Last year was one of the worst for McDonald’s Corporation (NYSE:MCD) in its six decades of history that eventually meant a management change was inevitable. The axing of CEO, Don Thompson, continues to elicit debate on whether it came too soon or it was overdue. During an interview on Bloomberg, billionaire investor, Bill Ackman of Pershing Square, reiterated that McDonald’s board did the right thing in letting Thompson go.
McDonald’s Corporation (NYSE:MCD) having failed to find the right mix that would have triggered an upside meant Thompson was more than ever under pressure as the company sought to reassure investors about the long-term prospects. “The board did the right thing in changing the management, I don’t know anything about the new CEO though,” said Mr. Ackman.
Ackman believes that the main undoing to McDonald’s was the way it was being run and that a management change would probably help rejuvenate a company that continues to feel the full effects of competition. Ackman reiterates that Burger King Worldwide Inc (NYSE:BKW) holds the upper hand on how it is being run when compared to McDonald’s.
There is no doubt that McDonald’s Corporation (NYSE:MCD) has underperformed in the recent quarters seen by its same-store sales growth falling short of the likes of Chipotle Mexican Grill, Inc. (NYSE:CMG).
Thompson had steadied the company seen by the company’s annual revenue that still dwarfs those of the competition amidst an increase of players in the space. McDonald’s Corporation (NYSE:MCD) board had stuck by their man believing that the behemoth status of the company did not justify calls for success overnight. The giant fast food chain has over 36,000 restaurants worldwide meaning keeping track of each store taste is always sure to be a hard nut to crack.
The board was willing to go through a rough period in hope that things would turn out in the long run but with pressure coming from all quarters, change was inevitable.
Thompson himself might be responsible for his demise at McDonald’s Corporation (NYSE:MCD) as rarely he gave interviews and when he did, he did not sound that convincing. The noise and pressure from Wall Street seem to have grown louder for the board to ignore.
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