executive Compensation

The chart below provides the three-year average annual EPS growth and ROIC necessary to ~~have a long-term component based on measures that are not limited~~achieve threshold, target, and maximum payouts for the 2023–2025 PRSUs.

2023–2025*

THRESHOLD

TARGET

MAXIMUM
Three-Year Compound Annual EPS growth

0.0%

9.0%

13.0%
Three-Year Average of Annualized ROIC

16.0%

20.0%

24.0%

*
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^th percentile
-25%
35^th percentile
-12.5%
50^th percentile
0%
65^th percentile
+12.5%
80 – 100^th percentile
+25%

*
Payouts between 19th and 79th percentiles will be interpolated.
2021 PRSUs
In 2021, the Committee granted PRSUs to ~~stock price. As operating income focuses on~~our executives, which were subject to EPS, ROIC and relative TSR performance metrics for the ~~key elements associated with driving our business and ROTA measures~~2021–2023 performance period. Driven by the ~~efficiency~~execution of our ~~capital investments, we believe these strike an appropriate balance as~~Accelerating the ~~primary measures~~Arches growth strategy, the Company achieved the maximum performance level for both our ~~long-term cash incentive plan. CPUP also incorporates a~~EPS growth and ROIC and our TSR ~~multiplier that rewards strong shareholder returns relative~~was at the 67th 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 payout~~resulting 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%187.5% of the target ~~award. Based upon performance through 2011, we currently expect~~amount in early 2024.
Stock Options
The remaining 50% of the ~~2010–2012 CPUP payout factor to be~~target annual long-term incentive award values for our NEOs were granted in the ~~range~~form of ~~170%–190% of target awards. As a result of these awards, we expect 2012 compensation for all members of senior management~~options. Options granted 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 relative to the S&P 500 Index which functions as a multiplier (either positive or negative). Detailed information about the calculation of the 2010 CPUP awards was included in our ~~2011 proxy statement.~~
> ~~Stock options~~
~~Options align the compensation executives receive to the return earned by shareholders, thereby incentivizing executives to increase shareholder value. Options, including those granted in 2011,~~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.
8.Adjustments to Reported Results
In order to focus our executives on the fundamentals of our 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 charges to have a significant impact on payouts.
The ~~Company’s policies~~Committee considers potential adjustments pursuant to pre-established guidelines, including materiality, to provide consistency in how the Committee views the business. The following graphic illustrates the three categories (“strategic,” “regulatory” and ~~practices regarding option grants, including~~“external”) of items the ~~timing~~Committee may exclude from financial results for purposes of ~~grants~~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 ~~the determination~~in any given year, aggregate adjustments may increase or decrease incentive payouts.
As part of the ~~exercise price, are described~~Accelerating the Arches strategy, certain initiatives were put into place which had an impact on ~~page [    ].~~financial results. The Company incurred restructuring costs associated with Accelerating the Organization, the Company’s internal effort to modernize ways of working, as well as accelerated restaurant closing charges, representing expenses associated with the Lease Right of Use Asset and fixed asset write-offs. In addition, the Company incurred costs related to the write-off of impaired software no longer in use. Consistent with its pre-established adjustment guidelines, the Committee adjusted the financial results for the purposes of determining incentive payouts so that employees were not impacted by events beyond their control. Refer to the following table for more details on the adjustments the Committee approved with respect to 2023 STIP awards.

>
642024 proxy statement

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Executive Compensation

2023 STIP Adjustments

CATEGORY
ADJUSTMENTS
ADJUSTMENT TO
OPERATING
INCOME ($M)*
Strategic
Asset impairment and gains/losses related to strategic initiatives, including restructurings, acquisitions, divestitures, and developmental licensee transactions
Exclude costs associated with the ~~RSUs~~Accelerating the Arches strategic actions

Exclude costs related to impairment of software assets
293

72
Regulatory
Changes in tax or accounting law or regulations
N/A
N/A
External
Extraordinary, unforeseeable events, such as natural disasters or the impact of social or political unrest that are outside of management’s control
N/A
N/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 ~~value~~following chart provides the net adjustment (other than for foreign currency translation), as described above, by segment, made to 2023 operating income for purposes of ~~RSUs is linked~~calculating STIP payouts. There were no adjustments made to ~~our stock price. The performance-based vesting conditions based upon~~Systemwide sales.

Operating Income ($M)
Corporate
365
U.S.

71

International Operated Markets (IOM)
100

2021 PRSU Adjustments
In determining EPS ~~growth require~~and ROIC results for 2021–2023 PRSU awards, the ~~executives~~Committee adjusted performance consistent with the above pre-established guidelines, adjusting performance for the same items that applied to ~~achieve~~STIP awards for the ~~Company’s strategic objectives in order to vest in~~respective performance years. 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~~aggregate, the ~~end of a three-year service period, subject~~Committee’s adjustments pursuant to the ~~Company’s achievement of EPS growth targets over that period. The target performance level for~~pre-established guidelines increased the RSUs granted to executives in 2011 is 6% compounded annual growth in EPS on a cumulative basis over baseline 2010 EPS of $4.60. If target performance is achieved (cumulative EPS of $15.53), the full number of RSUs covered by the 2011 awards will vest. Achievement of below target performance reduces the number of RSUs that will vest, but above target performance does not increase the number of RSUs earned.2021–2023 PRSU payouts.
9.Other Compensation Elements
~~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%.~~Retirement Savings Arrangements
> ~~Retirement savings plans~~
~~The NEOs participate in our tax-qualified defined contribution retirement savings plan and a supplemental non-qualified deferred compensation retirement plan.~~ We believe a competitive retirement program ~~aligns with market practices, and thereby~~ contributes to the recruitment and retention of top executive talent. We do not have any supplemental executive retirement plans. Our U.S.-based NEOs only participate in the same tax-qualified defined contribution retirement savings plan and non-tax-qualified deferred compensation retirement plan that are applicable to U.S.-based employees.
Perquisites & Other Benefits
We provide certain limited perquisites to our NEOs, including financial planning, physical examination (which are also available for our NEOs’ spouses), life insurance and matching charitable donations. Mr. Kempczinski is permitted to use our corporate aircraft for personal travel; however, we require full reimbursement of incremental costs associated with personal use of the aircraft once our costs reach 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 our Company; accordingly, we provide risk-based executive security for select NEOs. We do not provide any tax gross-ups on the perquisites described above.

>	~~Severance and change in control arrangements~~
	corporate.mcdonalds.com65

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Executive ~~Retention Replacement Plan (ERRP). Mr. Skinner participates~~Compensation

NEOs also participate in the ~~Executive Retention Replacement Plan or ERRP. Since Mr. Skinner fulfilled~~broad-based benefit and welfare plans available to Company staff. We maintain 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 a global assignment to local employment in another country; and domestic and international relocation policies, covering employees who relocate in connection with their employment. These policies provide certain relocation and expatriate benefits, which are intended to equalize cost of living differences between the ~~retention period from 1999 through 2002~~home and ~~satisfies the retirement age requirement under the ERRP, he is entitled to retire at any time and receive certain cash benefits,~~assignment country, as well as to facilitate the ~~vesting of all of his outstanding equity awards. Options would continue~~transition associated with an international assignment or domestic relocation. During 2023, Messrs. Borden and Erlinger received trailing tax equalization benefits from prior international assignments.

See footnote 4 to ~~become exercisable~~the “2023 Summary Compensation Table” beginning on ~~their originally scheduled dates and RSUs would be paid out~~page 69 for additional details on the ~~originally scheduled dates, based on the Company’s achievement~~costs of the ~~applicable performance goals. In addition, 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 benefits~~provided to our NEOs.

Severance & Change in Control Arrangements

We have a U.S. severance plan that covers all U.S.-based officers, including our NEOs. 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 ~~[ ].~~

73. Ms. McDonald is not covered by the U.S. Severance Plan, and pursuant to the terms of her offer letter, Ms. McDonald is entitled to 26 weeks’ advanced written notice of a termination of her employment (or a payment in lieu of such notice) for any reason other than her gross misconduct or persistent and continued misconduct.
~~McDonald’s Corporation 2012~~        13
~~Change in control employment agreements.  The Company has~~We do not have any change in control ~~employment~~ agreements, ~~with its NEOs. Benefits under~~and we do not provide for any single-trigger change of control benefits or Section 280G tax gross-up payments. Refer to 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~~for further information regarding the severance benefits payable 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, generallyour NEOs in the ~~case~~event of a termination of employment.
10.New Hire Compensation
Gillian McDonald
In September 2022, the ~~CEO only, personal use~~Company hired Ms. McDonald as President, International Operated Markets. In connection with the commencement of her employment, the Committee approved a sign-on long-term incentive grant consisting of time-based RSUs, PRSUs and stock options, which were granted in February 2023 at the same time as the Company’s ~~aircraft.~~annual long-term incentive awards. These sign-on long-term incentive awards were granted to replace long-term incentive awards Ms. McDonald forfeited at her previous employer upon her joining the Company. The Company does not provide any 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.
~~CERTAIN ADJUSTMENTS IN MEASURING PERFORMANCE~~
In measuring financial performance the Committee focuses on the fundamentals of the underlying business performance and adjusts for items that are not indicative 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~~time-based RSUs granted to ~~the executives~~Ms. McDonald had a grant value of $2 million and vest in ~~2011 were:~~
> ~~impairment charges, net of taxes.~~
~~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 inputequal installments on ~~compensation for~~ each of the ~~executives. In 2011, prior~~first two anniversaries of the grant date. The PRSUs awarded to ~~each Committee meeting, the CEO~~Ms. McDonald had a grant value of $750,000 and ~~the CFO provided input~~vest on the ~~materials prepared by management and presented~~third anniversary of the grant date, subject to the achievement of performance goals approved in connection with the 2023 annual PRSUs, as described on page 70. The options granted to Ms. McDonald had a grant value of $750,000 and vest in equal installments on each of the first four anniversaries of the grant date.
Jonathan Banner
In September 2022, the Company hired Mr. Banner as Executive Vice President and Chief Global Impact Officer. In connection with the commencement of his employment, the Committee ~~(except~~approved a sign-on long-term incentive grant consisting of time-based RSUs and PRSUs, which was granted in February 2023 at the same time as the Company’s annual long-term incentive awards. These sign-on long-term incentive awards were granted to replace long-term incentive awards Mr. Banner forfeited at his previous employer upon joining the Company. The time-based RSUs granted to Mr. Banner had a grant value $2.4 million, and vest in equal installments on each of the first two anniversaries of the grant date. The PRSUs awarded to Mr. Banner had a grant value of $1.35 million, and vest on the third anniversary of the grant date, subject to the achievement of performance goals approved in connection with ~~respect to their own compensation).~~the 2023 annual PRSUs, as described on page 70.

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14 ~~McDonald’s Corporation 2012~~

Executive Compensation

~~THE ROLE OF COMPENSATION CONSULTANTS~~11.Compensation Policies & Practices
Policy Regarding Management’s Stock Ownership
~~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 $27.0 billion (at the 35th percentile of our comparator group).
~~McDONALD’S 2011 PEER GROUP COMPANIES~~
~~(Dollars In billions)~~
00000000000 00000000000 00000000000
Peer    Market capitalization ($)(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 MANAGEMENT~~
~~The Company has adopted~~We maintain stock ownership requirements ~~for senior management~~ because we believe ~~they~~executives will more effectively pursue the long-term interests of shareholders if they are shareholders themselves. ~~The following table provides our current stock ownership requirements, by level.~~
~~Level~~
~~Stock ownership requirements~~
~~(multiple of base salary)~~
~~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~~
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 hasExecutives have five years to ~~satisfy the requirements. Currently, all executives meet or are~~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 ~~their respective~~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 illustrates our stock ownership requirements.
STOCK OWNERSHIP REQUIREMENTS
MULTIPLE OF SALARY
Presidentand CEO

■■■■■■ 6x
Other NEOs

■■■■ 4x
~~Further,~~
The Committee reviews compliance with these stock ownership requirements annually. Based on the ~~Company has~~most recent annual evaluation, all of our NEOs are in compliance.
Policy Regarding Prohibition on Pledging & Hedging
We have adopted restrictions that prohibit ~~certain employees, including all of senior management,~~executives from engaging in pledging and/or derivative transactions to hedge the economic risk associated with their ~~stock ownership. These restrictions also require approval~~ownership of our common stock. Further, executives may not enter into any 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~~

~~CLAWBACK~~Compensation Recoupment & Forfeiture Provisions

The ~~Company’s~~Company has adopted a clawback policy intended to comply with the SEC rules and NYSE listing standards that require the Company to recoup certain incentive-based compensation ~~plans contain clawback provisions~~erroneously awarded to current and former executive officers of the Company in the event the Company is required to file certain financial restatements.

In addition, our STIP awards and long-term incentive grant agreements for executives provide that ~~apply~~we may terminate awards and/or recapture previously paid awards if a participant engages in willful fraud that (i) causes harm to ~~senior management.~~our Company or (ii) is intended to manipulate performance goals either during employment, or after employment has terminated.

~~Senior management~~Furthermore, our executives have executed restrictive covenants. An executive who violates the restrictive covenants to which they are subject will forfeit outstanding long-term incentive awards, whether or not vested, and may be required to repay ~~compensation~~awards that have previously ~~awarded under TIP and CPUP in certain circumstances (for example, the commission of fraud) and 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 NEO 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 risks to the Company 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.

~~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 the Company, and therefore is the most highlybeen paid.

~~POLICY WITH RESPECT TO DEDUCTIBILITY OF COMPENSATION~~Policies & Practices Regarding Long-Term Incentive Awards

We ~~generally design our compensation programs to allow the Company to deduct compensation expense under Section 162(m)~~do not grant long-term incentive awards when in possession 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) of the Code.

~~POLICIES AND PRACTICES REGARDING EQUITY AWARDS~~

~~Equity awards cannot be granted when the Company possesses~~ material non-public information. ~~The Company~~While we generally ~~makes~~make broad-based ~~equity~~long-term incentive grants at approximately the same time each year following our release of full-year financial ~~information; however, the Company~~results, we may choose to make ~~equity awards~~long-term incentive grants outside of the annual broad-based grant ~~(i.e.~~(e.g., ~~for~~as 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~~our common stock on the date of grant.


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Executive Compensation

12.Mitigating Risk in Executive Compensation
~~McDonald’s Corporation 2012~~ 17Our executive 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 our 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, the Committee’s independent compensation consultant assists in the review of our global incentive compensation programs, including both broad-based programs and executive compensation programs, taking into consideration the factors described above. Based on this review, the Committee believes that the risks arising from our compensation programs are not reasonably likely to have a material adverse effect on our Company.


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Executive Compensation

~~COMPENSATION TABLES~~
Compensation Tables
2023 Summary Compensation Table
The following table ~~below~~ summarizes the total compensation earned by ~~or paid to~~ our NEOs in ~~2009, 2010~~2023 and, ~~2011.~~if required, 2022 and 2021.

NON-EQUITY

NAME AND

STOCK

OPTION

INCENTIVE PLAN

ALL OTHER

PRINCIPAL POSITION

YEAR

SALARY

AWARDS

AWARDS

COMPENSATION

COMPENSATION

TOTAL
(a)

(b)

($)(c)⁽¹⁾

($)(e)⁽²⁾

($)(f)⁽³⁾

($)(g)

($)(i)⁽⁴⁾

($)(j)
Christopher Kempczinski

2023

1,417,500

6,500,181

6,500,043

4,027,620

709,657

19,155,001
President and CEO

2022

1,368,833

5,750,227

5,750,012

4,240,878

660,564

17,770,514

2021

1,302,500

7,000,179

7,000,002

4,368,745

356,706

20,028,132
Ian Borden

2023

900,000

2,000,162

2,000,026

1,589,850

315,432

6,805,470
Executive Vice President and Global CFO

2022

847,257

1,625,070

1,625,032

1,807,170

2,018,558

7,923,087

2021

791,133

2,125,213

2,125,001

1,532,408

1,702,035

8,275,790
Gillian McDonald⁽⁵⁾⁽⁶⁾

2023

808,365

4,125,589

2,125,031

1,296,651

145,288

8,500,924
President, International Operated Markets

Jonathan Banner⁽⁷⁾

2023

700,000

4,750,395

1,000,040

890,316

5,992

7,346,743
Executive Vice President, Chief

Global Impact Officer

Joseph Erlinger

2023

840,000

1,875,238

1,875,021

1,638,492

180,046

6,408,797
President, McDonald’s USA

2022

835,833

1,750,034

1,750,002

1,346,315

235,838

5,918,022

2021

808,333

2,250,034

2,250,001

1,767,484

369,552

7,445,404

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~~
(1)
~~Reflects annual increases in salary that took effect March 1, 2011. Annualized~~
Annual base salaries as of December 31, ~~2011~~2023 for our NEOs were as follows: Mr. Kempczinski: $1,425,000; Mr. Borden: $900,000; Ms. McDonald: $808,365 (GBP 650,000) ; Mr. Banner: $700,000, and Mr. Erlinger: $840,000.
~~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 (the “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, RSUs~~date. 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 ~~target levels~~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 63). PRSUs are subject to a cap of ~~diluted EPS growth. Additional information~~200% of target. Further, if the Company’s absolute TSR for the three-year performance period is ~~disclosed~~negative, then the cap is 100% of target. The fair value of PRSUs that include the TSR modifier is determined using a Monte Carlo valuation model. Assuming the highest level of performance is achieved for the 2023 PRSU awards, the maximum value of these awards at the grant date would be as follows: Mr. Kempczinski: $13,000,362; Mr. Borden: $4,000,324; Ms. McDonald: $4,250,724; Mr. Banner: $4,700,672; and Mr. Erlinger: $3,750,476. This column also includes certain time-based restricted stock units (“RSUs”) granted to Ms. McDonald and Mr. Banner in 2023, as described in footnotes 6 and 7 below, the 2023 Grants of Plan-Based Awards table on page ~~[    ] and~~70, the Outstanding Equity Awards at ~~2011 Year-end~~2023 Year-End table on ~~pages [    ]~~page 71, and ~~[    ]. A more detailed~~the discussion ~~of the assumptions used~~ in the ~~valuation of RSU awards may be found in the Notes to Consolidated Financial Statements under “Share-based Compensation”~~CD&A on ~~pages 41 and 42 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2011.~~page 66.
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 48 and 59 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.
(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 ~~2011~~2023 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%~~21.6%; an expected annual dividend yield of ~~3.2%~~2.3%; a risk-free return of ~~2.8%~~3.9%; and expected option life based on historical experience of ~~6.3~~5.8 years. Additional information about options is disclosed in the 2023 Grants of Plan-Based Awards table on page 70 and the Outstanding Equity Awards at ~~2011 Year-end~~2023 Year-End table on ~~pages [    ] and [    ].~~page 71. 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 31~~pages 48 and 59 of the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2011.~~2023.
(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 ~~2011~~2023 includes the Company’s contributions to ~~the Profit Sharing and Savings~~its 401(k) Plan and ~~Excess Benefit~~Amended & Restated Deferred Compensation Plan, except for Ms. McDonald who receives an allowance in lieu of participating in our UK retirement plan. Details on the Company’s contributions to its 401(k) Plan and Amended & Restated Deferred ~~Bonus~~Compensation Plan ~~as follows:~~and the allowance provided to Ms. McDonald are below:
~~James A. Skinner~~
~~$597,333~~
~~Peter J. Bensen~~
~~196,684~~
~~Donald Thompson~~
~~268,417~~
~~Timothy J. Fenton~~
~~156,250~~
~~Janice L. Fields~~
~~137,333~~

Christopher Kempczinski

$
343,628
Ian Borden

$
84,906
Gillian McDonald

$
101,046
Jonathan Banner

$
0
Joseph Erlinger

$
132,679
~~Also~~
The Company’s incremental cost of perquisites is included in the amounts provided in this column and based on actual charges to the Company. This column also includes the following categories of perquisites: ~~personal use of Company-provided cars or an allowance; life insurance;~~ financial counseling; annual physical examinations for the executives and their spouses; executive ~~security;~~security (for select NEOs); matching charitable ~~donations; limited~~donations and Company-paid life insurance (for U.S.-based NEOs). U.S.-based NEOs received a car allowance through March 2023, when the company car program for executives was discontinued in the U.S. The company car program was maintained in certain other markets, including the UK, and Ms. McDonald received a car allowance in the amount of $30,096. In addition, this column includes personal ~~items; and personal~~ use ~~(which includes travel for service on boards of directors other than our Board)~~ of the Company’s aircraft ~~(with~~by the CEO. The Company requires full reimbursement of costs associated with personal use once Company costs reach a ~~net~~threshold of $250,000, including fuel, on-board catering, landing/handling fees, hourly maintenance costs and crew costs attributable to personal flights and excluding fixed costs, such as pilot salaries and the cost of the aircraft. In addition to personal flights with a cost of $250,000, Mr. Kempczinski used the ~~Company~~Company’s aircraft to travel to outside Board meetings at a cost of $69,301 in ~~2011 of $108,851 for Mr. Skinner).~~2023. 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~~travel or to be joined by their spouses on the ~~aircraft.~~aircraft for business travel. In 2023, Messrs. Kempczinski and Erlinger received benefits related to spousal travel to business events; however, this travel did not result in any incremental cost to the Company. For all NEOs, the amount reported also includes personal costs associated with an offsite business meeting, including in some cases, spousal costs. The Company does not provide any tax gross-ups on the perquisites described above.


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Mr. ~~Fenton previously performed an international assignment in Hong Kong. As a result, he~~Borden and Mr. Erlinger received certain ~~tax-related~~ benefits ~~in connection with his~~related to previous international ~~assignment. In particular,~~assignments. Mr. ~~Fenton participated in the Company’s~~Borden received 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 paymentpreparation services in the amount of ~~$86,195 on~~$38,739, the shipment of household goods in the amount of $29,203, administrative services associated with his global relocation, as well as tax equalization in the amount of $126,165. Mr. ~~Fenton’s behalf. Consistent with Company policy, the Company also provided Mr. Fenton with~~Erlinger received tax preparation services, ~~at a cost of $29,514.~~

~~McDonald’s Corporation 2012~~ 19

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 determinedtaxes owed under the ~~Code based on four times the Standard Industry Fare Level (SIFL) rate per person or (ii) 200% of the actual fuel cost.~~

2020 tax equalization benefit, as well as tax equalization.

~~(6)~~

(5)

Certain amounts for Ms. ~~Fields was~~McDonald were paid in British Pounds and, when the exact payment date is available, reflect the exchange rate on the date the respective payments were made. When information is not ~~an executive officer in 2009.~~available, the amounts reflect the average monthly exchange rate for the reporting year.

~~Grants of Plan-based Awards–Fiscal 2011~~

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

~~(1)~~
(6)
~~Reflects~~
Consistent with prior Company practice, Ms. McDonald received equity grants intending to align with the Company’s annual performance cycle and buy out her outstanding long-term incentives from her prior employer. These grants include a sign-on incentive equity grant of $2,000,000 in time-based RSUs vesting equally on the first two anniversaries of the grant date, $750,000 in stock options vesting equally on the first four anniversaries of the grant date and $750,000 in PRSUs vesting on the third anniversary of the grant date, subject to ~~performance-based vesting conditions under~~ the ~~Equity Plan. The RSUs vest on February 9, 2014, subject to~~ achievement of ~~a specified EPS growth target during~~performance conditions (which are the ~~performance period ending on December 31, 2013. The performance target~~same as for ~~all RSU~~the PRSU awards granted to the other NEOs in ~~2011 is compounded~~2023). For more information, see the 2023 Grants of Plan-Based Awards table on page 70 and the Outstanding Equity Awards at 2023 Year-End table on page 71, as well as the discussion in the CD&A on page 66.
(7)
Consistent with prior Company practice, Mr. Banner received equity grants intending to align with the Company’s annual ~~EPS~~performance cycle and buy out his outstanding long-term incentives from his prior employer. These grants include a sign-on incentive equity grant of $2,400,000 in time-based RSUs vesting equally on the first two anniversaries of the grant date and $1,350,000 in PRSUs vesting on the third anniversary of the grant date, subject to the achievement of performance conditions (which are the same as for the PRSU awards granted to the other NEOs in 2023). For more information, see the 2023 Grants of Plan-Based Awards table on page 70 and the Outstanding Equity Awards at 2023 Year-End table on page 71, as well as the discussion in the CD&A on page 66.

2023 Grants of Plan-Based Awards

ALL OTHER

ALL OTHER

GRANT

STOCK

OPTION

EXERCISE

DATE FAIR

AWARDS:

AWARDS:

OR BASE

VALUE OF

ESTIMATED FUTURE PAYOUTS

ESTIMATED FUTURE PAYOUTS

NUMBER

NUMBER OF

PRICE OF

STOCK

UNDER NON-EQUITY

UNDER EQUITY

OF SHARES

SECURITIES

OPTION

AND

INCENTIVE PLAN AWARDS⁽¹⁾

INCENTIVE PLAN AWARDS

OF STOCK

UNDERLYING

AWARDS

OPTION
NAME

GRANT DATE

THRESHOLD

TARGET

MAXIMUM

THRESHOLD

TARGET

MAXIMUM

OR UNITS

OPTION

($/SH)

AWARDS
(a)

PLAN

(b)

($)(c)

($)(d)

($)(e)

(#)(f)

(#)(g)

(#)(h)

(#)(i)

(#)(j)

(k)

($)(l)⁽²⁾
Christopher Kempczinski

STIP

2/13/2023

0

2,850,000

5,700,000

Equity Plan⁽³⁾

2/13/2023

0

23,519

47,038

6,500,181

Equity Plan⁽⁴⁾

2/13/2023

119,596

266.20

6,500,043
Ian Borden

STIP

2/13/2023

0

1,125,000

2,250,000

Equity Plan⁽³⁾

2/13/2023

0

7,237

14,474

2,000,162

Equity Plan⁽⁴⁾

2/13/2023

36,799

266.20

2,000,026
Gillian McDonald

STIP

2/13/2023

0

970,038

1,940,076

Equity Plan⁽³⁾

2/13/2023

0

4,976

9,952

1,375,267

Equity Plan⁽⁴⁾

2/13/2023

25,299

266.20

1,375,001

Equity Plan⁽⁵⁾

2/13/2023

0

2,714

5,428

750,095

Equity Plan⁽⁵⁾

2/13/2023

13,800

266.20

750,030

Equity Plan⁽⁵⁾

2/13/2023

7,514

2,000,227
Jonathan Banner

STIP

2/13/2023

0

630,000

1,260,000

Equity Plan⁽³⁾

2/13/2023

0

3,619

7,238

1,000,219

Equity Plan⁽⁴⁾

2/13/2023

18,400

266.20

1,000,040

Equity Plan⁽⁶⁾

2/13/2023

0

4,885

9,770

1,350,116

Equity Plan⁽⁶⁾

2/13/2023

9,016

2,400,059
Joseph Erlinger

STIP

2/13/2023

0

1,008,000

2,016,000

Equity Plan⁽³⁾

2/13/2023

0

6,785

13,570

1,875,238

Equity Plan⁽⁴⁾

2/13/2023

34,499

266.20

1,875,021

(1)
Each NEO received an annual cash award under the STIP. The 2023 STIP measured Company performance based on operating income growth (40%), Systemwide sales growth (30%), new restaurant openings (15%) and human capital metrics (15%). For Ms. McDonald and Mr. Erlinger only, STIP payouts could be increased or decreased by up to 15% of 6%their target award (subject to a maximum payout of 200% of target) based on a ~~cumulative basis, adjusted to exclude certain items as described~~modifier measuring the conversion of registered applicants into new restaurant owners and diversity of such new restaurant owners for the IOM segment for Ms. McDonald and the U.S. segment for Mr. Erlinger. Target awards were established based on ~~page [    ]. If target is achieved,~~a percentage of salary. Achievement of targets results in a 100% payout. Actual payouts are based on achievement of the ~~RSUs will vest. If no compounded EPS growth is achieved, no RSUs will vest. If compounded EPS growth is achieved, but below~~metrics and can range from 0% to 200% of target. Columns (d) and (e) above show the target and maximum award payouts. Actual STIP payouts are shown in column (g) of 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 the~~2023 Summary Compensation Table on page ~~[     ].~~69. See the CD&A beginning on page 53 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~~footnote 2 and 3, respectively, to the 2023 Summary Compensation Table on page ~~[     ].~~69.
(3)
The PRSUs and RSUs received by the NEOs, as shown in columns (f), (g), (h) and (i), have dividend equivalent rights. The PRSUs are scheduled to vest on February 13, 2026, subject to achievement of positive three-year average annual EPS growth (75% weight) and three-year ROIC (25% weight) of at least 16%. If performance against EPS and ROIC meets the threshold for a 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 negative, the maximum payout is 100% of target. See the discussion beginning on page 63 for more information.
(4)
Reflects option grants, which vest 25% on each of the first four anniversaries of the grant date. For details regarding options, refer to footnote 3 to the 2023 Summary Compensation Table on page 69.
(5)
To buy out her outstanding long-term incentives from her prior employer, Ms. McDonald received a sign-on award consisting of 2,714 PRSUs and 13,800 options with terms consistent with our annual awards as described on page 66, and 7,514 time-based RSUs, which vest in two equal installments on each of February 13, 2024 and 2025. See columns (g), (i) and (j) above and footnote 6 of the 2023 Summary Compensation Table beginning on page 69.
(6)
To buy out his outstanding long-term incentives from his prior employer, Mr. Banner received a sign-on award consisting of 4,885 PRSUs with terms consistent with our annual awards, as described on page 66, and 9,016 time-based RSUs, which vest in two equal installments on each of February 13, 2024 and 2025. See columns (g) and (i) above and footnote 7 of the 2023 Summary Compensation Table beginning on page 69.
~~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:~~

