Chicago - McDonald's Corp. shook up its top management by naming its head of U.S. operations Jack Greenberg as president and chief executive of the world's largest restaurant chain in a move cheered by Wall Street.
Greenberg succeeds Michael Quinlan, who has served as McDonald's chief executive officer for more than a decade. Quinlan will remain as chairman of the board. The changes are effective Aug. 1.
In an interview, Greenberg, who joined Oak Brook, Ill.-based McDonald's in 1982 as chief financial officer, said his No. 1 priority will be people. The company has decentralized its U.S. operations and created a process under which talented people can rise more quickly, he said.
“They have more accountability for their efforts, and I surely want to make sure that happens globally,” Greenberg said.
“What can happen to companies that have great success and uninterrupted success is that you can get complacent,” Greenberg said of recent struggles in its home market.
“McDonald's has learned a lot,” he added. “We think there's an enormous amount of growth ahead of us all over the world, including in the United States.”
McDonald's stock rose $2.56 to $61.875 in consolidated New York Stock Exchange trading.
“Greenberg has been there since 1982 but he represents some new thought,” said Peter Oakes, an analyst for Merrill Lynch & Co. Inc. “He's had creative and insightful strategies in the past, and I think we'll see more of it.”
McDonald's, with more than 23,000 restaurants in 110 countries, including some 12,000 in the United States, has been plagued by stiff U.S. competition and some menu flops.
Last month, McDonald's announced plans to reorganize its home office and cut jobs. It also outlined plans to overhaul its food production system across the United States and help franchisees pay for the new system.
“Quinlan has set this platform financially, operationally and culturally, and now it's time to pass it on to someone else to implement it,” said Mitchell Speiser at Lehman Brothers. “It is clearly a positive and the market thinks so too.”
James Cantalupo, who leads McDonald's international division, will succeed Greenberg as vice chairman of the overall company.
“Everyone recognizes that international has really been their key growth driver, and Jim Cantalupo is being rightly rewarded for his stewardship of the international business,” said Ronald Steger, a consultant to the restaurant industry for KPMG Peat Marwick.
Alan Feldman, currently president of McDonald's USA's Northeast Division where he is responsible for more than 2,300 restaurants, was named president of McDonald's USA and will report to Greenberg. Feldman joined McDonald's four years ago from Pizza Hut, and analysts said his nomination bucks criticisms that the fast-food giant is insular.
“This is further evidence of the changing of the guard,” Merrill Lynch's Oakes said, noting the move is positive.
The company has faced unrelenting competition in the United States. It has struggled to improve U.S. same-store sales, with overall sales growth driven primarily by expansion. Some franchisees have spoken out against the company for opening too many U.S. stores, creating competition among McDonald's restaurants. Menu and promotional campaign missteps have hurt the company's image.
“It's very difficult when an icon like McDonald's understands it has some very serious challenges ahead,” said Chuck Hamburg, a food service consultant and professor of restaurant management at Roosevelt University in Chicago.
“And it comes to the realization that it's not the golden arches that are important any more but the hamburger contained under those golden arches that makes the difference,” he added.
In a statement, Quinlan said it is time to utilize the tremendous depth of management skill at the company.
“I'm proud to pass the baton to Jack Greenberg,” Quinlan said.
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