Dive Brief:

• McDonald's plans to increase representation of underrepresented groups in roles at the senior director level and above from 29% in 2020 to 35% by the end of 2025, according to a Thursday announcement. The chain aims to grow representation of women in leadership from 37% in 2020 to 45% in 2025, and to reach gender parity in leadership roles by the end of 2030. 
• The company is linking 15% of executives' annual incentive bonuses to "human capital metrics" to help reach these diversity benchmarks, Restaurant Business reports. CEO Chris Kempczinski's incentive payment target is 180% of his annual salary, according to the publication.
• McDonald's vowed to improve diversity across its company in July, and hired Reginald Miller as its new global chief diversity officer last fall. This latest diversity pledge follows a series of discrimination lawsuits filed by Black franchisees against the company, which allege corporate intentionally steered Black operators toward underperforming stores. 

Dive Insight:

McDonald's has been embroiled in a growing number of lawsuits claiming racial discrimination is rampant in both its corporate office and restaurants over the past several months. McDonald's has denied these claims and defended its culture, most recently telling CNBC that it invested significantly in former Major League Baseball player and current franchisee Herbert Washington's organization — which is suing the chain for discrimination — and gave him several chances to address the business challenges he was facing. 

Though CEO Chris Kempczinski has stated from the beginning of his tenure at the chain that he intends to clean up McDonald's culture issues, consistent accusations of racism following a high-profile ouster of its ex-CEO over a sex scandal are hard to pivot away from. 

However, Kempczinski's dedication to these goals — he has included himself in the new standards for bonuses — could help differentiate his tenure from his predecessor's in the eyes of employees, franchisees and consumers. 

"We're serious about holding ourselves and our leaders accountable to these foundational commitments, and doing so with respect to local regulations and employment laws around the world," he shared in a letter Thursday. "That’s why we are adding annual targets designed to meet these five-year goals to our annual compensation incentive metrics for Executive Vice Presidents. These targets are endorsed by our Board of Directors and extend to our most senior leaders — including me."

McDonald's isn't the only chain holding executives accountable for diversity improvements. Starbucks announced in October that pay for senior vice presidents and above will be tied in part to diversity metrics to reach its goal of representation of at least 30% for Black, indigenous and people of color at all corporate levels and at least 40% at retail and manufacturing roles by 2025. Yum Brands also committed $100 million last summer to improve racial and gender diversity by 2024.