McDonald’s CEO Don Thompson Don Thompson was one of the most powerful executives in the nation. Now he’s cleaning out his desk. The remarkable rise and fall of McDonald’s CEO.

McDonald’s corporate headquarters, in the suburb of Oak Brook, is an island of serenity, with Prairie-style buildings reposed amid 80 acres of streams and fields. It is the home of Hamburger University, the company’s management school, as well as a state-of-the-art test kitchen, 4,000 works of contemporary American art, and many thousands more pieces of brand memorabilia. Giant banners hanging in the main building’s four-story atrium show the company engaged in what it proclaims to be a “World of Good.” On a banner draped across the second-floor landing, two restaurant workers, aglow with possibility, grin beside the question “What Kind of Future Can I Have at McDonald’s?”


On a Wednesday afternoon in late January, however, the mood here was decidedly glum. In an earnings call the previous Friday, McDonald’s executives had struggled to find the upside to one of the worst years in the company’s six-decade history. Earnings had fallen from $1.4 billion in 2013 to $1.1 billion in 2014. U.S. same-store sales had not grown in any month since November 2013, and 2014 represented the first annual decline in 30 years. And as part of a $100 million cost-cutting measure announced earlier in the month, McDonald’s was in the process of laying off 63 of its 1,700 corporate employees.

During a series of interviews with current and former McDonald’s workers and executives over the past few months, I found that these corporate folk mostly loved their jobs. Talking to them, I sometimes felt like I was among adults who had all attended the same transformative summer camp. They boasted about the “ketchup in their veins” and referred to their membership in the “McFamily,” using the word without irony or apology. The ongoing layoffs meant that many of them were saying difficult farewells to McDonald’s brothers and sisters, uncles and aunts. Others tensed nervously each time a supervisor asked for a minute of their time.

But the mood was about to get worse. They would learn shortly that their CEO was out.

To investors and analysts, the departure of Don Thompson was not exactly unexpected. After all, McDonald’s stock had barely budged during Thompson’s two-and-a-half-year tenure, a period during which the Standard & Poor’s 500-stock index had soared 47 percent. What’s more, on Thompson’s watch, the iconic company had drawn fire from all sides: health advocates, animal rights activists, low-income workers. Parents who had happily inhaled Big Macs as kids now consider eating at McDonald’s a sort of vice, like smoking. And anyhow, their children prefer a range of newer, more upscale fast-casual establishments, such as Panera Bread, Five Guys, and Shake Shack. To sought-after millennial consumers, in particular, unprocessed food, eco-friendly policies, and fair labor practices tend to trump price, speed, and consistency.

Thompson on December 12, six weeks before his ouster. Photo: Bob Stefko

That afternoon, Thompson met with the board of directors in the main building’s executive wing. The 13-person body, which included Thompson himself, was heavy with influential Chicagoans who knew one another well, including Abbott Laboratories CEO Miles White, Ariel Investments chief John Rogers Jr., School of the Art Institute president Walter Massey, and longtime nonexecutive chairman Andy McKenna, who had been a friend of the company’s founder, the legendary Ray Kroc. The group ostensibly reached a mutual decision that Thompson, a robust 51, would retire.

Around 3:30, minutes after the meeting wrapped up, the news was relayed to McDonald’s investor relations and communications teams, the people responsible for disseminating it internally and externally. Thompson’s last day would be March 1. The new CEO: Steve Easterbrook, 48, an ambitious Brit who had not only worked at the company for years, most recently as its chief brand officer, but had successfully run two fast-food chains in the United Kingdom for a time.

“Surreal,” Heidi Barker Sa Shekhem, a senior vice president of communications, called the news. She knew it would be just as wrenching to her colleagues. For Papa Bear, as Thompson called himself, was loved by all. He had worked at McDonald’s for 24 years, nearly half his life. He was the burger giant’s first black CEO—among America’s black corporate chiefs, only American Express’s Ken Chenault runs a larger enterprise—“the icing on the cake” of McDonald’s four-decade embrace of diversity, says Patricia Harris, the chief diversity officer there. Thompson’s ascension to the top job had carried special meaning for the company’s sizable black work force. “Seeing him in a leadership role filled us with unparalleled pride,” Sa Shekhem says.