>
TIP measures performance using a “team factor” that is initially determined 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.”
> 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:~~
~~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 factor~~ ~~Modifiers~~
~~Potential weight of~~
~~each modifier (range)~~
~~Potential overall adjustment of~~
~~team factor by modifiers (range)~~
~~Corporate factor~~702024 proxy statement
~~>  Comparable Guest Counts Growth~~
~~Up to +7.5 or -5~~ ~~Up to +/-15~~
~~>  Customer Satisfaction Opportunity~~
~~percentage points~~ ~~percentage points~~
~~>  G&A Expense Control~~
~~AOW factor~~
~~>  Comparable Guest Counts Growth~~
~~Up to +/-10~~ ~~Up to +/-25~~
~~>  Customer Satisfaction Opportunity~~
~~percentage points~~ ~~percentage points~~
~~>  Improvements in Employee Commitment~~

Table of Contents

Executive Compensation

22        ~~McDonald’s Corporation 2012~~
Outstanding Equity Awards at ~~2011 Year-end~~2023 Year-End

OPTION AWARDS

STOCK AWARDS

MARKET

EQUITY INCENTIVE

EQUITY INCENTIVE

NUMBER OF

NUMBER OF

NUMBER OF

VALUE OF

PLAN AWARDS:

PLAN AWARDS:

SECURITIES

SECURITIES

SHARES OR

SHARES OR

NUMBER OF

MARKET OR PAYOUT

UNDERLYING

UNDERLYING

UNITS OF

UNITS OF

UNEARNED

VALUE OF UNEARNED

UNEXERCISED

UNEXERCISED

OPTION

OPTION

STOCK THAT

STOCK THAT

SHARES, UNITS OR

SHARES, UNITS OR

OPTIONS

OPTIONS

EXERCISE

EXPIRATION

HAVE NOT

HAVE NOT

OTHER RIGHTS THAT

OTHER RIGHTS THAT
NAME

EXERCISABLE

UNEXERCISABLE

PRICE

DATE

VESTED

VESTED

HAVE NOT VESTED

HAVE NOT VESTED
(a)

(#)(b)⁽¹⁾

(#)(c)⁽¹⁾

($)(e)

(f)

(#)(g)⁽²⁾

($)(h)⁽³⁾

(#)(i)⁽⁴⁾

($)(j)⁽³⁾⁽⁴⁾
Christopher Kempczinski

9,291

0

112.11

11/12/2025









52,553

0

128.09

3/8/2027

42,017

0

157.79

2/19/2028

48,829

0

174.15

2/13/2029

121,174

40,391

216.15

2/18/2030

113,232

113,232

215.03

2/16/2031

34,131

102,384

253.39

2/14/2032

0

119,596

266.20

2/13/2033

110,819

32,858,942
Ian Borden

7,264

0

97.15

3/16/2025

17,134

0

116.73

2/11/2026

27,028

0

128.09

3/8/2027

26,261

0

157.79

2/19/2028

29,297

0

174.15

2/13/2029

24,235

8,078

216.15

2/18/2030

34,374

34,374

215.03

2/16/2031

9,646

28,935

253.39

2/14/2032

0

36,799

266.20

2/13/2033

33,279

9,867,556
Gillian McDonald

0

39,099

266.20

2/13/2033

7,682

2,277,790

7,863

2,331,458
Jonathan Banner

0

18,400

266.20

2/13/2033

9,218

2,733,229

8,695

2,578,154
Joseph Erlinger

31,513

0

157.79

2/19/2028

33,204

0

174.15

2/13/2029

28,700

9,566

216.15

2/18/2030

36,396

36,396

215.03

2/16/2031

10,387

31,161

253.39

2/14/2032

0

34,499

266.20

2/13/2033

34,450

10,214,770

      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


(1)
~~In general, options~~
Options 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 ~~[    ].~~73.
(2)
~~These RSUs vested on February 11, 2012 and were not~~
PRSUs are typically granted to our NEOs subject to performance-based vesting conditions, but from time to time, we grant time-based RSUs. In connection with her hiring Ms. McDonald was granted time-based RSUs, as ~~they were~~well as PRSUs and options with terms consistent with the Company’s annual long-term incentive awards. Ms. McDonald’s RSUs vest in two equal installments on each of February 13, 2024 and 2025. In connection with his hiring Mr. Banner was granted ~~to Ms. Fields prior to serving~~time-based RSUs, as ~~President~~well as PRSUs with terms consistent with the Company’s annual long-term incentive awards. Mr. Banner’s RSUs vest in two equal installments on each of ~~McDonald’s USA.~~February 13, 2024 and 2025. See footnotes 2, 6 and 7 of the 2023 Summary Compensation Table beginning on page 69.
(3)
Calculated by multiplying the number of shares covered by the award by ~~$100.33,~~$296.51, the closing price of Company stock on the ~~New York Stock Exchange~~NYSE on December ~~30, 2011.~~29, 2023 (the last trading day of 2023).
(4)
~~Reflects~~
The following table reflects the number of shares that vested on February16, 2024, based on the 187.5 % payout factor and the unvested ~~performance-based RSUs~~PRSUs that are scheduled to be paid out ~~as follows~~in 2025 and 2026 if performance equals 100% of the ~~targets~~targets. In the event of fractional shares, amounts are ~~met (or were~~rounded up to the nearest whole share.


	corporate.mcdonalds.com71

Table of Contents

Executive Compensation


NAME	GRANT DATE	VESTING DATE	NUMBER OF PRSUs*
Christopher Kempczinski	2/16/2021	2/16/2024	64,634
	2/14/2022	2/14/2025	22,139
	2/13/2023	2/13/2026	24,046
Ian Borden	2/16/2021	2/16/2024	19,623
	2/14/2022	2/14/2025	6,257
	2/13/2023	2/13/2026	7,399
Gillian McDonald	2/13/2023	2/13/2026	7,863
Jonathan Banner	2/13/2023	2/13/2026	8,695
Joseph Erlinger	2/16/2021	2/16/2024	20,775
	2/14/2022	2/14/2025	6,738
	2/13/2023	2/13/2026	6,937

*	Number of unvested PRSUs that are scheduled to be paid out ~~in the case of awards that vested in 2012).~~include dividend equivalents.


~~Named executive officer~~	~~Vesting date~~		~~Number of RSUs~~


~~James A. Skinner~~		~~02/11/12~~		~~33,112~~
		~~02/10/13~~		~~25,295~~
		~~02/09/14~~		~~21,071~~


~~Peter J. Bensen~~		~~02/11/12~~		~~5,782~~
		~~02/10/13~~		~~7,115~~
		~~02/09/14~~		~~6,587~~


~~Donald Thompson~~		~~02/11/12~~		~~6,833~~
		~~02/10/13~~		~~10,435~~
		~~02/09/14~~		~~9,218~~


~~Timothy J. Fenton~~		~~02/11/12~~		~~6,833~~
		~~02/10/13~~		~~6,641~~
		~~02/09/14~~		~~5,927~~


~~Janice L. Fields~~		~~02/10/13~~		~~5,218~~
		~~02/09/14~~		~~4,742~~

24 ~~McDonald’s Corporation 2012~~

Option Exercises and Stock ~~Vested–~~Vested – Fiscal ~~2011~~2023

OPTION AWARDS

STOCK AWARDS


NUMBER OF SHARES

VALUE REALIZED

NUMBER OF SHARES

VALUE REALIZED

ACQUIRED ON EXERCISE

ON EXERCISE

ACQUIRED ON VESTING

ON VESTING
NAME (a)

(#)(b)

($)(c)

(#)(d)

($)(e)
Christopher Kempczinski

0

0

33,940

9,163,461
Ian Borden

5,796

1,130,046

6,790

1,833,232
Gillian McDonald

0

0

0

0
Jonathan Banner

0

0

0

0
Joseph Erlinger

34,881

5,310,141

8,039

2,170,450

00000000 00000000 00000000 00000000 00000000
   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

~~Non-qualified~~Non-Qualified Deferred ~~Compensation–~~Compensation – Fiscal ~~2011~~2023


EXECUTIVE

REGISTRANT

AGGREGATE

AGGREGATE

AGGREGATE

CONTRIBUTIONS

CONTRIBUTIONS

EARNINGS IN

WITHDRAWALS /

BALANCE AT
NAME

IN LAST FY

IN LAST FY

LAST FY

DISTRIBUTIONS

LAST FYE
(a)

($)(b)⁽¹⁾

($)(c)⁽²⁾

($)(d)

($)(e)

($)(f)⁽³⁾
Christopher Kempczinski

339,599

323,828

1,072,563

0

6,478,986
Ian Borden

54,096

65,106

10,611

0

148,506
Gillian McDonald

0

0

0

0

0
Jonathan Banner

0

0

0

0

0
Joseph Erlinger

1,093,958

112,879

397,630

0

5,486,954
00000000 00000000 00000000 00000000 00000000 00000000
   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


(1)
Represents salary deferrals which are also reported as compensation for ~~2011~~2023 in the 2023 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.69.
(2)
Includes the following aggregate amounts ~~previously~~ reported in the Summary Compensation Table in ~~the aggregate, as follows:~~prior years:

Christopher Kempczinski

$
3,812,113
Ian Borden

$
18,804
Gillian McDonald

$
0
Jonathan Banner

$
0
Joseph Erlinger

$
2,150,783
(3)
The balance reflected in this column for Mr. Kempczinski includes dividend accruals that had been inadvertently excluded in prior years and which were credited to his account in 2023.


722024 proxy statement

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

~~EXCESS BENEFIT AND DEFERRED BONUS PLAN (EXCESS PLAN)~~Table of Contents

~~The Company’s Excess~~Executive Compensation

Deferred Compensation Plan ~~is a successor plan to the Supplemental Plan described below. The Excess Plan is a non-tax-qualified, unfunded plan that allows~~
U.S. paid NEOs and certain ~~management and~~other highly compensated employees are eligible to ~~(i) make tax-deferred contributions from their salary, TIP and CPUP awards; and (ii) receive matching contributions (on deferrals of salary and TIP awards only)~~participate in the Company’s Amended & Restated Deferred Compensation Plan (the “Deferred Compensation Plan”), ~~in excess of the Internal Revenue Service (IRS) limits under the Profit Sharing and Savings Plan.~~
~~At the time of deferral, participants~~a non-qualified, unfunded deferred compensation plan. A participant may elect to ~~receive~~delay receiving up to 50% of the participant’s base salary and/or up to all of the participant’s STIP award for the year in order to defer income tax until the year a Deferred Compensation Plan distribution is actually received. If a participant contributes the maximum amount of before-tax or other after-tax contributions permitted under applicable U.S. tax law for a calendar year to the Company’s tax-qualified 401(k) Plan (the “401(k) Plan”), the participant’s Deferred Compensation Plan account will be credited with the notional amount equal to the amount the participant would have received as Company matching contributions under the 401(k) Plan without regard to the applicable limits applying to the 401(k) Plan (6% of eligible compensation), reduced by the amount of Company matching contributions made to the participant’s 401(k) Plan account for the year.
When a participant elects to defer compensation under the Deferred Compensation Plan, the participant must also elect when Deferred Compensation Plan distributions will be made, either based on the participants separation from service or based on a fixed distribution year, and whether the distribution will be in ~~a lump-sum~~the form of lump sum or ~~in regular~~ installments over a period ~~of up~~not to exceed 15 ~~years following~~years. Distributions upon a separation from ~~service. Distributions~~service are delayed for six months following ~~separation from service.~~the participant’s separation.
~~Deferrals~~Participants select how their Deferred Compensation Plan accounts are ~~nominally invested in investment funds selected by participants and are credited with a rate of return based on the investment option(s) selected.~~invested. The notional investment options ~~are currently based on~~offered under the Deferred Compensation Plan mirror 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 ~~Excess~~adoption of the Deferred Compensation Plan, ~~the Company’s Supplemental Plan allowed participants~~Company executives could elect to defer ~~compensation in excess of~~base salary and STIP awards and be credited with notional Company matching contributions without regard to the ~~IRS~~applicable annual limits that applied to the 401(k) Plan under the Company’s Supplemental Profit Sharing and Savings ~~Plan. In 2004,~~Plan (the “Supplemental Plan”). As with the ~~Company froze the Supplemental Plan. Prior to 2005,~~Deferred Compensation Plan, the Supplemental Plan ~~allowed~~is an unfunded non-qualified plan, with participants’ benefits subject to the claims of the Company’s creditors in the event of bankruptcy. The Supplemental Plan’s investment funds are the same as those offered under the Deferred Compensation Plan.

The Supplemental Plan was not amended to comply with Section 409A of the Internal Revenue Code (“Section 409A”) when the law took effect as of January 1, 2005, therefore the Company prohibited additional deferrals and the crediting of ~~salary and all or~~notional Company matching contributions to participants’ Supplemental Plan accounts with respect to compensation earned after 2004. The Company adopted the predecessor to the Deferred Compensation Plan effective January 1, 2005 to comply with the requirements of Section 409A.

As a ~~portion of cash incentives as well as Company contributions on deferrals of salary and TIP. The investment options for existing accounts under~~“grandfathered” non-qualified deferred compensation plan subject to pre-Section 409A law, the Supplemental Plan ~~are identical~~allows participants greater flexibility in making or changing distribution elections and in electing to ~~those~~take in-service and hardship withdrawals. Further, the maximum length of installment payments under the ~~Excess~~Supplement Plan is 25 years in contrast to 15 years under the Deferred Compensation Plan. A participant may elect to have distributions commence in the year following termination in a single lump-sum; installments commencing on a date of the participant’s choice; or an initial lump-sum payment with subsequent installment payments, all of which 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 Upon Termination of Employment or Change in Control
~~Our~~In the event of a termination or change in control followed by termination of employment, our NEOs would ~~become entitled to~~receive certain payments and benefits, as described below.
Termination of Employment
Severance
The McDonald’s Corporation Officer Severance Plan, amended and restated as of November 1, 2022 (the “Severance Plan”) would provide benefits to our U.S. NEOs upon termination of employment by the Company without “cause.” Ms. McDonald is not covered by the Severance Plan, and pursuant to the terms of her offer letter, Ms. McDonald is entitled to 26 weeks’ advanced written notice of a termination of her employment (or a payment in ~~connection~~lieu of such notice) for any reason other than her gross misconduct or persistent and continued misconduct.


	corporate.mcdonalds.com73

Table of Contents

Executive Compensation

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 the target bonus opportunity under the STIP for the fiscal year in which the termination occurs, multiplied by a severance multiple applicable to each U.S.-based NEO, based on their position. Upon a qualifying termination of employment, our CEO and CFO are entitled to a cash severance payment equal to 1.5 multiplied by the sum of their current salary and target STIP, and our other participating executives, including Messrs. Banner and Erlinger, are entitled to a cash severance payment equal to one year of their current salary and target STIP. Each U.S.-based NEO also receives a continued subsidy of medical, dental and vision benefits through COBRA, which amounts are based on their position (18 months for our CEO and CFO and 12 months for Messrs. Banner and Erlinger). In addition, upon termination, each U.S.-based NEO would receive a prorated STIP payment based on actual performance (and paid at the same time STIP 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 following table provides the value of the benefits that would have been payable to the U.S.-based NEOs under the Severance Plan, assuming a covered termination of employment on December 31, 2023:

CASH

BENEFITS




NAME

SEVERANCE ($)

CONTINUATION ($)

OTHER ($)⁽¹⁾

TOTAL ($)
Christopher Kempczinski

6,412,500

29,609

14,700

6,456,809
Ian Borden

3,037,500

27,441

14,700

3,079,641
Jonathan Banner

1,330,000

17,752

14,700

1,362,452
Joseph Erlinger

1,848,000

18,294

143,931

2,010,225

(1)
Reflects outplacement assistance and, for Mr. 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 the NEO is 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 original expiration date). If a 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, 2023, 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 29, 2023.

TERMINATION
NAME

RETIREMENT ($)

WITHOUT “CAUSE” ($)
Christopher Kempczinski

0

17,227,671
Ian Borden

5,255,323

5,534,175
Gillian McDonald

592,561

888,841
Jonathan Banner

0

139,426
Joseph Erlinger

5,600,780

5,862,203

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.


742024 proxy statement

Table of Contents

Executive Compensation

PRSUs and RSUs

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 RSUs (and related dividend equivalents), subject to the Company satisfying any 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 vests at target. RSUs (and any related dividend equivalents) are settled upon termination of employment (in accordance with the Internal Revenue Code). In the event of a termination for “cause,” all PRSUs and RSUs (and any dividend equivalents) are forfeited.

For the PRSUs and RSUs held by our NEOs, vesting is based on the length of Company service during the vesting period, and achievement of any applicable performance goals. 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 29, 2023.

TERMINATION
NAME

RETIREMENT ($)

WITHOUT “CAUSE” ($)
Christopher Kempczinski

0

25,005,281
Ian Borden

8,770,766

7,512,674
Gillian McDonald

1,165,877

712,514
Jonathan Banner

0

788,124
Joseph Erlinger

9,186,473

7,893,986

A pro rata portion of the time-based RSUs (and any dividend equivalents) awarded to Ms. McDonald and Mr. Banner would have vested in the event the Company terminated either of their employments without cause on December 31, 2023. The full RSU award (and any dividend equivalents) for each of Ms. McDonald and Mr. Banner would have vested in the event of death or disability. Based on the closing price of the Company’s common stock on December 29, 2023, the value of the pro rata time-based RSUs that would have vested if Ms. McDonald had been terminated without cause is $1,566,166 and the value of the pro rata time-based RSUs that would have vested if Mr. Banner had been terminated without cause is $1,879,280.
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 with~~certain 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 ~~either~~either: (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 following~~Had 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:~~2023, and their employment been terminated as a result, each eligible NEO would have had a right to the above-described cash 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-traded~~publicly 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’s~~NEO’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.


	corporate.mcdonalds.com75

Table of Contents

Executive Compensation

If the awards ~~cannot be~~are not replaced ~~(e.g.~~(e.g., because the acquirer does not have ~~publicly-traded~~publicly 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 ~~Code~~change 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’s~~NEO’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 ~~employee~~NEO will not result in accelerated vesting of replacement awards.

~~McDonald’s Corporation 2012~~ 27

If a change in control had occurred on December 31, ~~2011~~2023, 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, ~~2011~~2023, are set forth in the Outstanding Equity Awards at ~~2011 Year-end~~2023 Year-End table beginning on page ~~[ ].~~71.

The following table ~~below~~ summarizes the value of the change in control ~~payouts~~payments 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, 2011~~29, 2023, 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.~~29, 2023. 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 ~~were~~was no change in control, the amounts shown would have vested over time, subject to continued employment and, with respect to the ~~RSUs,~~PRSUs, subject to performance-based vesting ~~conditions, except for Mr. Skinner due to the ERRP. As a result, the values shown~~conditions.

STOCK OPTIONS

RSUS (TARGET

(CLOSING PRICE

NUMBER OF SHARES

ON 12/29/23 MINUS

MULTIPLIED BY CLOSING

NAME

EXERCISE PRICE) ($)

PRICE ON 12/29/23) ($)

TOTAL ($)
Christopher Kempczinski

20,511,717

23,915,607

44,427,324
Ian Borden

5,812,996

7,152,414

12,965,410
Gillian McDonald

1,185,091

4,609,841

5,794,932
Jonathan Banner

557,704

5,311,384

5,869,088
Joseph Erlinger

6,123,597

7,340,105

13,463,702

Additional Compensation Matters
2023 Pay Ratio
We have approximately 150,000 employees, which include those in our corporate and other offices as well as in Company-owned and operated restaurants, of which approximately 70% are ~~greater than the benefit attributable solely to acceleration~~based outside of the ~~awards.~~U.S. Most of these employees work in flexible, part-time roles, which is reflected in the compensation levels of our employees. In order to attract and retain talent, we provide competitive compensation commensurate with an employee’s position and geographic location, while also aligning compensation to Company and individual performance.

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~~We are committed to a strong pay-for-performance culture that closely aligns the interests of our executives with those of our shareholders. We aim to have approximately 90% of our CEO’s total target direct compensation opportunity be subject to performance against our robust and objective performance targets. For 2023, our CEO’s total compensation was $19,155,001, resulting in a ratio of 1,212:1.
~~(OTHER THAN FOLLOWING A CHANGE IN CONTROL)~~

>	~~McDonald’s Corporation Severance Plan (Severance Plan)~~
762024 proxy statement

~~Under~~

Table of Contents

Executive Compensation

Median Employee Methodology

In 2022, we identified our median employee for purposes of the ~~Severance Plan, Messrs. Bensen, Fenton~~pay ratio disclosure by annualizing one month’s total gross wages for our employees (other than our CEO) located in all of our markets who were employed on October 1, 2022. We considered all full-time, part-time, seasonal and ~~Thompson~~temporary workers employed on such date. We believe that our methodology is straightforward and ~~Ms. Fields~~transparent; we did not exclude employees. Our median employee in 2022 was a restaurant crew employee located in Korea. We believe there has been no change to our employee population and compensation arrangements that would ~~receive severance benefits if they were terminated~~result in a significant change to our pay ratio calculation or disclosure. However, our 2022 median employee is no longer employed by the ~~Company without “cause”; due to~~Company. Accordingly, we have substituted a ~~reduction in work force or job elimination, but excludes terminations~~new median employee with substantially similar fiscal 2022 compensation as the original median employee for ~~performance reasons. Applicable benefits consist~~purposes of ~~a lump-sum payment with respect to severance~~our 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 delayedratio disclosure 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~~2023. Our median employee for 2023 is a restaurant crew employee located in Poland and in 2023 had total compensation of $15,802, 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 exercisablecalculated 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).~~Summary Compensation Table rules.

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.2023 Pay vs. Performance

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.

PAY VS. PERFORMANCE

VALUE OF INITIAL

FIXED $100

INVESTMENT BASED ON:⁽⁵⁾

AVERAGE

SUMMARY

AVERAGE

PEER

SUMMARY

COMPENSATION

COMPENSATION

GROUP

COMPENSATION

COMPENSATION

TABLE

ACTUALLY

TOTAL

TOTAL

ANNUAL

TABLE

ACTUALLY

TOTAL FOR

PAID TO

SHAREHOLDER

SHAREHOLDER

NET

EPS

TOTAL FOR PEO

PAID TO PEO

NON-PEO NEOs

NON-PEO NEOs

RETURNS

RETURN

INCOME

GROWTH
YEAR⁽¹⁾

($)⁽²⁾

($)⁽³⁾

($)⁽²⁾

($)⁽⁴⁾

($)

($)⁽⁶⁾

($)

(%)⁽⁷⁾
2023

19,155,001

27,482,762

7,265,484

9,156,146

164

144

8,469

18.0
2022

17,770,514

21,900,032

6,075,626

6,875,284

143

124

6,177

15.0
2021

20,028,132

37,719,393

8,029,832

13,484,955

142

133

7,545

50.0
2020

10,847,032

7,952,323

5,126,870

3,870,736

111

110

4,731

(23.0)
~~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~~
Mr. Kempczinski served as our principal executive officer (“PEO”) for the entirety of 2020, 2021, 2022 and 2023. Our other named executive officers (“NEOs”) for the applicable years were as follows:
-
2023: Messrs. Borden, Banner and Erlinger and Ms. McDonald;
-
2022: Messrs. Borden, Erlinger, Ozan, Ms. Ralls-Morrison, and Brian Rice;
-
2021: Messrs. Borden, Erlinger and Ozan and Ms. Ralls-Morrison; and
-
2020: Messrs. Borden and Erlinger and Heidi Capozzi, Jerome Krulewitch and Kevin Ozan.
(2)
Amounts reported in this column represent (i) the total compensation reported in the Summary Compensation Table (“SCT”) for the applicable year in the case of Mr. Kempczinski and (ii) the average of the ~~performance period,~~total compensation reported in the SCT for the applicable year for our NEOs reported for the applicable year, other than the PEO for such years.
(3)
Amounts reported in this column represent the compensation actually paid to Mr. ~~Skinner would be entitled to receive a pro rata CPUP award based upon actual performance against~~Kempczinski as our President and CEO in the ~~specific metrics. This number represents the pro rata CPUP payment~~indicated fiscal years, based on ~~actual performance through 2011.~~his total compensation reported in the SCT for the indicated fiscal years and adjusted as shown in the following table:

PEO


2023

2022

2021

2020
Summary Compensation Table - Total Compensation^(a)

$
19,155,001

$
17,770,514

$
20,028,132

$
10,847,032
- Grant Date Fair Value of Stock Awards and Option Awards Granted in Fiscal Year^(b)

$
13,000,224

$
11,500,239

$
14,000,181

$
9,500,140
+ Fair Value at Fiscal Year-End of Outstanding and Unvested Stock Awards and Option Awards Granted in Fiscal Year^(c)

$
16,287,558

$
14,642,639

$
24,274,810

$
9,684,864
+ Change in Fair Value of Outstanding and Unvested Stock Awards and Option Awards Granted in Prior Fiscal Years^(d)

$
4,778,608

$
2,375,183

$
7,531,726

$
(3,386,758)
+ Fair Value at Vesting of Stock Awards and Option Awards Granted in Fiscal Year That Vested During Fiscal Year^(e)

$
0

$
0

$
0

$
0
+ Change in Fair Value as of Vesting Date of Stock Awards and Option Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year^(f)

$
261,819

$
(1,388,065)

$
(115,094)

$
307,325
= Compensation Actually Paid

$
27,482,762

$
21,900,032

$
37,719,393

$
7,952,323

~~(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.

Table of Contents

Executive Compensation

~~James A. Skinner~~(4)
~~$23,079,880~~ ~~No acceleration of vesting; outstanding options would be exercisable~~
Amounts reported in ~~accordance with original vesting schedule and remain outstanding for 9.5 years or until expiration of~~this column represent the ~~original term if sooner. RSUs would vest~~compensation actually paid to our NEOs other than Mr. Kempczinski 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 basisindicated fiscal year, based on the ~~number~~average total compensation for such NEOs reported in the SCT for the indicated fiscal year and adjusted as shown in the following table. See footnote 1 for our NEOs included in the average for each indicated fiscal year:

Other NEOs Average⁽¹⁾


2023

2022

2021

2020
Summary Compensation Table - Total Compensation^(a)

$
7,265,484

$
6,075,626

$
8,029,832

$
5,126,870
- Grant Date Fair Value of Stock Awards and Option Awards Granted in Fiscal Year^(b)

$
4,937,876

$
3,440,186

$
5,125,135

$
3,630,184
+ Fair Value at Fiscal Year-End of Outstanding and Unvested Stock Awards and Option Awards Granted in Fiscal Year^(c)

$
5,997,952

$
4,304,023

$
8,313,597

$
3,818,854
+ Change in Fair Value of Outstanding and Unvested Stock Awards and Option Awards Granted in Prior Fiscal Years^(d)

$
801,375

$
343,053

$
2,321,850

$
(2,031,739)
+ Fair Value at Vesting of Stock Awards and Option Awards Granted in Fiscal Year That Vested During Fiscal Year^(e)

$
0

$
0

$
0

$
199,881
+ Change in Fair Value as of Vesting Date of Stock Awards and Option Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year^(f)

$
29,211

$
(407,232)

$
(55,189)

$
387,054
= Compensation Actually Paid

$
9,156,146

$
6,875,284

$
13,484,955

$
3,870,736

The below footnotes apply to the tables included in each of footnotes 3 and 4.
(a) Represents Total Compensation as reported in the SCT for the indicated fiscal year.
(b) Represents the aggregate grant date fair value as of ~~months employed~~the indicated fiscal year of the stock awards and option awards granted to each of Mr. Kempczinski and the respective NEOs as applicable for each year, during such fiscal year, calculated using the same methodology used for financial statement reporting purposes.
(c) Represents the aggregate fair value as of the indicated fiscal year-end for each of Mr. Kempczinski’s, and the respective NEOs’ as applicable for each year, outstanding and unvested stock awards and option awards granted during such fiscal year, calculated using the same methodology used for financial statement reporting purposes and, for awards subject to performance-based vesting conditions, based on the probable outcome of such performance-based vesting conditions as of the last day of the fiscal year.
(d) Represents the aggregate change in fair value during the indicated fiscal year of the outstanding and unvested stock awards and option awards held by each of Mr. Kempczinski and the respective NEOs as applicable for each year, as of the last day of the indicated fiscal year, calculated using the same methodology used for financial statement reporting purposes and, for awards subject to performance-based vesting ~~period~~conditions, based on the probable outcome of such performance-based vesting conditions as of the last day of the fiscal year.
(e) Represents the aggregate fair value at vesting of the stock awards and ~~would~~option awards that were granted to each of Mr. Kempczinski and the respective NEOs as applicable for each year, and vested during the indicated fiscal year, calculated using the same methodology used for financial statement reporting purposes.
(f) Represents the aggregate change in fair value, measured from the prior fiscal year-end to the vesting date, of each stock award and option award held by each of Mr. Kempczinski and the respective NEOs as applicable for each year, that was granted in a prior fiscal year and which vested during the indicated fiscal year, calculated using the same methodology used for financial statement reporting purposes. Amounts reported in this row in last year’s proxy statement have been updated to correct an error in the previously disclosed amounts in the PEO table of $(1,804,056) for 2022 and $1,665,937 for 2020, and the Other NEOs Average table of $(573,809) for 2022 and $1,194,465 for 2020.
(5)
The information provided reflects the respective values at the end of each year of a $100 investment on December 31, 2019, including the reinvestment of any dividends, for each of our common stock and our peer group (see footnote 6 for further information on our peer group). Historic stock price performance is not necessarily indicative of future stock price performance.
(6)
The TSR Peer Group consists of the component companies of the DJIA, the peer group used by us for purposes of the stock performance graph in our Annual Report on Form 10-K.
(7)
Represents annual EPS growth. As noted in the CD&A, for 2023, the Committee determined that EPS growth continues to be ~~paid out~~viewed as a core driver of our performance and stockholder value creation. Accordingly, EPS is utilized as the most heavily weighted performance metric applicable to our PRSU award design. EPS growth is calculated as the percentage change in ~~accordance~~our EPS from the prior fiscal year, with ~~actual performance results achieved.~~EPS calculated as earnings per share, adjusted consistent with pre-established guidelines as described on page 64 of the CD&A.


