Company Name: McDonald's Corp.
Public Availability Date: January 13, 2006

Document Sections:

INQUIRY LETTER
INQUIRY LETTER
APPENDIX
INQUIRY LETTER
STAFF REPLY LETTER

[INQUIRY LETTER]

January 13, 2006

Via Overnight Delivery

U.S. Securities and Exchange Commission
Division of Corporation Finance
Office of Chief Counsel
100 F Street, N.E.
Washington, D.C. 20549

Re: McDonald's CorporationTrowel Trades S&P 500 Index Fund Shareholder Proposal

Ladies and Gentlemen:

I am the Executive Vice President, General Counsel and Secretary of McDonald's Corporation, and I am submitting this letter pursuant to Rule 14a-8(j) under the Securities Exchange Act of 1934 to notify the Securities and Exchange Commission of McDonald's intention to exclude from its proxy materials for its 2006 annual meeting of stockholders a shareholder proposal (the "Proposal") submitted by the Trowel Trades S&P 500 Index Fund (the "Proponent"). A copy of the Proposal and the accompanying letter from the Proponent are attached as Exhibit 1. McDonald's requests that the Staff confirm that it will not recommend any enforcement action to the Commission if, for the reasons set forth below, McDonald's excludes the Proposal from its proxy materials. McDonald's currently intends to file definitive copies of the proxy materials with the Commission on or about April 7, 2006.

Pursuant to Rule 14a-8(j), I am furnishing the Staff with six copies of this letter and its exhibits. I am also furnishing copies of the no action letters referenced in this letter. A copy of this letter also is being provided simultaneously to the Proponent.

The Proposal

The Proposal requests that McDonald's shareholders approve the following resolution:

"RESOLVED: that the shareholders of McDonald's Corporation (the "Company") urge the Board of Directors to seek shareholder approval of future severance agreements with senior executives that provide benefits in an amount exceeding 2.99 times the sum of the executives' base salary plus bonus. "Future severance agreements" include employment agreements containing severance provisions, retirement agreements and agreements renewing, modifying or extending existing [sic] such agreements. "Benefits" include lump-sum cash payments (including payments in lieu of medical and other benefits); the payment of any "gross-up" tax liability; the estimated present value of periodic retirement payments; any stock or option awards that are awarded under any severance agreement; any prior stock or option awards as to which the executive's access is accelerated under the severance agreement; fringe benefits; and consulting fees (including reimbursable expenses) to be paid to the executive."

The Proposal is Excludable under Rule 14a-8(i)(3)

Portions of the Proposal are Materially False and Misleading

The Staff has permitted exclusion of proposals under Rule 14a-8(i)(3) where it is shown objectively that they contain materially false or misleading statements. See Staff Legal Bulletin No. 14B (September 15, 2004) and State Street Corp. (March 1, 2005).

The supporting statement accompanying the Proposal states, "In our opinion, severance agreements as described in this resolution, commonly known as 'golden parachutes', are excessive..." The Staff has previously allowed the phrase "commonly known as 'golden parachutes'" to be excluded from similar proposals on grounds that the phrase is materially false and misleading due to the narrow definition of the term "golden parachute." See PMC Sierra (March 1, 2004); FirstEnergy Corp. (February 26, 2004). While the Staff recently declined to allow exclusion of certain proposals that used the phrase "golden parachutes" (see Hilton Hotels Corp. (March 24, 2005) and Occidental Petroleum Corp. (February 14, 2005)), we believe, for the reasons set forth below, that the reference to "golden parachutes" by the Proponent is materially false and misleading under the more pertinent standard established in PMC Sierra and FirstEnergy and therefore is excludable under Rule 14a-8(i)(3).

The generally accepted definition of the term "golden parachute" is a compensation arrangement made with an executive in connection with a change in control of a company1. The Proposal references the term to describe the types of agreements to which the Proposal relates. The Proposal in fact applies, however, to the broader category of severance agreements, which may or may not have any connection to a change in control of McDonald's. The reference to golden parachutes is misleading to shareholders who could be led to believe that the Proposal relates only to agreements triggered by a change in control, whereas the Proposal applies to a much larger category of arrangements with executives. Shareholders who may think they are voting solely to require prior shareholder approval of change in control agreements or similar provisions would be mistaken.