The communications team was still coping with the shock of the news when in sauntered Thompson, whistling amiably. “Hello there, Miss Heidi,” he sang out. “Hey, Miss Bridget.”

Thompson is lineman big, with a large bald pate and a loping gait. His rounded features look always on the verge of spreading into an open-mouthed smile, and he smiled now as he greeted Sa Shekhem and the others, pulling them in for massive hugs. He was doing great, he told them. He was there to comfort them. “Whatever you need,” he announced, “I’m here to help.”

The rise of Don Thompson is among the most extraordinary in American business. He grew up in a two-flat in the shadow of Cabrini-Green, the now mostly demolished public housing project on Chicago’s Near North Side. Born in 1963 to unwed parents who could not care for him, he was taken in by his grandmother when he was two weeks old (she later legally adopted him). As he began to describe his grandmother to me, he simply uttered, “Wow,” then remained silent for a good 10 seconds. “I believe God sends you angels.”


Rosa J. Martin came to Chicago from Mississippi, and she so firmly believes that education is the means for black advancement that even to this day, at the age of 99, she squirrels away money for her two great-grandchildren’s college funds. Thompson is not sure how she managed to get him into a nearby Catholic school that they couldn’t afford. (“I was Catholic all week and Baptist on the weekends,” he joked.) The food budget was so tight, Thompson recently told CBS News Sunday Morning, that when he pleaded with his grandmother for a McDonald’s hamburger, she’d say, “We’re going home. I’ll make you a McDonald’s.”

Around the time Thompson entered fifth grade, in the early 1970s, some of his cousins joined street gangs that operated in and around Cabrini-Green. “It was just part of the deal of living there,” Thompson told me. But Martin wouldn’t accept that deal. She took her grandson with her to the outskirts of Indianapolis, where one of her daughters lived. “It was too quiet to sleep,” Thompson recalled.

The boy filled his time with an endless assortment of odd jobs. He had a paper route. He cleaned a movie theater and his church. He printed up business cards to pass out to the elderly residents of a nearby building; he did their shopping, washed their clothes, cooked, pulled weeds. “I didn’t know what minimum wage was—just pay me fair,” he said of the work. In seventh grade, he began carrying a briefcase to school. “I got teased, but I just didn’t care. It served a purpose and a function. Plus, I thought it was pretty cool: the executive look.”

At Purdue University, which he attended on an engineering scholarship, Thompson worked in the dining hall to help pay his way. During his freshman year, in 1981, he met another 17-year-old engineering major named Liz Watson. They struck up a conversation before a calculus lecture. Where are you from? Where in Chicago? What street? Thompson’s grandmother’s old walkup was on the 1300 block of North Cleveland Avenue. Liz had spent her life just four blocks away, on the 900 block of Cleveland, in a low-rise apartment in Cabrini-Green.

In 1988, four years after graduating from Purdue, Don married Liz; they settled not far from their old neighborhood. This was the Cabrini-Green of the late ’80s, with stories of snipers and drugs there appearing regularly in the news. Yet, Liz emphasizes, the environment was also nurturing and complex: “I can’t imagine another neighborhood being so full of a sense of community and love. I wouldn’t trade it for anything.”

At the time, Liz was working as an engineer at Ameritech, and Don at the defense contractor Northrop Grumman. Two years later, he got a call from a McDonald’s recruiter that would change his life.

Like Motorola, another Chicago corporate success story, McDonald’s was legendary for having upended an industry, drawing on the “science” of food standardization and the development of sophisticated supplier networks to dominate the fast-food business in America and, increasingly, the world. It was renowned for its culture of training and promoting from within. And it was committed to developing minority leaders.

Thompson accepted a job designing food delivery systems. Almost from the start, he was schooled in the doctrines of Ray Kroc. Among them, the importance of the “three-legged stool,” which represents McDonald’s employees, franchisees, and suppliers. Only when they were in proper balance, Kroc preached, would the company thrive.

As a new employee, Thompson was also enrolled in the company’s Black Career Development program, classes that McDonald’s has held since the 1970s both to educate all employees about cultural differences and to help minorities navigate its corporate culture. Role-playing in one workshop, he was instructed to respond to a request to carry the CEO’s bag as the two of them left the office. “I’m a young African American man. I’m like, ‘I don’t tote anyone’s bag,’ ” Thompson recalls.

