Lying CEO Must Pay Back $105 Million

In what the New York Times described as “one of the largest claw backs in the history of corporate America”, former McDonald’s CEO Steve Easterbrook, who was fired in 2019 for having an inappropriate relationship with a subordinate, must return $105 million in stock and cash to the fast-food chain as part of a lawsuit settlement. McDonald’s case against Easterbook alleged that, during an internal investigation, the former executive lied about having multiple sexual relationships with subordinates, concealed evidence, and tried to impede the investigation.    

After a 2019 internal investigation, McDonald’s and Easterbrook agreed that he would be terminated without cause and receive a nine-figure severance package. This agreement was based on Easterbrook’s assurances that he had engaged in a single, consensual, non-physical relationship with a female subordinate, according to the court complaint. But, in July 2020, McDonald’s received an anonymous tip that Easterbrook had a sexual relationship with a second employee. That led to a second investigation that uncovered that Easterbook had engaged in affairs with two other employees and had used his McDonald’s email to send dozens of explicit photos of women — including these employees—to his personal email account. The investigation also revealed that Easterbrook had awarded hundreds of thousands of dollars’ worth of McDonald’s stock to one of the women with whom he was having a sexual relationship, according to the court complaint. 

McDonald’s lawsuit accused Easterbrook of fraud and sought damages and return of the stock awards and cash granted under the 2019 severance agreement. Easterbrook’s attempt to get the case dismissed was denied in 2021.  

In announcing the settlement, McDonald’s chairman Enrique Hernandez Jr. said that the lawsuit sought to hold Easterbrook “accountable for his lies and misconduct, including the way in which he exploited his position as C.E.O.” Easterbrook admitted that he had “failed at times to uphold McDonald’s values and fulfill certain of my responsibilities as a leader of the company. I apologize to my former co-workers, the Board, and the company’s franchisees and suppliers for doing so.”

What this means to you: 

Corporate values are not just for posters on the breakroom wall.  They should be part of how all employees do their jobs every day, from the drive-through window to the executive suite.  

At Fair Measures, we incorporate your organization’s values into all of our instructor-led trainings.  After all, the law sets minimum standards, while values set the highest standards.  Our attorney-trainers get students to think about and identify what values make your organization a great place to work, and what they can do to maintain a respectful workplace.