The Proposal Contains Statements that Directly Impugn Character

Rule 14a-8(i)(3) also allows exclusion of a proposal if the proposal contains statements that directly or indirectly impugn character or integrity without factual foundation. See Staff Legal Bulletin No. 14B. In Swiss Helvetia Fund (April 3, 2001), a company sought exclusion of a proposal requesting that the company's directors "try not to violate their fiduciary duties" on grounds that the proposal impugned the character and integrity of the board. In allowing exclusion, the Staff noted that the proposal implied that board members had violated, or may violate, their fiduciary duties.

The Proposal similarly impugns the character and integrity of the senior executives of McDonald's. The supporting statement asserts that requiring shareholder approval of specified agreements "may have the beneficial effect of insulating the board of directors from manipulation in the event a senior executive's employment must be terminated by the Company." This statement clearly implies that the executives of McDonald's are prone to manipulate McDonald's board for personal benefit, and that the board is susceptible to such manipulation. This statement has no factual basis. Indeed, the Proponent does not attempt to support the statement by way of any examples of purported manipulation by any executives of McDonald's, or any other company.

Because the supporting statement implies that McDonald's executives will attempt to, and could, manipulate McDonald's board, the Proposal impugns character and integrity without any factual foundation and therefore is excludable under Rule 14a-8(i)(3).

The Proposal is so Vague and Indefinite With Respect To Implementation that it is Inherently Misleading

The Staff has permitted exclusion under Rule 14a-8(i)(3) where the proposal or supporting statement is contrary to the proxy rules, including Rule 14a-9, which prohibits materially false or misleading statements in proxy materials. In Staff Legal Bulletin No. 14B, the Staff noted that proposals that are so "inherently vague or indefinite that neither the stockholders.... nor the company in implementing the proposal (if adopted), would be able to determine.... exactly what actions or measures the proposal requires" may be properly excluded or modified under Rule 14a-8(i)(3). The Staff has consistently reaffirmed this stance. See, Proctor & Gamble Company (June 30, 2005) (proposal with no definite objective excludable as vague and indefinite); Woodward Governor Company (November 26, 2003) (proposal seeking a policy to compensate upper management based on stock growth excludable as vague and indefinite); and Philadelphia Electric Company (July 30, 1992) (proposal requesting a plan that "equates with the gratuities bestowed upon management, directors and other employees" excludable as vague and indefinite).

The Proposal seeks prior shareholder approval of certain future severance agreements with McDonald's senior executives. The Proposal is so vague as to its implementation, however, that both the shareholders and McDonald's would be at a loss to understand what action would be required to implement the Proposal.

The Proposal applies to severance agreements that exceed 2.99 times the sum of an executive's base salary plus bonus. The Proposal fails to specify the time period for which an executive's base salary and bonus should be used as a baseline in determining whether a severance agreement exceeds 2.99 the threshold amount. On its face, the Proposal would seem to suggest that the calculation would be done at the time an agreement is entered into, amended, renewed or extended. While the amount of a base salary can be determined at any time, it is unclear whether McDonald's should look to an executive's current salary plus last year's bonus, last year's salary plus bonus or some average over a period of time. Different approaches could result in outcomes that are drastically different from what a shareholder expected when voting on the Proposal. Accordingly, both McDonald's and its shareholders would face a great deal of confusion in trying to determine how the Proposal, if adopted, could be implemented.

Second, the Proposal seeks shareholder approval of "future severance agreements with senior executives..." While it is clear that the Proposal would require prior shareholder approval of any new severance agreements or modifications thereof, it is unclear how the Proposal is meant to apply to existing agreements with executives. For example, if an executive of a company currently has a severance agreement that provides benefits in excess of 2.99 times the threshold, would the Proposal apply to a modification of that agreement that has nothing to do with the severance benefits? This possibility could force shareholders, at great cost and expense to the company, to have to consider and approve a modification to a severance agreement that has nothing to do with severance benefits. The Proposal fails, however, to make this prospect clear to McDonald's shareholders.

