- McDonald’s is suing its former manager Steve Easterbrook over his multi-million dollar separation.
- The fast-food giant claims that Easterbrook lied about consensual relationships with multiple employees, and that the former CEO destroyed evidence.
- McDonald’s fired Easterbrook in November 2019 for having a consensual relationship with an employee.
- Executive compensation company Equilar estimates that the Easterbrook divorce package is now worth about $ 57.3 million.
- In November 2019, Equilar placed the value of the fired CEO’s severance deal at around $ 41 million, according to Inc.
- In a complaint filed by McDonald’s on Monday, the fast-food giant demanded that Easterbrook be required to “return all cash and share prices” of the severance pay.
- Visit the Business Insider website for more stories.
Former CEO of McDonald’s Steve Easterbrook received a multi-million dollar divorce fee after he was fired from the fast-food giant on November 1, 2019. But now the Golden Arches are proposing a case to cut the strings retroactively on the golden parachute of the former CEO.
On Monday, McDonald’s filed a complaint alleging that Easterbrook sent nudes from his work email, and then attempted to delete the photos before handing over his phone to investigators. McDonald’s lawyers wrote that the former CEO lied about his multiple affairs with employees, in order to persuade McDonald’s to enter into a severance agreement “on terms more favorable than the truth would have justified.”
Executive compensation company Equilar has previously estimated that the severance deal was worth more than $ 41 million, according to a November 2019 article in Inc. Courtney Yu, the director of research at Equilar, told Business Insider that the value of Easterbrook’s divorce package has increased since its fire. Equilar now estimates that the package is worth $ 57,319,352 in total based on the shares raised in the Separation Initiative. That’s $ 3,763,872 in cash, and $ 53,555,480 in equity.
In the company’s complaint to Delaware’s Court of Chancery, McDonald’s lawyers wrote that McDonald’s first became aware of allegations that Easterbrook was engaged “in an unfavorable personal relationship with a McDonald’s employee” in October 2019. In the following investigation, the board found of the company whose CEO had a “non-physical, consensual relationship involving texting and video calling” with an employee of the company.
The complaint alleges that Easterbrook told investigators that the relationship was non-sexual and “the only one of an intimate character he ever had with a McDonald’s employee.” The board then reached an agreement with its CEO that he would be terminated “without cause” so that he would “earn substantial benefit compensation.”
“If Easterbrook had been honest with McDonald’s investigators and not concealed evidence, McDonald’s would have known it had legal reason to terminate him in 2019 and would not have agreed that his termination was ‘without cause’,” McDonald’s’s lawyers wrote.
Now that McDonald’s is suing over the deal, Yu said Easterbrook could stand to lose more because of the stock-heavy nature of his divorce.
“Some things have changed, but for the most part, he still continues to lose a good chunk of his divorce because a lot of it was based on equity,” Yu told Business Insider.
McDonald’s attorney and Steve Easterbrook did not immediately respond to a request from Business Insider for comment.
McDonald’s has not stated the amount it claims for damages. Instead, the fast-food company demanded that the court award “compensatory damages” and fees to attorneys, accountants and experts. As an alternative route, McDonald’s requested the court order “Easterbrook to return all cash and share prices awarded on the basis of” his divorce agreement.