782024 proxy statement

Table of Contents

Executive Compensation

~~McDonald’s Corporation 2012~~ 29

Relationship Between Pay & Performance
~~If Mr. Skinner’s employment were to terminate due to death or disability, under~~The “Compensation Actually Paid” in the ~~ERRP, he or his estate would be entitled to receive: (i) accrued salary~~preceding tables reflects the Committee’s emphasis on pay-for-performance and ~~annual incentive awards; and (ii) payment or provision of death or disability benefits, as applicable, equal~~alignment with shareholder value creation through equity-based compensation. As illustrated in the graphics to the ~~benefits provided~~right, year-over-year changes to “Compensation Actually Paid” were primarily driven by our stock performance, with our TSR outpacing the peer group, and the level of achievement against the performance metrics in our incentive programs, including EPS growth. Net Income is not a metric in the Company’s executive compensation program and the results in the graph do not reflect any adjustments related to costs associated with the Accelerating the Arches strategic actions or the impairment of software assets, as described on page 65.
Most Important Performance Measures
The following table consists of the financial performance measures, which in the Company’s assessment represent the most important financial performance measures used by the Company to link compensation actually paid to the ~~estates~~NEOs for 2023. In addition to these financial metrics, the Company’s executive compensation program is impacted by our performance with respect to human capital metrics and ~~beneficiaries~~new restaurant opening goals. See the CD&A for further information regarding how the Company utilized each of ~~his peers. Upon termination for “cause,” he would be entitled to receive accrued salary~~the measures below, as well as the human capital and ~~annual incentive awards and no other benefits.~~
~~EFFECT OF TERMINATION OF EMPLOYMENT UNDER EQUITY INCENTIVE PLANS~~
new restaurant opening goals, in its 2023 executive compensation program.
>
MOST IMPORTANT PERFORMANCE MEASURES
~~Stock Options~~
EPS Growth
Systemwide Sales Growth
Operating Income Growth
Return on Invested Capital (ROIC)
Relative Total Shareholder Return (TSR)
Share Price Increase
~~Unvested options are generally forfeited on termination~~

*
Pursuant to SEC rules, the net income reflected in this graphic is consistent with GAAP.


	corporate.mcdonalds.com79

Table of ~~employment,~~Contents

PROPOSAL 3
Vote to approve an Amendment to the Company’s Restated Certificate of Incorporation to limit liability of officers as permitted by law
The Board is requesting that shareholders vote in favor of the approval and adoption of an amendment to the Company’s Restated Certificate of Incorporation to limit liability of officers as permitted by law.
Our Board unanimously recommends that you vote FOR Proposal 3.

The Board has unanimously approved, adopted and declared advisable an amendment to our Restated Certificate of Incorporation to provide for the elimination of monetary liability of certain officers of the Company in certain limited circumstances (the “Amendment”).
Pursuant to and consistent with ~~vested options remaining outstanding and exercisable for 90 days, except on termination for “cause.~~Section 102(b)(7) of the General Corporation Law of the State of Delaware (“DGCL” ~~For grants prior~~), Article FOURTEENTH of our Restated Certificate of Incorporation already eliminates the monetary liability of directors to ~~2010, executives (and all other employees)~~the fullest extent permitted by Delaware law, as it currently exists or as it 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 participantsamended in the ~~ERRP, if an~~future. Effective August 1, 2022, Section 102(b)(7) was amended to permit companies to include in their certificates of incorporation limitations of monetary liability for certain senior corporate officers, such as a corporation’s president, chief executive ~~terminates employment~~officer, chief operating officer, chief financial officer, chief legal officer, controller, treasurer, and chief accounting officer. Consistent with Section 102(b)(7), the Amendment would permit exculpation of these officers for breaches of their fiduciary duty of care in any direct claim to the fullest extent permitted by Delaware law, as it currently exists or as it may be amended in the future. Like the provision limiting the monetary liability of directors, the DGCL, as currently in effect, does not permit the elimination of liability of these officers for any ~~reason other than death~~breach of their duty of loyalty to the company or ~~disability, all options granted~~its shareholders, any acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of the law, or any transaction from which the officer derived an improper personal benefit. The DGCL, as currently in effect, also does not permit the limitation of monetary liability of these officers in any action by or in the ~~last 12 months are immediately forfeited.~~
~~The table below summarizes the value~~right of the ~~payouts on termination~~company, such as a derivative claim.
The Amendment to Article FOURTEENTH is set forth in its entirety in Section 1 of ~~employment in circumstances~~Exhibit A.
Taking into account (i) that the Amendment would ~~result in acceleration~~mitigate the risk 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 realizedpersonal financial ruin as a result of ~~acceleration~~an unintentional misstep, (ii) that this exculpation will help attract and retain officers, and (iii) the narrow type of ~~awards. The values shown are greater than~~claims for which officers may be exculpated from liability, the ~~incremental benefit attributable solely to acceleration~~Board determined that it is in the best interests of the ~~awards.~~
~~Named executive officer~~ ~~Type of termination~~
~~Stock options~~
~~(closing price on 12/30/11~~
~~minus exercise price) ($)~~
~~James A. Skinner~~
~~Retirement~~ ~~n/a~~ ~~(1)~~
~~Special circumstances~~ ~~$17,582,498~~
~~Death/disability~~ ~~17,582,498~~
~~Peter J. Bensen~~
~~Retirement~~ 0 ~~(2)~~
~~Special circumstances~~ ~~2,061,175~~
~~Death/disability~~ ~~3,647,635~~
~~Donald Thompson~~
~~Retirement~~ ~~4,118,890~~
~~Special circumstances~~ ~~4,118,890~~
~~Death/disability~~ ~~5,693,275~~
~~Timothy J. Fenton~~
~~Retirement~~ ~~2,812,346~~
~~Special circumstances~~ ~~2,812,346~~
~~Death/disability~~ ~~3,824,605~~
~~Janice L. Fields~~
~~Retirement~~ ~~1,835,320~~
~~Special circumstances~~ ~~1,835,320~~
~~Death/disability~~ ~~2,645,132~~
~~(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~~Company 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, RSUs 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.

~~DEFERRED COMPENSATION~~

Following separation from service for any reason, the NEOs would receive distributions from their accounts under the Supplemental Plan and the Excess Plan in accordance with their elected distribution schedules, as described on pages [ ].

~~PROPOSAL NO.2~~

~~ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION~~

~~We are asking~~ our shareholders to ~~provide an advisory, nonbinding vote~~adopt the Amendment.

If the Amendment is approved and adopted, it will become effective upon our filing it with the Secretary of State of the State of Delaware. The Board retains the discretion to ~~approve~~abandon, and not implement, the ~~compensation awarded~~Amendment at any time before it becomes effective, even if it is approved by shareholders.

Shareholders are also asked to consider Proposal 4, which relates to certain indemnification provision updates and other miscellaneous changes. Proposals 3 and 4 are independent of each other. If both Proposal 3 and Proposal 4 are approved by the shareholders, then the Company intends to file a certificate of amendment 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~~Restated Certificate 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 for and retain managerial talent.

~~We are asking our shareholders to indicate their support for our named executive officer compensation. We believe~~Incorporation 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 that the Company may continue to grant equity awards and 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 and aligns the interests of employees and directors with those of shareholders. Except as otherwise specified below, the terms 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 may be subject to awards granted prior to June 1, 2012) 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.~~The Company intends~~ ~~to use treasury shares purchased through its share repurchase program 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% of the fair market value of a share of the common stock 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 is 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.~~ The Company may make such provisions as it deems appropriate to withhold any taxes due in connection with any Award, 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 been 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 will not affect the tax treatment of the exercise. Upon such exchange, and except 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 orimplements all of the ~~value~~amendments contemplated by Section 1 and 2 of Exhibit A. If only one of these proposals is approved by the shareholders, but the other proposal is not, then we will file a certificate of amendment that ~~acceleration may be considered an “excess parachute payment” under Section 280G~~implements only the amendments to our Restated Certificate of ~~the Code. This would result in the imposition~~Incorporation that were approved by shareholders.


802024 proxy statement

Table 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.~~Contents

~~RECOMMENDATION~~

PROPOSAL 4
Vote to approve Amendments to the Company’s Restated Certificate of Incorporation to implement miscellaneous changes
The Board is requesting that shareholders vote in favor of the approval and adoption of amendments to the Company’s Restated Certificate of Incorporation to implement other miscellaneous changes.
Our Board unanimously recommends that you vote FOR Proposal 4.

The Board ~~believes that the approval of the 2012 Plan will enable us to continue its pay-for-performance compensation strategy~~has unanimously approved, adopted 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 proposeddeclared advisable amendments to our Restated Certificate of Incorporation to ~~eliminate~~provide for the ~~classification~~updates described below to implement other miscellaneous changes (the “Amendments”). The Amendments include:
1. Purpose of the ~~Board~~Company
Amend Article THIRD to remove non-essential text regarding the purposes of ~~Directors.~~
~~Article TWELFTH~~the Company and clarify that the Company is permitted to engage in any lawful act or activity for which corporations may be organized in conformity with the current provisions of the Delaware General Corporation Law (“DGCL”). The purpose clause in our existing Restated Certificate of Incorporation ~~currently provides~~contains detailed language that ~~our Directors are divided into three classes, with~~is no longer typical or required under the ~~term of office of one class expiring each year and~~DGCL.
2. Preferred Stock
Amend Article FOURTH to remove certain provisions related to the ~~Directors in each class serving three-year terms. If~~Board’s ability to fix 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~~series of preferred stock authorized for ~~cause.~~issuance by the Board, to ensure that we retain flexibility with respect to the terms of any future preferred stock issuances, including with respect to voting rights. There are currently no shares of any series of preferred stock outstanding.

3. Board Committee Designation and Size
Amend Article EIGHTH to conform certain legacy provisions regarding the designation and size of Board committees to the current requirements under the DGCL, which would provide our Board with flexibility to designate additional Board committees more easily in the future.
36 ~~McDonald’s Corporation 2012~~4. Borrowing of Money by the Board
Amend Article ~~TWELFTH would be further amended~~EIGHTH to ~~provide~~remove a provision that ~~following~~addresses the ~~termination~~ability of the ~~classified~~ Board ~~structure~~to borrow money. This provision is not required under the DGCL, as currently in ~~2015, a Director appointed~~effect, and is merely illustrative as an example of the Board’s authority.
5. Indemnification
Amend Article EIGHTH to ~~a vacancy or new directorship would serve for a term expiring at~~remove the ~~next Annual Shareholders’ Meeting following his or her appointment.~~
~~Finally, Section (d)~~last paragraph of Article ~~TWELFTH sets forth~~EIGHTH that describes 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).~~Company to indemnify in certain circumstances, but does not mandate indemnification by the Company of, directors, officers, employees, and agents of the Company. This language does not conform to the current requirements and provisions of the DGCL. As is more typical, our By-Laws and existing indemnification agreements with directors and officers instead reflect our applicable indemnification policies. The Amendments would continue to provide our Board with the ~~same standard~~flexibility to account for changes in the DGCL and related laws and market practices for indemnification through By-Law

corporate.mcdonalds.com81

Management Proposal

amendments and as warranted, indemnification agreements. The Amendments would ~~be required~~not broaden, restrict, or otherwise change the scope of indemnification being provided by the Company to ~~amend any other Article in~~ our ~~Restated Certificate of Incorporation; therefore, Section (d) of~~directors and officers.

6. Staggered Board

Amend Article TWELFTH ~~would be repealed~~ to remove ~~this language that~~certain inoperative staggered board provisions addressing director elections, terms, and removal, which are no longer applicable as the Board is ~~duplicative of applicable law.~~elected annually.

***

The proposed ~~changes to Article TWELFTH~~Amendments are set forth in their entirety in Section 2 of Exhibit A.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.~~

~~VOTE TO APPROVE SHAREHOLDERS’ RIGHT TO CALL SPECIAL MEETINGS~~

The Board believes it is appropriate to make the Amendments to update and modernize our Restated Certificate of ~~Directors is requesting~~Incorporation. The Amendments are not being proposed as a result of any pending litigation.

The Amendments described in this Proposal 4 are interdependent such that shareholders ~~approve~~will be approving all or none of the Amendments. The description of the Amendments is a summary and is qualified by the complete text of the Amendments set forth in Section 2 of Exhibit A hereto. If the Amendments are approved and adopted, they will become effective upon our filing them with the Secretary of State of the State of Delaware. The Board retains the discretion to abandon, and not implement, any or all of the Amendments at any time before they become effective, even if they are approved by shareholders.

Shareholders are also asked to consider Proposal 3, which relates to exculpation of officers. Proposals 3 and 4 are independent of each other. If both Proposal 3 and Proposal 4 are approved by the shareholders, then the Company intends to file a certificate of amendment to our Restated Certificate of Incorporation that implements all of the amendments contemplated by Section 1 and 2 of Exhibit A. If only one of these proposals is approved by the shareholders, but the other proposal is not, then we will file a certificate of amendment that implements only the amendments to our Restated Certificate of Incorporation that ~~would enable holders~~were approved by shareholders.


822024 proxy statement

Table of ~~at least 25%~~Contents

PROPOSAL 5
Advisory Vote to Ratify the Appointment of Ernst & Young LLP as Independent Auditor for 2024
Our Audit & Finance Committee is directly responsible for the appointment, compensation, retention, evaluation, and termination of our independent external audit firm. Our Audit & Finance Committee has appointed Ernst & Young LLP (“EY”) as our independent external audit firm for 2024. 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 corporate 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, and in executive session, which provides the opportunity for continuous assessment of EY’s effectiveness and independence, as well as for considering alternative audit firms.
Our Board unanimously recommends that you vote FOR Proposal 5.

Our Audit & Finance Committee and its Chair are directly involved in the selection of EY’s lead engagement partner, who rotates every five years in accordance with SEC rules and EY policies.
Our Audit & Finance Committee and Board believe the continued retention of EY as our independent external audit firm for 2024 is in the best interests of our ~~outstanding shares~~Company and shareholders, and are therefore asking shareholders to again ratify this annual appointment. A representative of ~~Common Stock (excluding derivatives)~~EY is expected to ~~request~~attend our virtual 2024 Annual Shareholders’ Meeting, where he or she will be available to answer shareholders’ questions.
While our Audit & Finance Committee and Board value 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 interestsopinions of shareholders, ~~by causing our Company to incur unnecessary costs~~this vote is advisory 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~~non-binding. If 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 is responsible for~~do not ratify the appointment of EY, our Audit & Finance Committee will reconsider such appointment, after which it may select another audit firm or nonetheless retain EY if it determines doing so to be in the ~~independent auditor engaged by the Company. The Audit Committee has appointed Ernst & Young LLP as independent auditor for 2012. The Board is asking~~best interests of our Company and shareholders. In addition, even if shareholders to approve this appointment. Ernst & Young LLP audited the Company’s financial statements and internal control over financial reporting for 2011. A representative of that firm will attend the Annual Shareholders’ Meeting and will have an opportunity to make a statement and answer questions. Information about the voting standard for this proposal appears on page [ ].
~~The Board of Directors recommends that shareholders vote FOR~~ratify the appointment of ~~Ernst~~EY, our Audit & ~~Young LLP as independent auditor for 2012.~~Finance Committee may select another audit firm if it determines doing so to be in the best interests of our Company and shareholders.


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Audit & Finance Committee Matters

~~McDonald’s Corporation 2012~~ 37

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’s~~our financial statements, including ~~the Company’s~~our internal control over financial reporting. ~~Ernst & Young LLP (Ernst & Young), the Company’s~~EY, our independent auditor, is responsible for performing an audit of ~~the Company’s~~our annual consolidated financial statements in accordance with ~~generally accepted accounting principles (GAAP)~~the auditing standards of the Public Company Accounting Oversight Board (United States) (the “PCAOB”) and for issuing a report on those financial statements. ~~Ernst & Young~~EY also reviews ~~the Company’s~~our interim consolidated financial statements in accordance with ~~Statement on Auditing Standards No. 100 (interim financial information). The~~applicable auditing standards. Our Audit & Finance Committee oversees ~~the Company’s~~our financial reporting process and internal control structure on behalf of ~~the Board of Directors. The~~our Board. Our Audit & Finance Committee met ~~nine times during 2011, including meeting~~ regularly with ~~Ernst & Young~~EY and the head of internal ~~auditor,~~audit, both privately and with management ~~present.~~present, during 2023.

In fulfilling its oversight responsibilities, ~~the~~our Audit & Finance Committee has reviewed and discussed with management and ~~Ernst & Young the~~EY our audited and interim financial statements ~~including Management’s Discussion and Analysis,~~ included in ~~the Company’s~~our 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’s~~our annual consolidated financial statements, ~~the~~our Audit & Finance Committee also discussed with ~~Ernst & Young other~~EY the matters required to be discussed ~~with the auditor under Statement on Auditing Standards No. 61, as modified or supplemented~~by applicable SEC and PCAOB requirements (communication with audit committees), and those addressed by ~~Ernst & Young’s~~EY’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).

~~The~~Our Audit & Finance Committee is responsible for the engagement of ~~the~~our independent auditor, and it appointed ~~Ernst & Young~~EY to serve in that capacity ~~during 2011~~for 2023 and ~~2012.~~2024. 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, the~~regard, 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, ~~the~~our Audit & Finance Committee recommended to ~~the~~our Board ~~of Directors~~ that ~~the~~our audited consolidated financial statements be included in ~~the Company’s~~our Annual Report on Form 10-K for the year ended December 31, ~~2011~~2023 for filing with the SEC.

Respectfully submitted,

The Audit & Finance Committee

~~Enrique Hernandez, Jr., Chairman~~Catherine Engelbert, Chair
Margaret Georgiadis
John Mulligan
Amy Weaver

Audit & Finance Committee Matters
~~Walter E. Massey~~Policy for Pre-Approval of Audit & Permitted Non-Audit Services
~~Cary D. McMillan~~
~~Sheila A. Penrose~~
~~Roger W. Stone~~
~~POLICY FOR PRE-APPROVAL OF AUDIT AND PERMITTED NON-AUDIT SERVICES~~
~~The~~Our Policy for Pre-Approval of Audit ~~Committee has a policy for~~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. The~~our 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, ~~the~~our 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 approved~~a 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 ~~reconsidered~~reviewed for renewal each year.
~~The~~Our Corporate Controller monitors services provided by ~~the independent auditor~~EY and overall compliance with ~~the pre-approval policy. The~~our Pre-Approval Policy. Our Corporate Controller also reports periodically to ~~the~~our 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 policy~~our Pre-Approval Policy to ~~the Chairman~~our Audit & Finance Committee Chair.


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Audit & Finance Committee Matters

In accordance with our Pre-Approval Policy, all services provided to our Company by EY in 2023 and 2022 were pre-approved by our Audit & Finance Committee.

~~The policy~~Our Pre-Approval Policy is available on the ~~Company’s~~“Governance Resources” section of our website at~~www.governance.mcdonalds.com~~https://corporate.mcdonalds.com/corpmcd/investors/corporate-governance/governance-resources.html.

~~McDonald’s Corporation 2012~~ 39

~~AUDITOR FEES AND SERVICES~~

Auditor Fees & Services

The following table ~~presents~~shows the fees paid for professional services rendered for the audit of ~~the Company’s~~our annual consolidated financial statements for ~~2011~~2023 and ~~2010 and~~2022, as well as fees paid for other services provided by ~~our independent auditor~~EY in those years:

DOLLARS IN MILLIONS

2023

2022
Audit fees⁽¹⁾

$
9.9

10.0
Audit-related fees⁽²⁾

1.0

1.0
Tax fees




Compliance

0.2

0.2
Planning/advisory

0.2

0.1
Total tax fees

0.4

0.3
Total

$
11.3

11.3

(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

(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 internal control environment assessment, information technology governance, and business process and data conversion testing. Also includes fees for employee benefit plan audits and certain attestation services not required by statue 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.~~


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40 ~~McDonald’s Corporation 2012~~

~~Shareholder proposal~~

[~~PROPOSAL NO. 7.~~
Exchange Act”), we are asking shareholders to approve, on an advisory basis, the compensation of our named executive officers for 2023, including the Compensation Discussion and Analysis (the “CD&A”), compensation tables and related material disclosed in this Proxy Statement.

FORProposal 2.

PROPOSALS 6-14
SHAREHOLDER PROPOSALS
Our Board unanimously recommends that you vote AGAINST each shareholder proposal.

~~ADVISORY VOTE ON A SHAREHOLDER PROPOSAL REQUESTING A NUTRITION REPORT~~

The text of the following shareholder ~~proposal~~proposals and supporting ~~statement appear~~statements appears exactly as received byfrom the ~~Company~~proponent(s) unless otherwise noted. All statements contained in the shareholder ~~proposal~~proposals and supporting ~~statement~~statements are the sole responsibility of the ~~proponent.~~proponents. The shareholder ~~proposal~~proposals may contain assertions about ~~the~~our Company or other matters that ~~the Company believes~~we believe are incorrect, but ~~the Company has~~we have not attempted to refute all ~~of those~~such assertions. ~~The Board recommends a vote against the~~Each shareholder proposal ~~based~~is required to be voted on at our 2024 Annual Shareholders’ Meeting only if not withdrawn and properly presented. Our Board unanimously recommends that you vote “AGAINST” each shareholder proposal for the reasons set forth in the ~~Company’s statement~~respective statements in ~~opposition following~~opposition.

The names and share ownership of the proponents of the shareholder ~~proposal.~~proposals are set forth on the following pages. The addresses of the proponents and the names, addresses and share ownership of any co-filers are available, and will be provided promptly, upon request by emailing shareholder.services@us.mcd.com or by calling (630) 623-7428.

~~John Harrington advised~~


862024 proxy statement

Table of Contents

Exchange Act”), we are asking shareholders to approve, on an advisory basis, the compensation of our named executive officers for 2023, including the Compensation Discussion and Analysis (the “CD&A”), compensation tables and related material disclosed in this Proxy Statement.

FORProposal 2.

PROPOSAL 6
ADVISORY VOTE ON ADOPTION OF ANTIBIOTICS POLICY (1 OF 2)
The Congregation of the Benedictine Sisters of Boerne, Texas (“BSBT”), together with certain co-filers, has notified us that it intends to submit this shareholder proposal at our 2024 Annual Shareholders’ Meeting. BSBT beneficially owns shares of our common stock worth at least $2,000. The proponents are responsible, and neither we nor our Board accept any responsibility, for the content of this proposal.
Our Board unanimously recommends that you vote AGAINST Proposal 6.

Shareholder Proposal
RESOLVED: Shareholders request that McDonald’s adopt an enterprise-wide policy to phase out the use of medically-important antibiotics for disease prevention purposes in its beef and pork supply chains. The policy should include, in the discretion of board and management, global sourcing targets with timelines, metrics for measuring implementation, and third-party verification.
SUPPORTING STATEMENT: A policy meaningful to shareholders would include:
● Establishment of a glidepath for the phase out, inclusive of interim reduction targets;
● A commitment to annual disclosure of enterprise-wide antibiotic use including reporting by shared class of antibiotics¹
WHEREAS: The World Health Organization (WHO) and the U.S. Centers for Disease Control and Prevention² (CDC) report that antibiotic resistance is a global public health crisis that threatens to reverse many medical advances made over the last century.
According to the CDC, antibiotic use, both in food animals and human medicine, is the “single most important factor” driving this crisis.³ Nearly two-thirds of medically important antibiotics sold in the U.S. are intended for livestock use⁴ with around 80 percent of those sales consisting of cattle and swine (originally cited at the FDA website under Animal Veterinary News). McDonald’s is the single largest purchaser of beef in the U.S. and a major buyer of pork.⁵
In 2018, McDonald’s published its Global Vision for Antibiotic Stewardship in Food Animals which included a goal to prohibit routine preventive use of antibiotics by meat suppliers and committed to developing “species-specific policies outlining our requirements and implementation timelines for suppliers providing chicken, beef, dairy cows, pork and laying hens for use in McDonald’s restaurants.” It also announced the goal of setting reduction targets for medically-important antibiotics across 80 percent of its global beef supply by the end of 2020.
McDonald’s did not fulfill its promise. In March 2022, it replaced its commitment to set targets for ‘reducing use’ of medically important antibiotics with targets for the ‘responsible use’ of the drugs.
¹
https://exploreanimalhealth.org/antibiotics-used-farm-animals/#:~:text=Some%20antibiotics%20are%20approved%20for,drug%20used%20in%20human%20medicine.
²
https://www.cdc.gov/drugresistance/biggest_threats.html
³
https://www.cdc.gov/drugresistance/pdf/ar-threats-2013-508.pdf
⁴https://amrreview.org/sites/default/files/Antimicrobials%20in%20agriculture%20and%20the%20environment%20-%20Reducing%20unnecessary%20use%20and%20waste.pdf
⁵
http://www.chicagotribune.com/business/ct-mcdonalds-antibiotics-0824-biz-20170823-story.html

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However, if responsible use does not incorporate absolute reduction targets, then McDonald’s pledge is not aligned with the WHO’s imperative to achieve absolute antimicrobial reductions (inclusive of medically important antibiotics) by at least 30-50% by 2030.⁶

By changing its 2018 promise, McDonald’s exposes itself to reputational risk.

Consumer demand for meat raised with limited or no antibiotics is high – surveys have found that the majority of consumers are more likely to eat at restaurants that serve such meat. U.S. producers, including Tyson, supply beef raised without antibiotics. Failure to offer meat raised with minimal antibiotics endangers McDonald’s market share.

⁶	https://www.who.int/news/item/25-11-2022-quadripartite-welcomes-new-political-commitments-in-fight-against-antimicrobial-resistance


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Our Board’s Statement in Opposition

Our Board unanimously recommends that you vote “AGAINST” this proposal. We have a strong track record of supporting responsible antibiotic useacross our supply chain, we are already implementing protein-specific antibiotic use policies that align with the WHO Guidelines (as defined below), and we are leading several global partnerships to gather additional data on antibiotic use to further manage and measure responsible antibiotic use. As a result, our Board believes that adoption of the requested policy is unnecessary, duplicative, and would not provide meaningful benefit to shareholders.

We are committed to helping preserve the long-term effectiveness of antibiotics.

We are striving to help preserve antibiotic effectiveness for future generations by working across our industry and supply chain with producers, veterinarians, academics, and other experts in the field. McDonald’s global position on responsible antibiotic use recognizes that effective treatment of sick animals requires antibiotic selection with oversight from a qualified veterinarian through a valid Veterinary Clinic Patient Relationship (VCPR). Importantly, in alignment with guidance from the World Health Organization (the “WHO”), our antibiotic use policies do not permit the routine use of medically important antibiotics for the purpose of growth promotion or the habitual use of antibiotics for disease prevention.¹ Reduction, where possible without adverse effects on animal health and welfare, remains an intended outcome of our commitments.

Our longstanding commitment began in 2003, when we initially outlined our position on antibiotic use in our supply chain. In 2017, we implemented our revised Vision for Antibiotic Stewardship (“VAS”), which outlines our approach and commitment to responsible antibiotic use (available at https://corporate.mcdonalds.com/content/dam/sites/corp/nfl/pdf/McDonalds-Global-Vision-for-Antimicrobial-Stewardship-in-Food.pdf) promoting refining antibiotic selection and administration, reducing non-therapeutic antibiotic use, and, when possible, replacing antibiotics with long-term solutions to proactively prevent disease and protect animal health and welfare. We remain committed to the treatment of sick animals, aligned with herd or flock veterinarian direction, to support the safety of the consumer food supply chain.

We routinely engage with external experts, who help inform our approach and are advocating for positive change across the industry.

We advocate for increased transparency and data collection, and for public policies that enable better assessment of antibiotic use and the identification of opportunities to minimize and, where possible, eliminate the need to use antibiotics to treat sick animals across the industry. Our VAS and protein-specific antibiotic use policies (for chicken, beef, and pork) are based on the WHO “One Health”² approach that emphasizes the need for collaborative, multi-disciplinary efforts at the local, national, and global levels to achieve optimal health for people, animals, and the environment. As such, we routinely engage with external experts, including veterinarians, academics, nongovernmental organizations, producers, and suppliers, who understand these important interdependencies and responsible use strategies, and who can provide us with advice and direction related to developing our own antibiotic use policies. Building upon these relationships, we are a founding member of the International Consortium for Antimicrobial Stewardship in Agriculture (ICASA).³In this cross-industry collaboration, we work to identify and advance commercial solutions to address Antimicrobial Resistance.

This is applicable to our existing antibiotic use policies for chicken and beef supply chains. Beef: Habitual use of medically important antibiotics for disease prevention is a probable indication of an underlying herd-specific and/or management issue and is not permitted except in the following narrowly defined situations: based upon the determination of a qualified veterinarian familiar with the disease history in the herd, non-routine prevention uses may be permitted if there is a high risk of contraction of a particularly infectious disease. If use is deemed necessary and when effective multiple treatment options exist, McDonald’s encourages adoption of a tiered approach to antibiotic selection – least important to human medicine being the first choice, with Highest Priority Critically Important Antibiotics (HPCIAs) reserved for last resort. Chicken: Antibiotics shall not be used for routine prevention or for growth promotion. In addition, antibiotics shall only be prescribed by a licensed chicken veterinarian that has clinically diagnosed an infectious disease or illness, and such antibiotics must be used strictly in accordance with labeled and veterinary direction for dose, duration, route, frequency, withholding period and withdrawal times.

²	https://www.who.int/health-topics/one-health#tab=tab_1

³	International Consortium for Antimicrobial Stewardship in Agriculture (ICASA) - Foundation for Food & Agriculture Research (foundationfar.org)


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Shareholder Proposal

We have made, and continue to make, meaningful commitments and progress across our global supply chain.

Currently, there is limited data on antibiotic use in industries as a whole. Our intention is to help drive positive behavioral change and transparency, as well as enable comprehensive assessment of antibiotic use across our in-scope supply chains and industries in the future. To this end, we are engaged in global partnerships across our supply chains to gather antibiotic use data, which helps inform the development, implementation, and evolution of our responsible protein-specific antibiotic use policies applicable for in-scope markets. Because each supply chain is unique, we must work in a targeted way to meet our commitments.

