McDonald's CEO dies in Orlando

April 19, 200422 yr

McDonald's CEO dies in Orlando

The Associated Press

Posted April 19, 2004, 12:59 PM EDT

McDonald's Corp. chairman and CEO Jim Cantalupo, 60, died unexpectedly of a heart attack Monday in Orlando. McDonald's was in town holding its international owner and operator convention.

Cantalupo helped engineer a turnaround of the fast-food chain by focusing on better food and service during 16 months at the helm.

The company moved quickly to name Cantalupo's successors. Charlie Bell, McDonald's 43-year-old president and chief operating officer, was elected CEO by the board of directors and will keep the president's title; Andrew J. McKenna, 74, the board's presiding director, was named chairman.

McKenna said Cantalupo was stricken in Orlando, where McDonald's was holding its international owner and operator convention.

"Jim was a brilliant man who brought tremendous leadership, energy and passion to his job. He made an indelible mark on McDonald's system," McKenna said.

Officials said the Orlando convention was not being canceled; however, several events this morning were postponed and other reorganized.

Cantalupo emerged from retirement to be named chairman and CEO in January 2003 after a major management shake-up. He had worked for McDonald's for 28 years.

Under Cantalupo, the company -- which had reported its first-ever quarterly loss for the last three months of 2002 -- worked to revitalize its brand.

The fast-food giant slowed its breakneck expansion pace, closed hundreds of restaurants and added new menu items, including an entree-sized salad and the McGriddle breakfast sandwich. Last week, the company kicked off an anti-obesity campaign by announcing the introduction of Adult Happy Meals, with salad, bottled water and a pedometer, as well as healthier options for children's Happy Meals.

The company also introduced a new global advertising campaign, adopting a slogan -- "I'm lovin' it" -- meant to appeal to younger and hipper consumers. Ads show people break dancing, diving into the ocean with a surfboard or speeding down a water slide, all to a pop music soundtrack.

"We don't want McDonald's to look and feel 50 years old to our customers," Cantalupo said last month in a speech to Wall Street analysts, noting that the company will celebrate its 50th anniversary next year. "We want McDonald's to be forever young."

Cantalupo assumed the reins at McDonald's after former CEO Jack Greenberg announced his retirement at the end of 2002 -- just nine months after the company had asked him to stay on until 2005.

Many industry analysts had been urging Greenberg's ouster for a number of months and generally greeted Cantalupo's accession happily.

Bell was considered to be heir apparent when the company elevated him in December 2002 from head of European operations to be president and chief operating officer under Cantalupo. But Bell, then just 42, was expected to have several years of seasoning under the senior executive.

Analysts said Cantalupo's death is a harsh blow to the company.

"Cantalupo was in my mind the one guy who was able to get their organization shifted out of the expansion mode and more in an efficiency mode," said Morningstar analyst Carl Sibilski. "It was a tough thing to do. Not a lot of people thought he could do it, but he proved them wrong."

J.P. Morgan analyst John Ivankoe said Bell, a native of Australia who previously headed the company's operations in his home country and in the Asia Pacific, Middle East and Africa division, was the "logical choice" for CEO.

"While we are saddened by Jim Cantalupo's death, we do not believe it changes to the long-term fundamentals of the business," he said in a note to investors.

McDonald's shares fell 42 cents to $27.04 in morning trading on the New York Stock Exchange. The stock price rose by 49 percent from the time Cantalupo was named to the job through last week.

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