Former McDonald's CEO Repays $105M to Company After Lying About Relationship With Employee
Former McDonald's CEO Steve Easterbrook repaid over $105 million in equity awards and cash to the company after lying about his relationship with an employee while still at the company.
"During my tenure as CEO, I failed at times to uphold McDonald's values and fulfill certain of my responsibilities as a leader of the company," said Easterbrook in a prepared statement Thursday by McDonald's. "I apologize to my former co-workers, the board and the company's franchisees and suppliers for doing so."
McDonald's Chairman Enrique Hernandez Jr. in a prepared statement said the settlement announced Thursday holds Easterbrook responsible and asserts the board's decision to sue.
"The resolution avoids a protracted court process and allows us to move forward," Hernandez said.
In late 2019, McDonald's fired Easterbrook after he admitted to exchanging videos and text messages in a non-physical, consensual relationship with an employee. Easterbrook told the company there were no other occurrences like that when he was fired, and an inspection of his cell phone appeared to corroborate the statement. Easterbrook was granted a separation agreement "without cause" by McDonald's board that let him keep tens of millions in stock-based benefits and other compensation.
However, the company got an anonymous tip in July 2020 from an employee alleging that Easterbrook had a sexual relationship with another employee. McDonald's confirmed the relationship after an investigation, along with two other sexual relationships with other employees in the year before Easterbrook was fired. Easterbrook had removed the evidence from his phone, the company said.
McDonald's board sued Easterbrook in August 2020, saying it wouldn't have terminated 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 since Easterbrook's separation agreement made clear he would forfeit those if the company determined he had engaged in "detrimental conduct."
The action against Easterbrook came amid a larger reckoning at the company over sexual harassment in its ranks. Over the last five years, at least 50 workers have filed charges against the company, alleging physical and verbal harassment and, in some cases, retaliation when they came forward.
In October 2019—a month before Easterbrook was fired—McDonald's introduced a new harassment training program for its 850,000 U.S. employees, but franchisees weren't required to provide it.
McDonald's went further this spring, saying it will mandate worker training to combat harassment, discrimination, and violence in its restaurants starting next year. The training will be required for 2 million workers at 39,000 stores worldwide.
The Associated Press contributed to this report.