Chicken

●

In 2017, in partnership with our suppliers, we announced our Chicken Antibiotics Policy, which includes eliminating the use of Highest Priority Critically Important Antibiotics (HPCIAs) as well as not permitting the routine use of antibiotics for disease prevention or growth promotion, in our top chicken sales markets around the world. ⁴ All in-scope markets are currently on track to eliminate the use of HPCIAs in our chicken supply by the end of 2027 and antibiotics shall not be used for routine prevention or for growth promotion. The use of HPCIAs to human medicine has already been eliminated from all chicken served in Australia, Brazil, Canada, Europe, Japan, South Korea and the U.S.

●

Since February 2019, we’ve tracked the use of medically important antibiotics in the supply chain supporting our top chicken sales markets, representing 80 slaughter facilities and more than 8 billion birds. Producer data collection is managed by our third-party provider, the Food Animal Initiative (FAI).

Beef

●

In 2018, we implemented our Global Beef Antibiotics Policy (available at https://corporate.mcdonalds.com/content/dam/sites/corp/nfl/pdf/McDonalds_Beef_and_Dairy%20_Antibiotic_Policy.pdf), which is informed by our VAS and guidance from expert bodies such as the WHO and the World Organization for Animal Health. The Policy identifies our expectations and anticipated implementation plans across ten in-scope markets.⁵

●

In 2022, we established market-appropriate responsible use targets informed by significant research, pilot testing, and collaboration with subject-matter experts in-line with the “One Health” approach. Our targets focus on the responsible use of medically important antibiotics and are aligned with WHO Guidelines on AMR.

●

Overall reduction remains an intended outcome, while allowing for the necessary treatment of sick animals, aligned with herd veterinarian direction. More information on the market-specific targets for the responsible use of antibiotics in our beef supply chain can be found on page 7 of our Global Beef Antibiotics Policy.

●

In 2023, we worked with supply chain partners to deploy data collection processes and begin building access to use data that will help enable future measurement of antibiotic use and trends over time in our supply chain. Through collaboration, we have identified a number of opportunities, as well as challenges, in continuing to improve data and measurement capabilities in this space.

●

In many European markets, such as France, Germany, the U.K. and Poland, many of our suppliers are already participating in annual mandatory reporting of their antibiotic use progress. Building off of this external requirement, we are working to understand how we can use existing tracking and reporting to measure progress toward our own targets.

⁴

For purposes of this goal, in-scope markets refers to the country in which the final product is sold. Markets covered by this goal include Brazil, Canada, Japan, South Korea, the U.S., Australia, China and Europe. For the purposes of this goal, Europe includes Austria, Azerbaijan, Belgium, Bulgaria, Croatia, the Czech Republic, Denmark, Estonia, Finland, France, Georgia, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Moldova, the Netherlands, Norway, Poland, Portugal, Romania, Serbia, Slovakia, Slovenia, Spain, Switzerland, Sweden, the U.K. and Ukraine. As of December 2023, Belarus, Bosnia & Herzegovina and Kazakhstan have been removed from the scope of this goal based on our exit from those markets.

⁵	These markets (Australia, Brazil, Canada, France, Germany, Ireland, New Zealand, Poland, the U.K., and the U.S.) accounted for over 80% of our global beef supply chain as of the end of 2022.


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Pork

●

In 2022, we evaluated the supplier feedback, which we are leveraging to inform updates to the Policy, including its implementation timeline.

●

In 2023, we continued to engage with suppliers and academia regarding our pork policy. As part of this process, we have initiated work to identify and develop market-specific plans for the collection of antibiotic use data across in-scope markets.

Further information regarding our strategies, governance, and performance related to the responsible use of antibiotics is available on the “Responsible Antibiotic Use” section of our website at https://corporate.mcdonalds.com/corpmcd/our-purpose-and-impact/food-quality-and-sourcing/responsible-antibiotic-use.html

In light of our current responsible-use antibiotic policies and practices, our focus on helping to drive continuous improvement with our suppliers and the industry, and our work to increase access to antibiotic use data and transparency, our Board believes that the adoption of the requested policy is unnecessary, duplicative, and would not provide meaningful benefit to shareholders.

Our Board unanimously recommends that you vote “AGAINST” Proposal 6.


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Exchange Act”), we are asking shareholders to approve, on an advisory basis, the compensation of our named executive officers for 2023, including the Compensation Discussion and Analysis (the “CD&A”), compensation tables and related material disclosed in this Proxy Statement.

FORProposal 2.

PROPOSAL 7
ADVISORY VOTE ON ADOPTION OF ANTIBIOTICS POLICY (2 OF 2)
The Shareholder Commons, on behalf of Legal and General Investment Management America, Inc., (“LGIMA”) and another co-filer, has notified us that it intends to submit this shareholder proposal at our 2024 Annual Shareholders’ Meeting. LGIMA beneficially owns shares of our common stock worth at least $25,001. The proponents are responsible, and neither we nor our Board accept any responsibility, for the content of this proposal.
Our Board unanimously recommends that you vote AGAINST Proposal 7.

Shareholder Proposal
ITEM 7 – Comply with Expert Guidelines on Antimicrobial Use
RESOLVED, shareholders ask that the board of directors institute a policy that the Company (“McDonald’s”) comply with World Health Organization (“WHO”) Guidelines on Use of Medically Important Antimicrobials in Food-Producing Animals (“WHO Guidelines”)¹ throughout McDonald’s supply chains.
SUPPORTING STATEMENT: McDonald’s is the largest beef purchaser in the United States and one of the largest in the world; its policies thus have tremendous influence on the overall market. Investor activists applauded² McDonald’s when it committed in 2018 to reduce antibiotics use in all beef sold in its restaurants, and to announce reduction targets by the end of 2020.³ McDonald’s has not done so. While McDonald’s updated its policy ⁴ in December 2022 to encourage substantial antibiotics intensity reductions from its beef suppliers, its guidance has no deadline. Given the Company’s history of failing to meet its commitments in this area, this latest guidance should not satisfy investors.
Antibiotics overuse is known to exacerbate antimicrobial resistance (“AMR”), which the WHO describes as “one of the top 10 global public health threats facing humanity.”⁵ AMR poses a systemic threat to public health and the economy. When the efficacy and availability of life-saving drugs are compromised, the entire economy suffers. And when the economy suffers, investors lose. By 2050, AMR could cause $100 trillion in lost global production,⁶ thus lowering the economy’s intrinsic value.
McDonald’s policies deviate from the WHO Guidelines, which recommend “an overall reduction in use of all classes of medically important antimicrobials in food-producing animals” and provide evidence-based recommendations and best practices. A November 2022 investigation⁷ found that McDonald’s supplier Cargill sources meat from U.S. farms that use “highest priority critically important antibiotics,” which are so essential to human medicine that the WHO Guidelines suggest their use in livestock farming be stopped.
¹
https://apps.who.int/iris/bitstream/handle/10665/258970/9789241550130-eng.pdf
²
https://www.npr.org/sections/thesalt/2018/12/11/675559302/there-are-lots-of-antibiotics-in-the-beef-supply-mcdonalds-vows-to-change-this
³
https://corporate.mcdonalds.com/corpmcd/our-stories/article/beef_antibiotics.html
⁴
https://corporate.mcdonalds.com/corpmcd/our-purpose-and-impact/food-quality-and-sourcing/responsible-antibiotic-use.html#advocatingForResponsibleAntibioticUselnBeef
⁵
https://www.who.int/news-room/fact-sheets/detail/antimicrobial-resistance
⁶
https://amr-review.org/sites/default/files/160518_Final%20paper_with%20cover.pdf, p.1
⁷
https://www.theguardian.com/global/2022/nov/21/mcdonalds-and-walmart-beef-suppliers-put-public-health-at-risk-with-reckless-antibiotics-use

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Shareholder Proposal

As a McDonald’s competitor explained, robust AMR protections raise “[t]he ~~intends~~challenge of individual costs and widely distributed societal benefits.”⁸ But for diversified investors, the portfolio-wide costs associated with AMR are paramount.

McDonald’s decision not to ~~present~~prioritize broad AMR risks does not account for its diversified owners’ interests in optimizing public health, the economy, and their long-term portfolio returns. By engaging meat suppliers that use medically important drugs beyond WHO Guidelines, McDonald’s adds to the economic threat AMR poses to its diversified shareholders: reducing the economy’s intrinsic value will directly reduce diversified portfolios’ long-term returns.⁹ McDonald’s profit gain that comes at the expense of public health is a bad trade for McDonald’s diversified shareholders, who rely on broad economic growth to achieve their financial objectives.

By changing its policies and adhering to the WHO Guidelines, McDonald’s could save lives, contribute to a more resilient economy, and protect its diversified investors’ portfolios.

Please vote for: Comply with Expert Guidelines on Antimicrobial Use – Item 7

⁸	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, p. 14

⁹	https://www.unepfi.org/fileadmin/documents/universal_ownership_full.pdf


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Our Board’s Statement in Opposition

We are committed to helping preserve the long-term effectiveness of antibiotics.

We are striving to help preserve antibiotic effectiveness for future generations by working across our industry and supply chain with producers, veterinarians, academics, and other experts in the field. McDonald’s global position on responsible antibiotic use recognizes that effective treatment of sick animals requires antibiotic selection with oversight from a qualified veterinarian through a valid Veterinary Clinic Patient Relationship (VCPR). Importantly, in alignment with guidance from the World Health Organization (the “WHO”), our antibiotic use policiesdo not permit the routine use of medically important antibiotics for the purpose of growth promotion or the habitual use of antibiotics for disease prevention.¹ 1 Reduction, where possible without adverse effects on animal health and welfare, remains an intended outcome of our commitments.

Our longstanding commitment began in 2003, when we initially outlined our position on antibiotic use in our supply chain. In 2017, we implemented our revised Vision for Antibiotic Stewardship (“VAS”), which outlines our approach and commitment to responsible antibiotic use (available at https://corporate.mcdonalds.com/content/dam/sites/corp/nfl/pdf/McDonalds-Global-Vision-for-Antimicrobial-Stewardship-in-Food.pdf). promoting refining antibiotic selection and administration, reducing non-therapeutic antibiotic use, and, when possible, replacing antibiotics with long-term solutions to proactively prevent disease and protect animal health and welfare. We remain committed to the treatment of sick animals, aligned with herd or flock veterinarian direction, to support the safety of the consumer food supply chain.

We routinely engage with external experts, who help inform our approach and are advocating for positive change across the industry.

We advocate for increased transparency and data collection, and for public policies that enable better assessment of antibiotic use and the identification of opportunities to minimize and, where possible, eliminate the need to use antibiotics to treat sick animals across the industry. Our VAS and protein-specific antibiotic use policies (for chicken, beef, and pork) are based on the WHO “One Health”² approach that emphasizes the need for collaborative, multi-disciplinary efforts at the local, national, and global levels to achieve optimal health for people, animals, and the environment. As such, we routinely engage with external experts, including veterinarians, academics, nongovernmental organizations, producers, and suppliers, who understand these important interdependencies and responsible use strategies, and who can provide us with advice and direction related to developing our own antibiotic use policies. Building upon these relationships, we are a founding member of the International Consortium for Antimicrobial Stewardship in Agriculture (ICASA). ³ In this cross-industry collaboration, we work to identify and advance commercial solutions to address Antimicrobial Resistance.

This is applicable to our existing antibiotic use policies for chicken and beef supply chains. Beef: Habitual use of medically important antibiotics for disease prevention is a probable indication of an underlying herd-specific and/or management issue and is not permitted except in the following narrowly defined situations: based upon the determination of a qualified veterinarian familiar with the disease history in the herd, non-routine prevention uses may be permitted if there is a high risk of contraction of a particularly infectious disease. If use is deemed necessary and when effective multiple treatment options exist, McDonald’s encourages adoption of a tiered approach to antibiotic selection – least important to human medicine being the first choice, with Highest Priority Critically Important Antibiotics (HPCIAs) reserved for last resort. Chicken: Antibiotics shall not be used for routine prevention or for growth promotion. In addition, antibiotics shall only be prescribed by a licensed chicken veterinarian that has clinically diagnosed an infectious disease or illness, and such antibiotics must be used strictly in accordance with labeled and veterinary direction for dose, duration, route, frequency, withholding period and withdrawal times.

²	https://www.who.int/health-topics/one-health#tab=tab_1

³	International Consortium for Antimicrobial Stewardship in Agriculture (ICASA) - Foundation for Food & Agriculture Research (foundationfar.org)


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We have made, and continue to make, meaningful commitments and progress across our global supply chain.

Chicken

●

In 2017, in partnership with our suppliers, we announced our Chicken Antibiotics Policy, which includes eliminating the use of Highest Priority Critically Important Antibiotics (HPCIAs)as well as not permitting the routine use of antibiotics for disease prevention or growth promotion, in our top chicken sales markets around the world.⁴ All in-scope markets are currently on track to eliminate the use of HPCIAs in our chicken supply by the end of 2027 and antibiotics shall not be used for routine prevention or for growth promotion. The use of HPCIAs to human medicine has already been eliminated from all chicken served in Australia, Brazil, Canada, Europe, Japan, South Korea and the U.S.

●

Beef

●

In 2018, we implemented our Global Beef Antibiotics Policy (available at https://corporate.mcdonalds.com/content/dam/sites/corp/nfl/pdf/McDonalds_Beef_and_Dairy%20_Antibiotic_Policy.pdf), which is informed by our VAS and guidance from expert bodies such as the WHO and the World Organization for Animal Health. The Policy identifies our expectations and anticipated implementation plans across ten in-scope markets. ⁵

●

⁴	For purposes of this goal, in-scope markets refers to the country in which the final product is sold. Markets covered by this goal include

Brazil, Canada, Japan, South Korea, the U.S., Australia, China and Europe. For the purposes of this goal, Europe includes Austria,

Azerbaijan, Belgium, Bulgaria, Croatia, the Czech Republic, Denmark, Estonia, Finland, France, Georgia, Germany, Greece, Hungary,

Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Moldova, the Netherlands, Norway, Poland, Portugal, Romania, Serbia, Slovakia,

Slovenia, Spain, Switzerland, Sweden, the U.K. and Ukraine. As of December 2023, Belarus, Bosnia & Herzegovina and Kazakhstan have

been removed from the scope of this goal based on our exit from those markets.

⁵	These markets (Australia, Brazil, Canada, France, Germany, Ireland, New Zealand, Poland, the U.K., and the U.S.) accounted for over 80% of our global beef supply chain as of the end of 2022.


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Pork

●

In 2021, we created a global, cross-functional working group to develop a Global Pork Antibiotic Policy that is anchored to responsible use and informed by our VAS and the WHO Guidelines on Use of Medically Important Antimicrobials in Food Producing Animals. Our global suppliers were asked to conduct gap assessments between our draft Policy’s criteria/expectations and their then-current internal antibiotic use policies. In 2022, we evaluated the supplier feedback, which we are leveraging to inform updates to the Policy, including its implementation timeline. In 2023, we continued to engage with suppliers and academia regarding our pork policy. As part of this process, we have initiated work to identify and develop market-specific plans for the collection of antibiotic use data across in-scope markets.

Our Board unanimously recommends that you vote “AGAINST” Proposal 7.


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Exchange Act”), we are asking shareholders to approve, on an advisory basis, the compensation of our named executive officers for 2023, including the Compensation Discussion and Analysis (the “CD&A”), compensation tables and related material disclosed in this Proxy Statement.

FORProposal 2.

PROPOSAL 8
ADVISORY VOTE ON WORLDWIDE SWITCH TO CAGE-FREE EGGS
The Accountability Board, Inc. (“TAB”) has notified us that it intends to submit this shareholder proposal at our 2024 Annual Shareholders’ Meeting. TAB owns shares of our common stock worth at least $25,000. The proponent is responsible, and neither we nor our Board accept any responsibility, for the content of this proposal.
Our Board unanimously recommends that you vote AGAINST Proposal 8.

Shareholder Proposal
Dear fellow shareholders,
When Bob Langert first visited an industrial egg facility, he couldn’t wait to leave. The 30-year McDonald’s veteran and former company VP recalled the experience in his book:
“I went through the massive warehouse-type structure with aisles and aisles of cages that stretched beyond 100 yards with the cages stacked on top of each other to 20 feet high or more,” he described. “The laying hens were really squished, with no room to spread their wings. The stench was like a filthy bathroom that hadn’t been cleaned in a long time, with a strong ammonia smell. I couldn’t wait to get out.”
In 2015, McDonald’s addressed this issue in the U.S. and Canada, pledging to use 100% cage-free eggs there by 2025. Its announcement said this “reinforces the focus we place on food quality” and quoted Marion Gross (who later became EVP & Global Chief Supply Chain Officer) as calling it a “milestone” that would “improve the treatment of animals.”
In fact, McDonald’s has already reached 100% cage-free eggs domestically (two years early). It’s also achieved 85% in Canada and uses them in some other markets too.
But food quality and animal welfare are important worldwide.
In fact, cage confinement, specifically, faces increased regulation. Switzerland banned it back in 1992. And since then, the entire E.U. has limited it and bans or restrictions on it have been adopted in eleven U.S. states (see CageFreeLaws.com), the U.K., Norway, Bhutan, Austria, Germany, Canada, New Zealand, and Australia.
Further, numerous McDonald’s competitors are making the switch to cage-free eggs globally.
For example, Restaurant Brands International (Burger King’s owner) is tracking to reach 39% worldwide by 2025 and 100% “by 2030 or earlier” and Yum! Brands (KFC’s owner) says it’ll also use 100% cage-free eggs globally by 2030. Starbucks, CKE Restaurants (Carl’s Jr. And Hardee’s) Cheesecake Factory, Darden, Bloomin’ Brands, Krispy Kreme, General Mills, Kraft Heinz, Unilever, Nestle, Sodexo, Aramark, Shake Shack, and others have also made global pledges.
But not McDonald’s.
In additional to the substantial ethical implications, this is also a material issue, since animal welfare poses risks that could jeopardize the delivery of durable financial returns. In fact, as McDonald’s declared in its 2022 proxy statement, its very “ability to serve safe, quality food comes from animals that are cared for properly.”

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Shareholder Proposal

Looking ahead, cage-free eggs may be widely available now in some markets while, in others, growing capacity could take time (as was the case domestically when McDonald’s adopted its ten-year pledge). Setting targets for making the shift globally could reflect this reality—and would certainly be consistent with the policies of McDonald’s peers, the development of related regulations, and McDonald’s own statements.

THEREFORE: Shareholders ask McDonald’s to publish measurable targets for switching to cage-free eggs worldwide and regularly report its progress meeting those targets. Thank you.

Contact: MCD@TABholdings.org

The proponent recommends you vote “FOR” the proposal.


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Our Board’s Statement in Opposition

Our Board unanimously recommends that you vote “AGAINST” this proposal. After careful review, our Board has determined that our continued approach to prioritize animal welfare strategies across our supply chain, including prioritizing markets where we have a greater opportunity to influence and establish a cage-free egg supply chain, is a more appropriate and effective use of company resources and management’s attention.

We have a longstanding commitment to improving animal welfare, which is supported by robust policies, strategies, and progress reporting for all categories.

We believe we have a responsibility to improve the health and welfare of animals in our supply chain and work with our global network of suppliers to actively encourage industry and cross- sector collaboration. To achieve a positive impact in this area, we engage recognized subject- matter experts and academia to access guidance and challenge the way we think. Taking a whole-system approach that considers everything from housing to humane slaughter, we leverage our global scale in local markets to help drive positive outcomes, across all categories.

We source chicken, beef, dairy, pork, and eggs from suppliers who share our values. Our expectations for these suppliers are clearly outlined in our policies, standards, and specifications for raw materials and finished products, which include strict requirements for animal health and welfare.

We focus on the issues and markets through which we can have the greatest impact, including pursuing a cage-free egg supply chain in markets where we have a greater opportunity to influence change.

We’re using our scale and influence to help positively impact our planet, animals, and the people in our supply chain. As we continue to work with suppliers to increase the supply of cage-free eggs, we are focusing on higher volume markets, including the U.S., Canada, Australia, France, Germany, and Arcos Dorados (the largest McDonald’s Developmental Licensee, with operations in Latin America and the Caribbean).

We have made, and continue to make, meaningful progress across our various supply chains globally.

In 2015, our U.S. market, which purchased almost 2 billion eggs in 2023, made a commitment to sourcing 100% cage-free eggs by the end of 2025. McDonald’s engaged animal welfare experts and academics to help egg producers build and renovate their farms and implement new technology to help us promote a cage-free egg supply large enough to meet our needs.

Through years of partnership with and the support of our suppliers, we were able to drive the significant industry change necessary to meet our target. We are proud to share that, as of the end of 2023, McDonald’s has achieved its goal to source 100% cage-free eggs in the U.S. – two years ahead of schedule.

We have also made progress on sourcing cage-free eggs in our other markets across the globe. For example, Canada and Arcos Dorados have also set goals of sourcing 100% cage-free eggs by the end of 2025, with Canada sourcing more than 85% cage-free eggs as of the end of 2022. Additionally, Australia¹, France, and Germany have each already achieved a 100% cage free egg supply chain.

In light of our comprehensive animal welfare strategy and current cage-free commitments focused on markets where we have the greatest impact, our Board believes that the adoption of the requested policy is unnecessary, duplicative, and would not provide meaningful benefit to shareholders.

Our Board unanimously recommends that you vote “AGAINST” Proposal 8.

¹ Please see McDonald’s Australia’s website for more information: https://mcdonalds.com.au/our-impact/food-quality-sourcing


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Exchange Act”), we are asking shareholders to approve, on an advisory basis, the compensation of our named executive officers for 2023, including the Compensation Discussion and Analysis (the “CD&A”), compensation tables and related material disclosed in this Proxy Statement.

FORProposal 2.

PROPOSAL 9
ADVISORY VOTE ON POULTRY WELFARE DISCLOSURE
The Humane Society of the United States (“HSUS’) has notified us that it intends to submit this shareholder proposal at our 2024 Annual Shareholders’ Meeting. HSUS owns shares of our common stock worth at least $2,000. The proponent is responsible, and neither we nor our Board accept any responsibility, for the content of this proposal.
Our Board unanimously recommends that you vote AGAINST Proposal 9.

Shareholder Proposal
Following significant shareholder support last year, and the company’s subsequent inaction despite it, we again ask McDonald’s to disclose fundamental details about one of its animal welfare initiatives.
Here’s the background:
In 2017, McDonald’s pledged to source broiler (meat) chickens “raised with improved welfare outcomes.” This commitment impacts five billion birds annually, according to McDonald’s.
Following its pledge, McDonald’s adopted 15 “key welfare indicators” (KWIs) for broilers, then invested millions into technology to “automate gathering welfare and behavioral indicators.” In 2022, McDonald’s used the KWIs to set “targets” that would be used to rank suppliers “in performance peer groups that will inform timebound improvement goals. “McDonald’s declares, without elaboration, that this target and improvement system will be “key to ensuring [its] chicken welfare efforts” are beneficial to the birds, suppliers, and the planet.
But despite such extensive promotion of its KWI-based welfare efforts, McDonald’s still refuses to disclose just what the 15 KWIs actually are.
Last year, a shareholder proposal requesting disclosure of the KWIs received significant support, garnering nearly 40% of the vote. Here’s what Institutional Shareholder Services concluded about it:
“The company has set a goal to increase the welfare of its broiler chickens by the end of 2024 and the proponent is asking the company to publicly disclose the 15 key welfare indicators (KWIs) it has set as part of this goal. The proponent is also asking how the KWIs are measured and how they improve the welfare of the broiler chickens in the company’s supply chain. The company says this would disrupt its current efforts. More disclosure on the way the company is measuring the commitments it has would allow shareholders to better assess the effectiveness of the company’s animal welfare commitment and management of related risks. This request is not considered to be overly burdensome. Therefore, shareholder support is warranted.”
It strikes us as strange that McDonald’s continues to seem intent on keeping its KWIs secret, even after such significant support for transparency. Indeed, if a company has developed metrics for measuring performance and informing progress toward an important (and material) significant policy goal, it ought to disclose what they are.
And to be certain, animal welfare transparency is a significant policy issue.

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For example, the 2023 “Transparency Trends” report from FMI (a leading food industry trade association) found it’s “extremely important” to the vast majority of shoppers that brands are transparent, with 74% of respondents saying that specifically means providing “values-based information such as animal welfare.” And a 2023 Merck study found that for 66% of consumers, both “animal care/treatment” and “transparency in animal proteins” are “extremely or very important.”

THEREFORE: Shareholders again ask McDonald’s to disclose its “15 key welfare indicators” and explain how it’s using each one to measure and improve animal welfare.

We believe this request is reasonable, not at all onerous, and comprises the fundamental information companies should provide to display responsibility and accountability on their material policy pledges.


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Our Board’s Statement in Opposition

Our Board unanimously recommends that you vote “AGAINST” this proposal. We have reported transparently and accurately since the launch of our Broiler Chicken Welfare Commitments in 2017 and remain committed to advancing work within our supply chain to meet our goal by the end of 2024 as planned. We believe the additional disclosure requested by this proposal is unnecessary and would not provide meaningful benefit to shareholders due to the specific and technical nature of the requested information.

We have a longstanding commitment to improving the welfare outcomes of broiler chicken in our supply chain and already publicly disclose relevant information about our metrics and our progress.

For more than a decade, we have worked with our suppliers, nongovernmental organizations, academics, and industry experts to advance the welfare outcomes of the chicken served at McDonald’s restaurants. In 2017, we announced a commitment to source chickens (broilers) raised with improved welfare outcomes, and we are on track to meet our commitment by the end of 2024¹.

Our chicken welfare strategy aims to balance scientifically robust animal welfare, human health, and environmental considerations, and is informed by our Chicken Sustainability Advisory Council (the “CSAC”) comprised of 15 researchers, academia, welfare experts, NGOs and suppliers. In 2019, the CSAC defined 15 globally aligned Key Welfare Indicators (“KWIs”) to operationalize our strategy. The KWIs measure performance at the ~~Annual Shareholders’ Meeting. Mr. Harrington~~farm and processor levels towards our welfare outcomes commitment and inform our progress on our chicken welfare goal. Those outcomes include attributes contributing to assessments of overall health, livability, mobility and welfare.

Following 2024, we will continue our partnership with suppliers, farmers, researchers and welfare experts, assessing opportunities to build on the progress we have made so far and working together to drive positive outcomes. As our approach and progress evolves, we will continue to share information relevant to shareholders and other stakeholders, but do not believe that the specific, technical disclosure requested by this proposal is necessary or adds significantly to the information the Company already shares.

We continue to make significant progress in implementing our chicken welfare strategy and transparently communicate this progress with effective Board oversight.

In July 2023, we disclosed progress on all eight of our Broiler Welfare Commitments through our 2022-2023 Purpose & Impact Report. This update was intended to inform stakeholders of the latest actions on each of our commitments as of the end of 2022 and highlight that we are on track toward achieving our 2024 goal. Some highlights include:

●

We have initiated a process to define, then implement, our third-party on farm auditing protocol by the end of 2024. This third-party verification will enable continuous improvement;

●

These commitments apply to chickens raised for sale at McDonald’s restaurants in Australia, Canada, France, Germany, Italy, Ireland, the Netherlands, Poland, South Korea, Spain, Switzerland, the U.K. and the U.S. Russia has been removed from the scope of this goal based on our 2022 exit from this market.


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We intend to continue reporting progress on a regular cadence with oversight from our Board and Sustainability & Corporate Responsibility Committee, which oversees our Broiler Welfare Commitments in addition to our other animal health and welfare commitments.

Due to our transparent reporting related to our Broiler Welfare Commitments, as well as our intention to continue reporting on a regular cadence through commitment completion, our Board believes the additional specific and technical disclosure requested by this proposal is unnecessary and would not provide meaningful benefit to shareholders.

Our Board unanimously recommends that you vote “AGAINST” Proposal 9.


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PROPOSAL 10
ADVISORY VOTE ON CONGRUENCY ANALYSIS ON HUMAN RIGHTS
The National Legal and Policy Center (“NLPC”) has notified us that it intends to submit this shareholder proposal at our 2024 Annual Shareholders’ Meeting. NLPC beneficially owns shares of our common stock worth at least $2,000. The proponent is responsible, and neither we nor our Board accept any responsibility, for the content of this proposal.
Our Board unanimously recommends that you vote AGAINST Proposal 10.

Shareholder Proposal
WHEREAS: Inconsistencies persist between many companies’ published policies and actual practices and operations, posing substantial risks to their reputations and ongoing viability.
The “Human Rights” statement^{1 2} and policy³ published by McDonald’s Corporation (“Company”) espouse the following:
● “over two million individuals who work in McDonald’s franchised restaurants around the world are critical to the System’s success, enabling it to drive long-term value creation “
● “we take seriously our responsibility to respect and promote human rights and to act with due diligence to avoid infringing on the human rights of others and addressing any impacts on human rights if they occur.”
● “We commit to reduce the risk of infringing on human rights by identifying, monitoring, and addressing any impacts on human rights to our employees, which we have caused or to which we have contributed.”
McDonald’s appears to uphold-or rescind-these principles inconsistently across countries where it conducts business.
For example in China, the Company seeks accelerated growth⁴ in an environment where many U.S.-based businesses increasingly exercise caution⁵ due to uninsurable risks.⁶ In its zeal to grow to 10,000 stores by 2028, McDonald’s must comply with the dictatorial Chinese Communist Party, which controls the government. But the Company is more than just a restaurant operator in the country; McDonald’s is in a minority partnership (48%-52%) with Chinese state-owned CITIC Capital.⁷ Thus the Company jointly owns ~~100 shares~~its China locations with an entity the U.S. State Department says is responsible for atrocities including genocide, forced sterilization, forced abortions, and torture⁸ -- especially against the Muslim Uyghurs in Xinjiang province, where McDonald’s operates at least two restaurants.⁹

¹ https://corporate.mcdonalds.com/corpmcd/our-purpose-and-impact/jobs-inclusion-and-empowerment/humanrights.html
² https://corporate.mcdonalds.com/corpmcd/our-purpose-and-impact/jobs-inclusion-and-empowerment/talent-andbenefits.html
³ https://corporate.mcdonalds.com/content/dam/sites/corp/nfl/pdf/McDonalds_Human_Rights_Policy1.pdf
⁴ https://www.reuters.com/markets/deals/mcdonalds-acquire-carlyles-stake-china-unit-2023-11-20/
⁵ https://www.wsj.com/finance/stocks/wall-streets-china-dreams-slip-away-f68ac708
⁶ https://www.wsj.com/articles/your-china-business-may-be-uninsurable-political-risk-coverage-222fl5dd
⁷ https://www.prnewswire.com/news-releases/mcdonalds-to-acquire-carlyles-stake-in-mcdonalds-china- 301993539.html
⁸ https://www.state.gov/reports/2022-country-reports-on-human-rights-practices/china/
⁹ https://twitter.com/xinjiangchannel/status/1346733542718390272?lang=en


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Yet upon Russia’s invasion of Ukraine, the Company temporarily closed all its locations in Russia, while promising to continue to pay its 62,000 employees in the country.¹⁰ But two months later the Company announced it would exit Russia permanently (representing 9% of revenues), stating in a press release, “The humanitarian crisis caused by the war in Ukraine, and the precipitating unpredictable operating environment, have led McDonald’s to conclude that continued ownership of the business in Russia is no longer tenable, nor is it consistent with McDonald’s values.”¹¹ The abandonment by the Company of its Russian locations came despite no reports of endangerment to its restaurants or workers.

