The stock price of McDonald’s Corporation (MCD) has risen up by over 1.24% today till the late morning trading session. The stock closed at $157.72 on Monday.
McDonald’s is a fast food company that was founded in 1940 as a restaurant operated by Richard and Maurice McDonald, in San Bernardino, California, United States. They rechristened their business as a hamburger stand. The first time a McDonald’s franchise used the Golden Arches logo was in 1953 at a location in Phoenix, Arizona. In 1955, Ray Kroc, a businessman, joined the company as a franchise agent and proceeded to purchase the chain from the McDonald brothers. McDonald’s had its original headquarters in Oak Brook, Illinois, but has approved plans to move its global headquarters to Chicago by 2018.
When McDonald’s told employees at company-owned restaurants three years ago that they were getting a raise, workers cheered. CEO Steve Easterbrook said at the time that the enhanced compensation package, including better benefits, would make a “real difference” in workers’ lives.
Three years later, McDonald’s efforts haven’t kept pace with increasing minimum wages. McDonald’s move to boost pay came in April of 2015, as union-led protests that came to be known as the “Fight for $15” were sweeping the nation. Under pressure from activists, the company said that it would set the starting pay for 90,000 workers at company-owned restaurants in the U.S. at one dollar over the local minimum wage. The announcement generated a raft of generally positive headlines, with Easterbrook touting his desire to build a “progressive burger company.”
“McDonald’s publicity stunt has turned out to be a sham,” Kuper, an employee at a McDonald’s restaurant in Chicago, said in a statement emailed by Fight for $15. Most McDonald’s restaurants are independently operated as franchises, with the owner setting the wage structure rather than leaders at the company.
For its part, McDonald’s doesn’t dispute that pay at its restaurants hasn’t kept pace with local wages. Instead, it contends that the company never intended to continuously keep raising wages so that it remained at least $1 above the minimum wage.
“The increase announced in 2015 was applicable to the local wages on July 1, 2015, and was not a policy thereafter,” Terri Hickey, a spokesperson for McDonald’s said in an email. McDonald’s never promised that it would always keep wages $1 above the minimum, but executives did indicate a commitment to higher wages.
Shortly after the sweetened pay package was announced in April 2015, for example, Chief Financial Officer Kevin Ozan told analysts in an earnings call that boosting worker pay would “enhance our competitiveness in the marketplace” by helping McDonald’s “attract and retain the best employees.”
Our analysts have given a “HOLD” rating to McDonald’s stock. Although it shows great potential, however due to the fluctuation, this is not the stock where you want invest big right now.