CHICAGO – McDonald’s Corp. clawed back $105 million in cash and stock from former president and chief executive officer Stephen Easterbrook. The quick-service burger chain fired Easterbrook in 2019 when the company found he had a consensual relationship with a subordinate that violated company policy. McDonald’s sued Easterbrook in 2020 in Delaware Court of Chancery after an internal investigation revealed other inappropriate relationships with McDonald’s employees.

The McDonald’s board of directors on Dec. 16 approved a settlement resolving the company’s lawsuit against Easterbrook “over his misconduct, lies, and efforts to impede investigations into his actions,” the company said.

“Under the settlement, Mr. Easterbrook has returned equity awards and cash, with a current value of over $105 million, which he would have forfeited had he been truthful at the time of his termination and, as a result, been terminated for cause,” the company added.

Easterbrook also issued an apology.

“McDonald’s and its board of directors value doing the right thing and putting customers and people first,” he said. “During my tenure as CEO, I 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.”  

McDonald’s alleged that Easterbrook lied about and destroyed information related to his conduct which violated company policy. Not only did Easterbrook have physical sexual relationships with three McDonald’s employees in the year before he was fired, according to McDonald’s lawsuit, he approved a stock grant, worth hundreds of thousands of dollars, for one of those employees in the midst of the relationship; and he was knowingly untruthful with McDonald’s investigators in 2019. The company learned of the alleged behavior through an anonymous tip.

McDonald’s said the company will dismiss its lawsuit against Easterbrook with prejudice.

“This settlement holds Steve Easterbrook accountable for his clear misconduct, including the way in which he exploited his position as CEO,” said Enrique Hernandez, Jr., chairman of the board of directors of McDonald’s. “The resolution avoids a protracted court process and allows us to move forward. It also affirms the board’s initial judgment to pursue this case. With this settlement, company employees, management and the board can continue to focus their attention on the growth of the business and building community both inside and outside the system.”