McDonald’s Corp. has clawed back more than $105 million of a severance package and received an apology from Steve Easterbrook, its ousted president and CEO, the company said Thursday.
The Chicago-based burger brand said it “will dismiss its action against him with prejudice” after Steve Easterbrook, who was ousted in November 2019 over sexual relationships with subordinate employees, agreed to return awards and cash received as part of a severance.
McDonald’s had sued Easterbrook in August 2020, claiming misconduct, lies and efforts to impede investigations into his actions. The company also alleged Easterbrook covered up relationships with employees, approved stock grants and destroyed evidence.
“Under the settlement, Mr. Easterbrook has returned equity awards and cash, with a current value of over $105 million, which he would have forfeited had he been truthful at the time of his termination and, as a result, been terminated for cause,” the company said.
Easterbrook also apologized to the company, its board and the McDonald’s community for failing to uphold McDonald’s values and fulfill his responsibility as a leader of the company.
“This settlement holds Steve Easterbrook accountable for his clear misconduct, including the way in which he exploited his position as CEO,” said Enrique Hernandez Jr., McDonald’s chairman, in a statement.
“The resolution avoids a protracted court process and allows us to move forward. It also affirms the board’s initial judgment to pursue this case,” Hernandez said. “With this settlement, company employees, management and the board can continue to focus their attention on the growth of the business and building community both inside and outside the system.”
In the apology distributed by the company, Easterbrook said: “McDonald's and its board of directors value doing the right thing and putting customers and people first. 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. I apologize to my former co-workers, the board and the company’s franchisees and suppliers for doing so.”
Hernandez, in a message from the board to the McDonald’s system that was shared by the company, said the board appreciated the employee who “had the courage to speak up” about the misconduct.
“They came forward in a very real demonstration of our commitment to our values that are central to our brand, and for that, the board remains extremely grateful,” Hernandez said.
“Today’s resolution avoids a protracted court process and moves us beyond a chapter that belongs in our past,” he said. “But 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.”
Hernandez said McDonald’s launched training at the corporate level “to help people understand why, when and how to speak up and to create a more inclusive environment.”
McDonald's has more than 39,000 locations in more than 100 countries.
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