McDonald’s CEO Steve Easterbrook

Is Forced Out
AFP / 06:00 AM November 05, 2019

McDonald’s announced Sunday that its president and CEO Steve Easterbrook was forced out after
showing “poor judgment” by engaging in a “consensual relationship” with an employee.

He was replaced by Chris Kempczinski, the president of McDonald’s USA.

Kempczinski was also elected to the board of directors.
ADVERTISEMENT

“Easterbrook… has separated from the company following the board’s determination that he violated
company policy and demonstrated poor judgment involving a recent consensual relationship with an
employee,” the company said in a statement.

“The company confirms that this leadership transition is unrelated to the company’s operational or
financial performance.”

ADVERTISING
inRead invented by Teads
McDonald's CEO is out after "a recent consensual relationship with an employee," the company
says https://t.co/cvp6V7G209 pic.twitter.com/nnMzBwWjbO
— CNN Breaking News (@cnnbrk) November 3, 2019
In an email to McDonald’s employees, Easterbrook said his relationship was “a mistake” that
violated company policy.

“Given the values of the company, I agree with the board that it is time for me to move on,” the email
said.

Joe Erlinger, president of international operated markets, will take over as head of McDonald’s USA,
the company said.
In its most recent earnings report, on October 22, McDonald’s said profits dipped 1.8 percent in the
third quarter from the year-ago period to $1.6 billion.
ADVERTISEMENT

Revenues at the company, which has 38,000 restaurants in more than 100 countries, edged up 1.1
percent to $5.4 billion.

The fast-food giant notched a healthy 5.9 percent increase in global comparable sales, including a
solid rise in the United States.

But profits were pressured by increased spending on technology and research and development.

McDonald’s has invested heavily in-home delivery and mobile payment initiatives in recent years,
and in 2019 has unveiled a number of acquisitions to boost its drive-through operation.

‘The Plan Is Working’

Kempczinski told The Wall Street Journal on Sunday that he plans to continue the focus on
technology.

“There isn’t going to be some radical, strategic shift.

The plan is working,” he said.

Easterbrook had served as chief executive since 2015.

Under his leadership, McDonald’s share price doubled, but he was unable to stop a decline in sales.
Like other fast-food chains, McDonald’s is facing headwinds as consumers seek out healthier dining
options.

Easterbrook’s pay as CEO rose with McDonald’s share price, which closed last week at $194.
His compensation hit a peak in 2017 at $21.8 million, including $9.1 million in incentive-based pay,
the Journal said.
Workplace relationships have cost a number of CEOs their jobs in recent years, and the topic has
become even more sensitive amid the #MeToo movement.
Intel CEO Brian Krzanich and yoga apparel brand Lululemon chief Laurent Potdevin resigned from
their companies in 2018 following revelations of relationships with employees.

Related Articles

Airbnb Banned Parties in California

Wework’s Ex-Ceo Faces Pregnancy Discrimination Complaint
In 2016, Priceline CEO Darren Huston stepped down for the same reason, as did BestBuy CEO Brian
Dunn in 2012.