Ralph Alvarez to step down as McDonald’s president, operating chief due to health issues

Alvarez cites health in departing McDonald’s post

OAK BROOK, Ill. — McDonald’s Corp. said Tuesday that long-time executive Ralph Alvarez will retire as president and chief operating officer at the end of the year, due to health reasons.

Alvarez, 55, served as president of McDonald’s North America, McDonald’s USA and McDonald’s Mexico before taking over the No. 2 spot in 2006 after the abrupt resignation of Mike Roberts. The 15-year company veteran has been among the handful of McDonald’s executives cited by analysts as being in line to potentially succeed CEO Jim Skinner as the eighth CEO in the fast-food giant’s history.

In a statement, Alvarez said that seven orthopedic surgeries and years of chronic pain, leading to two knee replacements in the past six months, “have made me realize it’s time to move on.”

Alvarez also is resigning from the company’s board of directors.

Oak Brook, Ill.-based McDonald’s has been a notable winner amid the recession because of its cheap menu. Sales of Dollar Menu items, Angus burgers and its new McCafe espresso drinks have been strong as consumers trade down to less expensive choices when eating out. The company is also updating its image, recently unveiling a revamped midtown Manhattan location complete with flat-screen TVs and upholstered chairs similar to what McDonald’s has done at thousands of outlets around in France and the United Kingdom.

McDonald’s recession-resistant performance drove third-quarter profit above Wall Street expectations to $1.26 billion, but revenue was slightly shy of forecasts. Weaker October sales showed that the world’s largest burger chain isn’t completely immune to the pressures on cash-strapped customers and to rising unemployment, which reduces breakfast and lunch traffic.

The company said Tuesday its Area of the World executive leadership team, which is responsible for 32,000 McDonald’s restaurants worldwide, will now report to Skinner. The company did not disclose any plans to seek a replacement for Alvarez’s posts, but whoever does take on the position may be viewed as being groomed for management’s top spot.

McDonald’s board has engineered smooth CEO transitions in the past few years, following the unexpected losses of two chief executives within a year — Jim Cantalupo, who died of a heart attack in 2004, and Charlie Bell, who died of cancer months later.