Considering the disparate approach between these two examples, it appears that whatever the Company’s principles are, that “McDonald’s values” have stark inconsistencies.

Resolved: Shareholders request the Public Policy and Strategy Committee of the Board of Directors to analyze the congruency of the Company’s ~~common stock.~~human rights policy positions with its actions, especially in countries in geopolitical conflicts or under oppressive regimes, as they impact how the Company maintains its reputation, viability and profitability. A report published on the Company’s website, at reasonable cost and omitting proprietary or confidential information, by March 31, 2025, would be most beneficial.

¹⁰ https://www.cnbc.com/2022/03/08/mcdonalds-will-temporarily-close-850-restaurants-in-russia-nearIy-2-weeksafter-putin-invaded-ukraine.html

¹¹ https://www.cnbc.com/2022/05/16/mcdonalds-says-it-will-sell-its-russia-business-after-previously-pausingoperations-due-to-ukraine-war.html


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Our Board’s Statement in Opposition

Our Board unanimously recommends that you vote “AGAINST” this proposal. Our strong human rights commitments and existing due diligence processes already address the topic raised by this proposal. As a result, our Board believes the requested report is unnecessary and would not provide meaningful value to shareholders.

We take our responsibility to respect human rights throughout our value chain seriously and have due diligence processes surrounding our commitments.

Our human rights commitments are guided by the United Nations Guiding Principles on Business and Human Rights (UNGPs) and other internationally recognized standards. The ~~address~~UNGPs outline that businesses should demonstrate respect for human rights through key steps that include Human Rights Due Diligence and Integrate Findings. McDonald’s manages our approach to human rights in line with these steps, including:

●

Human Rights Due Diligence: To assess and prioritize human rights impacts we conduct human rights assessments, monitor media and third-party reporting, and ongoing internal and external stakeholder engagement. Internal routine accountability mechanisms are also critical for our ongoing due diligence across operations and supply chain. Our Running Great Restaurants and Supplier Workplace Accountability (SWA) initiatives are prime examples of this and are complemented by ad hoc deep dives and heightened human rights due diligence on an as-needed basis.

●

Integrate Findings: Continual improvement is core to McDonald’s business ethics, and we extend this to business partners within our System. Findings from targeted accountability mechanisms are used to improve specific compliance and performance findings and inform longer-term strategies. When appropriate, new work is initiated to take forward recommendations.

Given our clear commitment to human rights and our existing due diligence processes, the requested report is duplicative of existing workstreams and unnecessary.

Our Board provides effective oversight of our human rights commitments.

Our Board and its Committees have oversight of human capital management, including human rights. Human rights professionals within our Global Impact function manage a cross-functional Human Rights Working Group. The executive sponsors of this Group – our Chief Global Impact Officer, Global Chief People Officer, Global Chief Supply Chain Officer, and Global Chief Legal Officer – report to the CEO on human rights risks and share relevant updates to the Board Committees.

Our Global People and Global Supply Chain functions are responsible for our day-to-day human rights performance and measurement, including with our System partners. Our Board and management work together with internal teams throughout our organization on an ongoing basis to help ensure human rights are woven throughout our business, enabling us to fulfill our commitment to respect the rights of all people and communities who serve, produce, and enjoy our food. We believe this existing Board oversight is a more effective way to assess the topic raised by this proposal than the requested report.

We have a comprehensive Enterprise Risk Management program with Board oversight.

We maintain a robust enterprise risk management (“ERM”) program that is overseen by our Board and Audit & Finance Committee. Our ERM program is designed to enable our Board and management to identify, assess, monitor, and manage critical risks to our business. Our Board and management work together with internal teams throughout our organization on an ongoing basis to identify, understand, and proactively assess and manage key short-and long-term business risks. Our business results are subject to a variety of risks, including those that are described in our filings with the Securities and Exchange Commission.

We believe our existing human rights approach aligned with the UNGPs, which specifically includes a framework for due diligence and integrating findings, along with our comprehensive ERM program and Board oversight is a more effective way to assess and mitigate risks to our business and long-term shareholder value than the report requested in this proposal.

Our Board unanimously recommends that you vote “AGAINST” Proposal 10.


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PROPOSAL 11
Advisory Vote on corporate Giving Disclosure
The National Center for Public Policy Research (“NCPPR”) has notified us that it intends to submit this shareholder proposal at our 2024 Annual Shareholders’ Meeting. NCPPR owns shares of our common stock worth at least $2,000. The proponent is responsible, and neither we nor our Board accept any responsibility, for the content of this proposal.
Our Board unanimously recommends that you vote AGAINST Proposal 11.
Shareholder Proposal
Whereas: Corporate contributions should enhance the image of our Company in the eyes of the ~~proponent is available upon request by calling 1-630-623-2553 or by sending a request~~public. Increased disclosure of these contributions would serve to ~~McDonald’s Corporation, Shareholder Services, Department 720, One McDonald’s Plaza, Oak Brook, IL 60523.~~create greater goodwill for our Company. It would also allow the public to better voice its opinions on our corporate giving strategy. Inevitably, some organizations might be viewed more favorably than others. This could be useful in guiding our Company’s public policy and philanthropic decision making in the future. Corporate giving should ultimately enhance shareholder value in line with the Company’s fiduciary duty.
~~Shareholder Proposal~~Resolved:
~~Evaluating Our Company’s Policy Responses and Financial Risks~~
~~Regarding the Childhood Obesity Issue~~
~~Whereas, the contribution of the fast food industry to the global epidemic of childhood obesity has become a major public issue:~~
§ ~~The Centers for Disease Control reports that 1 in 3 US children born in the year 2000 will develop diabetes as a result of diet.~~
§ ~~Childhood obesity greatly increases the risk of diabetes, hypertension, heart disease, cancers, asthma, arthritis, reproductive complications and premature death.~~
§ A 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.
~~Growing public concerns have spurred action by policymakers:~~
§ ~~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.~~
§ ~~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, the Yale Rudd Center on Food Policy and Obesity, recently released a study 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.
~~Resolved:~~
~~Shareholders request~~Proponent requests that the Board of Directors ~~issue~~list on the Company website any recipient of material donations from the Company, excluding employee matching gifts. Optimally, this list would include all recipients of $5,000 or more, or would include an explanation of why such donations are not material to the company but still appropriate for the company to undertake.
Supporting Statement: Current disclosure is insufficient to allow shareholders to evaluate the proper use of corporate assets given to third-party organizations and how those assets should be used.
For instance, as of August 2023, a ~~report,~~review of an organization called GLSEN’s website had included McDonald’s as a “freshmen partner” on its corporate partnerships page.¹ A review of GLSEN’s website as of November 2023, however, no longer lists the Company’s name.
The ambiguity around this partnership is important because GLSEN advocates a divisive and controversial agenda. For example, GLSEN advocates for concealing a student’s preferred gender identity from parents, providing sexually explicit books to minors, and integrating gender ideology at ~~reasonable expense~~all levels of curriculum in public schools—all behavior that seeks to build barriers between parents and ~~excluding proprietary~~their children.²
Without further disclosure, it is unclear to whom, how much, and for what purposes, Company funds are going, and whether such organizations engage in conduct that may cause financial and reputational harm, such as the divisive political and policy advocacy outlined above.
¹ https://www.glsen.org/take-action/corporate-partners
² https://www.glsen.org/activity/model-local-education-agency-policy-on-transgender-nonbinary-students#d; https://www.foxnews.com/media/target-partners-org-pushing-kids-genders-secretly-changed-schools-withoutparental-consent

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Recent events have made clear that company bottom-lines, and therefore value to shareholders, drop when companies engage in overtly political and divisive partnerships. Following Bud Light’s embrace of partisanship, its revenue fell $395 million in North America when compared to the same time a year ago.³ This amounts to roughly 10 percent of its revenue in the months following its leap into contentious politics.⁴ Target Corporation’s market cap fell over $15 billion amid backlash for similar actions.⁵ And Disney stock fell 44 percent in 2022 – its worst performance in nearly 50 years -amid its decision to put extreme partisan agendas ahead of parents’ rights.⁶

³ https://www.cnn.com/2023/08/03/business/anheuser-busch-revenue-bud-light-intl-hnk/index.html.

⁴ https://www.theguardian.com/business/2023/aug/03/bud-light-revenue-sales-anheuser-busch

⁵ https://www.foxbusiness.com/media/target-market-cap-losses-hit-15-7-billion-share-near-52-week-low-amidwoke-backlash; https://nypost.com/2023/05/23/target-to-remove-some-lgbtq-merchandise-after-facing-customerbacklash/?dicbo=v2-x4CMNWo

⁶ https://www.washingtonexaminer.com/policy/economy/disney-has-lost-50-billion-in-value-since-war-with-floridabegan; https://www.hollywoodreporter.com/business/business-news/disney-stock-2022-1235289239/; https://markets.businessinsider.com/news/stocks/disney-stock-price-decline-bob-iger-pandemic-inflation-recessionstreaming-2022-12; https://www.foxnews.com/media/disneys-decline-shows-woke-focus-alienating-fans-wsjcolumn


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Our Board’s Statement in Opposition

Our Board unanimously recommends that you vote “AGAINST” this proposal. This request is duplicative to ongoing disclosure practices given sufficient information ~~within six months~~about the Company’s charitable contributions is already publicly available. The Board has appropriate oversight of the 2012 annual meeting, assessing the company’s policy responses to growing evidence of linkages between fast food and childhood obesity, diet-related diseases and other impacts on children’s health. Such report should include an assessment of the potential impacts of public concerns and evolving public policy on the company’s finances and operations.]Company’s Community Impact & Philanthropy strategy.

~~[Statement in Opposition to be inserted]~~

~~McDonald’s Corporation 2012~~ 41

~~Board and governance matters~~

~~LEADERSHIP STRUCTURE~~

Since 2004, our Board has been led by an independent Chairman, Andrew McKenna. This structure has worked well to assure constructive engagement among the Board and the Chief Executive Officer, and effective oversight of management. In addition, this structure allows the CEO to focus onInformation about the Company’s ~~business, while the Chairman can focus on corporate governance matters, as well as leadership development and succession planning.~~

~~DIRECTOR SELECTION PROCESS~~

charitable contributions is publicly available.

The Company ~~has a policy for the consideration of Director candidates under which the Governance Committee establishes criteria for nominees, screens candidates~~already provides information, including on its website 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 management and shareholders. The Committee may, at the Company’s expense, retain search firms and other advisors to assist it.

The Governance Committee reviews the size and structure of the Board and considers Director tenure, skills and experience in determining the slate of nominees and as part of Director succession planning. All candidates are evaluated on the basis of qualifications. The Governance Committee seeks Directors with records of achievement in their chosen fields and experience relevant to the Company’s scope, strategy and operations. Director candidates also are expected to possess certain qualities, such as integrity, independence of mind, analytical skills, a commitment to serve the interests of shareholders, and a willingness to challenge management in a constructive and collegial environment, as well as the ability to exercise good judgment and provide practical insights and diverse perspectives. Candidates also are evaluated in light of Board policies, such as those relating to Director independence and service on other boards.

Candidates with appropriate qualifications are interviewed in person, typically by the Chairman, the Chief Executive Officer, a majority of the members of the Governance Committee and other available Directors. The Governance Committee also periodically evaluates all Directors in light of the above considerations and their contributions to the Board.

Shareholders who wish to suggest candidates for nomination by the Board 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 DIVERSITY~~

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:~~annual Purpose & Impact Report, about significant charitable donations. Recent disclosures include:

●

In the U.S., one penny from every Happy Meal at ~~which Board members then served as officers (including Mattel, Inc., Inter-Con Security Systems, Inc. and NIKE, Inc.);~~participating McDonald’s was donated to Ronald McDonald House Charities, to support families with sick children, totaling $5.9 million in 2022.

●

~~in which Board members or their immediate family members then held~~The Company is an ~~aggregate 10% or more direct or indirect interest (including Schwarz Supply Source and Inter-Con Security Systems, Inc.); and~~American Red Cross Annual Disaster Giving Program partner, with an annual pledge of $1 million to support disaster relief efforts globally.

●

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 donated over $5 million in 2022 in employee assistance and ~~Wells Fargo & Company).~~international relief support efforts in response to the war in Ukraine.

●

In 2023, McDonald’s Corporation donated $500,000 to earthquake relief efforts in Turkey.

●

The Company made a two-year, $5 million commitment to the Obama Foundation which included support for youth focused community programming in Chicago.

●

The Company launched a Chicago-based investment strategy, including a $3.5 million investment with 40 local nonprofit organizations reducing barriers to employment for youth.

●

The Company contributed $1 million to the Smithsonian Institution in support of the building of the National Museum of the American Latino.

~~These relationships involved McDonald’s purchases of products~~This information, including additional details about these 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~~related efforts, is available on the Company’s website at~~www.governance.mcdonalds.com~~.and is regularly updated as part of annual Purpose & Impact reporting. Therefore, the list requested by this proposal is duplicative and unnecessary.

We have comprehensive internal processes, compliance guidelines and oversight of charitable contributions at the management and Board levels.

The Company has existing processes for, and oversight of, corporate charitable donations to help ensure that they are appropriate and consistent with the Company’s strategy and values.

McDonald’s is a part of many communities around the world, and we believe we have a responsibility to support those communities and the people within them. It’s a responsibility we take seriously ‒ because we know when our communities thrive, so does our business.

Our holistic Community Impact & Philanthropy strategy focuses on three key areas:

●

Families and Their Well-Being, including our support of Ronald McDonald House Charities: As the Ronald McDonald House Charities founding and forever mission partner, our employees, customers, Franchisees, and suppliers have provided their time, funds, and in-kind services to help RMHC® positively impact millions by ensuring that no family has to deal with a child’s medical crisis alone.

●

Support During Times of Need: When it comes to providing support during a humanitarian crisis, we primarily work through our long-standing partnership with the American Red Cross. We also develop programs designed to deliver longer-term community support and are committed to addressing pressing needs in Chicago where our headquarters are located.

●

Opportunity Employment: We want to create meaningful opportunities, such as through job skills or employment access, and unlocking resources for the McDonald’s System to participate in supporting their local communities.


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Shareholder Proposal

We understand the need for accountability and effective risk management in connection with our charitable giving program and diligently follow the guidelines and processes outlined in our Global Compliance Guidelines for Charitable Contributions Policy. Our charitable contributions are governed by this policy to help ensure that Company funds are allocated appropriately in a manner that helps protect our business, our employees, our values, and our brand.

As part of its oversight responsibilities related to brand trust, the Board’s Sustainability & Corporate Responsibility Committee regularly reviews reports on the Company’s Community Impact & Philanthropy strategy and receives an annual report on the Company’s charitable giving.

Given existing disclosures, and management and Board oversight of our charitable contributions and Community Impact & Philanthropy strategy, our Board believes this proposal is duplicative to existing processes and oversight.

~~Number of~~

~~2011 meetings~~

Our Board unanimously recommends that you vote “AGAINST” Proposal 11.


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beneficially owns shares of our common stock worth at least $2,000. The proponent is responsible, and neither we nor our Board accept any responsibility, for the content of this proposal.

AGAINSTProposal 11.

~~Audit~~PROPOSAL 12
Advisory Vote on Annual Report on Global Political Influence
John Harrington has notified us that he intends to submit this shareholder proposal at our 2024 Annual Shareholders’ Meeting. Mr. Harrington owns shares of our common stock worth at least $2,000. The proponent is responsible, and neither we nor our Board accept any responsibility, for the content of this proposal.
Our Board unanimously recommends that you vote AGAINST Proposal 12.

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 any charitable donations directed to public policy research or influence for the preceding year including:
●
~~Enrique Hernandez, Jr.~~
~~(Chairman)~~
~~Walter E. Massey~~
~~Cary D. McMillan~~
~~Sheila A. Penrose~~
~~Roger W. Stone~~
Recipients and amounts.
● The Company’s membership in or payments to nongovernmental organizations including trade and business associations, scientific or academic organizations and charities.
●
~~> Oversees financial reporting, accounting, control and compliance matters.~~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 2021, international media reported McDonald’s “paused all of our political giving while we review our policies and procedures” and, moving forward, “will ensure that all contributions continue to align with our values and the purpose of our business.” This raises significant concerns regarding the global extent of McDonald’s political activity given increased public scrutiny and demand for transparency.
A truly global corporation, McDonald’s operates in 118 countries, with 200,000 employees, approximately. While McDonald’s discloses some information about United States political activities, funds spent to influence public policy internationally are almost entirely undisclosed. Currently shareholders receive minimum information on global corporate spending to influence policies.
Vanguard cautioned:
“[P]oor 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.”
Consequently, industry support for scientific advocacy intended to shape policymaking is receiving heightened scrutiny. McDonald’s website displays a partial list of trade group memberships, limited to national trade associations with annual memberships of $25,000 or more. Associations like International Food Information Council (IFIC) – a food/agrochemical industry group that conducts promotion and research to advance industry interests that often contradict public health, actively defending unhealthy products including sugar, processed foods, artificial sweeteners, and toxic pesticides – are absent.

~~> 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 the Board about, related person transactions.~~

		9

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Shareholder Proposal

Among many blind spots for investors surrounding McDonald’s political activities, the European Union Commission proposed mandatory nutritional labeling, potentially impacting McDonald’s and suppliers’ products as early as 2024. Concurrently, McDonald’s received legal notice alleging failure to manage its plastic waste as required by French law. Most recently, McDonald’s made headlines purportedly lobbying extensively against the European Union’s proposed packaging-reduction legislation.

Awareness regarding McDonald’s products’ environmental and health impacts increases across countries. A McDonald’s executive recently highlighted, “effective policy advocacy, and strong partnerships add up to a powerful response [to such issues]”. Utilizing the highest transparency standards regarding policy advocacy, partnerships, and all corporate political activities, globally, is imperative.

McDonald’s minimally discloses these relationships online, raising transparency and credibility concerns. Media and public scrutiny may quickly reveal corporate activity that appears inconsistent with a company’s stated values, on which our business depends.

Table ~~continued on next page~~

of Contents
Shareholder Proposal

Our Board’s Statement in Opposition

Our Board unanimously recommends that you vote “AGAINST” this proposal. Our political activities outside the U.S. are already subject to public reporting requirements. As a result, and because we are committed to the highest ethical standards when engaging in political activity, our Board believes the requested annual report would be duplicative and, therefore, unnecessary and an inefficient use of resources that would not provide meaningful value to shareholders.

We are recognized as a top company for political transparency and accountability, and shareholders have supported our existing policies and disclosures.

The Center for Political Accountability-Zicklin Index of Corporate Political Disclosure and Accountability (www.politicalaccountability.net) recognized McDonald’s ~~Corporation 2012~~ 43

~~Table continued from previous page~~


~~Committee~~	~~Current members~~	~~Primary 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~~as a “First Tier” company in 2023 for political transparency and accountability. In addition, more than 75% of shares voting rejected a substantially identical proposal at our 2023 Annual Shareholders’ Meeting, indicating that shareholders support our current practices in this area and would be better served by management focusing on other matters.

Our limited public policy engagement outside the U.S. is focused on promoting shareholder value.

Because public policy issues have the potential to impact our business and stakeholders, we believe in certain cases it may be in our and our shareholders’ best interests to make political contributions and engage with policymakers. We participate in public policy dialogues when doing so supports our business strategy and when we believe we can contribute to solving policy issues. We aim to make constructive contributions that will lead to policies that benefit our Company, our shareholders, consumers, and society.

The core of our public policy outreach is to defend, promote, and enhance the franchise business model that drives and sustains our business. Additionally, we generally engage in public policy discussions related to our four Impact Areas: planet; food quality and sourcing; jobs, inclusion, and empowerment; and community impact.

Our political expenditures outside the U.S. are limited and already generally subject to reporting requirements.

Any support that we direct to candidates, electioneering, lobbying, and charities outside the U.S. is generally required, by law, to be disclosed by the recipient or donor. McDonald’s disclosure of political contributions and advocacy spend are made according to each country’s legal framework and through the relevant national and regional regulatory authorities. For example, under the European Transparency Register we disclosed advocacy spending in the EU of less than €699,000 in 2022, and similarly disclosed to the French High Authority for Transparency in Public Life between €100,000 and €200,000 of engagement expenditures in 2022. We abide by all applicable laws governing interactions with public officials.


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Shareholder Proposal

Our Board ~~meetings~~provides effective oversight of our lobbying and ~~meetings~~political activities.

Our Board and Public Policy & Strategy Committee oversee our public policy activities within and outside the U.S., which includes evaluating the long-term interests of the ~~Committees~~Company and/or its system of restaurants and alignment with our business model, mission, and purpose. The Committee is briefed regularly by our Chief Global Impact Officer on corporate political giving and related matters.

The Chief Global Impact Officer, with support from the Global Chief Legal Officer, oversees the implementation of effective compliance and reporting procedures related to political activities and policy engagements, as well as the continuing enhancement of these processes. In the future, we plan to regularly update our website with disclosures related to our advocacy issues and philosophy, U.S. federal and state lobbying activities and related costs, and McDonald’s Political Action Committee (PAC) contributions.

Given our existing practices and public reporting, our Board believes the requested annual report would be duplicative and, therefore, unnecessary and an inefficient use of resources that would not provide meaningful value to shareholders. In addition, our shareholders’ recent rejection of a substantially identical proposal indicates that shareholders would be better served by management focusing on other matters.

Our Board unanimously recommends that you vote “AGAINST” Proposal 12.


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beneficially owns shares of our common stock worth at least $2,000. The proponent is responsible, and neither we nor our Board accept any responsibility, for the content of this proposal.

AGAINSTProposal 11.

PROPOSAL 13
Advisory Vote on Reduction of Supply Chain Water Usage policy
PGGM Vermogenbeheer B.V. (“PGGM”), together with certain co-filers, has notified us that it intends to submit this shareholder proposal at our 2024 Annual Shareholders’ Meeting. PGGM beneficially owns shares of our common stock worth at least $15,000. The proponents are responsible, and neither we nor our Board accept any responsibility, for the content of this proposal.
Our Board unanimously recommends that you vote AGAINST Proposal 13.

Shareholder Proposal
WHEREAS: Consumption of freshwater surpasses the rate at which ~~they serve.~~ it can be naturally replenished in many regions, creating water shortage risks for companies. Compounded by climate change, the World Resources Institute predicts the world will be unable to meet 56 percent of global water demand by 2030.
Companies without a plan to adapt to water scarcity are exposed to risks including increased input costs, price volatility, shifting production zones, stranded assets, government targets, and loss of social license to operate. Barclays warns that the consumer staple sector, including food companies, faces a potential $200 billion impact from water risks.
McDonald’s (the “Company”) is among the world’s largest purchasers of beef and pork, two of the most water-intensive commodities. McDonald’s sourcing practices put pressure on water-stressed regions, which may further compromise long-term profitability. McDonald’s acknowledges the financial materiality of water stress, noting that water scarcity is likely to increase costs through supply chain disruption, water supply disruption, or reputational damage.
McDonald’s and its suppliers are reliant on high water risk regions, for example the water-stressed Colorado River Basin where the Company’s third-largest beef supplier operates. In this region, over 50 percent of water withdrawals are dedicated to irrigating crops for animal feed, calling into question the Company’s supply chain resilience. States are implementing water use reduction regulations, impacting agricultural production, and federal regulators are developing new water use guidelines to take effect in 2026. McDonald’s potato supply chain has recently come under scrutiny for unsustainable groundwater pumping, diminishing aquifers in drought-stricken states. These controversies increase the likelihood of procurement, brand, and regulatory repercussions.
CDP predicts the financial impacts of water risks are five times greater than the costs of addressing them. Although McDonald’s has conducted a water risk assessment of its value chain, it has not disclosed the results. While McDonald’s engages with suppliers on regenerative agriculture, it has not disclosed water-related impacts of these efforts or a measurable strategy to mitigate water risks.
Given company, community, and ecosystem dependence on freshwater, water shortages pose a financial risk to McDonald’s. For investors to feel confident in the Company’s water risk management, McDonald’s should align with best practices such as those outlined by the Corporate Expectations for Valuing Water and set quantitative, timebound targets to reduce water use across its supply chain, especially in water-stressed areas.¹ Peers including Starbucks, Danone, and Cargill have established such targets.
¹ https://www.ceres.org/sites/default/files/Ceres%20Corporate%20Expectations%20for %20Valuing%20Water%202022.pdf


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Shareholder Proposal

RESOLVED: Shareholders request that McDonald’s issue a report assessing the feasibility and practicality of establishing time-bound, quantitative goals to reduce supply chain water usage to mitigate value chain risks related to global water scarcity in high-risk areas. The report should be prepared at reasonable expense and omit proprietary information.

SUPPORTING STATEMENT: In the report, proponents recommend McDonald’s consider, at management’s discretion:

●

disclosing its reliance on agricultural products from water-stressed regions; and

●

explaining how McDonald’s engages suppliers in high-risk watersheds to reduce water use.


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Shareholder Proposal

Our Board’s Statement in Opposition

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%~~unanimously recommends that you vote “AGAINST” this proposal, as production of the ~~total number~~requested report is duplicative of ~~meetings~~work the Company is already undertaking and therefore the proposal is unnecessary and would not provide meaningful benefit to shareholders.

We are aligned with this proposal’s stated goal of identifying, assessing and mitigating risks related to supply chain water usage. However, after careful review of the request for a report assessing the practicality of time-bound quantitative goals, our Board has determined that shareholders would be better served by our continued efforts to implement our risk management strategy and ~~relevant Committees while~~water stewardship efforts in our supply chain.

The Company implements climate risk identification and management strategies, which includes water-related risks.

At McDonald’s, we are assessing climate risks and strengthening our collective resiliency because it’s the right thing to do for our planet, our communities, and our business. The Board of Directors oversees risks related to sustainability and corporate responsibility matters, including those related to climate, through the Sustainability & Corporate Responsibility Committee.

The Company’s risk management processes identify, prioritize, and address a broad range of risks that can directly or indirectly impact the organization in the short, medium, and long term. Climate, forests, water, and other natural resource-related risks are assessed based on both breadth as well as depth of impact to the McDonald’s System. Supply chain water usage-related risks and potential management strategies are evaluated as part of these existing processes, making the requested report duplicative and unnecessary.

We analyze medium- and long-term implications from water stress risks for both McDonald’s restaurants and our supply chain on a periodic basis. The results of these assessments are integrated into climate-related risk discussions within the business to inform future planning and help ensure we are appropriately managing these risks.

The Company has embedded water stewardship in its sourcing requirements and set climate-related expectations for suppliers.

McDonald’s has a history of supporting water stewardship efforts at restaurants and within our supply chain, including reporting to CDP Water for several years. The Company is working to conserve water, use it responsibly and efficiently, and build resiliency. We recognize that water is a key pillar in how we build resiliency, for both our restaurants and suppliers. For example, the Company expects its suppliers to proactively manage, measure and minimize the environmental impact of their own operations, including through responsible water use and disposal. We also expect suppliers to be consistently improving the sustainability of sourcing practices throughout their supply chains and encourage them to report their progress through the CDP Water disclosure.

Through our Supplier Code of Conduct, which applies to all of our suppliers, we communicate the importance of conserving and safeguarding water. Guidance for suppliers on best practice water stewardship and management is included in our Global Sustainable Sourcing Guide, an internal resource that is in line with emerging risks and developing best practices. This resource, which guides action for our food, packaging and logistics suppliers at the market and global levels, identifies water stewardship as one of McDonald’s priority impact areas which are key issues in our business and supply chain where we want to drive positive sustainability outcomes.

In addition, we have undertaken water risk analyses, including as part of Taskforce on Climate- Related Financial Disclosure modelling, and between 2021-2022, we conducted water efficiency pilots in restaurants across the U.S. and used the results to recommend internal restaurant standards around water efficiency and use reduction.

Considering our established risk management strategies, supply chain expectations, and transparent disclosures, the report requested by this proposal is duplicative of existing efforts and will not provide additional meaningful benefit to shareholders.

Our Board unanimously recommends that you vote “AGAINST” Proposal 13.


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beneficially owns shares of our common stock worth at least $2,000. The proponent is responsible, and neither we nor our Board accept any responsibility, for the content of this proposal.

AGAINSTProposal 11.

PROPOSAL 14
Vote on Binding By-law Amendment for Stockholder PRE-Approval of Director Compensation
John Chevedden has notified us that he intends to submit this shareholder proposal at our 2024 Annual Shareholders’ Meeting. Mr. Chevedden owns shares of our common stock worth at least $15,000. The proponent is responsible, and neither we nor our Board accept any responsibility, for the content of this proposal.
Our Board unanimously recommends that you vote AGAINST Proposal 14.

