McDonald's to Eliminate COO Position After Fenton Retirement -- 2nd Update

McDonald's Corp. announced another management shake-up, as the burger chain tries to regain momentum after a series of missteps.

The company said Thursday that Chief Operating Officer Tim Fenton, 56, has decided to retire from McDonald's on Oct. 1. McDonald's said it won't replace Mr. Fenton, and instead will restructure its senior ranks so that global division presidents would report directly to Chief Executive Don Thompson.

Mr. Fenton had been considered a contender for the CEO position. A 41-year veteran of McDonald's, he got his start as a restaurant employee at a Utica, N.Y., outlet of the burger giant. In a news release, he said his decision was related to his severe asthma. "I simply cannot continue to meet the global travel demands of this position and will focus on improving my health closer to home," he said.

A McDonald's spokeswoman said Mr. Fenton's "retirement and the timing were both his personal choice."

Mr. Thompson, who is nearing his second anniversary as CEO, has previously made changes at the company in response to slowing sales growth. In December 2012 he replaced McDonald's U.S. president and veteran executive Jan Fields.

Earlier this month McDonald's reported its fourth consecutive month of same-store sales declines in the U.S. Executives recently have admitted to complicating their kitchen operations with too many new menu items, which resulted in slower service.

Mr. Fenton will serve as a special adviser to Mr. Thompson focused on global franchising and restaurant portfolio optimization, among other things.

In announcing Mr. Fenton's retirement, McDonald's said it would broaden responsibilities for two other senior leaders. Chief Financial Officer Pete Bensen will assume oversight for world-wide supply chain, development and franchising functions, and Global Chief Brand Officer Steve Easterbrook will assume oversight for the restaurant solutions group and corporate strategy and the company's sustainability and philanthropy department.

This isn't the first time a high-ranking McDonald's executive has retired, citing health reasons. In December 2009, Chief Operating Officer Ralph Alvarez, 55 at the time and widely regarded as the likely successor to then Chief Executive Jim Skinner, abruptly announced his retirement, saying that chronic knee problems made the global travel required by his job too painful.

Write to Julie Jargon at [e-mail]

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