Updated from 11:14 a.m. EDT

Jim Cantalupo, the longtime McDonald's ( MCD) executive who oversaw a major turnaround at the hamburger chain during just 16 months as chairman and CEO, died of a heart attack Monday. He was 60 years old.

The company quickly named 28-year company veteran Charlie Bell, its chief operating officer and president, to succeed Cantalupo.

Cantalupo died "suddenly and unexpectedly" at a restaurant owners' convention in Orlando, Fla., Andrew J. McKenna, the company's presiding director and new nonexecutive chairman, said in a statement. "Our entire McDonald's system mourns this tragic loss, and our thoughts and prayers are with Jim's wife, Joann, and his family," McKenna said.

Since Cantalupo was named chairman and chief executive Jan. 1, 2003, McDonald's stock has risen 71%, and it is up more than 120% since bottoming two months later. The shares eased Monday, down 71 cents, or 2.6%, at $26.75.

The late CEO is widely credited with reviving the company through a radical program that emphasized growth at existing restaurants, revamped menus and curtailed the company's longtime strategy of unending new-restaurant expansion.

"Cantalupo's primary benefit was to get the whole system moving from when he took over, and really right the ship," said Carl Sibilski, an analyst at Morningstar. "Instead of allocating capital to more store openings, he allocated back to existing stores and back to shareholders."

Cantalupo spent 28 years at McDonald's, starting as controller in 1974, and had been at various times president, vice chairman and chief executive of McDonald's International.

Bell was managing director of McDonald's Australia from 1993 to 1999, when he was appointed president of Asia/Pacific, Middle East and Africa. He was named president and chief operating officer upon Cantalupo's appointment to CEO and had frequently been mentioned as the boardroom's heir apparent.

Citigroup analyst Mark Kalinowski noted that Bell has been with McDonald's since he was 15, when he started as a part-time crew member. "As they say, ketchup runs in his veins," Kalinowski said. At age 19, Bell became the youngest-ever store manager at McDonald's Australia, Kalinowski noted.

Bell "was the right candidate," said Scott Rothbort, president of LakeView Asset Management and a contributor to Street Insight. "He should be a solid force for years to come in continuing the spirit of Cantalupo." (Rothbort is long McDonald's shares.)

Company observers expect the new CEO to continue with Cantalupo's turnaround strategy. Last week, McDonald's forecast higher-than-expected first-quarter earnings and said March sales jumped 11.5% overall, but the stock fell as investors worried about anemic sales overseas. Same-store sales in Europe dropped 2.9%; the region makes up about one-third of the company's total profit.

CIBC analyst John Glass went as far as downgrading the shares on April 14, noting that the stock market was becoming "hyper-sensitive" to McDonald's same-store sales results and warning that comparisons would toughen in May.

Investors had been pampered with six straight months of double-digit U.S. same-store sales and five straight months of positive same-store sales in Europe. As a result, the stock closed down 4.5% on April 14, the first day of trading after last week's announcement.

In his note, Glass said he is most concerned about the company's operations in Europe. The analyst thinks food price increases are harder to pass along to consumers in the fast-food arena.

Doug Christopher, an analyst at Crowell, Weedon & Co., agreed that same-store sales monthly comparisons will get harder in May, but said they are likely to remain consistent in the positive 3% to 6% range both in the U.S. and overseas. Christopher said the percentage increases won't be as huge as they have been in the past year.

"What we've seen these last few months has been amazing," Christopher said.

Christopher, who is personally long McDonald's stock, expects that in the next year, the company's turnaround will be completed. (Crowell, Weedon & Co. does not do investment banking.)

The analyst said he doesn't expect that Bell will make any changes to McDonald's current revitalization plan. "It's the strategy that matters, what they're talking about," he said.

The most important things Bell can do are communicate with the company and make good on his revitalization-related promises. "Cantalupo was a leader, a decision maker. We have to be sure that Bell is a decision maker," Christopher said. McDonald's has said it plans to open 850 new restaurants in 2004 and close 400.

Both Sibilski and Rothbort credited Cantalupo with changing McDonald's from an expansion machine into a better-managed, fiercer competitor.

"That was tough to do because ... when you're moving in one direction, it's hard to turn in a different direction," said Sibilski. "That's how he's made his mark on McDonald's."

Among Cantalupo's achievements was implementing "the best risk management in the business, in terms of the ability to manage and maintain commodity costs and also to monitor risk of disease," Rothbort said.

Cantalupo also led McDonald's evolution as healthier eating became a priority for Americans, Rothbort said. "He has taken McDonald's from a burger and fries place to more of a casual dining experience," and in so doing, "turned Burger King into a noncompetitor," Rothbort said.

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