McDonald's has replaced Don Thompson as CEO following months of lackluster results that caused the company's shares to go down last year.

The company's board named Steve Easterbrook as its new CEO effective March 1, replacing Thompson, 51, who has been with McDonald's for 25 years.

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Thompson also loses his board seat while Easterbrook, the current chief brand officer, will get a seat following his appointment as new CEO.

Analysts said the replacement of McDonald's CEO had long been expected by investors. Following the news that Thompson has finally been removed, McDonald's stock jumped more than 3 percent in after-hours trading.

The stock was down 14.5 percent from its highest point in the past year was down 3.4 percent last year.

The announcement also came a week after McDonald's posted terrible results for the fourth quarter of 2014 - a 21 percent drop in earnings and 3.6 percent store traffic decline globally.

"It's tough to say goodbye to the McFamily, but there is a time and season for everything. I am truly confident as I pass the reins over to Steve, that he will continue to move our business and brand forward," Thompson said in announcing his retirement.

McDonald's has more than 36,000 locations in more than 100 countries, with about 80% of the restaurants owned and run by franchisees.

"I am honored to lead this great brand, and am committed to working with our franchisees, suppliers and employees to drive forward our strategic business priorities to better serve our customers," Easterbrook said.

Easterbrook, however, will not have an easy time leading the fast food chain. Analysts said McDonald's new CEO will have to solve an immense challenge especially that a lot of people want nothing to do with McDonald's.

Aside from naming a new CEO, the McDonald's board also named CFO Pete Bensen to the newly created role of chief administrative officer, reporting to Easterbrook, Kevin Ozan, currently corporate controller, will become CFO and report to Bensen. Both moves are effective March 1.

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