- McDonald’s is suing former CEO Steve Easterbrook over his multi-million dollar departure deal.
- The fast food giant alleges Easterbrook lied about consensual relationships with several employees and the former CEO destroyed evidence.
- McDonald’s fired Easterbrook in November 2019 for having a consensual relationship with an employee.
- Executive compensation monitoring company Equilar estimates that Easterbrook’s severance pay is now worth around $ 57.3 million.
- In November 2019, Equilar valued the ousted CEO’s departure deal at around $ 41 million, according to Inc.
- In the complaint filed Monday by McDonald’s, the fast food giant asked Easterbrook to “return all cash and stock rewards” of the original deal.
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Former McDonald’s CEO Steve Easterbrook received a multi-million dollar severance package after being fired from the fast food giant on November 1, 2019. But now the Golden Arches are suing to retroactively cut the strings of the parachute. gilded from its former CEO.
McDonald’s filed a complaint on Monday alleging Easterbrook sent nudes from his work email and then attempted to delete the photos before handing his phone over to investigators. McDonald’s lawyers wrote that the former CEO lied about his multiple dealings with employees, in order to trick McDonald’s into agreeing to a severance agreement “on more favorable terms than the truth would warrant. “.
Executive compensation monitoring firm Equilar previously estimated the departure deal to be worth more than $ 41 million, according to a November 2019 article in Inc. Courtney Yu, director of research at Equilar, told Business Insider that the value of Easterbrook’s severance pay had increased since he was fired. Now, Equilar estimates the package is worth $ 57,319,352 in total based on the inventory included in the original starting deal. This represents $ 3,763,872 in cash and $ 53,555,480 in equity.
In the company’s complaint to the Delaware Chancellery Court, attorneys for McDonald’s wrote that McDonald’s first became aware of allegations that Easterbrook was engaging in “an inappropriate personal relationship with an employee. McDonald’s ”in October 2019. In the subsequent investigation, the company’s board of directors found that its CEO had engaged in a“ non-physical consensual relationship involving texting and video calling ”with a company employee.
The complaint alleges that Easterbrook told investigators the relationship was not sexual and “the only intimate one he’s ever had with a McDonald’s employee.” The board then reached an agreement with its CEO that he would be fired “without cause”, so that he would receive “substantial severance pay”.
“If Easterbrook had been frank with McDonald’s investigators and not withheld evidence, McDonald’s would have known he had a legal reason to fire him in 2019 and would not have agreed that his dismissal was ‘without cause’ McDonald’s lawyers wrote.
Now that McDonald’s has taken legal action over the deal, Yu has said Easterbrook stands to lose more due to the hefty nature of his compensation.
“Some things have changed, but for the most part, he’s still at risk of losing a good chunk of his severance pay because a lot of it was based on fairness,” Yu told Business Insider.
McDonald’s attorney and Steve Easterbrook did not immediately respond to Business Insider’s request for comment.
McDonald’s did not specify the amount it is claiming in damages. Instead, the fast food company asked the court to award it “compensatory damages” and legal, accountant and expert fees. As an alternative, McDonald’s asked the court ordering “Easterbrook to return all cash and stock awards granted under” its separation agreement.