For the foregoing reasons, the Proposal is so vague and indefinite with respect to its implementation that shareholders and McDonald's would be unable to determine exactly what actions or measures the Proposal would require if adopted. Accordingly, the Proposal is excludable under Rule 14a-8(i)(3).

Conclusion

For the reasons set forth above, it is McDonald's view that it may exclude the Proposal from the Proxy Materials under Rule 14a-8(i)(3), and McDonald's requests confirmation that the Staff will not recommend any enforcement action to the Commission if McDonald's excludes the Proposal.

Should the Staff make an initial determination that the Proposal may not be excluded from the proxy materials, I would appreciate an opportunity to discuss the Staff's determination before a response to this letter is issued. When a written response to this letter becomes available, please fax the letter to me at (630)623-3510 and to the Proponent at (313)222-7170. Should the Staff have any questions in the meantime, please feel free to call me at (630) 623-3373 or Carol Vix, Senior Counsel, at (630) 623-3107.

Sincerely,

/s/

Gloria Santona
Executive Vice President,
General Counsel and Secretary

cc: Cheryl A. Derezinski, Senior Vice President, Comerica Bank & Trust, National Association

Jake McIntyre, Assistant to the Secretary Treasurer, International Brotherhood of Bricklayers

Enclosures

Doc. No. 254081

-----FOOTNOTES-----

¹ See definitions of "Golden Parachute" at:
http://www.investopedia.com/terms/g/goldenparachute.asp; and
http://dictionary.reference.com/search?q=golden%20parachute

[INQUIRY LETTER]

December 8, 2005

By Overnight Delivery and Fax 630-623-0497

The Secretary
McDonald's Corporation
McDonald's Plaza
Oak Brook, IL 60523

RE: Trowel Trades S&P 500 Index Fund

Dear Secretary:

In our capacity as Trustee of the Trowel Trades S&P 500 Index Fund (the "Fund"), I write to give notice that pursuant to the 2005 proxy statement of McDonald's Corporation (the "Company"), the Fund intends to present the attached proposal (the "Proposal") at the 2006 annual meeting of shareholders (the "Annual Meeting"). The Fund requests that the Company include the Proposal in the Company's proxy statement for the Annual Meeting.

A letter from the Fund's custodian documenting the Fund's continuous ownership of the requisite amount of the Company's stock for at least one year prior to the date of this letter is being sent under separate cover. The Fund also intends to continue its ownership of at least the minimum number of shares required by the SEC regulations through the date of the Annual Meeting.

I represent that the Fund or its agent intends to appear in person or by proxy at the Annual Meeting to present the attached Proposal. I declare the Fund has no "material interest" other than that believed to be shared by stockholders of the Company generally.

Please direct all questions or correspondence regarding the Proposal to the attention of Jake McIntyre, Assistant to the Secretary Treasurer, International Union of Bricklayers, at 202-383-3263.

Sincerely,

/s/

Cheryl A. Derezinski
Senior Vice President
Comerica Bank & Trust, National Association, Trustee of the Fund

Enclosure

[APPENDIX]
RESOLVED: that the shareholders of McDonald's Corporation ("the Company") urge the Board of Directors to seek shareholder approval of future severance agreements with senior executives that provide benefits in an amount exceeding 2.99 times the sum of the executives' base salary plus bonus. "Future severance agreements" include employment agreements containing severance provisions, retirement agreements and agreements renewing, modifying or extending existing such agreements. "Benefits" include lump-sum cash payments (including payments in lieu of medical and other benefits); the payment of any "gross-up" tax liability; the estimated present value of periodic retirement payments; any stock or option awards that are awarded under any severance agreement; any prior stock or option awards as to which the executive's access is accelerated under the severance agreement; fringe benefits; and consulting fees (including reimbursable expenses) to be paid to the executive.

SUPPORTING STATEMENT

In our opinion, severance agreements as described in this resolution, commonly known as "golden parachutes", are excessive in light of the high levels of compensation enjoyed by senior executives at the Company and U.S. corporations in general.

