Shareholders Sue McDonald’s For Allowing Ex-CEO To Keep $40 Million Severance Package

McDonald’s institutional shareholders have McF**king had it with generous payouts to executives forced out over improper conduct.

More than two years since firing CEO Steve Easterbrook over an inappropriate relationship he had with a subordinate, McDonald’s is now facing a lawsuit from a group of shareholders – including at least one major union pension funds – who believe Easterbrook should reimburse the company for the legal fees it spent trying to oust him.

Easterbrook was fired in 2019 after four years in the top job where he won praise for innovations like all-day breakfast and other initiatives that supposedly bolstered sales.

A trio of pension funds tied to the Teamsters’ union said in a court filing released Friday that McDonald’s should have demanded reimbursement for the millions of dollars in legal fee that it was forced to pay during its battle with Easterbrook. Instead, the company allowed him to walk out the door with almost $40 million.

According to Bloomberg, disgruntled shareholders are also criticizing Micky D’s chairman Rick Hernandez and other board members over allegedly misleading the board about the extent of Easterbrook’s deceptions.

For example, Hernandez and other members of the board were criticized for paying Easterbrook severance after he allegedly misled them about the nature and duration of his allegedly “inappropriate” relationship with a subordinated.

Here’s more on what shareholders had to say:

Board members weren’t acting in the best interest of shareholders by keeping “secret such salacious misconduct and paying Easterbrook a lavish severance package to quietly leave the company,” the investors said in the court filing.

The McDonald’s board will fight the request, its lawyer said Monday. “Plaintiffs’ allegations do not support a derivative claim, and the board will move to dismiss the case,” Ron Olson said in an emailed statement.

Court papers show McDonald’s accused the former CEO of lying about his sexual liaisons with underlings and sending dozens of sexually explicit pictures of women using his company email.

The company originally sought to recoup his severance package, which it valued at $37 million, but eventually caved, as Easterbrook and his legal team fought back.

At this point, even if the shareholders win in their suit against McDonald’s, the money won’t come from Easterbrook, but from McDonald’s insurance coverage.