McDonald’s Corp. has amended its bylaws to simplify the process for putting shareholders’ candidates up for election to the company’s board of directors, a move that could ease a takeover attempt by disgruntled investors.
This enables any party owning more than 3 percent of McDonald’s stock to put a candidate on the proxy, the voting guide distributed to shareholders in preparation for the company’s annual shareholder meeting. Traditionally for McDonald’s and most other public companies, the proxy has listed only the candidates favored by the company.
Many attempts to take control of a company start with an effort by investors to gain seats on the board. Last October, for instance, Starboard Capital Partners decided to change the strategic direction of Darden Restaurants by nominating a whole slate of candidates for board seats. It succeeded in replacing the entire board, and Starboard CEO Jeff Smith is now Darden’s chairman.
McDonald’s byline change is part of a movement among public companies to give shareholders more input in the election of directors. The reform is known as proxy access, and other converts include The Coca-Cola Co. and JP Morgan Chase.
Despite McDonald’s financial struggles for the last two years, the company has not been embroiled in the sort of shareholder struggles that led to a change in control of Bob Evans Farms and, less recently, Wendy’s and Cosi. However, some investors have been openly calling for the burger chain to spin off its vast real estate holdings to realize the underlying value and pass on those dollars to shareholders.
McDonald’s usually holds its shareholder meeting in May.