McDonald’s Fires CEO over relationship with employee

McDonald’s has fired its chief executive, Steve Easterbrook, over his consensual relationship with an employee of the company.

Mike Spector reported the news for Reuters:

McDonald’s Corp dismissed Chief Executive Steve Easterbrook over a recent consensual relationship with an employee, which the board determined violated company policy, the fast-food giant said on Sunday.

The board found that Easterbrook, 52, who had led McDonald’s since 2015, had “demonstrated poor judgment” involving the relationship, McDonald’s said in a news release. Easterbrook relinquished his seat on the company’s board as well.

“This was a mistake,” Easterbrook said of the relationship in an email to employees on Sunday released by the company. “Given the values of the company, I agree with the board that it is time for me to move on.”

His departure was among the most significant in corporate America in the past several years over relationships deemed inappropriate.

Scrutiny of executives and their treatment of employees has intensified amid the #MeToo social media movement, which highlighted instances of sexual harassment in the workplace. In June 2018, Intel Corp CEO Brian Krzanich resigned after an investigation found he had a consensual relationship with an employee that breached company policy.

Cathy Bussewitz and Dee-Ann Durbin from AP wrote:

McDonald’s board of directors voted on Easterbrook’s departure Friday after conducting a thorough review. Details of Easterbrook’s separation package will be released Monday in a federal filing, according to a company spokesman. He will also be leaving the company’s board. Easterbrook was CEO since 2015.

McDonald’s would not provide details about the employee with whom Easterbrook was involved, and an attorney for Easterbrook declined to answer questions.

The board of directors named Chris Kempczinski, who recently served as president of McDonald’s USA, as its new president and CEO.

Two weeks ago, McDonald’s reported a 2% drop in net income for the third quarter as it spent heavily on store remodeling and expanded delivery service. The company’s share price has dropped 7.5% since, though it’s still up 9.2% for the year. The burger chain also has been plagued by declining restaurant traffic.

The leadership transition is unrelated to the company’s operational or financial performance, the company said in a news release.

The Financial Times’ Richard Henderson noted:

Mr Easterbrook, who is British and divorced, wrote in an email to McDonald’s staff: “I engaged in a recent consensual relationship with an employee, which violated McDonald’s policy. This was a mistake. Given the values of the company, I agree with the board that it is time for me to move on. Beyond this, I hope you can respect my desire to maintain my privacy.”

The dismissal comes at a time of upheaval in the fast-food business, as shifting tastes and new competitors have added pressure to established groups. As consumers switched to healthier alternatives and sales fell across the industry, Mr Easterbrook embarked on growth initiatives across its 38,000 locations that span 100 countries. These included revitalising the menu, serving breakfast throughout the day and securing a food delivery partnership with UberEats. The moves were part of Mr Easterbrook’s plan to turn McDonald’s from a waning fast-food empire to a “modern, progressive burger company”, in his words.

Under Mr Easterbrook’s tenure, the group also installed electronic screens in its restaurants allowing customers to order and customise their meals. In March, the company acquired artificial intelligence business Dynamic Yield for $300m to expand further restaurant goers’ ability to craft bespoke burgers.