Wrong answer. That hang-up about bag toting, Thompson was told, could cost him a couple of minutes with the boss, time in which the CEO could get to know him.

After just a year at the company, the ambitious 28-year-old felt so slighted at not receiving an outstanding employee award (none was given that year) that he almost quit. “I felt McDonald’s must not be ready for an African American engineer who contributed all these great things,” he said. “I was in my own pity party.”

Before resigning, he sat down with Raymond Mines, a gruff man in the crucial operations department, who was then one of the company’s highest-ranking black executives. Mines found a different job for the disgruntled Thompson: as a meetings facilitator. Thompson traveled the country toting flip charts, acting as an emcee for company meetings. It wasn’t even close to what the future CEO envisioned for himself. But Thompson decided he’d be the best meeting facilitator possible.

Turned out Mines had been testing him. A year later, he made Thompson an operations manager.

‘I’m a young African American man. I’m like, “I don’t tote anyone’s bag.” ’ Don Thompson

Like all those new to operations, Thompson was first embedded at a McDonald’s restaurant, in his case in the South Chicago neighborhood. There he worked every job from fry guy to assistant manager. With the support of Fred Turner, a former company CEO who was senior chairman at the time, Thompson rose quickly through the ranks, running corporate offices in Denver, and the San Diego area, and the Midwest. Each time he uprooted his wife and, later, his two young children, Xavier (now 21, a junior at Purdue) and Maya (18, a Stanford freshman). “We started to feel the power of the McFamily when we moved,” says Liz. “McDonald’s folks welcomed us to each new community.”

Thompson was proud of his company’s emphasis on rewarding hard work and results regardless of pedigree (his predecessor as CEO, Jim Skinner, never graduated from college), and he turned into a true believer. “I have my faith in God. My wife. And the McFamily,” he’d say.

In 2006, Skinner, who had been named CEO two years earlier, made Thompson president of McDonald’s USA, overseeing all domestic operations. In 2010, he appointed Thompson chief operating officer, essentially his No. 2. (Skinner declined to comment for this story.) It was a great time to enter the corporation’s highest ranks: Worldwide, McDonald’s was on a roll. During Skinner’s eight-year tenure, the company’s stock price tripled, beating the market averages by a huge margin.

Thompson proved an energetic and hands-on executive, keen to involve himself in the smallest details—something he says he learned from Turner, whom Thompson credits with a near-mystical understanding of the business. (Turner could taste when the starch levels in potatoes were slightly off, touch a bun to determine its moisture levels.) Thompson had also developed an uncanny ability to nurture his staff even as he lowered the boom, a skill for which Turner had nicknamed him the Velvet Hammer.

When Skinner retired at the end of June 2012, Thompson got his job.

One December day in Oak Brook, in the Latin America Room (each McDonald’s conference room is named for an area in which the company operates), I sat in on a meeting with Thompson and his communications team, a group of eight that included the equivalent of a chief of staff and a speechwriter. Sipping on a large McDonald’s iced coffee and whistling quietly to himself, Thompson studied a packet on China that had been prepared for his upcoming trips to Shanghai and Beijing. “Will the ambassador be there the week we are?” he asked the group.


Thompson came across as both formidable and disarmingly informal. (Later I saw him try to get the attention of a woman preparing burgers in the Arch, a McDonald’s franchise inside the corporate headquarters, by calling out, “Hey, Lil’ Bit! Lil’ Bit!”) Each time he was ready to move on to the next agenda item, he said, “Alllrighteee!” or “Goooood enough!”, stretching out the words like gooey cheese. “Purrrfect!”

At the meeting, Thompson tweaked his speech for a National Urban League event in New York City. Looking over another talk he was to give for Ronald McDonald House, a company charity that provides families of hospitalized children a place to stay, he requested extra time to make the rounds. “You can’t go to a Ronald House and not tour and see the folks!” he boomed.

Thompson was unfailingly upbeat around his staff. (“He’s one of the most inspirational leaders I’ve ever seen,” says Mike Donahue, cofounder of LYFE Kitchen and a former McDonald’s communications chief.) But during an interview in his office, Thompson made a rare departure from script. “My role comes with personal risk and job-related risk,” he conceded. “It comes with some sleepless nights.”