Business Essentials for Professionals


McDonald's CEO Resigns Due To "Consensual Relationship" With A Subordinate

McDonald's CEO Resigns Due To "Consensual Relationship" With A Subordinate
The Chief Executive Officer of one of the largest fast food chains of the world was forced to resign because of a consensual relationship with a junior employee.
Steve Easterbrook, CEO of McDonald's, was ordered to relinquish his position after the company’s board directors found that he "demonstrated poor judgment" by getting involved in a consensual relationship with an employee, the fats food giant announced on Sunday.
According to the statement issued by the company, Easterbrook was found to have violated a policy against manager relationships with direct or indirect reports by entering into the relationship and as such he was voted by the board members to resign. Chris Kempczinski, previously the president of McDonald's USA, has replaced Easterbrook.
In an email to McDonald's employees, Easterbrook described his recent relationship with an employee as "a mistake". "Given the values of the company, I agree with the board that it is time for me to move on," he wrote.
He is "deeply grateful for his time at McDonald's", said Desiree Moore, a Chicago-based lawyer acting as a spokeswoman for Easterbrook. "He acknowledges his error in judgment and supports the company's decision," Moore said and added that no further comments would be made by Easterbrook.
The company said that the severance package details of Easterbrook will be made public in a federal filing on Tuesday. No further details about the relationship has been made public by McDonald's.
According to The Sunday Times, Easterbrook, who is also a former head of the company's business in the United Kingdom, is divorced.
Easterbrook is the latest name of top executives of large companies who were forced to relinquish their positions because of similar relationships with their employees. More corporate are strictly implementing regulations geared to prevent employees entering into relationships with subordinated ever since the #MeToo campaign broke out about two years ago.
"We are seeing substantially more interest" in these policies, Jonathan Segal, a Philadelphia-based employment lawyer, told The Washington Post last year, in reference to the stepping down of the chief executive of Intel over violation of company rules against consensual relationship with subordinates.
"I'm seeing more companies ask about them," Segal said. "I'm seeing more companies add them to their anti-harassment policies. I've seen more companies look at them in their codes of conduct."
At a time when McDonald’s was struggling to hold on to customers, Easterbrook was made the head of the company in 2015. It was the same year that the company had reported a 33 per cent drop in global profits for the first quarter of that year and a steep drop in its sale in the United States. After assuming office, Easterbrook had announced a plan to "better address today's consumer needs, expectations and the competitive marketplace."
Easterbrook’s stint as the company chief is considered a successful one as the share price of the company nearly doubled under him and McDonald’s once again regained the position of the top player in the US fast food industry even in the face of challenges for the industry as a whole. A pay cheque of $15.9 million was given to Easterbrook last year. He also sits on the board of US retailing giant Walmart.

Christopher J. Mitchell

Markets | Companies | M&A | Innovation | People | Management | Lifestyle | World | Misc