McDonald’s is suing its former CEO Steve Easterbrook after new evidence has surfaced claiming he had covered up and lied about sexual relationships with employees.
The lawsuit comes nine months after the fast-food chain ousted Easterbrook, as the matter was reopened last month following an employee report. It aims to recoup tens of millions of dollars in severance and benefits.
Easterbrook’s position as CEO was terminated on 3 November after he had been found violating company policy and demonstrating poor judgment involving a consensual relationship with an employee. He was appointed CEO in March 2015.
According to the official SEC filing, the McDonald’s board has now concluded that Easterbrook had lied to the company during the internal probe into his actions and destroyed information regarding inappropriate personal behaviour.
It was discovered that he had in fact been involved in sexual relationships with three additional employees prior to his termination and had also approved an “extraordinary stock grant, worth hundreds of thousands of dollars, for one of those employees in the midst of their sexual relationship”.
Evidence reportedly consisted of explicit photographs and videos of various women which were sent from his company email to his personal one.
Following further investigation, the board has filed litigation at Delaware Chancery Court to recover the compensation that Easterbrook retained upon his exit from McDonald’s. The board said it would not have constituted a “without case” termination had they had been aware.
Executive pay firm Equilar estimated that Easterbrook’s severance package was worth $41.8 million when he left, as cited by Reuters.
Easterbrook’s successor, Chris Kempczinski, updated McDonald’s corporate values last month and recently released a statement: “We now know that his [Easterbrook] conduct deviated from our values in different and far more extensive ways than we were aware when he left the company last year. McDonald’s does not tolerate behaviour from any employee that does not reflect our values.”
McDonald’s has also taken immediate action to prevent Easterbrook from exercising any stock options or selling any stock issuable in respect of outstanding equity awards.
© FoodBev Media Ltd 2023