Question: McDonald s the global fast food restaurant giant was sued in 2009

McDonald’s, the global fast-food restaurant giant, was sued in 2009 by a former employee who said she was dismissed because, as a senior director of executive compensation, she objected to a complex scheme to keep country club fees paid for a top executive out of the company’s 2007 proxy statement. The fees amounted to roughly $2,940, a trifling amount when compared to the $3.5 million in total compensation paid to the executive that year.
Source: A. Barr, “McDonald’s Suit Illustrates Pay Disclosure Dance,” The Wall Street Journal, June 25, 2009.

Why might a company want to avoid disclosing in its proxy statements the amounts it pays for top executive benefits such as country club memberships?

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