McDonald’s announced Thursday it has settled its lawsuit against former CEO Steve Easterbrook, clawing back his severance payment valued at $105 million.
The fast-food giant first brought a suit against its disgraced former chief executive in August 2020, claiming that he committed fraud and lied during the company’s internal probe into his behavior months earlier. As a result of that investigation, the company’s board found Easterbrook had a consensual relationship with an employee and fired him in November 2019. Despite their findings, the board still granted him a severance package that included cash and equity.
In the lawsuit, McDonald’s alleged that new information about Easterbrook’s actions came to light in July 2020, prompting further investigation from the company. According to the lawsuit, a probe allegedly revealed that Easterbrook lied to the company and destroyed information regarding his inappropriate behavior, including three alleged additional sexual relationships with employees before his firing.
As part of the settlement, Easterbrook has returned the equity and cash awarded in his severance agreement, according to McDonald’s. He also issued an apology.
“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,” he said in a statement. “I apologize to my former co-workers, the Board, and the company’s franchisees and suppliers for doing so.”
Easterbrook’s attorney declined to comment further.
Under current CEO Chris Kempczinski, McDonald’s has been trying to change the perception of company culture by holding town halls with employees and other stakeholders and instating new company-wide values.
“This settlement holds Steve Easterbrook accountable for his clear misconduct, including the way in which he exploited his position as CEO,” McDonald’s Chairman Enrique Hernandez Jr. said in a statement. “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.”