Mcdonald’s CEO Sacked In 2019 For Misconduct Returns $105M

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Mcdonald’s CEO Sacked In 2019 For Misconduct Returns $105M
Mcdonald’s CEO Sacked In 2019 For Misconduct Returns $105M

Former McDonald’s CEO Steve Easterbrook has returned more than $105 million in equity awards and cash to the burger chain after the company discovered that he had lied about the extent of his misconduct while serving as CEO.

“During my tenure as CEO, I failed at times to uphold McDonald’s values and fulfill certain of my responsibilities as a company leader,” Easterbrook said in a prepared statement released by McDonald’s on Thursday. “I sincerely apologize to my former coworkers, the board, and the company’s franchisees and suppliers.”

McDonald’s fired Easterbrook in late 2019 after he admitted to exchanging videos and text messages with an employee in a nonphysical, consensual relationship. Easterbrook told the company at the time of his firing that there had been no other similar incidents, and an examination of his mobile phone appeared to support that claim. McDonald’s board of directors approved a “no-cause” separation agreement that allowed Easterbrook to keep tens of millions of dollars in stock-based benefits and other compensation.

The company then received an anonymous tip from an employee in July 2020 claiming that Easterbrook had a sexual relationship with another employee. Following an investigation, McDonald’s confirmed that relationship, as well as two other physical and sexual relationships with employees in the year preceding the firing of its top executive. Easterbrook, according to the company, had deleted evidence of those relationships from his phone.

In August 2020, McDonald’s board of directors sued Easterbrook, claiming that it would not have fired him without cause if it had known the extent of his misconduct. The company sought the return of equity awards granted in 2018 and 2019, because Easterbrook’s separation agreement stated that he would forfeit those awards if the company determined he engaged in “detrimental conduct.”

McDonald’s Chairman Enrique Hernandez Jr said in a prepared statement that the settlement announced Thursday holds Easterbrook accountable and confirms the board’s decision to pursue the case.

“The resolution saves us from a lengthy court process and allows us to move forward,” Hernandez said.

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The action against Easterbrook came as part of the company’s larger reckoning with sexual harassment in its ranks. Over the last five years, at least 50 employees have filed complaints against the company, alleging physical and verbal harassment, as well as retaliation for coming forward.
McDonald’s introduced a new harassment training program for its 850,000 US employees in October 2019 – a month before Easterbrook was fired – but franchisees were not required to provide it.

McDonald’s went even further this spring, announcing that beginning next year, it will require employee training to combat harassment, discrimination, and violence in its restaurants. Two million workers at 39,000 stores worldwide will be required to complete the training.