Are Fred L. Turners gone for good?
Just short of 40 years ago, Fred L. Turner made a memorable remark here. “We will continue to take the hamburger business more seriously than anyone else,” he told the Pittsburgh Society of Financial Analysts.
At age 40, he was president of Chicago-based McDonald's Corp., having risen from a 23-year-old trainee fresh out of college, working the grills, fryers and service counters. The next year, he'd be CEO, only the company's second behind legendary founder Ray Kroc. So getting to the top wasn't just a myth. And this even at burger-flipping, the proverbial “dead-end job” scoffed at by so many.
But there was a bigger question that day in March 1973. Were hamburgers finished as a growth story?
McDonald's stock had split several times. Founded in 1955 at a single stand, going public in 1965, the chain had swelled to 2,272 restaurants and just come off $1 billion in annual sales.
Yet a skeptic at Turner's presentation wondered if the fast young company hadn't reached slower-paced middle age.
Fair question, but way premature.
When honorary board chairman Turner died Jan. 7 at age 80, McDonald's had more than 33,000 restaurants in more than 100 countries, annual revenue of more than $27 billion and profit of $5.5 billion. It's one of the best-known brand names worldwide.
This despite disapproval from lots of critics here at home. They deplore the national waistline, especially in children's sizes, and blame it on fat, salt and sweet. How much they'd like to regulate, not just persuade us to moderate. So calories are posted, recipes deflavored and vegetables pushed. Makes you wonder whether Ray Kroc could ever have risen from a dead-end job in this meddling era.
McDonald's stock has been an investor's feast.
It traded at $66.25 per share the day Turner spoke. Adjusted for stock splits since 1973, that now computes to 97 cents per share — which trades on the New York Stock Exchange around $91. It's very near a 100-fold increase.
Plus, the stock paid no cash dividends back then. Now each share yields $3.08 per year.
So if someone bought 100 shares at $6,625 plus commission — and held on all this time, the holding has gone way over $600,000, not counting dividends. The stock price alone has compounded at over 12 percent annually.
It's almost a cinch, because brokers at Turner's talk recommended it — and some of our neighbors bought.
Could Turner himself have foreseen such flourishing? He amassed well over a million shares and ironically hadn't aspired to corporate eminence at first. His aim was just to franchise a restaurant from Ray Kroc. But he proved a company-changer. He founded the firm's Hamburger University (which has trained over 80,000 franchisees and managers) and championed such new menu items as Egg McMuffins, Chicken McNuggets and Happy Meals.
Could all this happen today? A government more in tune with free enterprise would help.
And why not a new crop of young people “taking the hamburger (or any) business more seriously than anyone else?”
Jack Markowitz is a Thursday columnist for Trib Total Media. Email firstname.lastname@example.org.
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