Glass Lewis backs McDonald's directors in boardroom fight with Carl Icahn

By Svea Herbst-Bayliss

BOSTON (Reuters) - Proxy advisory firm Glass Lewis on Tuesday recommended McDonald's Corp (NYSE:MCD) investors vote for the company's directors, dealing a setback to billionaire investor Carl Icahn's efforts to replace two directors.

"The Dissident (Icahn) has failed to make a sufficiently compelling case to warrant the boardroom changes it is seeking here," Glass Lewis wrote in the report seen by Reuters.

A representative for Icahn did not immediately have a comment.

The report came one day after Institutional Shareholder Services, Glass Lewis' larger rival, also recommended that shareholders back the company's nominees. McDonald's shareholders will meet on May 26.

Icahn nominated candidates to the fast-food restaurant's board to hold the company accountable for pledges it made a decade ago on sourcing pork.

McDonald's says it has worked to change its pork sourcing. But it is behind schedule on a plan to stop buying pork from suppliers that confine pigs in small crates during pregnancy. Both ISS and Glass Lewis say Icahn has raised awareness for animal rights.

"We acknowledge (Icahn's) efforts to seek improvements to animal welfare conditions is a worthy and noble endeavor," Glass Lewis wrote. But the advisory firm also criticized Icahn, saying he had taken a "decidedly simplistic and myopic view of ESG concerns, with no substantive regard given to the economics of the Company’s business nor to the creation of shareholder value."

McDonald's said Icahn's two nominees lack the broader expertise needed to serve on the company's board. Glass Lewis wrote that Icahn's candidates "lack the requisite background, qualifications and experience for serving on the board of a large multinational firm" like McDonald's.