The Wall Street Journal reports that Steve Easterbrook, the former CEO of McDonald's, has agreed to return $105 million back to the company that was paid to him in severance after he was fired after kit was discovered he'd had a consensual but inappropriate relationship with an employee.
The story says that "the former CEO has returned company stock and cash currently valued at more than $105 million that was allotted to him after he was dismissed in November 2019 when he acknowledged having a consensual relationship with an unnamed employee." A subsequent internal probe revealed "email messages with attachments that contained dozens of nude and sexually explicit photos and videos of Mr. Easterbrook with company employees and other women between late 2018 and early 2019.
"In its lawsuit, McDonald’s said it had concluded that Mr. Easterbrook lied to investigators and its board to cover up relationships with employees to secure the multimillion-dollar severance package. It said Mr. Easterbrook had breached his fiduciary duties as a company officer and committed fraud.
Easterbrook resisted the claw-back efforts, saying that "the company had information about his relationships with other employees when it negotiated his multimillion-dollar severance package." The new agreement avoids legal discovery and a court fight.
- KC's View:
The Journal story notes that when he was fired, "Easterbrook’s compensation, benefits and stock were valued at nearly $42 million when issued in 2019." It is the increase in McDonald's stock price since then that accounts for the fact that he has to give back more than double what he was originally paid.
I'm glad he is paying. I assume his c-suite career is over. I hope other people in similar positions take note.