Shareholder Proposal
Proposal 14 – Bylaw Amendment: Stockholder Approval of Director ~~was a member. All Directors attended the 2011 Annual Shareholders’ Meeting.~~
Compensation
44The Bylaws of McDonald’s Corporation ~~2012~~are amended as follows:
~~BOARD AND COMMITTEE EVALUATIONS~~Article III, Section 9. is deleted and replaced in its entirely as follows:
~~The Governance Committee annually evaluates~~Compensation - No employee of the ~~performance~~Corporation shall receive any additional compensation or remuneration for serving as a member 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 effectivenessMembers of the Board ~~notably Director succession and Board composition.~~of Directors who are not otherwise employed by the Corporation may receive such compensation only as determined in this Section. 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.~~Directors shall not have any authority to fix the compensation of directors. The compensation of directors the corporation pays shall be fixed at $1 in a fiscal year; provided, however, the corporation may pay, grant, or award compensation greater than $1 in a fiscal year if such compensation has been (1) disclosed to stockholders in advance of the fiscal year in which the corporation will pay, grant, or award such compensation; (2) submitted to an approval vote of stockholders at an annual or special meeting of stockholders in advance of the fiscal year in which the corporation will pay, grant, or award such disclosed compensation; and (3) approved by a majority of stockholders votes present in person or represented by proxies and entitled to vote cast in favor of the disclosed annual compensation at an annual or special meeting of stockholders in advance of the fiscal year in which the corporation will pay, grant, or award such compensation, which majority shall include only stockholder votes of stockholders that are not directors of the Company.
~~DIRECTOR COMPENSATION~~Supporting statement
McDonald’s stockholders seek an independent Board of Directors, one that has as its sole objective representing stockholders without conflict of interest. One interest pertains to compensation and how McDonald’s compensates directors for board service. Stockholders seek the authority to approve compensation that directors receive from McDonald’s.
Stockholders want and need authority over how and how much McDonald’s compensates directors. If stockholders approve compensation, then directors have the greatest incentive to work in the sole interest of stockholders. Currently, directors design and approve compensation with no approval from stockholders. Directors receive whatever compensation they desire. This bylaw amendment corrects this problem.

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Shareholder Proposal

The ~~Governance Committee recommends~~bylaw amendment provides for a stockholder vote on director compensation. Directors can continue to design and propose compensation structure and amount, including the ~~Board the form~~mix and amount of cash and equity. Stockholders will have final approval over whether Directors receive what directors propose. Stockholders will vote on Director compensation as disclosed in the proxy statement for ~~non-management Directors. Only non-management~~a stockholder meeting before the fiscal year in which Directors ~~are~~receive that compensation. Stock owned by Directors will not count in the vote, so the vote result represents the independent views of stockholders.

I urge stockholders to approve this bylaw amendment and assume proper authority over the compensation of directors who represent us.


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Shareholder Proposal

Our Board’s Statement in Opposition

Our Board unanimously recommends that you vote “AGAINST” this proposal. The proposal seeks a binding amendment to the Company’s By-laws, that if adopted would introduce uncertainty and additional complexity into the important process of approving Director compensation. Further, we believe the proposal is unnecessary given the Board’s robust governance processes associated with Director compensation and would be harmful to the Company and our shareholders.

The binding nature of the proposal would cause the Company to cease paying Directors for rendered services and create uncertainty about future Director compensation.

As the Company’s shareholders have not voted on any Director compensation, if the proposal is adopted the Board would cease to be paid for their service, onincluding any compensation previously approved by the Board for services already rendered by the time of the 2024 Annual Meeting of Shareholders. Moreover, each year the Directors would be uncertain if they will receive compensation in excess of $1 for their service until the Annual Meeting of Shareholders. Currently, our Director compensation program helps us to attract and retain highly-qualified Directors; however, this uncertainty and deviation from market practice could make it more challenging, which is not in the best interest of the Company or our shareholders.

The Company’s Director compensation is reasonable in amount and supported by a robust governance process.

The Delaware General Corporation Law expressly permits a company’s board of directors to determine director compensation. Annually, the Governance Committee reviews Director compensation and makes a recommendation to the full Board. ~~In 2011, this~~The Company retains an independent compensation ~~structure was as follows: (i)~~consulting firm to perform a comprehensive annual review of the amount and form of the Director compensation, including benchmarking with peers and similarly-sized companies. Directors receive a balanced mix of compensation, consisting of an annual cash retainer and share equivalent awards that are not distributable until the Directors’ service on the Board ends. These share equivalent awards help to align the interest of ~~$90,000; (ii) an annual retainer fee~~our Directors with those of ~~$20,000 for each Director serving as Chair~~our shareholders and emphasize a long-term view of our business. Further, the proponent’s supporting statement does not offer any concerns with the amount or structure of the ~~Audit, Compensation~~Company’s Director compensation, and the Company has not received negative feedback on our Director compensation as part of our ongoing shareholder engagement efforts.

Our Directors are already accountable to our shareholders.

Each of our Directors is elected annually by a majority vote of our shareholders, which provides shareholders considerable influence over our Board. Our Board believes the annual election and majority voting standard are a more effective means of holding our Board accountable for reasonable Director compensation than a binding annual shareholder vote on such a complex topic.

For all of the above reasons, the Board believes that the proposed binding By-law amendment that requires immediate shareholder pre-approval of Director compensation is inadvisable and unnecessary and would not provide benefits to the Company or ~~Governance Committees, and an annual retainer fee~~our shareholders.

Our Board unanimously recommends that you vote “AGAINST” Proposal 14.


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Table of ~~$10,000~~Contents

Stock Ownership
Director & Executive Stock Ownership Policies
Our Stock Ownership Guidelines for ~~each Director serving as Chair~~Directors provide that Directors should own shares of ~~other Board Committees; and (iii)~~our common stock ~~equivalent units with a $130,000~~equal in value ~~granted annually~~ to ~~each Director serving for~~five times 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 paid to Directors within five years of ~~$100,000; (ii) an annual retainer fee of $25,000 for serving~~joining our Board. All Directors are currently in compliance with the guidelines, which are regularly reviewed by our Governance Committee. In addition, our Stock Ownership and Retention Policy imposes requirements on senior officers, as ~~Chair of the Audit, Compensation~~discussed under “Policy Regarding Management’s Stock Ownership” on page 67. Directors and officers are prohibited from entering into hedging or ~~Governance Committees and an annual retainer fee of $15,000 for serving as Chair of other Board Committees; and (iii)~~pledging arrangements with respect to our common ~~stock equivalent units with a $140,000 value.~~

stock.
~~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:
~~Name~~
~~Outstanding stock awards~~
~~as of December 31, 2011~~
~~Susan E. Arnold~~
~~6,872~~
~~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~~
~~Susan E. Arnold~~
–
~~Robert A. Eckert~~
~~15,000~~
~~Enrique Hernandez, Jr.~~
–
~~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.
~~(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.
Our Stock ~~ownership~~
~~STOCK OWNERSHIP GUIDELINES~~
~~The Company imposes stock ownership guidelines~~Ownership Guidelines for Directors, Stock Ownership and ~~senior officers. These guidelines~~Retention Policy, and Policy With Respect to the Hedging and Pledging of McDonald’s Stock are available on the ~~Company’s~~“Governance Resources” section of our website at~~www.governance.mcdonalds.com~~https://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 owners~~Security Ownership of ~~more than five percent of the Company’s common stock outstanding as of December 31, 2011:~~
000000000000000 000000000000000 000000000000000

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 ~~the~~our common stock and common stock equivalent units for the named individuals, including Director nominees, as well as all current Directors and ~~the~~executive officers as a group, as of March 1, ~~2012, except as noted below.~~2024. Directors and executive officers as a group owned (directly, indirectly and through benefit plans) ~~[less~~less than ~~1.0%]~~1% of ~~the Company’s~~our common ~~stock:~~stock.

COMMON

STOCK

NAME

STOCK⁽¹⁾

EQUIVALENTS⁽²⁾

TOTAL
Directors

Anthony Capuano

117

982

1,099
Kareem Daniel

0

870

870
Lloyd Dean

0

12,577

12,577
Catherine Engelbert

2,079

3,134

5,213
Margaret Georgiadis

2,130

9,103

11,233
Enrique Hernandez, Jr.

9,939

92,075

102,014
Michael Hsu⁽³⁾

89

0

89
John Mulligan

2,900

8,364

11,264
Jennifer Taubert

0

1,401

1,401
Paul Walsh

0

4,615

4,615
Amy Weaver

0

870

870
Miles White

5,000

20,822

25,822
Named Executive Officers

Christopher Kempczinski

647,807

4,798

652,605
Ian Borden

239,750

0

239,750
Gillian McDonald

11,813

0

11,813
Jonathan Banner

5,419

0

5,419
Joseph Erlinger

206,152

0

206,152
All Directors and executive officers as a group (24 persons)

1,491,005

169,186

1,660,191
000000000000 000000000000 000000000000 000000000000 000000000000
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)

(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 unallocated shares held in the Company’s Profit Sharing and Savings Plan as follows: Directors Skinner, [            ]; and Thompson, [            ]; Mr. Bensen, [            ]; Ms. Fields [            ] and the Group, [            ].
~~(3)~~ ~~Includes shares that could be purchased by exercise of~~vested stock options onfor executive officers. Includes 9,939 RSUs granted to Mr.Hernandez in connection with his service as Chairman, which shall be payable in either shares of our common stock 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)cash at our discretion, 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)~~ shall vest upon his separation from our Board. Directors and executive officers as a group have sole voting and investment power over the shares ~~of common stock~~ listed ~~in the prior table~~above, except ~~as follows: (i)~~for 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;~~by: Ms.Georgiadis: 2,130; Mr. Hsu: 89; Mr.Mulligan: 2,900; 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.Marion Gross: 14,312.
~~(5)~~(2) ~~For Director Rogers, includes 77,500 shares of common stock held in a margin account.~~
~~(6)~~ Includes common stock equivalent units credited under ~~the Company’s retirement plans and the~~our Amended & Restated Deferred Compensation Plan and/or Board of Directors’ Deferred Compensation Plan, which are payable in cash.
(3) Mr. Hsu is a first-time Director nominee.

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Stock Ownership

~~COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT~~
Security Ownership of Certain Beneficial Owners
The following table shows all beneficial owners of more than 5% of our common stock outstanding as of December 31, 2023.

AMOUNT AND NATURE OF

PERCENT OF
NAME AND ADDRESS

BENEFICIAL OWNERSHIP

CLASS
The Vanguard Group, 100 Vanguard Boulevard, Malvern, PA 19355⁽¹⁾

69,043,882

9.52%
BlackRock, Inc., 50 Hudson Yards, New York, NY 10001⁽²⁾

51,974,467

7.20%
~~Our~~
(1) Reflects shares deemed to be beneficially owned by The Vanguard Group, directly or through its subsidiaries, as of December31, 2023, according to a Schedule 13G/A filed with the SEC on February13, 2024 that indicates: (a)The Vanguard Group, an investment adviser, has sole voting power with respect to no shares, shared voting power with respect to 935,150 shares, sole dispositive power with respect to 65,827,581 shares and shared dispositive power with respect to 3,216,301 shares; and (b)all 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 December31, 2023, according to a Schedule 13G/A filed with the SEC on January 26, 2024 that indicates: (a)BlackRock,Inc., a parent holding company, has sole voting power with respect to 46,509,457 shares and sole dispositive power with respect to 51,974,467 shares; and (b) allsuch 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.
Delinquent Section 16(a) Reports
Section 16(a) of the Exchange Act requires our Directors and executive officers, ~~and Directors and persons who own~~as well as beneficial owners of more than 10% of our common stock, ~~(Reporting Persons) must~~to file reports with the SEC ~~about~~regarding their ownership of ~~and transactions in our common stock and~~ our securities ~~related to our common stock. Reporting Persons must furnish us with copies of these reports.~~and changes thereto. Based solely on our review of those reports ~~provided to us~~ and ~~inquiries we have made,~~related written representations, we believe all such filing requirements applicable to our Directors and executive officers were timely met during 2023, except: (i) Catherine Engelbert, Director, had a transaction on April 3, 2023 that ~~during the year ended December 31, 2011, all Reporting Persons~~was reported on her Form 4 filed on August 4, 2023; and (ii) Jo Sempels, Senior Vice President and President, International Developmental Licensed Markets, filed an amended Form 3 on June 1, 2023 to report certain holdings that were inadvertently excluded from his initial Form 3, which was timely filed on September 8, 2022, and were also omitted from the Forms 4 filed after the original Form 3 was filed.


1222024 proxy statement

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2025 Annual Shareholders’ Meeting
The following table summarizes how shareholders may submit proposals, including Director nominations, for our 2025 Annual Shareholders’ Meeting. Any such proposal or nomination should be emailed to corporatesecretary@us.mcd.com. See Rule 14a-8 under the Exchange Act and our By-Laws for all ~~required reports.~~requirements.
TYPE OF PROPOSAL /
NOMINATION

DESCRIPTION / INFORMATION TO BE PROVIDED

WHEN PROPOSAL / NOMINATION
MUST BE RECEIVED
Shareholder-Nominated Director Candidates

Our 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 our Corporate Secretary in accordance with, and each nominee must meet the qualifications required by, our By-Laws. Shareholders who intend to solicit proxies in support of Director nominees other than our Board’s Director nominees must also comply with the additional requirements of Rule 14a-19(b) under the Exchange Act.

No earlier than 5:00 p.m. Central Time on January 22, 2025, and no later than 5:00 p.m. Central Time on February 21, 2025
Proxy Access Director Candidates

Our By-Laws provide that, under certain circumstances, a shareholder or group of up to 20 shareholders may seek to include Director candidates that they have nominated in our proxy statement. Such nominating shareholder or group of shareholders must own, and have owned continuously for at least three years, at least 3% of the aggregate voting power of our outstanding common stock. The number of shareholder-nominated candidates appearing in our proxy statement cannot exceed the greater of two and 20% of the number of Directors then serving on our Board (if not a whole number, the largest whole number below 20%, which may be reduced under certain circumstances as described in our By-Laws). The nominating shareholder or group of shareholders must also deliver the information required by, and satisfy the other applicable requirements of, our By-Laws, and each nominee must meet the qualifications set forth in our By-Laws.

No earlier than 5:00 p.m. Central Time on January 22, 2025, and no later than 5:00 p.m. Central Time on February 21, 2025
Shareholder Proposals

SEC rules permit shareholders to submit proposals for inclusion in our proxy statement by satisfying the requirements of Rule 14a-8 under the Exchange Act. To be considered for inclusion in our proxy statement for our 2025 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 December [•], 2024
Other Proposals

For any proposal that is sought to be presented directly from the floor of our 2025 Annual Shareholders’ Meeting, our By-Laws require that (i) timely notice be given in writing to our Corporate Secretary, (ii) the proposal, as determined by the Chairman of the meeting, be a proper subject for shareholder action under Delaware law and (iii) the proposal satisfy certain other requirements set forth in our By-Laws.

No earlier than 5:00 p.m. Central Time on January 22, 2025, and no later than 5:00 p.m. Central Time on February 21, 2025

We intend to file a proxy statement, proxy card and annual report to shareholders with the SEC in connection with the solicitation of proxies for our 2025 Annual Shareholders’ Meeting. Shareholders may obtain our proxy statement (and any amendments and supplements thereto) and other documents as and when filed by us with the SEC without charge from the SEC’s website at www.sec.gov.


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Transactions with ~~related persons, promoters and certain control persons~~
~~POLICIES AND PROCEDURES FOR RELATED PERSON TRANSACTIONS~~
Related Persons
The McDonald’s System has over ~~33,000~~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~~interact with many companies in many industries, including suppliers of food and other products and services. ~~The~~Our Board ~~of Directors~~ reviews and approves ~~(or ratifies),~~or ratifies, as appropriate, transactions, relationships, or arrangements in which ~~the~~our Company is a participant and ~~that~~which involve Directors, Director nominees, executive officers and beneficial owners of more than 5% of our common stock, ~~their~~as well as immediate family members (including domestic ~~partners~~partners) of the foregoing and companies in which ~~they~~the foregoing have a material interest.
~~The~~Our Board has ~~adopted~~ a written policy that sets out procedures for the reporting, review, and approval/ratification of related person transactions. The policy operates in conjunction with other aspects of ~~the Company’s~~our compliance program, including a requirement that Directors and employees report any circumstances that may create or appear to create a conflict of interest, 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 Committee~~our Board evaluates related person transactions for purposes of recommending to ~~the~~our disinterested ~~members of the Board that the~~Directors whether or not such 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.
~~The~~Our Board has considered ~~certain~~the following types of potential related person transactions and pre-approved them as not presenting material conflicts of ~~interest. Those transactions include (a)~~interest: (i) compensation paid to Directors and executive officers that has been approved by ~~the~~our Board or ~~the~~ Compensation Committee; ~~(b)~~(ii) Company contributions to ~~Ronald McDonald House Charities, Inc.~~RMHC® 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’s~~our common stock and in which all holders of ~~the~~our common stock receive the same benefit on a pro rata basis. ~~The Audit Committee~~Our Board considers the appropriateness of any related person transaction not within ~~these~~the pre-approved classes in light of all relevant factors, including:
> ● whether the terms of the transaction ~~and whether they~~ are ~~arm’s-length~~arm’s length and in the ordinary course of ~~McDonald’s~~our 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~~our disinterested Directors when so required under Delaware law.
Since January 1, 2023, there were no transactions, and there are no currently proposed transactions, in which our Company was or is to be a participant, in which the amount involved exceeds $120,000, and in which any related person had or will have a direct or indirect material interest.


1242024 proxy statement

~~McDonald’s Corporation 2012~~ 49

Table of Contents

~~RELATED PERSON TRANSACTIONS~~

Q&A: Proxy Materials & Voting Information
1.
What is Included in the Proxy Materials?
In 2011, the Company and its subsidiaries purchased approximately $750,000 worth of paper and other printed products (principally food product liners, trayliners, french fry bags, hash brown bags and bag stuffers) from Schwarz Supply Source. Director McKenna is Chairman of Schwarz, as well as a 40.46 % shareholder. Members of Director McKenna’s family are also shareholders of Schwarz. Schwarz’s business with the Company and its subsidiaries represents less than 1% of Schwarz’s total revenues. The Company believes that these purchases 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.]
~~In 2011, Inter-Con Security Systems, Inc., provided physical security services~~proxy materials for the ~~Company’s home office campus. Director Hernandez~~meeting include the Notice of 2024 Annual Shareholders’ Meeting, this Proxy Statement and our 2023 Annual Report on Form 10-K. If you received a paper copy of the proxy materials, they also include a proxy card or voting instruction form.
2.
What is the Record Date?
March 25, 2024 is the ~~President~~record date for the 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 ~~Chief Executive Officer, as well~~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?

PROPOSAL

OUR BOARD’S VOTING
RECOMMENDATION
VOTING STANDARD
EFFECT OF
ABSTENTIONS
EFFECT OF BROKER
NON-VOTES
1

Election of 12 Directors to Serve Until our 2025 Annual Shareholders’ Meeting and Until Their Successors Have Been Elected and Qualified

“FOR” EACH OF OUR
BOARD’S DIRECTOR
NOMINEES

Majority of votes cast

None

None
2

Advisory Vote to Approve Executive Compensation

“FOR”

Majority of the voting power represented at the meeting and entitled to vote thereon

Vote against

None
3

Vote to Approve an Amendment to the Company’s Restated Certificate of Incorporation to Limit Liability of Officers as Permitted by Law

“FOR”

Majority of votes of the common stock outstanding

Vote against

Vote against
4

Vote to Approve Amendments to the Company’s Restated Certificate of Incorporation to Implement Miscellaneous Changes

“FOR”

Majority of votes of the common stock outstanding

Vote against

Vote against
5

Advisory Vote to Ratify the Appointment of Ernst & Young LLP as Independent Auditor for 2024

“FOR”

Majority of the voting power represented at the meeting and entitled to vote thereon

Vote against

Brokers may vote in their discretion
6–14

Advisory Vote (except Proposal 14) on Nine Shareholder Proposals, Each Only if Properly Presented

“AGAINST” EACH
SHAREHOLDER PROPOSAL

Majority of the voting power represented at the meeting and entitled to vote on each shareholder proposal

Vote against

None

For Proposal 1, Directors will be elected by a ~~54.44% shareholder~~majority of ~~Inter-Con. Payments~~votes cast, which means that a Director nominee is elected if the number of votes cast “FOR” exceeds the number of the votes cast “AGAINST” his or her election.

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Q&A: Proxy Materials & Voting Information

With respect to each of the other proposals, shareholders may vote “FOR” or “AGAINST,” or abstain from voting. Pursuant to our By-Laws, in order to be approved by our shareholders, these proposals (other than the proposals to approve the amendments to the Company’s Certificate of Incorporation) 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. The proposals to approve the amendments to the Company’s Certificate of Incorporation must receive the affirmative vote of a majority of the common stock outstanding to be deemed approved by the ~~Company to Inter-Con for 2011 for such services totaled approximately $1.1 million. The Company believes that these services, which represent less than 1%~~shareholders.

Abstentions on any one or more of the ~~revenues~~proposals are shares present for purposes of ~~Inter-Con, were made~~determining a quorum, but an abstention on ~~terms~~any proposal (other than Proposal 1) will have the effect of a vote “AGAINST” that proposal.

If any other business properly comes before shareholders for a vote 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 or~~named 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 at~~~~mcdbod@us.mcd.com~~~~. Under the Board’s policy for communications addressed~~your proxies on such matters to the extent authorized by Rule 14-4(c) under the Exchange Act. Our Board ~~the Office~~knows of the Corporate Secretary collects mail from the Directors’ post office box and e-mail box, forwards correspondence directed to an individual Director to that Director, and screens correspondence directed to multiple Directors or the full Boardno matters, other than those described in order to forward it 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 Chairman of the Audit Committee.

~~CONSIDERATION OF DIRECTOR NOMINATIONS FOR THE 2013 ANNUAL SHAREHOLDERS’ MEETING~~

~~DIRECTOR CANDIDATES NOMINATED BY THE BOARD~~

Shareholders can suggest Director candidates for consideration for nomination by the Board by writing 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 to~~corporatesecretary@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~~this 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 respect to the 2013 Annual Shareholders’ Meeting, notice will be timely if it is sent 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 to~~corporatesecretary@us.mcd.com~~, 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 at~~www.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 provide 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 to 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 to~~corporatesecretary@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 ~~directly from~~for consideration at 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 to~~corporatesecretary@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.meeting.

~~McDonald’s Corporation 2012~~ 51

~~Solicitation of proxies and voting~~

~~NOTICE AND ACCESS~~

4.
Why Did I Receive a Notice of Internet Availability of Proxy Materials?

We follow the SEC’s “Notice and Access” ~~rule. Most~~rule and have sent most shareholders ~~will receive~~ a ~~notice~~Notice of Internet ~~availability~~Availability of ~~proxy materials (Notice)~~Proxy Materials in lieu of a paper copy of the ~~Proxy Statement and the Company’s Annual Report. The Notice~~proxy materials. It provides instructions ason how to ~~how shareholders can~~ access the proxy materials online, describes matters to be considered at the ~~Annual Shareholders’ Meeting~~meeting and ~~gives~~provides instructions ason how to ~~how shares can be voted. Shareholders receiving the~~vote your shares. If you receive a Notice of Internet Availability of Proxy Materials, you can request a paper copy of the proxy materials by following the instructions ~~set forth~~included therein.

5.	How Can I Attend the 2024 Annual Shareholders’ Meeting?

We will have a virtual meeting. Only shareholders as of the record date may attend the virtual 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), may~~advance to ask questions or vote at the ~~2012 Annual Shareholders’ Meeting. On that date, [ ] shares~~meeting by using the control number located on their Notice of ~~common stock were outstanding and there were approximately [ ]~~Internet Availability of Proxy Materials, proxy card, voting instruction form or other communication. Beneficial shareholders must obtain a legal proxy in advance of ~~McDonald’s common stock. Each share is entitled~~the meeting in order to ~~one~~vote. See “Meeting Logistics” on page 130.

6.	How Can I Vote Before the 2024 Annual Shareholders’ Meeting?

We encourage shareholders to vote ~~on each matter to be voted upon at~~before the ~~Annual Shareholders’ Meeting.~~

~~VOTING PRIOR TO THE ANNUAL SHAREHOLDERS’ MEETING~~

meeting. Most shareholders have a choice of voting ~~prior to~~by proxy before the meeting by ~~proxy over the Internet, by~~internet, telephone, or ~~by using a traditional proxy card. Refer to the Notice or your proxy or voting instruction card to see which options are available to you and how to use them.~~

mail. The ~~Internet~~internet 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 ~~available~~combined into one document for ~~shareholders~~purposes of uploading them to the meeting website. 401(k) Plan participants should review their proxy cards for voting instructions and note that their votes must be cast by 10:59 p.m. Central Time on May 19, 2024.

7.	Can I Vote at the 2024 Annual Shareholders’ Meeting?

We encourage you to vote before the meeting, but registered shareholders may also vote during the meeting by attending the virtual 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 must obtain and submit a legal proxy from his or her bank, broker, or other nominee. See “Meeting Logistics” on page 130. 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~~

8.
What is a Quorum?

A quorum will be present if the holders of a majority of the voting power of the shares of our common stock entitled to vote are present ~~in person~~ or represented by proxy at the ~~Annual Shareholders’ Meeting. Our~~meeting. Under Delaware law, abstentions and broker non-votes are counted as present in determining whether a quorum is present.

9.	How are Votes Tabulated?

We have appointed Broadridge Financial Solutions, Inc. as the independent inspector of election ~~Broadridge Financial Solutions, Inc. (Broadridge),~~for the meeting. The independent inspector of election will ~~determine whether or not a quorum is present.~~

~~VOTING TABULATION~~

~~All~~tabulate all votes cast at the ~~Annual Shareholders’ Meeting will be tabulated by Broadridge.~~meeting.


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~~Directors will be elected by majority vote, which means that~~Q&A: Proxy Materials & Voting Information

10.	What is the Difference Between Holding Shares as a Registered Shareholder and as a Beneficial Holder?

If 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).

~~With~~registered 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 declassification~~beneficial 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~~

11.
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 us before the ~~Company prior to the Annual Shareholders’ Meeting~~meeting will be voted as directed by shareholders.

Registered shareholders who submit ana validly executed proxy, but do not specify how they want their shares voted, will have their shares voted as follows:

●

“FOR” the election of each of our Board’s 12 Director nominees;

●

“FOR” the approval of executive compensation;

●

“FOR” the amendment to the Company’s Restated Certificate of Incorporation to limit liability of officers as permitted by law;

●

“FOR” the amendments to the Company’s Restated Certificate of Incorporation to implement miscellaneous changes;

●

“FOR” the ratification of the appointment of Ernst & Young LLP as independent auditor for 2024; and

●

“AGAINST” each shareholder proposal.

12.	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, and~~~~AGAINST~~ ~~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 intermediary~~holder is subject to certain NYSE rules regarding voting and votes according to its own procedures.

Under NYSE rules, ~~the~~Proposal 5 (the proposal to ~~approve~~ratify the appointment of Ernst & Young LLP as our independent ~~auditors~~auditor) is usually considered a ~~“discretionary”~~discretionary item. This means that brokerage firms may generally vote in their discretion on behalf of clients who have not furnished voting instructions at least 15 days before the ~~date of the Annual Shareholders’ Meeting.~~meeting. In contrast, all ~~of the~~ other proposals ~~set forth~~described in this Proxy Statement are ~~“non-discretionary”~~non-discretionary items. ~~Brokerage~~This means that brokerage firms that have not received voting instructions from their clients on these matters may not vote on these ~~proposals. These so-called “broker non-votes”~~proposals, resulting in a broker non-vote. 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 for the proposals to ~~approve~~amend the ~~declassification~~Company’s Certificate of ~~the Board~~Incorporation to limit liability of officers as permitted by law (Proposal 3) and ~~the shareholders’ right~~ to ~~call special meetings.~~implement miscellaneous changes (Proposal 4). For ~~these two proposals,~~both Proposal 3 and Proposal 4, a broker non-vote will have the same effect as a vote against the proposal. ~~Broker non-votes with respect to any proposal will be treated as shares present for purposes of determining a quorum~~

13.	What if I Want to Change My Vote?

Registered shareholders may revoke their proxy and change their vote before it is exercised at the ~~Annual Shareholders’ Meeting.~~meeting by (i) submitting written notice to our Corporate Secretary, (ii) submitting a later dated and properly executed proxy (by internet, telephone or mail), which must be received by us before 10:59 p.m. Central Time on May 21, 2024, or (iii) attending the virtual meeting and voting by ballot, as described above. Only your latest dated, validly executed proxy counts.

~~PROXY SOLICITATION~~Beneficial holders may change or revoke their voting instructions before they are exercised at the meeting by (i) 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 by the deadline set forth on the voting instruction form, or (ii) if properly registered in advance, by attending the virtual meeting and voting by ballot, as described above. Only your latest dated, validly executed proxy counts. 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.


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~~The Company~~Q&A: Proxy Materials & Voting Information

14.	How are Proxies Solicited, and What is the Cost?

We will provide the Notice ~~electronic delivery~~ of Internet Availability of Proxy Materials, 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,~~[•], 2024 in connection with the solicitation of proxies by ~~the~~our Board ~~of Directors~~on our behalf to be used at the ~~2012 Annual Shareholders’ Meeting. The~~meeting. We will pay the cost of soliciting ~~proxies will be paid by the Company. The Company has~~proxies. We have retained ~~Georgeson Inc. to aid in the~~Kingsdale Advisors for certain advisory and solicitation atservices for a fee of approximately ~~$26,000 plus reasonable out-of-pocket expenses.~~$70,000. Proxies also may be solicited by our Directors and employees ~~and Directors of the Company~~on our behalf by internet, telephone, mail, ~~telephone, facsimile, e-mail~~or email, or in person.

~~CONFIDENTIAL VOTING~~

~~It is the Company’s policy to protect the confidentiality of shareholder votes. Throughout the voting process, your vote~~ Those individuals will not ~~be disclosed to the Company, its Directors, officers or employees, except to meet legal requirements or to assert or defend claims~~receive additional compensation for or against the Company or except in those limited circumstances where (1) a proxy solicitation is contested; or (2) you authorize disclosure. The 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.such work.

