McDonald's dismisses the CEO for a consensual relationship with the employee

NEW YORK: McDonald's Corp fired executive director Steve Easterbrook about a recent consensual relationship with an employee, which the board determined to violate the company's policy, the fast-food giant said on Sunday.

The board found that Easterbrook, 52, who had run McDonald's since 2015, had demonstrated a poor judgment about the relationship, McDonald's said in a press release. Easterbrook also resigned from his position in the company's board of directors.

This was a mistake, Easterbrook said about the relationship in an email sent to employees on Sunday by the company. Given the values ​​of the company, I agree with the board of directors that it is time to move on.

His departure was one of the most significant in corporate America in recent years because of relationships considered inappropriate.

The scrutiny of executives and their treatment of employees has intensified amid the #MeToo social media movement, which highlighted cases of sexual harassment in the workplace. In June 2018, Intel Corp CEO Brian Krzanich resigned after an investigation found that he had a consensual relationship with an employee who violated the company's policy.

Chris Kempczinski, 51, the last president of McDonald's USA, was appointed as the company's new CEO, effective immediately. He also joined the board of McDonald's.

In his own message to the employees, Kempczinski thanked Easterbrook for recruiting him to McDonald's and said he hoped the company would continue with its customer-centered growth plan. McDonald's president Enrique Hernández Jr. called Kempczinski instrumental in the development of the company's strategic plan.

McDonald's, one of the world's most recognized brands, based in Chicago, recently celebrated the 40th anniversary of its Happy Meal for children and is known for its family reputation.

The company did not provide more details about the circumstances surrounding Easterbrook's departure. McDonald's is expected to disclose financial information related to Easterbrook's dismissal in a securities presentation as early as Monday, the company said.

The company appointed Joe Erlinger, president of internationally operated markets, as president of McDonald's USA, succeeding Kempczinski.

Although it is clearly a loss, McDonald's maintains one of the deepest and oldest management teams, which should help provide some stability through this unexpected transition, Raymond analyst James Brian Vaccaro said in a research note on the Departure from Easterbrook.

DOMINANCE CHALLENGE RIVALS

McDonald's shares doubled approximately during the Easterbrook holding. But the chain in October missed Wall Street earnings estimates for the first time in two years, as it spent money on remodeling US restaurants. UU.

Rival fast-food chains in the United States have challenged McDonald's dominance with valuable meals and new menu items, including plant-based hamburgers and meat substitutes launched by rivals such as Restaurant Brands International Inc Burger King and KFC of Yum Brands Inc. McDonald's is late in reintroducing chicken sandwiches and rival Wendys Co has begun serving breakfast.

The remodeling of the company's 14,000 restaurants in the US UU. It includes the introduction of digital order kiosks, mobile orders and payment and collection services, while being associated with delivery services based on GrubHub Inc, Uber Eats and DoorDash applications.

Easterbrook changed McDonald’s operations in the United Kingdom, where it was born, by refocusing on hamburgers and polishing the brand with an advertising campaign that sought to discredit little flattering rumors about its food.

A cricket enthusiast who earned a reputation among former UK colleagues for being fun, fair and a lover of simplicity, Easterbrook was also the rare CEO of McDonald's with experience managing other restaurant chains.

COMPLAINTS OF HARASSMENT

Following the disclosure of the expulsion from Easterbrook, a labor movement advocating a minimum wage of $ 15 per hour and union rights on behalf of fast-food workers, McDonald's allegedly had not addressed a problem of sexual harassment in the company.

McDonald's needs to sit with the surviving workers 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 dismissal and any other executive exit related to these issues.

McDonald's did not comment immediately on the group's statement.

McDonald's has faced accusations in the last year of tolerating sexual harassment in the workplace and retaliating against employees who talked about it.

In September, dozens of local government officials from 31 US states. UU. They pressured McDonald's to do a better job protecting workers from groping, obscene comments and other forms of sexual harassment, adding their voices to an employee-led campaign that has had strikes in several stores.

McDonald's then signaled an August announcement of a new training program for safe workplaces backed 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.

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