McDonald’s CEO Skinner Retires; Thompson Is Successor
McDonald’s Corp. (MCD) said Chief Operating Officer Don Thompson will take over as chief executive officer, becoming the first black CEO of the world’s largest restaurant chain, after Jim Skinner retires this year.
Thompson, 48, who became president and operating chief in January 2010, will assume his new role July 1, Oak Brook, Illinois-based McDonald’s said in a statement yesterday. Skinner, 67, who ran McDonald’s for more than seven years, also will retire from the board, where he serves as vice chairman.
“It will be a seamless transition,” Peter Saleh, an analyst at Telsey Advisory Group in New York, said in an interview last night. “They’re not going to skip a beat going from Jim to Don,” he said.
Thompson takes over as the company works to keep boosting sales and profit amid increasing competition and higher commodity prices. Wendy’s Co. and Yum! Brands Inc. (YUM)’s Taco Bell chain recently have been testing breakfast foods at some U.S. locations. Burger King Holdings Inc. (BKC) also began selling soft- serve ice cream and more upscale menu items last year in a bid to lure McDonald’s diners.
“Everyone today is trying to steal share from them,” Saleh said. Thompson needs to protect the breakfast business and continue to expand McCafe specialty beverages, he said.
Restaurant operators also are enduring higher commodity costs. Raw ingredient-prices may rise as much as 5.5 percent in the U.S. and 3.5 percent in Europe in 2012, Chief Financial Officer Peter Bensen said during an earnings call on Jan. 24.
McDonald’s fell 1 percent to $95.80 at the close in New York. The shares have declined 4.5 percent this year.
Thompson, a 22-year company veteran who started as an electrical engineer, was president of McDonald’s USA from 2006 to 2010 before he became operating chief. He is a director at McDonald’s and Exelon Corp. (EXC), according to the McDonald’s website. He received his bachelor’s degree in engineering from Purdue University in West Lafayette, Indiana.
Thompson will join five other black CEOs of Fortune 500 companies: Kenneth Chenault of American Express Co. (AXP), Clarence Otis at Darden Restaurants Inc. (DRI), Rodney O’Neal of Delphi Automotive Plc, Ursula Burns of Xerox Corp. (XRX) and Kenneth Frazier of Merck & Co.
There have been 13 black leaders of Fortune 500 companies ever, according to data from the Alexandria, Virginia-based Executive Leadership Council, an organization that promotes and studies black leadership. Thompson is a member of the council.
Thompson, through Lisa McComb, a McDonald’s spokeswoman, declined to be interviewed.
As COO, Thompson led remodeling efforts, added double-lane drive-throughs to stores and expanded the hours at some restaurants -- about 40 percent of U.S. locations are open 24 hours a day. McDonald’s is “just beginning to ramp up” store remodels in the U.S., Thompson said during an investor conference on March 14.
Last year, the fast-food chain remodeled 2,500 stores worldwide and this year plans to spend $2.9 billion to open 1,300 new restaurants and remodel 2,400.
McDonald’s hasn’t decided who will fill the COO position, McComb said in an e-mail yesterday. The company has operated in the past without a COO, she said.
Skinner started at McDonald’s as a management trainee in 1971. Thirty-three years later he became CEO, the company’s third in seven months, taking over from Charlie Bell who resigned to focus on his fight against cancer. In April 2004, then CEO James Cantalupo died of a heart attack.
Revenue at McDonald’s, which has more than 33,500 stores worldwide, of which about 80 percent are franchised, has jumped 42 percent since 2004. The company posted revenue of $27 billion in 2011. Analysts forecast revenue will increase 5.3 percent to $28.4 billion this year, according to data compiled by Bloomberg.
Skinner’s total compensation from McDonald’s last year was $8.75 million, which included a base salary of $1.47 million, according to a company filing with the U.S. Securities and Exchange Commission. Thompson made $4.07 million, including about $829,000 in salary.
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