Ousted McDonald’s CEO returns $ 105 million in malpractice settlement

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Former McDonald’s CEO Steve Easterbrook has returned more than $ 105 million in stock and cash to the fast food chain in a settlement to address claims he lied on the expanse of his misconduct while he was its highest executive.

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“During my tenure as CEO, I have at times failed to uphold the values ​​of McDonald’s and to fulfill some of my responsibilities as a leader of the company,” Easterbrook said in a prepared statement released by McDonald’s Thursday. “I apologize to my former colleagues, the board of directors and the franchisees and suppliers of the company for this.”

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In this file photo from July 26, 2017, then McDonald’s CEO Steve Easterbrook is interviewed on the New York Stock Exchange. (AP Photo / Richard Drew)

Easterbrook was fired from McDonald’s in late 2019 after admitting to exchanging videos and texts in a non-physical, consensual relationship with one of his employees.

McDonald’s insider Chris Kempczinski then took the reins as CEO.

Chris Kempczinski has been named McDonald’s new President and CEO. (Credit: McDonald’s)

At the time of the dismissal, Easterbrook said there had been no similar cases and an inspection of his cell phone records appeared to support this claim, which resulted in a separation agreement approved “without cause” which allowed him to keep tens of millions of dollars in inventory. benefits and other allowances.

However, McDonald’s subsequently received anonymous advice in July 2020 from an employee who claimed Easterbrook had sex with another employee. An investigation into the allegation confirmed the relationship as well as two other sexual relationships with employees in the year before Easterbrook’s dismissal. McDonald’s said Easterbrook removed evidence of those connections from his phone.

Following the revelations, the company’s board of directors sued Easterbrook in August 2020 for covering up the extent of his misconduct. The lawsuit sought repayment of Easterbrook’s equity awards granted in 2018 and 2019, which would have been lost under his original separation agreement had it been found to have engaged in “conduct detrimental “.

Easterbrook called for the lawsuit to be dismissed, arguing that McDonald’s claim that the company was unaware of its relationships with multiple employees when it proposed a separation agreement was false. McDonald’s then fired back, calling its attempt to dismiss the lawsuit as “morally bankrupt.”

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McDonald’s Chairman of the Board of Directors, Enrique Hernandez Jr., said settlement holds Easterbrook responsible for his “obvious misconduct”, upholds the board’s initial judgment to pursue the case, and avoids “proceeding prolonged judicial process “, allowing the company to move forward.

“With this regulation, the company’s employees, management and the board can continue to focus their attention on growing the business and strengthening the community both inside and out. outside the system, “he said.

The action against Easterbrook comes as at least 50 workers have filed complaints against the company in the past five years, alleging physical and verbal harassment and, in some cases, retaliation when they did come forward.

McDonald’s launched a new harassment training program in October 2019, a month before Easterbrook’s layoff, for its 850,000 employees. However, franchisees were not required to provide it. Starting next year, McDonald’s announced it will require training of 2 million workers at 39,000 McDonald’s stores around the world to promote a safe and respectful workplace.

The Associated Press contributed to this report.


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