Ex-McDonald’s chief to repay $105m to settle legal case

Former McDonald's CEO Steve Easterbrook was fired over his sexual relationships with subordinates.

Steve Easterbrook, the former McDonald’s chief executive, who was fired over his sexual relationships with subordinates, agreed to return $105m (€93m) in cash and equity awards to settle a lawsuit by the fast-food chain.

The amount represents the compensation Easterbrook would have forfeited had he been forthcoming about his actions and been fired for cause, the Chicago-based company said.

Mr Easterbrook, 54, also apologised for the behaviour that led to his 2019 exit. 

“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,” he said in a statement.

“I apologise to my former co-workers, the board, and the company’s franchisees and suppliers for doing so,” he said. 

The lawsuit lets McDonald’s close a painful chapter and keep legal proceedings from dragging on, chairman Rick Hernandez told employees and franchisees in a memo seen by Bloomberg. The board initially became aware of the situation because a worker “had the courage to speak up,” he said.

“Even as we move forward, there are lessons that cannot be forgotten, including the importance of continuing to foster a culture where the expectation is that people will speak up in response to wrongdoing,” Mr Hernandez said.

Some shareholders have criticised Mr Hernandez and other board members for paying Mr Easterbrook severance, only to file suit to claw it back later after concluding they had been misled about the extent of Mr Easterbrook’s misbehaviour. 

But Mr Hernandez was re-elected by investors in the annual meeting in May. Under current CEO Chris Kempczinski, McDonald’s has made changes to improve its corporate culture. 

Bloomberg