By Geoffrey White
The Associated Press

CHICAGO - McDonald's Corp. is replacing its chairman and chief executive, Jack Greenberg, as it struggles to emerge from a deep, two-year slump.

The fast-food chain said Thursday that Mr. Greenberg, 60, has decided to retire at the end of this year after 21 years at the company. McDonald's board elected the company's president and vice chairman, Jim Cantalupo, 59, to take over the top two spots.

McDonald's has reported lower earnings in seven of the past eight quarters and recently announced it is slowing its expansion pace as it grapples with a crowded restaurant market, sluggish economy, complaints about poor service and a depressed stock price. Several Wall Street analysts had been urging for months that Mr. Greenberg be replaced.

McDonald's stock price has lost about two-thirds of its value since Greenberg was named CEO in 1998, and shares fell to a seven-year low this fall. In trading Thursday, shares of McDonald's gained 41 cents to $18.78 on the New York Stock Exchange.

"In every company's history, there is a time when it is appropriate to pass the baton and give a new management team the opportunity to lead, and that time has come at McDonald's," Mr. Greenberg said in a company news release.

Mr. Greenberg's retirement announcement comes nine months after McDonald's board asked him to remain CEO through 2005, and he accepted.

Restaurant consultant Jerry McVety, president of Farmington Hills, Mich.-based McVety & Associates, said the poor economy apparently sank Mr. Greenberg with shareholders.

"He was doing well when things were going well; and when things turned down, they expected him to keep doing well," Mr. McVety said.