Former McDonald’s CEO Stephen Easterbrook announced the company’s new corporate headquarters during a grand opening ceremony on June 4, 2018, in Chicago.
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McDonald’s announced Thursday that it has settled a lawsuit against former CEO Steve Easterbrook, seeking back a $105 million severance payment.
Fast food giant first brought a lawsuit against a disgraced former executive in August 2020, claiming he had cheated and lied during the company’s internal investigation into his conduct several months earlier. As a result of that investigation, the company’s board of directors discovered Easterbrook had a consensual relationship with an employee and fired him in November 2019. Despite their findings, the board granted him a severance package that included cash and equity.
In the lawsuit, McDonald’s alleges that new information about Easterbrook’s actions came to light in July 2020, prompting the company to further investigate. An investigation allegedly revealed that Easterbrook lied to the company and destroyed information regarding his inappropriate behavior, including three additional alleged sexual relationships with employees. before being fired.
As part of the settlement, Easterbrook returned the equity and cash awarded in his severance agreement, according to McDonald’s. He also apologized for his behaviour.
When granted in 2019, Easterbrook’s severance was valued at $42 million by Equilar. Since then, the stock has rallied 37% to more than $264 per share.
“During my tenure as CEO, I have failed to uphold McDonald’s values and fulfill some of my responsibilities as the company’s leader,” he said in a statement. “I apologize to my former colleagues, the Board of Directors and the company’s suppliers and franchisees for doing so.”
Easterbrook’s attorney declined to comment further.
When the lawsuit was filed, it brought to light more than just Easterbrook’s conduct as CEO. It also brings more scrutiny to McDonald’s and its board.
Corporate governance experts questioned the board’s initial investigation into Easterbrook, asking why it was completed so quickly and why its servers weren’t checked, like an example of those kinds of investigations. Easterbrook allegedly deleted the email from his phone, but the company did not check its internal servers until new information became available.
Additional Security Fund Teamsters 237 Local and two affiliates sued the company and its board members, accusing them of violating their fiduciary duties. Shareholders led by CtW Investment Group and New York City Control Director Scott Stringer campaigned against the removal of two McDonald’s board members, even though they still fail in the end.
Under current CEO Chris Kempczinski, McDonald’s has attempted to change perceptions of company culture by hosting city halls with employees and other stakeholders and establishing new values across the board. All the people in company.
“This settlement holds Steve Easterbrook accountable for his apparent misconduct, including the way in which he abused his position as CEO,” said McDonald’s President Enrique Hernandez Jr. in a statement. “The resolution avoids a lengthy court proceeding and allows us to move forward. It also affirms the Board’s original decision to pursue this case.”
Shares of McDonald’s are up 23% this year, bringing its market value to $204 billion.
https://www.cnbc.com/2021/12/16/mcdonalds-claws-back-105-million-severance-from-fired-ceo-easterbrook.html McDonald’s reclaims $105 million in severance from fired CEO Easterbrook