Former McDonald’s chief executive Steve Easterbrook is to return equity awards and $105m received as part of a severance package in 2019.
McDonald’s settled its lawsuit with Easterbrook after it emerged that the British businessman had further hidden relationships with employees than the one for which he had originally lost his job.
The British businessman, 54, initially received the $105m in a severance package in 2019. He had been fired in November that year, after admitting to having had a consensual relationship with one employee.
At the time, McDonald’s said Easterbrook had “violated company policy” and shown “poor judgement”.
Further investigation then uncovered two more hidden relationships and McDonald’s said that, had it been aware of this, it would not have approved his multi-million dollar pay-off. In August 2020 the company launched legal action to recover benefits and severance pay from Easterbrook after accusing him of covering up these further sexual relationships with former colleagues.
Workplace relationships
Easterbrook apologised for failing to uphold the firm’s values and fulfil his responsibilities.
“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 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 claimed Easterbrook had lied when asked about his behaviour in an effort to secure a bigger severance package, committing fraud.
The case has played out 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. Most its restaurants are run by franchisees, who will need to meet the new safer workplace standards starting in January 2022.
The announcement came after it faced lawsuits by some female employees.
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Easterbrook, began working 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.
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