We believe that requiring shareholder approval of such agreements may have the beneficial effect of insulating the Board of Directors from manipulation in the event a senior executive's employment must be terminated by the Company. Because it is not always practical to obtain prior shareholder approval, the Company would have the option if this proposal were implemented of seeking shareholder approval after the material terms of the agreement were agreed upon.

For those reasons, we urge shareholders to vote for this proposal.

[INQUIRY LETTER]

January 24, 2006

U.S. Securities and Exchange Commission
Division of Corporation Finance
Office of Chief Counsel
100 F Street, N.E.
Washington, D.C. 20549

Overnight Delivery

RE: McDonald's Corporation-Trowel Trades S&P 500 Index Fund Shareholder Proposal

Ladies and Gentlemen:

This letter is submitted on behalf of the Trowel Trades S&P 500 Index Fund ("Proponent") in response to a letter dated January 13, 2006 on behalf of McDonald's Corporation ("Company") seeking a no action letter ("Request") pursuant to Rule 14a-8(j) promulgated by the Securities and Exchange Commission ("SEC") under the Securities and Exchange Act of 1934 ('Act") regarding the Company's intention to exclude from its 2006 proxy materials Proponent's shareholder proposal urging the Board of Directors to seek shareholder approval of future severance agreements with senior executives that provide benefits in an amount exceeding 2.99 times the sum of the executives' base salary plus bonus. Six copies of this response are being submitted and one copy is being sent to the Company.

The Company makes three arguments in support of exclusion: (1) portions of the proposal are false or materially misleading; (2) the proposal contains statements that directly impugn character; (3) the proposal is so vague and indefinite with respect to implementation that it is inherently misleading. As will be shown, upon analysis none of these arguments justify exclusion.

(1) Portions of the proposal are false or materially misleading

The crux of the Company's argument (Request, pages 2-3) is that the phrase "commonly known as golden parachutes" cannot be used in the supporting statements of shareholder proposals that deal with severance agreements that are not triggered by change in control provisions.

Ironically, this identical argument was made by Hilton Hotels Corp. to a similar proposal filed by the Proponent and rejected by the SEC in the case cited by the CompanyHilton Hotels Corp. (filing and effectiveness date of March 25, 2005, filing date changed March 29, 2005). In another case in which the SEC allowed the use of the term "golden parachute" in a proposal that applied to all severance agreements, not just those triggered by a change in control, The Kroger Co. (March 19, 2004), the proponent's response to the request for a no-action letter noted that:

"the Shareholder Proposal Handbook, which is edited by William Morley (who held a number of senior positions in the Division of Corporation Finance during his thirty year career), has observed (section 29.06, 2003 Supplement) that "severance provisions that are conditioned on a change of control of the company are referred to as 'golden parachutes,' although some activists use that term to refer to all severance agreements" (emphasis added).

The Abstract to the Investor Responsibility Research Center's ("IRRC") Background Report 2005 CG-G on "Golden Parachutes and other Severance Agreements, "March 15, 2005 notes that shareholder proposals historically have been concerned with severance agreements triggered by a change in control: "but increasingly the proposals focus more broadly on all executive severance packages." A copy of the relevant portion of the Abstract is attached hereto as Exhibit A. Also attached as Exhibit B is a copy of the IRRC Report on the Company's 2005 annual shareholder meeting. On page 2 of that report, the Corporate Governance Profile lists the Company as having a "golden parachute."

The Proponent respectfully submits that there is ample evidence and prior SEC precedent demonstrating that the phrase "golden parachutes" is commonly used to refer to all severance agreements, not just those triggered by change in control provisions. Even if such evidence and precedent did not exist, the appropriate response would be to allow the Company to omit the phrase "golden parachutes" and not omit the entire proposal.

(2) The proposal contains statements that directly impugn character

The phrase that the Company finds offensive in the Proponent's supporting statement is: "We believe that requiring shareholder approval of such agreements may have the beneficial effect of insulating the Board of Directors from manipulation in the event a senior executive's employment must be terminated by the Company." As will be shown, impugning character requires sterner stuff that that!

