McDonald’s CEO Steve Easterbrook famously known for pushing the fast food giant to the top and turning around the company’s sales has been fired for breaking company rules by having a consensual relationship with an employee.
The decision to fire Easterbrook was finalized by the firm’s board on Sunday after an investigation into the claims was launched. According to the personal conduct rules at the company, managers are not allowed to enter into relationships with a subordinate.
The McDonald’s board voted Friday to oust Easterbrook following a review, concluding that he violated the company’s policy against manager relationships with direct or indirect reports, the company said.
The divorced British businessman acknowledged the board’s decision and referred to his recent relationship with an employee “a mistake” in an email sent out to McDonald’s employees.
In the email, Easterbrook was quoted to have written- “Given the values of the company, I agree with the board that it is time for me to move on.” He also resigned from the company’s board on Sunday.
Steve Easterbrook was immediately replaced by McDonald’s U.S. chief, Chris Kempczinski, who in a statement referred to him as a “patient and helpful mentor.”
Desiree Moore, a Chicago-based lawyer acting as a spokeswoman for Easterbrook, said in a statement that he is “deeply grateful for his time at McDonald’s.”
“He acknowledges his error in judgment and supports the Company’s decision,” Moore said, adding that Easterbrook will be not be commenting further.
Details of Easterbrook’s severance package will be disclosed by Tuesday in a federal filing, the company said.
In review of the actions taken against Steve Easterbrook, most of the companies today don’t allow manager-employee relationships for various reasons even though they are not illegal.
Companies often introduce no-dating policies to avoid allegations of preferential treatment or lawsuits arising from unwanted advances or sexual harassment. Some companies introduce a consensual relationship agreement that require manager and employee to agree that the relationship will not interfere at work.
In August, McDonald’s announced a new staff training program, starting in October, focused on workplace training and harassment in response to scrutiny around how it handles sexual harassment in restaurants.
Steve Easterbrook as CEO for McDonald
Since 2015, Steve Easterbrook had contributed highly to McDonald’s rise in the fast food chain market and has been credited with overhauling the iconic burger chain through unveiling new-look restaurants, menus, eco-friendly policies and raising employee pay.
Easterbrook first joined the chain in 1993 and worked his way up the company before leaving in 2011 to head up other popular food chains, including Pizza Express and Wagamama.
He rejoined as head of the U.K. business in 2013 and under his tenure oversaw a raft of changes that drove growth in the U.K. arm before being appointed CEO two years later. Under his leadership, shares almost doubled, reaching an all-time high of $221.15 per share earlier this summer.
Easterbrook had also faced criticism for his compensation, which totaled almost $16 million last year, while his pay reached a peak of $21.8 million in 2017, a figure thousands of times the median $7,500 salary of McDonald’s restaurant employees. The firm also fell short of earnings estimates last month as it struggled to compete with other fast food giants such as Wendy’s and Restaurants Brands International, owner of Burger King and Popeyes.
Easterbrook pushed McDonald’s forward from a tough time, said Jonathan Maze, the editor of Restaurant Business. He improved sales — still on the upswing this year — and restructured the company, speeding up decision-making and cutting hundreds of millions in overhead costs, Maze said.
He also embraced technology in the form of in-store kiosks, online-order delivery and, in March, a $300 million start-up acquisition meant to speed up McDonald’s drive-through services.
The firing of McDonald’s CEO goes ahead to reveal how seriously companies are taking anti-harassment policies and codes of conduct. If the same could be applied to Uganda’s own labor laws, we could see a high improvement in how staff are treated.
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Author: Allan Bangirana
Allan Bangirana has a taste for all kinds of topics and usually writes about tech, entertainment, sports and community projects that make a difference in society.