McDonald's defends its wages, marketing strategy

During a sometimes contentious annual shareholder meeting, McDonald's (MCD) top executive defended the fast-food giant's record on worker pay -- and rebuffed claims it directs its marketing towards children.

Even before the meeting began, more than 100 people were arrested outside McDonald's corporate headquarters in suburban Chicago during a peaceful demonstration by activists and company employees.

Inside, along with shareholder questions about the company's performance goals and strategies, McDonald's was taken to task by some activists.

"While you choose to spend billions on athletic sponsorships and other marketing tactics to hook more kids on junk food and increase executive compensation, many of your employees can barely make ends meet on poverty wages," said Sriram Madhusoodanan with Corporate Accountability International.

"Moms are watching," said Sally Kuzemchak, who described herself as a mother of two, a blogger and a registered dietitian from Columbus, Ohio. "And what we're seeing looks like what tobacco companies did a couple of years ago, using Joe Camel as a kid-friendly mascot for cigarettes."

McDonald's CEO Don Thompson denied his company had a "predatory" focus on marketing towards children.

"We do have values at McDonald's and all of us are parents," he responded. "So for those who have challenges with our menus or the choices, we'd love to hear the feedback, and we'll do everything we can to try to address those as we look at the menu pipeline and portfolio."

Thompson also said his company continues to believe "that we pay fair, competitive wages...and we provide job opportunities and training for those entering the work force. We're trying to be a really great employer."

McDonald's sales in the U.S. have been slumping recently -- hurt in part by growing competition from Burger King (BKW), Taco Bell (YUM), Wendy's (WEN) and other fast food rivals, especially in the lucrative breakfast meal sector. Earlier this year, Thompson said the restaurant chain needed to stay relevant with its customers and promote its revamped menu.

But consumers have also been put off by growing criticism that McDonald's and other fast food chains are not paying their employees a livable wage. Earlier this year, a group of McDonald's employees filed a class-action lawsuit against franchise owners and the corporation, claiming some of the restaurants did not pay for overtime, failed to reimburse their workers for uniforms and forced employees to work "off the clock."

  • Bruce Kennedy

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