McDonald’s Corporation, the U.S. fast-food company, had a Say on Pay vote at this year’s annual meeting that merited careful analysis. In 2019, the former CEO violated company policy and was terminated “without cause”—a classification that provided a larger severance payment than if the termination had been “with cause.” We met with the Compensation Committee chairman and company executives to better understand the board’s decision and to properly evaluate whether the benefits to shareholders of a “without cause” termination warranted the large payout. Company executives shared that the policy violation had been brought quickly to the board’s attention and that they had taken a thoughtful approach in deciding on the CEO’s termination and severance. We agreed with McDonald’s that the board’s decisive actions allowed for a smooth transition to the current CEO, and that they best minimized shareholder impact by avoiding prolonged litigation, excess costs, and continued reputational risks. When we asked about the three years of continued stock-option vesting that was part of the payout, we learned that the former CEO was subject to continued stock price and performance factors, as vesting schedules are not accelerated for executives. Although we communicated our reservations about the “without cause” determination, the Vanguard funds ultimately voted in support of the Say on Pay proposal. Overall, McDonald’s has been responsive to our engagements and feedback. Its compensation program is generally well-structured and has historically received high support year after year. We recognize that the termination was a difficult situation for the board, with no easy answers. After our engagement with the company and our extensive analysis, we felt the board had taken the cleanest path to support long-term shareholder value for investors.