15.	How Can I View or Request Copies of Corporate Documents and SEC Filings?

~~McDonald’s Corporation 2012~~ 53

~~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 Armario~~~~Age: 52~~~~. Corporate Executive Vice President–Global Supply Chain, Development and Franchising~~

~~Peter J. Bensen~~~~Age: 49~~~~. Corporate Executive Vice President and Chief Financial Officer~~

~~Timothy J. Fenton~~~~Age: 54~~~~. President, McDonald’s Asia/Pacific, Middle East and Africa~~

~~Janice L. Fields~~~~Age: 56~~~~. President, McDonald’s USA~~

~~Richard Floersch~~~~Age: 54~~~~. Corporate Executive Vice President and Chief Human Resources Officer~~

~~Douglas M. Goare~~~~Age: 59~~~~. President, McDonald’s Europe~~

~~Kevin L. Newell~~~~Age: 55~~~~. Corporate Executive Vice President and Global Chief Brand Officer~~

~~Kevin M. Ozan~~~~Age: 48~~~~. Corporate Senior Vice President–Controller~~

~~Gloria Santona~~~~Age: 61~~~~. Corporate Executive Vice President, General Counsel and Secretary~~

~~James A. Skinner~~~~Age: 67~~~~. Vice Chairman and Chief Executive Officer~~

~~Jeffrey P. Stratton~~~~Age: 56~~~~. Corporate Executive Vice President–Chief Restaurant Officer~~

~~Donald Thompson~~~~Age: 49~~~~. President and Chief Operating Officer~~

~~McDONALD’S CORPORATION ANNUAL REPORT ON FORM 10-K, OTHER REPORTS AND POLICIES~~

Shareholders may access financial and other information on the ~~investor~~“Investors” section of ~~the Company’s~~our website at~~www.investor.mcdonalds.com.~~www.investor.mcdonalds.com. Copies of these documents and other information are also available free of charge by emailing a request to shareholder.services@us.mcd.com. Also available on our website or upon request, free of charge, are copies of the ~~Company’s~~ following documents:

●

Annual Report on Form 10-K, Quarterly Reports on Form 10-Q ~~Current Reports on Form 8-K,~~ 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.

A list of registered shareholders entitled to ~~those reports filed or furnished pursuant to section 13(a) or 15(d) of~~vote at the ~~Securities Exchange Act of 1934 as soon as reasonably practicable after filing such material electronically or otherwise furnishing it~~meeting will be available for inspection by any shareholder, for any purpose related to the ~~SEC. Also posted on McDonald’s website are~~meeting, for ten days before the ~~Company’s Corporate Governance Principles;~~meeting during ordinary business hours at our principal executive offices at 110 North Carpenter Street, Chicago, Illinois 60607. Email corporatesecretary@us.mcd.com to schedule an appointment to review 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.list.

~~HOUSEHOLDING OF ANNUAL SHAREHOLDERS’ MEETING MATERIALS~~

16.
What is Householding?

Shareholders ~~who share~~with 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 with the same last name and address who have elected to receive paper copies ~~and who share the same last name and address~~ will receive only one ~~set~~copy of the ~~Company’s Annual Report and Proxy Statement,~~proxy materials unless they have notified us that they wish to continue receiving multiple copies. This method of delivery ~~known~~(known as ~~“householding,” will help~~“householding”) helps 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’s~~our 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 proxy 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,~~43006, Providence, ~~RI 02940-3078.~~Rhode Island 02940-3006. If you are a beneficial shareholder and you would like to opt out of this practice, ~~and your shares are held in street name, please~~ contact your bank or broker.

If you are receiving multiple copies of the 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 phone numbers or address. If ~~your shares~~you are ~~held in street name, please~~a beneficial holder, contact your bank or broker.


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Q&A: Proxy Materials & Voting Information

17.	Who Should I Contact if I Have Questions?

If you have any questions or require assistance with voting, contact our proxy solicitation firm at:

54 ~~McDonald’s Corporation 2012~~Kingsdale Advisors
745 5^th 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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~~Information about registering for and attending the~~

Meeting Logistics
Attendance at Our 2024 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 https://www.cesonlineservices.com/mcd24_vm. 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 must pre-register no later than 9:00 a.m. Central Time on May 20, 2024 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 at~~~~www.investor.mcdonalds.com~~
~~Parking:~~ ~~Limited parking is available on Campus.~~
~~webcast:~~ ~~To listen to a live webcast of the Annual Shareholders’ Meeting, go to~~~~www.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 POLICY~~Pre-Registration for Registered Shareholders
~~As seating~~Registered shareholders must use the control number located on the Notice of Internet Availability, proxy card, email or other communication that accompanied their proxy materials. To pre-register to participate in the ~~Prairie Ballroom is very limited, we encourage shareholders to listen to~~meeting remotely, visit the website https://www.cesonlineservices.com/mcd24_vm with your control number and follow the instructions.
After registering, you will receive a confirmation email with a link and instructions for accessing the meeting. Verify that you have received the confirmation email in advance of the meeting, ~~via~~including the ~~live webcast.~~possibility that it may be in your spam or junk email folder.
~~If you decide to attend 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 to~~~~shareholder.services@us.mcd.com~~. ~~Requests for tickets~~Registration requests must be received no later than 5:9:00 ~~p.m.~~a.m. Central Time on May ~~17, 2012.~~20, 2024. You must pre-register and receive a confirmation email in order to vote and/or submit a comment or question during the meeting.
~~You~~Pre-Registration for Beneficial Shareholders & Obtaining a Legal Proxy to Vote
Beneficial shareholders must use the control number on 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 https://www.cesonlineservices.com/mcd24_vmwith your control number and follow the instructions.
After registering, you will receive a confirmation ~~letter~~email with a link and instructions for accessing the meeting. 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. Beneficial shareholders who intend to vote during the meeting must obtain a legal proxy from their bank, brokerage firm or other intermediary. Most banks or brokerage firms allow a shareholder to obtain a legal proxy either online or by ~~U.S.~~mail. Follow the instructions provided by your bank or brokerage firm. If you request a legal proxy online and do not receive an email containing your legal proxy within two business days of such request, contact your bank or brokerage firm. If you request a legal proxy by mail ~~after~~and do not receive it within five business days of such request, contact your bank or brokerage firm.
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 MCDRegister@proxy-agent.com 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 ~~receive~~encourage you to submit your ~~pre-registration materials. Your ticket~~legal proxy in advance in an email to MCDRegister@proxy-agent.com to ensure that your vote is counted, rather than wait to upload your legal proxy during the meeting. Multiple legal proxies must be combined into one document for purposes of uploading them to the meeting website.
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 accessing the available ballot on the meeting website. Beneficial shareholders who have previously submitted a legal proxy as described above may also vote directly by accessing the available ballot on the meeting website.


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Meeting Logistics

If you are a beneficial shareholder and you did not email your legal proxy in advance of the meeting, you must ~~show~~upload 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 & Obtaining a ~~government issued photo identification,~~Legal Proxy to Vote” above for information on obtaining a legal proxy from your bank or brokerage firm. Instructions for presenting the legal proxy (if necessary) along with the online ballot will be provided during the meeting. Prepare in advance by obtaining a legal proxy as soon as possible.

Submitting a Question During 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 them together and provide a single response to avoid repetition. In light of the number of business items on the meeting 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 also 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 ~~confirmation letter,~~meeting will be posted to ~~pick-up your ticket. As admission tickets are limited, only those shareholders who have pre-registered~~our website following the meeting.

Virtual Meeting Technical Assistance

If you encounter any technical difficulties accessing the meeting, the meeting reminder email will ~~receive tickets, on~~include technical support contact information, including a ~~first-come, first served basis. Overflow rooms~~telephone 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 open~~beginning at 7:8:30 a.m. Central Time on May ~~24, 2012. All tickets~~22, 2024 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~~meeting, contact our proxy solicitation firm at:

Kingsdale Advisors
745 5^th 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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Exhibit A – Proposed Amendments to Restated Certificate of Incorporation

Section 1
Set forth below is the text of Article FOURTEENTH in our Restated Certificate of Incorporation proposed to be ~~picked up~~amended by ~~8:45 a.m. Central Time.~~Proposal 3. Additions are indicated by double underlining.
~~Please do not bring items such~~FOURTEENTH: Elimination of Certain Liability of Directors or Officers. To the fullest extent that the general corporate law of the State of Delaware, as ~~bags~~it exists on the date hereof or as it may hereafter be amended, permits the limitation or elimination of the liability of directors or officers (or both directors and ~~briefcases~~officers), no director or officer of the Corporation shall be liable to the ~~meeting. Only small purses will~~Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director or officer. No amendment to or repeal of this Article Fourteenth shall apply to or have any effect on liability or alleged liability of any director or officer of the Corporation for or with respect to any acts or omissions of such director or officer occurring prior to such amendment or repeal. Solely for purposes of this Article Fourteenth, "officer" shall have the meaning provided in Section 102(b)(7) of the general corporate law of the State of Delaware. as amended from time to time.
Section 2
Set forth below is the text of Articles THIRD, FOURTH, EIGHTH and TWELFTH in our Restated Certificate of Incorporation proposed to be ~~permitted~~amended by Proposal 4. Additions are indicated by double underlining and deletions are indicated by strikethrough.
THIRD: The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the general corporate law of the State of Delaware.The nature of the business of the Corporation and the objects and purposes to be transacted, promoted or carried on are as follows:
1.To obtain by license or otherwise and to grant to others by license or otherwise the right to the use of drive-in food establishment systems and food service systems of every kind and character, and to manage and operate drive-in and other restaurants and eating places of all kinds.
2.To manufacture, construct, lease, purchase and otherwise acquire; to hold, own, repair, maintain, operate and invest, trade and deal in; to lien, mortgage, pledge and otherwise encumber, and to let, assign, transfer, sell and otherwise dispose of goods, wares and merchandise and personal property of every kind and description and wherever situated.
3.To the same extent as natural persons might or could do, to purchase or otherwise acquire, hold, own, maintain, work, develop, sell, lease, sublease, exchange, hire, convey, mortgage or otherwise dispose of and turn to account and deal in, lands, leaseholds, any interests, estates and rights in real property, any personal or mixed property, and franchises, rights, licenses, permits or privileges of every character.
4.To acquire by purchase, exchange or otherwise, all, or any part of, or any interest in, the ~~Prairie Ballroom~~properties, assets, business and good will of any one or more persons, firms, associations, corporations or syndicates engaged in any business which the ~~overflow rooms,~~Corporation is authorized to engage in; to pay for the same in cash, property or its own or other securities; to hold, operate, reorganize, liquidate, sell or in any manner dispose of the whole or any part thereof; and ~~these~~in connection therewith, to assume or guarantee performance of any liabilities, obligations or contracts of such persons, firms, associations, corporations or syndicates, and to conduct in any lawful manner the whole or any part of any business thus acquired.


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Exhibit A

5.To acquire by purchase, subscription, contract or otherwise, and to hold for investment or otherwise, sell, exchange, mortgage, pledge or otherwise dispose of, or turn to account or realize upon, and generally to deal in and with, any and all kinds of securities issued or created by, or interests in, corporations, associations, partnerships, firms, trustees, syndicates, individuals, municipalities or other political or governmental divisions or subdivisions, or any thereof, or by any combinations, organizations or entities whatsoever, irrespective of their form or the name by which they may be described; and to exercise any and all rights, powers, and privileges of individual ownership or interest in respect of any and all such securities and interests, including the right to vote thereon and to consent and otherwise act with respect thereto; to do any and all acts and things for the preservation, protection, improvement and enhancement in value of any and all such securities or interests, and to aid by loan, subsidy, guaranty or in any other manner permitted by law those issuing, creating, or responsible for any such securities or interests.

6.To develop, apply for, obtain, register, purchase, lease, take licenses in respect of or otherwise acquire, and to hold, own, use, operate, enjoy, turn to account, grant licenses in respect of, manufacture under, introduce, sell, assign, mortgage, pledge or otherwise dispose of any and all inventions, devices, formulae, processes, improvements and modifications thereof, letters patent and all rights connected therewith or appertaining thereunto, copyrights, trademarks, trade names, trade symbols and other indications of origin and ownership, franchises, licenses, grants and concessions granted by or recognized under the laws of the United States of America or of any state or subdivision thereof or of any other country or subdivision thereof.

7.To loan money upon the security of real and/or personal property of whatsoever name, nature or description, or without security.

8.To borrow money for any of the purposes of the Corporation, from time to time, and without limit as to amount; to issue and sell its own securities in such amounts, on such terms and conditions, for such purposes and for such prices, as the Board of Directors shall determine; and to secure such securities, by mortgage upon, or the pledge of, or the conveyance or assignment in trust of, the whole or any part of the properties, assets, business and good will of the Corporation, then owned or thereafter acquired.

It is the intention that the objects and purposes set forth in the foregoing clauses of this Article Third shall not, unless otherwise specified herein, be ~~subject~~in any wise limited or restricted by reference to, ~~inspection prior to admission to~~or inference from, the ~~meeting. Individuals attending~~terms of any other clause of this or any other article in this Certificate, but that the ~~meeting must wear appropriate attire~~objects and ~~will not~~purposes specified in each of said clauses shall be ~~allowed to enter~~regarded as independent objects and purposes.

It is also the ~~meeting wearing any attire~~intention that ~~could~~the foregoing clauses shall be construed as ~~intended~~powers as well as objects and purposes; that the Corporation shall be authorized to ~~conceal one’s identity (including,~~conduct its business or hold property in any part of the United States and its possessions, and foreign countries; that the foregoing enumeration of specific powers shall not be held to limit or restrict in any manner the general powers of the Corporation; and that generally the Corporation shall be authorized to exercise and enjoy all other powers conferred on corporations by the laws of Delaware.

FOURTH:

(2)Authority is hereby expressly granted to the Board of Directors subject to the provisions of this Article to authorize the issuance of one or more series of Preferred Stock and, with respect to each series, to fix by resolution or resolutions providing for the issuance of such series:

[...]

(g)The voting powers, if any, of such series in addition to the voting powers provided by law; except that such powers shall not include the right to have more than one vote per share;

(h)Any other preferences and relative, participating, optional or other special rights, and qualifications, limitations or restrictions thereof as shall not be inconsistent with law or with this Article.


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Exhibit A

Notwithstanding the fixing of the number of shares constituting a particular series upon the issuance thereof, the Board of Directors may at any time thereafter authorize the issuance of additional shares of the same series, or decrease the number of shares constituting such series (but not below the number of shares of such series then outstanding).

(3)All shares of any one series of Preferred Stock shall be identical with all other shares of the same series except that shares of any one series issued at different times may differ as to the dates from which dividends thereon shall be cumulative; and all series shall rank equally and be identical in all respects, except as permitted by the foregoing provisions of paragraph B. (2).

(4)(a) The holders of Preferred Stock shall be entitled to receive cash dividends when and as declared by the Board of Directors at such rate per share per annum, cumulatively if so provided, and with such preferences, as shall have been fixed by the Board of Directors, before any dividends shall be paid upon or declared and set apart for the Common Stock or any other class of stock ranking junior to the Preferred Stock, and such dividends on each series of the Preferred Stock shall cumulate, if at all, from and after the dates fixed by the Board of Directors with respect to such cumulation. Accrued dividends shall bear no interest.

(b) If dividends on the Preferred Stock are not declared in full then dividends shall be declared ratably on all shares of stock of each series of equal preference in proportion to the respective unpaid cumulative dividends, if any, to the end of the then current dividend period. No ratable distribution shall be declared or set apart for payment with respect to any series until accumulated dividends in arrears in full have been declared and paid on any series senior in preference.

(c) Unless dividends on all outstanding shares of series of the Preferred Stock having cumulative dividend rights shall have been fully paid for all past dividend periods, and unless all required sinking fund payments, if any, shall have been made or provided for, no dividend (except a dividend payable in Common Stock or in any other class of stock ranking junior to the Preferred Stock) shall be paid upon or declared and set apart for the Common Stock or any other class of stock ranking junior to the Preferred Stock.

(d) Subject to the foregoing provisions, the Board of Directors may declare and pay dividends on the Common Stock and on any class of stock ranking junior to the Preferred Stock, to the extent permitted by law. After full dividends for the current dividend period, and, in the case of Preferred Stock having cumulative dividend rights after all prior dividends have been paid or declared and set apart for payment, the holders of the Common Stock shall be entitled, to the exclusion of the holders of the Preferred Stock, to all further dividends declared and paid in such current dividend period.

(5)In the event of any liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary, before any payment or distribution of the assets of the Corporation shall be made to or set apart for the holders of shares of any class or classes of stock of the Corporation ranking junior to the Preferred Stock, the holders of the shares of each series of the Preferred Stock shall be entitled to receive payment of the amount per share fixed in the resolution or resolutions adopted by the Board of Directors providing for the issuance of the shares of such series, plus an amount equal to all dividends accrued thereon to the date of final distribution to such holders; but they shall be entitled to no further payment. If, upon any liquidation, dissolution or winding up of the Corporation, the assets of the Corporation, or proceeds thereof, distributable among the holders of the shares of the Preferred Stock shall be insufficient to pay in full the preferential amount aforesaid, then such assets, or the proceeds thereof, shall be distributed among such holders ratably in accordance with the respective amount which would be payable on such shares if all amounts payable thereon were paid in full. For the purposes of this paragraph B. (5), the sale, conveyance, exchange or transfer (for cash, shares of stock, securities or other consideration) of all or substantially all of the property or assets of the Corporation or a consolidation or merger of the Corporation with one or more corporations shall not ~~limited~~be deemed to ~~hats~~be a dissolution, liquidation or ~~costumes)~~winding up, voluntary or involuntary.


1342024 proxy statement

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Exhibit A

(6)Shares of any series of Preferred Stock which have been issued and reacquired in any manner by the Company (excluding shares purchased and retired, whether through the operation of a retirement or sinking fund or otherwise, and shares which, if convertible or exchangeable, have been converted into or exchanged for shares of stock of any other class or classes) shall have the status of authorized and unissued shares of Preferred Stock and may be reissued as a part of the series of which they were originally a part or may be reclassified and reissued as part of a new series of Preferred Stock or as part of any other series of Preferred Stock, all subject to the conditions or restrictions on issuance fixed by the Board of Directors with respect to the shares of any other series of Preferred Stock.

(7)Except as otherwise specifically provided herein or in the authorizing resolutions, none of the shares of any series of Preferred Stock shall be entitled to any voting rights and the Common Stock shall have the exclusive right to vote for the election of directors and for all other purposes. So long as any shares of any series of Preferred Stock are outstanding, the Corporation shall not, without the consent of the holders of a majority of the then outstanding shares of Preferred Stock, irrespective of series, either expressed in writing (to the extent permitted by law) or by their affirmative vote at a meeting called for that purpose: (i) adopt any amendment to this Restated Certificate of Incorporation or take any other action which in any material respect adversely affects any preference, power, special right, or other term of the Preferred Stock or the holders thereof, (ii) create or issue any class of stock entitled to any preference over the Preferred Stock as to the payment of dividends, or the distribution of capital assets, (iii) increase the aggregate number of shares constituting the authorized Preferred Stock or (iv) create or issue any other class of stock entitled to any preference on a parity with the Preferred Stock as to the payment of dividends or the distribution of capital assets.

(8)If in any case the amounts payable with respect to any obligations to retire shares of the Preferred Stock are not paid in full in the case of all series with respect to which such obligations exist, the number of shares of each of such series to be retired pursuant to any such obligations shall be in proportion to the respective amounts which would be payable on account of such obligations if all amounts payable in respect of such series were discharged in full.

(9)The shares of Preferred Stock may be issued by the Corporation from time to time for such consideration as may be fixed from time to time by the Board of Directors. Any and all shares for which the consideration so fixed shall have been paid or delivered shall be deemed fully paid and nonassessable.

(10)For the purpose of the provisions of this Article dealing with Preferred Stock or of any resolution of the Board of Directors providing for the issuance of any series of Preferred Stock or of any certificate filed with the Secretary of State of the State of Delaware pursuant to any such resolution (unless otherwise provided in any such resolution or certificate):

(a)The term “outstanding”, when used in reference to shares of stock, shall mean issued shares, excluding shares held by the Corporation and shares called for redemption, funds for the redemption of which shall have been set aside or deposited in trust;

(b)The amount of dividends “accrued” on any share of Preferred Stock as at any dividend date shall be deemed to be the amount of any unpaid dividends accumulated thereon to and including such dividend date, whether or not earned or declared, and the amount of dividends “accrued” on any share of Preferred Stock as at any date other than a dividend date shall be calculated as the amount of any unpaid dividends accumulated thereon to and including the last preceding dividend date, whether or not earned or declared, plus an amount equivalent to interest on the involuntary liquidation value of such share at the annual dividend rate fixed for the shares of such series for the period after such last preceding dividend date to and including the date as of which the calculation is made;

(c)The term “class or classes of stock of the corporation ranking junior to the Preferred Stock” shall mean the Common Stock of the Corporation and any other class or classes of stock of the Corporation hereafter authorized which shall rank junior to the Preferred Stock as to dividends or upon liquidation.


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Exhibit A

EIGHTH: In furtherance and not in limitation of the powers conferred by the laws of the State of Delaware the Board of Directors is expressly authorized and empowered:

[. ~~Cameras~~. .]

(b)By a resolution or resolutions passed by a majority of the whole Board, to designate one or more committees, each committee to consist of twoone or more of the directors of the Corporation which, to the extent provided in said resolution or resolutions or in the by-laws of the Corporation, shall have and may exercise the powers of the Board of Directors in the management of the business and affairs of the Corporation, and may have power to authorize the seal of the Corporation to be affixed to all papers which may require it. Such committee or committees shall have such name or names as may be stated in the by-laws of the Corporation or as may be determined from time to time by resolution adopted by the Board of Directors;

[. . .]

(e)Without any action by the stockholders, to authorize the borrowing of moneys for any of the purposes of the Corporation and, from time to time without limit as to amount, to authorize and cause the making, execution, issuance, sale or other disposition of promissory notes, drafts, bonds, debentures and other ~~recording devices will~~negotiable or non-negotiable instruments and evidences of indebtedness, and the securing of the same by mortgage, pledge, deed of trust or otherwise.

[. . .]

The Corporation shall have power to indemnify any and all of its directors or officers or former directors or officers or any person who may have served at its request as a director or officer of another corporation in which it owns shares of capital stock or of which it is a creditor against liabilities and expenses actually and necessarily incurred by them in connection with the defense of any action, suit or proceeding in which they, or any of them, are made parties, or a party, by reason of being or having been directors or officers or a director or officer of the Corporation, or of such other corporation, except in relation to matters as to which any such director or officer or former director or officer or person shall be adjudged in such action, suit or proceeding to be liable for negligence or misconduct in the performance of duty. Such indemnification shall not be ~~permitted in the ballroom and the overflow rooms. Cellular phones and all~~deemed exclusive of any other ~~electronic devices must~~rights to which those indemnified may be ~~turned off and put away during the meeting.~~entitled, under any by-law, agreement, vote of stockholders or otherwise.


		*~~Pre-registration form for 2012 Annual Shareholders’ Meeting of McDonald’s Corporation~~*
		~~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.~~
		~~Name~~ (~~please print~~) ~~Phone number~~
		~~Address~~
		~~City~~~~State~~~~Zip~~
		~~Name 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 order 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.~~
		*~~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 to~~~~shareholder.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 117 nor more than 2415 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 subjectSubject 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.


1362024 proxy statement

Table of Contents

Exhibit A

(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~~election 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 any~~series of Preferred Stock then outstanding, any director, or the entire Board of Directors, may be removed from office at any time, but~~one 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, and~~only by~~all 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 vote~~s ~~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.~~thereon.


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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 u~~pon 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.~~

~~MCD12-4713~~

58 ~~McDonald’s Corporation 2012~~

~~[Back cover to come]~~

~~C/O McDONALD’S CORPORATION~~

~~POST OFFICE BOX 9112~~

~~FARMINGDALE, NY 11735-9544~~

~~3 Ways To Vote~~

Signature [PLEASE SIGN WITHIN BOX] Date Signature [PLEASE SIGN WITHIN BOX] Date TO 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:~~

MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.

~~McDONALD’S~~ V38421-P07603 ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! For Against Abstain For Against Abstain For Against Abstain For Against Abstain For Against Abstain ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! C/O McDONALD'S CORPORATION

POST OFFICE BOX 9112 FARMINGDALE, NY 11735-9544 SCAN TO VIEW MATERIALS & VOTEw Read the Proxy Statement and have the proxy card in hand. Please note that the telephone and pre-meeting Internet voting turns off at 10:59 p.m. Central Time on May 21, 2024. 401(k) plan participants must vote by 10:59 p.m. Central Time on May 19, 2024. Vote by Internet: Before the meeting - www.proxyvote.com or scan the QR code above with your smartphone. During the virtual meeting (see the Proxy Statement for pre-registration instructions) - https://www.cesonlineservices.com/mcd24_vm Vote by Phone: 1-800-690-6903 Vote by Mail: Complete this proxy card, sign and return it using the enclosed envelope. McDONALD'S CORPORATION ANNUAL SHAREHOLDERS' MEETING FOR HOLDERS AS OF 3/25/24 TO BE HELD ON 5/22/24 AT 9:00 A.M. CENTRAL TIME McDONALD'S CORPORATION A

Proposals

The Board recommends a vote FOR each of its Director nominees identified on this proxy card. 1. Election of 12 Directors to serve until the Company's 2025 Annual Shareholders’ Meeting and until their successors have been elected and qualified. 1a. Anthony Capuano The Board recommends a vote FOR management proposal 2. The Board recommends a vote FOR management proposal 4. The Board recommends a vote FOR management proposal 3. 2. Advisory Vote to Approve Executive Compensation. 3. Vote to Approve an Amendment to the Company's Restated Certificate of Incorporation to Limit Liability of Officers as Permitted by Law. 4. Vote to Approve Amendments to the Company's Restated Certificate of Incorporation to Implement Miscellaneous Changes. 6. Advisory Vote on Adoption of Antibiotics Policy (1 of 2). 7. Advisory Vote on Adoption of Antibiotics Policy (2 of 2). 10. Advisory Vote on Congruency Analysis on Human Rights. 11. Advisory Vote on Corporate Giving Disclosure. 12. Advisory Vote on Annual Report on Global Political Influence. 13. Advisory Vote on Reduction of Supply Chain Water Usage Policy. 14. Vote on Binding By-law Amendment for Stockholder Approval of Director Compensation. 8. Advisory Vote on Worldwide Switch to Cage-Free Eggs. 9. Advisory Vote on Poultry Welfare Disclosure. The Board recommends a vote FOR management proposal 5. The Board recommends a vote AGAINST shareholder proposals 6 through 14. 5. Advisory Vote to Ratify the Appointment of Ernst & Young LLP as Independent Auditor for 2024. NOTE: Such other business as may properly come before the meeting or any adjournment thereof. This proxy is solicited on behalf of the Board of Directors (the Board) of McDonald’s ~~Corporation.~~Corporation (the Company). The shares represented by this proxy will be voted as directed by the shareholder (see reverse side). If this signed card contains no specific voting instructions, the shares will be voted with the Board’s recommendations, except for ~~Profit Sharing~~401(k) Plan ~~participants (see reverse side).~~

~~The Board of Directors recommends a vote~~~~FOR~~ ~~the nominees identified on this proxy.~~

~~Election of Directors: (5 Nominees)~~

participants. 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 approve the appointment of Ernst & Young LLP as independent auditor for 2012.~~

~~1d. Andrew J. McKenna~~

~~The Board of Directors recommends a vote~~~~AGAINST~~ ~~proposal 7.~~

~~1e. Donald Thompson~~

~~7. Advisory vote on a shareholder proposal requesting a nutrition report.~~

��

~~The Board of Directors recommends a vote~~~~FOR~~ ~~proposals 2, 3, 4, 5, and 6.~~

~~Advisory vote to approve executive compensation.~~

~~Approval of the 2012 Omnibus Stock Ownership Plan.~~

~~If you have comments, please check this box and write them on the back where indicated~~

Authorized Signatures — This section MUST be completed for your vote to be counted. — Sign B and Date ~~and Sign~~ Below

I (we) hereby revoke any proxy previously given, and appoint ~~James A. Skinner, Gloria Santona~~Christopher Kempczinski, Ian Borden and ~~Peter J. Bensen,~~Desiree Ralls-Morrison, 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~~Company's 2024 Annual Shareholders’ Meeting, or any postponement or adjournment thereof, and further authorize each such proxy to vote atin 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~~Director as such proxies may select in the event that any nominee(s) named above become(s) unable to serve. ~~(Plan~~(401(k) Plan participants are appointing the Plan ~~trustees~~Trustee – see reverse side.)

! ! ! Your vote is important. Thank you for voting. 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,~~online through the virtual meeting website, such vote will supersede this proxy. ! ! ! 1c. Lloyd Dean 1b. Kareem Daniel 1e. Margaret Georgiadis 1d. Catherine Engelbert 1f. Michael Hsu 1g. Christopher Kempczinski 1h. John Mulligan 1i. Jennifer Taubert 1j. Paul Walsh 1k. Amy Weaver 1l. Miles White ! ! ! ! ! ! ! ! ! ! ! !

~~Signature [PLEASE SIGN WITHIN BOX]~~

~~Date~~

~~Signature (PLEASE SIGN WITHIN BOX)~~

~~Date~~

~~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~~.


