Ex-McDonald’s boss to repay $105m over staff relationships
McDonald’s has settled a lawsuit in which its former chief executive, Steve Easterbook, has returned equity awards and cash worth over $105m.
The fast food chain had claimed that Mr Easterbrook hid and lied about sexual relationships with three staff.
Mr Easterbrook apologised for failing to uphold the firm’s values and fulfil his responsibilities.
The British businessman, 54, initially received the $105m in a severance package in 2019.
He was fired in November that year, after admitting to having had a consensual relationship with one employee.
At the time, McDonald’s said Mr Easterbrook had “violated company policy” and shown “poor judgement”.
But further investigation uncovered two more hidden relationships and the firm said that, had it been aware of this, it would not have approved his multi-million dollar pay-off.
“This settlement holds Steve Easterbrook accountable for his clear misconduct, including the way in which he exploited his position as CEO,” McDonald’s chairman Enrique Hernandez Jr said on Thursday.
“Today’s resolution avoids a protracted court process and moves us beyond a chapter that belongs in our past.”
In July 2019, an anonymous tip-off led investigators to find that Mr Easterbrook had sent sexually explicit photographs of three employees to his personal email from his company address.
Investigators also found messages showing that he approved a grant of company shares worth hundreds of thousands of dollars to one of the employees “shortly after their first sexual encounter”.
McDonald’s said it had not initially found the photos and messages because Mr Easterbrook had deleted them from his phone.
It claimed Mr Easterbrook violated his duty to the company by lying when asked about his behaviour in an effort to secure a bigger severance package, committing fraud.
But Mr Easterbrook’s lawyers called the suit “meritless”, claiming McDonald’s had details about his relationships on its computer systems at the time it negotiated the severance deal.
Safer workplace standards
The case has come as McDonald’s faces scrutiny over alleged sexual harassment in its restaurants.
In April, the chain announced it would implement new training at its 39,000 restaurants to prevent harassment and promote safe and respectful workplaces. The majority of its restaurants are run by franchisees, who will be required to meet the new safer workplace standards starting in January 2022.
The announcement came after it faced lawsuits by some female employees.
Mr Easterbrook, 54, first worked for McDonald’s in 1993 as a manager in London before working his way up the company. He left in 2011 to become boss of Pizza Express and then Asian food chain Wagamama, before returning to McDonald’s in 2013, eventually becoming its chief executive in 2015.