McDonald’s links executive pay to diversity targets

McDonald’s will tie executive pay to diversity goals and aim to hit gender parity in management by the end of 2030 as the company tries to overhaul its workplace culture.

CEO Chris Kempczinski described the new goals in a letter sent to employees Thursday. The company aims to increase the percentage of women in the roles of senior director and above from 37% to 45% globally by the end of 2025. It also wants to up the percentage of historically underrepresented groups in those positions from 29% to 35% by the end of 2025.

“We’re serious about holding ourselves and our leaders accountable,” Kempczinski said in the letter.

The new goals come amid a broader shift at McDonald’s. Former CEO Steve Easterbrook was fired in 2019 for violating company policy by engaging in a relationship with an employee. Around the time that Easterbrook was fired, McDonald’s also dismissed its chief people officer. Under their leadership, a party culture flourished, according to a report from the Wall Street Journal. The chain started an investigation into its human resources department last year for possible misconduct.

In November, the company hired a new global head of diversity, equity and inclusion.

The targets announced Thursday also follow racial discrimination lawsuits filed against the company by current and former franchise operators.

Earlier this week, a Black franchise operator sued the company for allegedly steering him toward less profitable restaurants in lower-income, predominantly Black neighborhoods because of his race. McDonald’s said in response that it had “invested significantly” in his restaurants and that it “will review the complaint and respond accordingly.”

In September, dozens of Black former franchise operators sued the company, citing similar complaints. McDonald’s has denied the allegations.