The Company's Request (page 3) claims this sentence "clearly implies" that McDonald's executives are "prone to manipulate McDonald's board for personal benefit, and that the board is susceptible to such manipulation. This statement has no factual basis."

With all due respect, it is the Company's argument that has no factual basis. Proponent's proposal applies to future severance agreements, and thus to future executives and future boards. Proponent's intent is to establish a framework for the future that safeguards against future events that Proponent believes might arise. There is no attempt by Proponent to claim that any of the Company's current executives or current board members has acted improperly. Proponent is simply attempting to insulate future executives and directors from the dangers of potential future manipulation.

The case cited by the Company, Swiss Helvetia Fund (April 3, 2001), is completely inapplicable to our case. In Swiss Helvetia Fund the shareholder was upset over the way directors responded to a previous year's vote on converting the Fund to an open-end structure and the proposal recommended "that the directors try not to violate their fiduciary duty to stockholders." That implication of a breach of fiduciary duty by specific directors regarding a specific act bears no relationship to Proponent's attempt to provide safeguards for how future executives and future directors may react to situations the Proponent believes may arise in the future.

As with the preceding argument, the appropriate relief to this argument would be to allow the Company to omit the relevant language and not omit the entire proposal.

(3) The proposal is so vague and indefinite with respect to implementation that it is inherently misleading.

The Company's main point here (Request, Page 4) is that the Proposal fails to specify the time period for which an executive's base salary and bonus should be used as a baseline in determining whether a severance agreement exceeds the 2.99 threshold amount.

The Proponent respectfully submits that its precatory proposal is neither vague nor indefinite, but instead reflects in clear, concise, well-defined terms the key concepts found in scores of shareholder proposals submitted on this topic in recent yearsif a severance package for senior executives exceeds 2.99 times base salary plus bonus, it should be submitted to shareholders for approval.

The Proponent has neither the duty nor the intention to micromanage the Company's negotiation of future severance agreements or the reconciliation them with existing severance agreements by imposing specific, detailed provisions (e.g., use of current year's salary and bonus or last year's base salary and bonus or some average over a period of time). The Proponent is confident in the judgment of the Company's executives and advisors to pick a measurement most appropriate for the Company and the workings of the applicable provisions of the Tax Reform Act of 1984 and the pertinent regulations of Section 280G of the Internal Revenue Code.

Finally, the Company argues that it is unclear how the Proposal is meant to apply to existing agreements with executives. The example cited by the Company is: an executive currently has a severance agreement that provides benefits in excess of 2.99 times the threshold and the Company wants to modify that agreement in a way that has nothing to do with benefits.

The Proponent respectfully submits that the Proposal is crystal clear on how that situation would be treated. Since it involves a current agreement and does not increase benefits beyond the threshold, there would be no reason to submit to a shareholder vote. The Proponent notes that if the Company wishes to adopt a policy governing the submission of future severance agreements to shareholders for approval, the Company will be able to specify for itself how to handle various factual scenarios.

Based on the foregoing, the Proponent respectfully urges that the relief sought in the Company's Request not be granted.

If you have any questions or need any additional information, please contact the undersigned at 312-612-8452 or kinczewski@marcoconsulting.com

Very Truly Yours,

/s/

Greg A. Kinczewski
Vice President/General Counsel

Enclosures

cc: Gloria Santona Executive Vice President/General Counsel/Secretary McDonald's Corporation 2915 Jorie Boulevard Oak Brook, IL 60523

[STAFF REPLY LETTER]

February 13, 2006

Response of the Office of Chief Counsel Division of Corporation Finance

Re: McDonald's Corporation Incoming letter dated January 13, 2006

The proposal urges the board of directors to seek shareholder approval of future severance agreements with senior executives that provide benefits in an amount exceeding 2.99 times the sum of the executives' base salary plus bonus.

We are unable to concur in your view that McDonald's may exclude the proposal under rule 14a-8(i)(3). Accordingly, we do not believe that McDonald's may omit the proposal from its proxy materials in reliance on rule 14a-8(i)(3).

Sincerely,

/s/

Tamara M. Brightwell
Attorney-Adviser