McDonald’s will tie executive bonuses to its diversity goals

The burger giant has promised to hire more women and people from underrepresented groups in leadership roles and plans to reach gender parity by the end of 2030.
Photo by Jonathan Maze

McDonald’s, facing mounting charges of discrimination in the U.S., on Thursday vowed to increase the diversity of its leadership team and will tie executive bonuses to the hiring of women and people from underrepresented groups.

CEO Chris Kempczinski said in a message to the system that it would increase women in leadership roles—senior director and above—to 45% by the end of 2025, from 37% now. The company also said it would reach gender parity by the end of 2030.

Kempczinski also said the company would increase the percentage of historically underrepresented groups in leadership roles to 35%, from 29%, by 2025.

The company is also tying 15% of executives’ annual incentive bonuses to four “human capital metrics” that cover diverse hiring targets and fostering a culture of inclusion. The other factors in bonuses include operating income growth and systemwide sales growth. Those payments can be substantial—for Kempczinski the incentive payment target is 180% of his annual salary.

“We recognize these issues weigh heavily on our people and have heard—loud and clear—that diversity, equity and inclusion are priorities for our entire team, from our crews to our senior leaders,” Kempczinski said. “We’re serious about holding ourselves and our leaders accountable to these foundational commitments.”

The hiring targets come as the Chicago-based burger giant has faced a number of discrimination lawsuits from both executives and franchisees—including one from what had been its largest Black U.S. operator filed just this week.

The franchisee lawsuits are critical of what is seen as the chain’s retreat from marketing to Black consumers, while also charging the company for steering Black franchisees into weaker stores and not giving them the same opportunities as their White counterparts. At the core of the complaint is a $700,000 revenue gap in 2018 between Black franchisees and the system average.

While McDonald’s had vigorously defended itself in those allegations, it also vowed to improve the culture of diversity within its system. In November, the company hired Reginald Miller its new global chief diversity and inclusion officer. That followed a promise in July to bolster diversity within its system.

The moves on Thursday were expressed as an update of those efforts. Executives will be required to meet annual targets on hiring diverse sets of leaders.

Senior leaders at the company have also vowed to create slates of diverse candidates for open officer roles, engaging with diversity groups in and out of the company, and strengthening their talent pipeline by mentoring more women and people of color.

“Our [diversity equity and inclusion] journey does not—and cannot—exist independently,” Kempczinski wrote. “It is deeply rooted in the values that make McDonald’s the thriving, vibrant brand it is today.”

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