McDonald's links executive pay to diversity targets, but that's not a good thing

In an announcement on Thursday, fast food giant McDonald's announced that it plans to tie executive pay to diversity goals in order to achieve gender and racial parity. The new goals come after a series of lawsuits based on racial discrimination filed by both current and former officials. The diversity targets are aimed at senior director level positions, but many believe that the new goals will only further exacerbate racial disparities as Black people are overrepresented in low income, high risk jobs, particularly in the food and beverage sector. Nonetheless, CEO Chris Kempczinski believes the targets will pave the path for a more equitable future, CNN reports.

In a letter to employees shared on Thursday, Kempczinski described the new diversity objectives. By the end of 2025, the firm aims to increase the percentage of women in the roles of senior director and above from 37 percent to 45 percent across the world. Moreover, the company plans to boost the percentage of historically underrepresented groups in those positions from 29 percent to 35 percent by the end of the same year. It is unclear what is meant by "underrepresented." The CEO affirmed, "We're serious about holding ourselves and our leaders accountable."

These goals come at a time when McDonald's is undergoing a broader culture shift. In November, the fast food giant hired a new global head of diversity, equity, and inclusion. Furthermore, former CEO Steve Easterbrook was fired in 2019 for violating company policy and engaging in a relationship with an employee. Around the same time that he was fired, the company terminated its chief people officer. Reportedly, a "party culture" flourished under their leadership. This was revealed after the chain launched an investigation into its human resources department last year for instances of possible misconduct. The Wall Street Journal filed a report on this investigation.

Furthermore, the new goals have been announced following a series of racial discrimination lawsuits against McDonald's. Just earlier this week, a Black franchise operator sued the firm for allegedly directing him toward less profitable restaurants in lower income, predominantly Black neighborhoods because of his race. In light of this, the fast food chain said in response that it had "invested significantly" in the operator's restaurants and that it "will review the complaint and respond accordingly." In September last year, dozens of Black operators who formerly owned franchises sued the company on similar grounds. However, McDonald's has denied all allegations.