		V38422-P07603 Proxy — ~~McDONALD’S~~McDONALD'S CORPORATION

Voting Instructions for McDonald’s Corporation ~~Profit Sharing and Savings~~401(k) Plan Participants

~~When~~ 401(k) plan participants must vote by 10:59 p.m. Central Time on May 19, 2024. By casting your vote on the reverse side of this proxy card, you are directing the ~~trustees~~Trustee of the ~~McDonald’s~~McDonald's Corporation ~~Profit Sharing and Savings~~401(k) Plan ~~Trust~~(the Plan) to vote the ~~McDonald’s~~ shares ~~credited~~of common stock of McDonald's Corporation that are allocated to ~~the accounts under the McDonald’s Corporation Profit Sharing and Savings~~your Plan ~~(the “Plan”). When you vote these~~account(s), as well as any 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 Plan participants ~~and Plan shares that~~and/or have not yet been ~~credited~~allocated to ~~participants’~~Plan participants' accounts. ~~When~~If you ~~direct~~do not specify voting instructions, the Trustee will vote of these shares ~~you have a special responsibility to consider~~in accordance with the ~~long-term best interests~~terms 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.~~

Plan. If you do NOT want to vote all shares in the same way, please contact Broadridge, the independent inspector of election, via email at mcdonalds@broadridge.com, or indicate that you want to vote ~~your~~the Plan shares and registered shares ~~separately in the~~~~Comments~~ ~~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.~~separately. Your directions to vote Plan shares will be kept confidential by ~~Broadridge,~~Broadridge. McDonald’s Corporation Annual Shareholders’ Meeting Information Wednesday, May 22, 2024 9:00 a.m. Central Time Virtual meeting at https://www.cesonlineservices.com/mcd24_vm To be admitted to the ~~independent inspector~~meeting as a shareholder, you must pre-register by visiting the website set forth above and using the control number on this proxy card. You must pre-register by 9:00 a.m. Central Time on Monday, May 20, 2024. More information on pre-registration can be found in the Proxy Statement. Important Notice Regarding the Availability of ~~election.~~


~~Comments:~~

Proxy Materials for McDonald’s Corporation's Annual Shareholders’ Meeting to be Held on May 22, 2024: The Notice and Proxy Statement and the 2023 Annual Report to Shareholders are available at www.proxyvote.com.

~~(If you noted any comments above, please mark the corresponding box on the reverse side.)~~

~~M41001-P20927-Z57186~~

¨ Important Voting Information: Your Vote is Important. Carefully review the proxy materials and vote your shares as promptly as possible, even if you plan to attend the virtual meeting. Follow the instructions to the right to ensure your vote is received by 10:59 p.m. Central Time on May 21, 2024.	~~Fee computed~~	Internet:
				Visit the website shown on ~~table below per Exchange Act Rules 14a-6(i)(1)~~your proxy card
			Telephone:
				Dial (800) 690-6903 (toll-free, 24/7)
			Mail:
				If you received a proxy card or voting instruction form by mail, mark, date, sign and ~~0-11.~~return it in the postage-paid envelope furnished for that purpose

~9%	Global Comparable Sales Growth in 2023		The Company’s Accelerating the Arches strategy continued to drive significant growth in 2023 despite ongoing macroeconomic pressures. The Company’s strong multi-year performance is evidence that the Company’s M-C-D strategic growth pillars have enabled the Company to continue to meet the evolving needs of our customers around the world.
~30%	Global Comparable Sales Growth since 2019

>	~~14 Directors; 12~~
	Board & Governance Practices
	Our Board’s commitment to strong corporate governance is highlighted by the following practices:
	● All Director nominees except the CEO are independent


~~Direct compensation~~ ~~elements~~	~~Performance-~~ ~~based~~	~~Primary metric(s)~~	~~Terms~~

SKYE ANDERSON	Jonathan Banner	Ian Borden	Morgan Flatley
~~Salary~~who has served McDonald's for 23 years, most recently as West Zone President, McDonald's USA, became our new President, Global Business Services		~~n/a~~joined McDonald’s as our new EVP – Chief Global Impact Officer	— ~~Evaluated annually, based on such factors~~who has served McDonald’s for nearly 30years, most recently as ~~competitive benchmarks~~President, International, became our new EVP and ~~individual performance~~Global Chief Financial Officer	who has served McDonald’s for six years, most recently as SVP – Global Chief Marketing Officer, became our new EVP – Global Chief Marketing Officer and New Business Ventures


Marion Gross	Gillian McDonald	Kevin Ozan	Brian Rice
who has served McDonald’s for 30 years, most recently as SVP – Chief Supply Chain Officer, North America, became our new EVP – Global Chief Supply Chain Officer	who previously served McDonald’s from 2006 to 2015, became our new EVP and President, International Operated Markets	who served McDonald's for more than 25 years, most recently as Senior EVP - Strategic Initiatives, retired	joined McDonald’s as our new EVP – Global Chief Information Officer

At our 2024 Annual Shareholders’ Meeting, you will be asked to vote upon the following proposals:	Proposal			Board’s Recommendation
		1	Election of 12 Directors to Serve Until our 2025 Annual Shareholders’ Meeting and Until Their Successors Have Been Elected and Qualified		FOR each of our Board’s Director nominees
		2	Advisory Vote to Approve Executive Compensation		FOR
		3	Vote to Approve an Amendment to the Company’s Restated Certificate of Incorporation to Limit Liability of Officers as Permitted by Law		FOR
		4	Vote to Approve Amendments to the Company’s Restated Certificate of Incorporation to Implement Miscellaneous Changes		FOR
		5	Advisory Vote to Ratify the Appointment of Ernst & Young LLP as Independent Auditor for 2024		FOR
		6-14	Advisory Vote (except for Proposal 14) on Nine Shareholder Proposals, Each Only If Properly Presented.		AGAINST each shareholder proposal

	Important Notice
	Regarding the Availability of Proxy Materials for the Shareholders’ Meeting to be held on May 22, 2024. This notice, the accompanying Proxy Statement and our 2023 Annual Report on Form 10-K are available free of charge at www.proxyvote.com.


Chairman’s Letter	2
Notice of 2024 Annual Shareholders’ Meeting	4
Proxy Summary	7
About McDonald’s	7
Governance Highlights	9
Our Purpose & Impact Overview	14
Executive Compensation Highlights	15
Voting Matters & Recommendations	17
Forward-Looking Statements & Website Links	17
PROPOSAL 1: Election of Directors	18
Director Qualifications	18
Other Information	20
Biographical Information	20
Board & Governance Matters	32
Board Leadership	32
Board Composition & Refreshment	34
Director Independence	34
Board Diversity	35
New Director Candidate Selection Process	35
Board Committees	36
Board Self-Evaluation	39
Board Oversight	40
Our Purpose & Impact	42
Shareholder Engagement	47
Board’s Response to Shareholder Proposals	47
Other Governance Policies & Principles	49
Communications With Our Board	50
Director Compensation	50

PROPOSAL 2: Advisory Vote to Approve Executive Compensation	52
Compensation Committee Report	53
Compensation Discussion & Analysis	53
Compensation Tables	69
Additional Compensation Matters	76
PROPOSAL 3: Vote to Approve an Amendment to the Company’s Restated Certificate of Incorporation to Limit Liability of Officers as Permitted by Law	80
PROPOSAL 4: Vote to Approve Amendments to the Company’s Restated Certificate of Incorporation to Implement Miscellaneous Changes	81
PROPOSAL 5: Advisory Vote to Ratify the Appointment of Ernst & Young LLP as Independent Auditor for 2024	83
Audit & Finance Committee Report	84
Audit & Finance Committee Matters	84
PROPOSALS 6–14: Shareholder Proposals	86
Proposal 6: Advisory Vote on Adoption of Antibiotics Policy (1 of 2)	87
Proposal 7: Advisory Vote on Adoption of Antibiotics Policy (2 of 2)	92
Proposal 8: Advisory Vote on Worldwide Switch to Cage-Free Eggs	97
Proposal 9: Advisory Vote on Poultry Welfare Disclosure	100
Proposal 10: Advisory Vote on Congruency Analysis on Human Rights	104
Proposal 11: Advisory Vote on Corporate Giving Disclosure	107
Proposal 12: Advisory Vote on Annual Report on Global Political Influence	111
Proposal 13: Advisory Vote on Reduction of Supply Chain Water Usage Policy	115
Proposal 14: Vote on Binding By-law Amendment for Stockholder Pre-Approval of Director Compensation	118
Stock Ownership	121
2025 Annual Shareholders’ Meeting	123
Transactions with Related Persons	124
Q&A: Proxy Materials & Voting Information	125
Meeting Logistics	130
Exhibit A: Proposed Amendments to Restated Certificate of Incorporation	132

>	~~Publicly disclose~~ ● Robust Director stock ownership requirements ● No Director hedging/pledging of Company stock ● Public disclosure of corporate political contributions ~~under Board’s policy~~and certain trade association memberships ● Significant shareholder outreach and engagement program



+8 8 of 12 Director nominees joined our Board within the last five years			92% 11 of 12 Directors are independent (all except our CEO)


~~Annual Cash~~ ~~Incentive (TIP)~~122024 proxy statement	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 end of three-year service period~~ — ~~Vesting subject to financial performance measures~~

~~Stock options~~	X	— ~~Stock price~~	— ~~Vest 25% per year~~ — ~~Ten-year term~~


	~~Board vote~~ ~~recommendation~~	~~Page reference~~ ~~(for more detail)~~



~~Management proposals:~~



~~Election of five Directors, each for a three-year term~~ ~~expiring in 2015~~	~~FOR EACH DIRECTOR~~ ~~NOMINEE~~	~~[ ]~~



~~Advisory vote to approve executive compensation~~	~~FOR~~	~~[ ]~~



~~Vote to approve 2012 Omnibus Stock Ownership Plan~~	~~FOR~~	~~[ ]~~



~~Vote to approve declassification of 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~~	~~[ ]~~


	BOARD			STANDING COMMITTEE MEMBERSHIP						OTHER PUBLIC COMPANY
NAME	TENURE	PRIMARY OCCUPATION	INDEPENDENT	AFC	CC	GC	SCR	PPS	EC	BOARDS
Anthony Capuano	1 year	President and CEO Marriott International, Inc.			⏺			⏺		1
Kareem Daniel	1 year	Former Chairman Disney Media & Entertainment Distribution			⏺		⏺			0
Lloyd Dean	8 years	Chief Executive Emeritus and Founding Executive CommonSpirit Health			⏺	⏺				2
Catherine Engelbert	4 years	Commissioner Women’s National Basketball Association					⏺		⏺	1
Margaret Georgiadis	9 years	Co-Founder and CEO Montai Health					⏺			1
Michael Hsu*	N/A	Chairman and CEO Kimberly-Clark Corporation								1
Christopher Kempczinski	4 years	President and CEO McDonald’s Corporation							⏺	1
John Mulligan	8 years	Strategic Advisor, Former EVP and COO Target Corporation						⏺	⏺	0
Jennifer Taubert	1 year	EVP, Worldwide Chairman, Innovative Medicine Johnson & Johnson			⏺			⏺		0
Paul Walsh	5 years	Executive Chairman McLaren Group Limited				⏺	⏺		⏺	2
Amy Weaver	1 year	President and CFO Salesforce, Inc.				⏺				0
Miles White	15 years	Former Executive Chairman Abbott Laboratories				⏺		⏺	⏺	0


AFC:	Audit & Finance Committee	SCR:	Sustainability & Corporate Responsibility Committee	⏺	Member
CC:	Compensation Committee	PPS:	Public Policy & Strategy Committee	⏺	Committee Chair
GC:	Governance Committee	EC:	Executive Committee	F	Financial Expert


	corporate.mcdonalds.com3


	corporate.mcdonalds.com5


	corporate.mcdonalds.com7

>	~~Independent Chairman~~
82024 proxy statement


~~Name~~		~~Director since~~		~~Occupation~~	~~Independent~~	~~Other company boards~~

	Our Planet		Jobs, Inclusion & Empowerment
● The Science Based Targets initiative (SBTi) has validated our global 2050 net-zero emission reduction target, aligning our 2030 global emissions target to help keep global temperature rises below 1.5°C. ● Continued to substantially achieve a deforestation-free supply chain across our primary commodities (beef, soy for chicken feed, palm oil, coffee, and fiber used in guest packaging), with 99% of sourced volumes supporting a deforestation-free supply chain in 2022.						● As of the end of 2022, 43% of leadership roles (Senior Director and above) globally were held by women. ● As of the end of 2022, our U.S. systemwide spend with diverse-owned suppliers was 25%, resulting in McDonald’s reaching its diverse-owned supplier spend goal for the second year in a row. ● In 2022, we raised hourly wages at over 90% of our U.S. Company-operated restaurants, impacting more than 44,000 employees and resulting in an 8% increase to the average hourly pay rate.
~~Robert A. Eckert~~	Food Quality & Sourcing	~~2003~~		— ~~Chairman, Mattel~~	X	— ~~Mattel~~ — ~~Levi Strauss~~ Community Connection
● As of the end of 2023, McDonald’s USA has achieved its commitment to sourcing 100% cage-free eggs by 2025 in the US market – two years ahead of schedule. ● By the end of 2022, we made significant progress across all five Global Happy Meal Goals in our 20 major markets. ● As of December 2022, we have established market-specific targets for responsible antibiotic use in our global beef supply chain for our 10 in-scope markets.		● Supported approximately 1.7 million young people with training programs and job opportunities since launching our Youth Opportunity Program in 2018. ● Continued the five-year, $100 million commitment to RMHC^®that we set in 2020 to help RMHC^® continue offering programs that ensure families have access to the medical care their child needs. ● In total, McDonald’s, our Franchisees and customers donated over $182 million to RMHC^® in 2022, helping the charity provide more than 2.2 million overnight stays for RMHC^® families around the world.


1	2	3
Pay for performance	Drive business results with a focus on creating long-term shareholder value	Pay competitively

What We Do		X		— ~~Chevron~~ 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 are designed to align interests of management with interests of shareholders ● Short-Term Incentive Plan (“STIP”) includes human capital metrics ● Majority of total direct compensation paid over the long term ● Robust 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-ups on perquisites* ● Granting discounted stock options ● Repricing of stock options ● Backdating of stock options ● Encourage unreasonable risk-taking ● Employment agreements ● Hedging or pledging of Company stock
							— ~~Nordstrom~~ * Other than standard relocation or expatriation benefits — ~~Wells Fargo~~

~~Jeanne P. Jackson~~			~~1999~~		— ~~President of Direct~~ ~~to Consumer,~~ ~~Nike~~	X

	— ~~Motorola Mobility~~ ~~Holdings~~
	corporate.mcdonalds.com15


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


~~Date and time~~Item to be Voted on			~~May 24, 2012, 9:00 a.m. Central Time~~
Our Board’s Voting Recommendation		Page
~~Place~~MANAGEMENT PROPOSALS			~~McDonald’s Office Campus, The Lodge, Prairie Ballroom~~
Proposal 1	Election of 12 Directors to Serve Until our 2025 Annual Shareholders’ Meeting and Until Their Successors Have Been Elected and Qualified	~~2815 Jorie Boulevard~~
	FOR each of our Board’s Director nominees	~~Oak Brook, Illinois 60523~~
	18
~~Record date~~Proposal 2	Advisory Vote to Approve Executive Compensation	~~March 27, 2012~~
	FOR		52
~~Voting~~Proposal 3	Vote to Approve an Amendment to the Company’s Restated Certificate of Incorporation to Limit Liability of Officers as Permitted by Law	~~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.~~
	FOR		80
~~Attendance~~Proposal 4		~~We encourage shareholders~~ Vote to ~~listen~~Approve Amendments to the ~~meeting via live webcast as seating in the Prairie Ballroom is limited. If you decide~~Company’s Restated Certificate of Incorporation to ~~attend in person, please follow the pre-registration instructions on page [ ].~~

		FOR	81
Proposal 5
	1		~~Notice of the Annual Shareholders’ Meeting~~

	2		~~Election of Directors~~

	2		~~Proposal No. 1~~. ~~Election of Directors~~

	2		~~Director qualifications and biographical information~~

	8		~~Executive compensation~~

	8		~~Compensation Committee Report~~

	8		~~Compensation discussion and analysis~~

	18		~~Compensation tables~~

	31		~~Proposal No. 2~~. Advisory ~~vote to approve executive compensation~~

	32		~~Other management proposals~~

	32		~~Proposal No. 3~~. Vote to ~~approve 2012 Omnibus Stock Ownership Plan~~

	36		~~Proposal No. 4~~. ~~Vote to approve~~Ratify the ~~declassification of the Board of Directors~~

	37		~~Proposal No. 5~~. ~~Vote to approve shareholders’ right to call special meetings~~

	37		~~Proposal No. 6~~. ~~Advisory vote to approve the appointment~~Appointment of Ernst & Young LLP as ~~independent auditor~~Independent Auditor for ~~2012~~2024	FOR	83
SHAREHOLDER PROPOSALS
Proposals 6–14	38 Advisory Vote (except Proposal 14) on Nine Shareholder Proposals, Each Only if Properly Presented		~~Audit Committee matters~~

	38		~~Audit Committee Report~~

	39		~~Policy for pre-approval of audit and permitted non-audit services~~

	40		~~Auditor fees and services~~

	41		~~Shareholder proposal~~ AGAINST

	41		~~Proposal No. 7~~. ~~[Advisory vote on a~~each shareholder proposal ~~requesting a nutrition report]~~

	42		~~Board and governance matters~~

	42		~~Leadership structure~~

	42		~~Director selection process~~

	42		~~Board diversity~~

	42		~~Succession planning~~

	43		~~Director independence~~

	43		~~Board committees~~

	44		~~Board and committee meetings~~

	45		~~Board and committee evaluations~~

	45		~~Risk oversight~~

	45		~~Code of Conduct for the Board of Directors~~

	45		~~Director compensation~~


	47			~~Stock ownership~~

	47			~~Stock ownership guidelines~~

	47			~~Security ownership of certain beneficial owners~~

	48			~~Security ownership of management~~

	49			~~Compliance with Section 16(a) of the Exchange Act~~

	49			~~Transactions with related persons, promoters~~~~and certain control persons~~

	49			~~Policies and procedures for related person transactions~~

	50			~~Related person transactions~~

	50			~~Communications~~

	50			~~Communications with the Board of Directors and non-management Directors~~

	50			~~Consideration of Director nominations for the 2013 Annual Shareholders’ Meeting~~

	51			~~Shareholder proposals for inclusion in next year’s Proxy Statement~~

	51			~~Other shareholder proposals for presentation at the 2013 Annual Shareholders’ Meeting~~

	52			~~Solicitation of proxies and voting~~

	52			~~Notice and access~~

	52			~~Record date~~

	52			~~Voting prior to the Annual Shareholders’ Meeting~~

	52			~~Voting at the Annual Shareholders’ Meeting~~

	52			~~Quorum~~

	52			~~Voting tabulation~~

	53			~~Registered shareholders~~

	53			~~Beneficial holders~~

	53			~~Proxy solicitation~~

	53			~~Confidential voting~~

	54			~~Additional information~~

	54			~~Executive officers~~

	54			~~McDonald’s Corporation Annual Report on Form 10-K, other reports and policies~~

	54			~~Householding of Annual Shareholders’ Meeting materials~~

	55			~~Information about registering for and attending~~~~the Annual Shareholders’ Meeting~~

	55			~~Ticket reservation and admission policy~~

	56			~~Exhibits~~

	56			~~Exhibit A~~

	57			~~Exhibit B~~

PROPOSAL 1 Election of Directors Our Board unanimously recommends the re-election of each of the 11 Director nominees named on the right, to serve on our Board for a one-year term beginning at our 2024 Annual Shareholders’ Meeting and continuing until our 2025 Annual Shareholders’ Meeting; and until their successors have been elected and qualified. Our Board also unanimously recommends the election of first-time Director nominee, Michael Hsu, to serve on our Board for a one-year term beginning at our 2024 Annual Shareholders’ Meeting and continuing until our 2025 Annual Shareholders’ Meeting; and until his successor has been elected and qualified. Enrique Hernandez, Jr., Chairman of our Board since 2016, has notified us that he is retiring and will not stand for re-election at our 2024 Annual Shareholders’ Meeting. We thank Mr. Hernandez for his many years of dedicated service to McDonald’s. Our Board unanimously recommends that you vote FOR each of its Director nominees.	Director Nominees for Re-Election
		Anthony Capuano	Paul Walsh	Christopher Kempczinski	Lloyd Dean
		Catherine Engelbert	Kareem Daniel	Amy Weaver	Miles White
		John Mulligan	Margaret Georgiadis	Jennifer Taubert
		First-Time Director Nominee
		Michael Hsu


	All of our Board’s Director nominees possess the following key attributes and skills:
	● A high level of integrity and ethics ● Strength of character and judgment ● Ability to devote significant time to Board duties ● Desire and ability to continually build expertise in emerging risk areas and areas of strategic focus for our Company ● Demonstrated focus on promoting equity and inclusion ● Business and professional achievements	● Ability to represent the interests of all shareholders ● Knowledge of corporate governance matters ● Understanding of the advisory and proactive oversight responsibility of our Board ● Comprehension of the role of a public company director and the fiduciary duties owed to shareholders ● Intellectual and analytical skills

ANTHONY CAPUANO	Director Qualifications		Skills & Qualifications
PRESIDENT AND CHIEF EXECUTIVE OFFICER, MARRIOTT INTERNATIONAL, INC. Age: 58 Board Tenure: 1 year Board Committees ● Compensation ● Public Policy & Strategy	Mr. Capuano brings to our Board over 25 years of leadership experience gained from his senior executive roles, including president and chief executive officer, at Marriott. His service at a global hospitality company known for its focus on creating a positive guest experience contributes an important perspective to our Board’s discussions regarding enhancing our own customers’ experiences, including through our loyalty programs. Our Board also benefits from Mr. Capuano’s significant global development experience, and his service on the social impact committee of Marriott’s board of directors provides our Board with valuable insights regarding our own corporate responsibility and sustainability efforts. Mr. Capuano’s public company board experience also gives him a broad understanding of governance issues facing public companies. Professional Experience Marriott International, Inc., a global hospitality company ● President and Chief Executive Officer (2023 – Present) ● Chief Executive Officer (2021 – 2023) ● Group President, Global Development, Design and Operations Services (2020 – 2021) ● Executive Vice President and Global Chief Development Officer (2009 – 2020) Other Public Company Directorships Mr.Capuano also serves on the board of Marriott International, Inc.	~~Susan E. Arnold~~~~, 58~~		Brand Management
					Customer- Centric
					Digital
					Finance / Capital Markets
					Global Experience
					Human Capital Management
					Marketing
					OtherPublic CompanyBoard
					Real Estate
					Sustainability / Corporate Responsibility

KAREEM DANIEL	Director Qualifications	Skills & Qualifications
~~Director since 2008~~FORMER CHAIRMAN, DISNEY MEDIA & ENTERTAINMENT DISTRIBUTION ~~Class 2014~~Age: 49 ~~Other current directorships~~: Board Tenure: 1 year Board Committees ● Compensation ● Sustainability & Corporate Responsibility	Mr. Daniel brings to our Board valuable leadership experience gained from his senior executive roles at Walt Disney, one of the world’s most well-known and admired brands. His extensive corporate development experience includes leading transformation across several Disney divisions. The knowledge Mr. Daniel has gained through leading the creation of a direct-to-consumer e-commerce business, as well as overseeing the development of new distribution and commercialization models, offers a valuable perspective to our Board’s discussions regarding strategy and business development. Professional Experience The Walt Disney Company, a global entertainment and media company ● Chairman, Disney Media & Entertainment Distribution (2020 – 2022) ● President, Consumer Products, and Chief of Staff, Office of the Chief Executive Officer (2020) ● President, Walt Disney Imagineering Operations, Product Creation, Publishing and Games (2019 – 2020) ● Executive Vice President, Global Business Operations, Walt Disney Imagineering (2017 – 2019) ● Senior Vice President, Strategy and Business Development, Disney Consumer Products and Interactive Media (2011 – 2017) Other Public Company Directorships None.		Brand Management
				Customer- Centric
				Digital
				Finance / Capital Markets
				Global Experience
				Human Capital Management
				Information Technology / Cybersecurity
				Marketing
				Sustainability / Corporate Responsibility

LLOYD DEAN	Director Qualifications	Skills & Qualifications
CHIEF EXECUTIVE EMERITUS AND FOUNDING EXECUTIVE, COMMONSPIRIT HEALTH Age: 73 Board Tenure: 8 years Board Committees ● Compensation (Chair since 2023) ● Governance	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 are particularly important and enhance his ability to oversee human capital management matters. Our Board also benefits from Mr. Dean’s finance, systems operations, service quality, human resources, customer-centric operations, community affairs and regulatory experience. Professional Experience CommonSpirit Health, a non-profit, Catholic health system ● Chief Executive Emeritus and Founding Executive (2022 – Present) ● Chief Executive Officer (2019 – 2022) Dignity Health, one of the nation’s largest healthcare systems ● President and Chief Executive Officer (2000 – 2019) Other Public Company Directorships Mr.Dean also serves on the boards of Golden Arrow Merger Corp. and Progyny, Inc.		Brand Management
				Customer- Centric
				Finance / Capital Markets
				Human Capital Management
				OtherPublic CompanyBoard
				Sustainability / Corporate Responsibility

CATHERINE ENGELBERT	Director Qualifications	Skills & Qualifications
COMMISSIONER, WOMEN’S NATIONAL BASKETBALL ASSOCIATION Age: 59 Board Tenure: 4 years Board Committees ● Audit & Finance (Chair since 2022) ● Sustainability & Corporate Responsibility ● Executive	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 gained from her service as Commissioner of a professional sports league and as former chief executive officer of Deloitte LLP. Having led more than 100,000 professionals at Deloitte, she also provides our Board valuable insights on talent management and other human capital management matters. Ms. Engelbert 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. With 33 years of previous public accounting experience 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 our Audit & Finance Committee Chair. Professional Experience Women’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) Other Public Company Directorships Ms.Engelbert also serves on the board of Royalty Pharma plc.		Brand Management
				Customer- Centric
				Digital
				Finance / Capital Markets
				Global Experience
				Human Capital Management
				Marketing
				Other Public Company Board
				Sustainability / Corporate Responsibility

MARGARET GEORGIADIS	Director Qualifications	Skills & Qualifications
CO-FOUNDER AND CHIEF EXECUTIVE OFFICER, MONTAI HEALTH Age: 60 Board Tenure: 9 years Board Committees ● Audit & Finance ● Sustainability & Corporate Responsibility	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 experience as a senior executive at large global businesses affords her a broad knowledge of global consumer businesses, as well as of technology and cybersecurity, digital consumer insights, e-commerce, and marketing. 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. Professional Experience Montai Health, a digital medical technology company ● Co-Founder and Chief Executive Officer (2022 – Present) Flagship Pioneering, a bioplatform innovation company ● CEO-Partner (2022 – Present) Synetro Group, a private investment and strategic advisory firm ● Managing Partner (2021 – Present) General Catalyst, a venture capital firm ● Endurance Partner-in-Residence, XIR (2021 – 2022) 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) Other Public Company Directorships Ms.Georgiadis also serves on the board of AppLovin Corporation.		Brand Management
				Customer- Centric
				Digital
				Finance / Capital Markets
				Global Experience
				Human Capital Management
				Information Technology / Cybersecurity
				Marketing
				OtherPublic CompanyBoard
				Sustainability / Corporate Responsibility

MICHAEL HSU	Director Nominee Qualifications	Skills & Qualifications
CHAIRMAN AND CHIEF EXECUTIVE OFFICER, KIMBERLY-CLARK CORPORATION Age: 59 Board Tenure: N/A Board Committees Committee assignments to be determined following election to the Board	Mr. Hsu would bring to our Board extensive experience in consumer products, global supply chain, operations, e- commerce, digital and human capital management gained from his service in senior executive roles at Kimberly-Clark and Kraft Foods. His service at a leading manufacturer and consumer products retailer known for its advancement across multiple product categories would bring customer-centric experience to our Board. In addition, his experience in enhancing digital and e-commerce capabilities platforms is an important asset as our Board considers these topics and their potential impact on our Company. Mr. Hsu’s prior experience at Kraft Foods also gives him a unique perspective and expertise in the global food supply chain industry. Professional Experience Kimberly-Clark Corporation, a consumer products company ● Chairman and Chief Executive Officer (2020 – Present) ● Chief Executive Officer (2019 – 2020) ● President and Chief Operating Officer (2017 – 2019) ● Group President, Consumer Products, North America (2012 – 2017) Kraft Foods, a food service company ● Executive Vice President and Chief Commercial Officer (2012 – 2012) ● President, Sales, Customer Marketing and Logistics, USA (2010 – 2012) Other Public Company Directorships Mr. Hsu also serves as Chairman of the Board of Kimberly-Clark Corporation. He previously served on the board of Texas Instruments Incorporated.		Brand Management
				Customer- Centric
				Digital
				Finance / Capital Markets
				Global Experience
				Human Capital Management
				Marketing
				Other Public Company Board
				Sustainability / Corporate Responsibility

					> Customer- Centric
					~~Special assignment reporting to Chief Executive Officer (2009)~~ Digital

					> Finance / Capital Markets
					~~President–~~ Global ~~Business Units (2007 – 2009)~~ Experience

					> Human Capital Management
					~~Vice Chair, P&G Beauty and Health (2006 – 2007)~~ Marketing


~~Robert A. Eckert,~~57	~~Director since 2003~~	~~Class 2012~~~~(Nominee)~~	~~Other current directorships~~~~: Mattel, Inc. and Levi Strauss & Co.~~Real Estate
			Sustainability / Corporate Responsibility

COMMITTEES

PRIMARY AREAS OF RISK OVERSIGHT

AUDIT & FINANCE

COMPENSATION

GOVERNANCE

SUSTAINABILITY & CORPORATE
RESPONSIBILITY

Public Policy &
Strategy

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Financial reporting
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Internal controls
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Enterprise risk process
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Oversight of specific cybersecurity and technology incidents
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Capital Structure
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Treasury
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Compliance

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Executive compensation
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Incentive plans
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Global compensation programs and policies

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Director selection
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Board succession
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Director compensation
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Governance structure

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Brand trust
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Environment and sustainability, including climate
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Food safety
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Corporate responsibility
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Human Rights
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Human capital, including workforce and workplace matters

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Strategy
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Public policy
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Labor matters, including activism
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Government affairs
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Corporate reputation
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Franchisee relations
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Cybersecurity and technology strategy and processes
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Compliance
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Tax planning