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McDonald's Shareholders Chicken Out

McDonald's shareholders nixed two proposals at the company's annual meeting: one to mandate the company use only cage-free eggs, the other to allow shareholders oversight of executive compensation.

McDonald's (MCD) - Get McDonald's Corporation Report may be gung-ho on its outlook, but it's less enthusiastic about altering its treatment of the animals it uses for its food products or reining in executive pay.

During the company's annual meeting on Wednesday shareholders -- with strong encouragement by the company's board -- voted against two stockholder proposals, including one that would have mandated the company use only cage-free eggs in its U.S. operations.

Cage-free eggs come from hens not caged in small enclosures called "battery cages." In November, California voters approved a ballot measure making it illegal to confine hens in such cages. McDonald's recently said it will study the issue, in consultation with a group of animal welfare scientists, egg suppliers, academics and nonprofit groups.

The other proposal would have given shareholders the right to vote on an advisory resolution to ratify executive compensation packages.

During the meeting CEO Jim Skinner touted the company's recent success amid the economic downturn, which has severely hurt its restaurant rivals as consumers opt to eat at home to save money. He also said McDonald's value-priced menu, along with the line of healthy-alternative menu items the company has produced in the past few years, are poised to continue to drive momentum in the second half of the year.

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Jim Cramer is also a fan of the company, and during his "Mad Money" Lightning Round on Tuesday said "I've liked McDonald's for a long time. I like it; I recommend it. It's a weak dollar play and don't be dissuaded by its recent run."

In 2008 the company experienced record results, with operating income up 17% and EPS rising 15%. Skinner said those trends appear to be continuing into 2009.

Skinner also took time to address a watchdog group, Corporate Accountability International, which has accused the fast food chain of not doing enough to promote healthier eating for children.

Sinner said that nutritional information is already provided by the company and that the McDonald's menu offers a wide variety of choices.

Separately, the company also declared a quarterly cash dividend of 50 cents per share payable on June 22 to shareholders of record as of June 8.

Shares of the company dropped 2% to $57.95 in afternoon trading.