McDonald’s ousts CEO over consensual relationship with a Worker
McDonald’s Corp disregarded Chief Executive Steve Easterbrook over a New consensual relationship with an employee, which the board decided violated company policy, the fast-food giant said on Sunday
The board found that Easterbrook, 52, who had headed McDonald’s since 2015, had”demonstrated poor judgment” between the relationship, McDonald’s said in a news release. Easterbrook relinquished his seat on the provider’s board also.
“This was a mistake,” Easterbrook said of this connection in an email to employees on Sunday published by the company. “Given the values of the company, I agree with the board that it is time for me to proceed.”
His departure was one of the most significant in corporate America in the last several years over relationships deemed inappropriate.
Scrutiny of their treatment of employees has intensified amid the #MeToo social networking motion, which emphasized instances of sexual harassment at work. In June 2018, Intel Corp CEO Brian Krzanich resigned after an investigation found he had a consensual relationship with a worker that violated company policy.
Chris Kempczinski, 51, most recently president of McDonald’s USA, was named the corporation’s new CEO, effective immediately. He also joined the McDonald’s board.
In his own message to employees, Kempczinski thanked Easterbrook for recruiting him to McDonald’s and said he expected the company to continue its customer-focused growth plan. McDonald’s Chairman Enrique Hernandez Jr. called Kempczinski”instrumental” in developing the company’s strategic plan.
Chicago-based McDonald’s, among the world’s most recognizable brands, recently celebrated the 40th anniversary of its Happy Meal for kids and is famous for its family-friendly reputation.
The company did not provide additional details about the circumstances surrounding Easterbrook’s departure. McDonald’s is expected to disclose financial information related to Easterbrook’s dismissal in a securities filing as soon as Monday, the company said.
The business called Joe Erlinger, who was president of international operated markets, as president of McDonald’s USA, succeeding Kempczinski.
“While clearly a reduction, McDonald’s maintains one of the deepest and longest-tenured management teams, which should help provide some stability through this unexpected transition,” Raymond James analyst Brian Vaccaro said in a research note about Easterbrook’s departure.
RIVALS CHALLENGE DOMINANCE
McDonald’s shares roughly doubled during Easterbrook’s tenure. But the series in October missed Wall Street profit estimates for the first time in two years as it spent money remodeling U.S. restaurants and speeding up service to address declining customer visits.
Rival fast-food chains in the United States have challenged McDonald’s dominance with value meals and fresh menu items, such as plant-based burgers and meat substitutes launched by competitions including Restaurant Brands International Inc’s Burger King and Yum Brands Inc’s KFC. McDonald’s is seen late in reintroducing chicken sandwiches and rival Wendys Co has begun serving breakfast.
The remodeling of the business’s 14,000 U.S. restaurants includes introducing electronic ordering kiosks, mobile ordering and pay-and-pickup services, while partnering with app-based delivery services GrubHub Inc, Uber Eats and DoorDash.
Easterbrook turned around McDonald’s operations in the UK, where he was born, by refocusing on burgers and burnishing the brand with an ad campaign that sought to debunk unflattering rumors about its food.
A cricket enthusiast who earned a reputation among former UK colleagues for being funny, fair and a lover of simplicity, Easterbrook was also the rare McDonald’s CEO with experience running other restaurant chains.
Following the disclosure of Easterbrook’s ouster, a labour movement advocating for a 15-an-hour minimum wage and union rights on behalf of fast-food workers, alleged McDonald’s had failed to deal with a sexual harassment problem at the firm.
“McDonald’s needs to sit down with worker-survivors and put them at the center of any solution,” the group, the Fight for $15 and a Union, said in a statement. “And the company needs to be completely transparent about Easterbrook’s firing and some other executive departures related to these problems.”
McDonald’s had no immediate comment on the group’s announcement.
McDonald’s has faced allegations in the past year of condoning sexual harassment at work and retaliating against employees who spoke up about it.
In September, dozens of local government officials from 31 U.S. states pressured McDonald’s to do a better job of protecting workers from groping, obscene comments and other forms of sexual harassment, adding their voices to an employee-led effort that has seen walkouts at several stores.
McDonald’s pointed then to an August announcement of a new training program for safe workplaces supported by more than 2,000 franchisees. Kempczinski said at the time that the company and franchisees”have a responsibility to take action on this issue and are committed to promoting positive change.”