Stock Groups

McDonald’s claws back $105 million severance from fired CEO Easterbrook

[ad_1]

Stephen Easterbrook (former CEO McDonald’s) unveils McDonald’s corporate headquarters in Chicago during the grand opening ceremony held on June 4, 2018.

Scott Olson | Getty Images

McDonald’sIt announced that it had settled the lawsuit against Steve Easterbrook, its former CEO. This allowed them to recover his $105 million severance pay.

Fast-food superpower first brought a suit against its disgraced former chief executiveHe claimed that he was guilty of fraud and had lied in an investigation by the company into his behaviour months before. After that investigation, Easterbrook and an employee were found to have a mutually beneficial relationship. fired him in November 2019. He was still awarded a severance deal that contained equity and cash, despite their findings.

McDonald’s alleges that Easterbrook’s activities were revealed in July 2020. The company initiated an investigation. According to reports, Easterbrook deceived the company by destroying information about his indecent behavior.

McDonald’s reports that Easterbrook received the cash and equity he was entitled to under his severance contract as part of the settlement. He also expressed his regret for his actions.

In a statement, he stated that “During my tenure in the CEO role I failed at times as to uphold McDonald’s principles and fulfil certain of my responsibilities of the company as a leader.” I apologize to my co-workers, Board members, as well as the franchisees, suppliers, for this behavior.    

It was not just Easterbrook’s misconduct as CEO that came to light when the lawsuit was brought forward. This lawsuit brought greater scrutiny to McDonald’s Board and Easterbrook’s Conduct as CEO.

Corporate governance experts challenged the board to answer questions about Easterbrook’s initial investigation. They also asked for reasons why Easterbrook was investigated so fast and why servers hadn’t been checked. This is common with these kinds of investigations.

Teamsters Local 237 Additional Security Fund sued two associates and the company, claiming that they violated their fiduciary obligation. CtW Investment Group’s Shareholders and Scott Stringer (New York City Comptroller) campaigned against two McDonald’s board member reelection. although they ultimately failed.

McDonald’s is currently led by Chris Kempczinski as CEO. He has tried to transform the culture of McDonald’s through holding town halls for employees and stakeholders, and introducing new values throughout the organization.

Enrique Hernandez Jr. McDonald’s Chairman stated that this settlement held Steve Easterbrook responsible “for his clear misconduct,” including how he used his position as CEO. “The resolution avoids a protracted court process and allows us to move forward. It also affirms the Board’s initial judgment to pursue this case.”

McDonald’s shares have increased 23% in the past year to reach $204 billion.

[ad_2]