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Ousted McDonald's chief executive returns $105m over misconduct

Dee-Ann Durbin, Associated Press

Former McDonald’s chief executive Steve Easterbrook has paid back more than 105 million dollars (£78.6 million) in equity awards and cash to the burger giant after it learned that he had lied about the extent of his misconduct while he was its top executive.

“During my tenure as CEO, I failed at times to uphold McDonald’s values and fulfil certain of my responsibilities as a leader of the company,” Mr Easterbrook said in a prepared statement issued on Thursday by McDonald’s. “I apologise to my former co-workers, the board and the company’s franchisees and suppliers for doing so.”

McDonald’s fired Mr Easterbrook in late 2019 after he acknowledged exchanging videos and text messages in a non-physical, consensual relationship with an employee.

At the time of his firing, he told the company there were no other similar instances and an inspection of his mobile phone seemed to back that up. The McDonald’s board approved a separation agreement “without cause” that allowed Mr Easterbrook to keep tens of millions in stock-based benefits and other compensation.

Then, in July 2020, the company received an anonymous tip from an employee claiming that Mr Easterbrook had engaged in a sexual relationship with another employee. After an investigation, McDonald’s confirmed that relationship as well as two other physical, sexual relationships with employees in the year before it fired its top executive. The company said Mr Easterbrook had removed evidence of those relationships from his phone.

McDonald’s board sued Mr Easterbrook in August 2020, saying it would not have terminated him without cause if it had known the extent of his misconduct. The company sought the return of equity awards granted in 2018 and 2019, since the separation agreement made clear he would forfeit those if the company determined he had engaged in “detrimental conduct”.

The settlement announced on Thursday holds Mr Easterbrook accountable and affirms the board’s decision to pursue the case, McDonald’s chairman, Enrique Hernandez Jr., said in a prepared statement.

“The resolution avoids a protracted court process and allows us to move forward,” Mr Hernandez said.

The action against Mr Easterbrook came amid a larger reckoning at the company over sexual harassment in its ranks. Over the last five years, at least 50 workers have filed charges against the company, alleging physical and verbal harassment and, in some cases, retaliation when they came forward.

In October 2019 – a month before Mr Easterbrook was fired – McDonald’s introduced a new harassment training programme for its 850,000 US employees, but franchisees were not required to provide it.

McDonald’s went further this spring, saying that from next year it will mandate worker training to combat harassment, discrimination and violence in its restaurants. The training will be required for two million workers at 39,000 restaurants worldwide.

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