McDonald's claws back $105 million from ex-CEO Easterbrook, settles lawsuit

• McD, in a probe, found former CEO lied to the company and destroyed information regarding his inappropriate behavior

• Easterbrook apologized for his conduct in a statement

McDonald’s Corp on Thursday said it had settled its lawsuit with former CEO Steve Easterbrook and clawed back his severance payment of $105 million in cash and stock in one of the largest recoveries in corporate America history.

The burger chain brought a lawsuit against its former chief in August 2020, claiming that he covered up and lied about his sexual relationships with employees.

In an internal probe, the company found Esterbrook guilty, and in a message to employees, Enrique Hernandez, the McD chairman, said that the company wanted to hold Easterbrook “accountable for his lies and misconduct, including the way in which he exploited his position as CEO,” and that this settlement achieved that goal.

Internal probe

Easterbrook was ousted from the company in November 2019 after the fast-food giant found that he had a non-physical consensual relationship with an employee.

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Despite the findings, the board granted him a severance package of $105 million that included cash and equity.

However, after the dismissal, an anonymous tip in July 2020 led to the discovery of dozens of sexually explicit photos of women, including three employees, that the former chief sent to his personal email from his company account.

In the internal probe, McDonald’s found out Easterbrook lied to the company and destroyed information regarding his inappropriate behavior.

Settlement

Easterbrook has returned the equity and cash as part of the settlement and apologized for his conduct.

“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 apologize to my former co-workers, the Board, and the company’s franchisees and suppliers for doing so.”    

Shares of McDonald’s have climbed 23% this year, bringing its market value to $204 billion.

Picture Credit: Business Insider