Former McDonald’s CEO Pays Company $105 Million In Settlement
Steve Easterbrook — the former CEO of McDonald’s — will pay the company $105 million in cash and securities following a prolonged legal battle.
Two years ago, the fast food giant’s board of directors voted to immediately terminate Easterbrook following a consensual relationship with a coworker. The settlement allows Easterbrook to avoid trial.
The Wall Street Journal reported:
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, McDonald’s said. Less than a year later, the company sought to recoup the severance through legal action. The settlement avoids a trial against the former top executive that was slated to begin in Delaware Court of Chancery in May…
Board Chairman Enrique Hernandez Jr. said that the settlement, which was approved by the board, holds Mr. Easterbrook accountable for misconduct, “including the way in which he exploited his position as CEO.” He added that the settlement avoids a protracted court process and allows the company to move forward.
“McDonald’s and its Board of Directors value doing the right thing and putting customers and people first. During my tenure as CEO, I failed at times to uphold McDonald’s values and fulfill certain of my responsibilities as a leader of the company,” said Easterbrook. “I apologize to my former co-workers, the Board, and the company’s franchisees and suppliers for doing so.”
Beyond the litigation with Easterbrook, McDonald’s is working to surmount obstacles induced by rampant labor shortages. In October, McDonald’s announced that it is partnering with IBM to automate drive-thrus — a project that McDonald’s had already been developing in the hopes of a nationwide rollout.
“There is a big leap between going from 10 restaurants in Chicago to 14,000 restaurants across the U.S. with an infinite number of promo permutations, menu permutations, dialect permutations, weather — I mean, on and on and on and on,” current McDonald’s CEO Chris Kempczinski explained over the summer. “Do I think in five years from now you’re going to see a voice in the drive-thru? I do, but I don’t think that this is going to be something that happens in the next year or so.”
Beyond McDonald’s, a Conference Board report shows that companies are earmarking an average 3.9% of total payroll for wage increases in 2022. Roughly 39% of firms said that rising price levels are a motivating factor for the wage hikes.
The most recent inflation data from the United States Department of Labor reveal that consumer prices are increasing at a 6.8% rate — consistently outpacing economists’ expectations and matching rates last seen in the early 1980s. Indeed, Treasury Secretary Janet Yellen and Federal Reserve Chair Jerome Powell recently asserted that policymakers should retire the term “transitory” as a descriptor for the current inflation environment.
In a recent Fox Business poll, 46% of respondents agreed that Biden’s social spending plan would “push inflation higher,” while 21% believed it would “help lower inflation.”
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