Nude photos cost McDonald's ex-CEO £78MILLION

Nude photos cost McDonald’s ex-CEO £78MILLION: British exec Steve Easterbrook returns severance and issues grovelling apology after sex pics he sent from work email to his private account proved affairs with staff

  • British former McDonald’s CEO Steve Easterbrook will pay back over £78million
  • Agreed settlement to return the money after nude pictures revealed staff affairs
  • Also issued a grovelling apology saying he failed to ‘uphold McDonald’s values’   
  • McDonald’s fired Easterbrook in late 2019 over explicit photos he sent to worker
  • He was paid a £31million severance because he said it was an isolated incident
  • But McDonald’s was later tipped off about another sexual relationship with staff
  • Investigation uncovered dozens of nude photos of the three women on his email

A British former CEO of McDonald’s has agreed to pay the company more than £78million in compensation after he was accused of lying about inappropriate workplace relationships. 

Steve Easterbrook, from Watford, agreed to return the sum in the form of cash and equity awards after he was sued by McDonalds for allegedly lying about consensual affairs with three other workers. 

He was fired in 2019 – and given a £31million severance package – after racy videos and text messages he had sent to an employee with whom he had a non-physical, consensual relationship, emerged. 

But McDonald’s sued Easterbrook, 54, to return the sum last year after the fast food chain found the former CEO had three sexual relationships with employees and stored dozens of nude photos of the women on his email.  

Announcing the settlement on Thursday, Easterbrook issued a grovelling apology for failing to ‘uphold McDonald’s values and fulfil certain of my responsibilities as a leader of the company’.

‘I apologise to my former co-workers, the board and the company’s franchisees and suppliers for doing so.’   

McDonald’s fired Easterbrook in 2019 after he was busted sending racy videos and text messages in a non-physical, consensual relationship with an employee

McDonald’s has clawed back more than £78million in severance benefits from former CEO Steve Easterbrook (right) who is accused of lying about inappropriate workplace relationships

Easterbrook is pictured with his former girlfriend Denise Paleothodoros, whom he dated from 2014 to 2018 when she was assigned to the McDonald’s account by her PR firm

At the time of his firing in 2019, Easterbrook told the company there were no other similar instances and an inspection of his cell phone seemed to back that up. 

McDonald’s board approved a separation agreement ‘without cause’ that allowed Easterbrook to keep tens of millions in stock-based benefits and other compensation.  

The severance deal was valued at nearly £31million when issued in 2019, according to an analysis at the time by executive-pay firm Equilar, but the company’s stock has since risen by more than a third. 

From 2015 to 2019, Easterbrook realised £46million in compensation, according to Equilar, suggesting that the massive clawback revokes nearly all he earned during his tenure as CEO. 

But, in July 2020, the company received an anonymous tip from an employee claiming that Easterbrook had engaged in a sexual relationship with another employee. 

After an investigation, McDonald’s confirmed that relationship as well as two other physical, sexual relationships with employees in the year before it fired its top executive. The company said Easterbrook had removed evidence of those relationships from his phone.

Easterbrook also dated Denise Paleothodoros when she was assigned to the McDonald’s account by her PR firm.

The affair came to light in 2015 but McDonald’s concluded the relationship did not violate its policies. Paleothodoros’s employers, Golin, moved her to another account.

McDonald´s fired Easterbrook in late 2019 after he acknowledged exchanging videos and text messages in a non-physical, consensual relationship with an employee

McDonald’s board sued Easterbrook in August 2020, saying it would not have terminated him without cause if it had known the extent of his misconduct. 

‘That evidence consisted of dozens of nude, partially nude, or sexually explicit photographs and videos of various women, including photographs of these company employees,’ the complaint stated. 

It added that Easterbrook had sent the photographs, which were allegedly taken in late 2018 and early 2019, as attachments to messages from his company e-mail account to his personal e-mail account.

In his response to the lawsuit, Easterbrook claimed that McDonald’s had information about his relationships on its computer systems when it negotiated his severance package. 

The company sought the return of equity awards granted in 2018 and 2019, since Easterbrook’s separation agreement made clear he would forfeit those if the company determined he had engaged in ‘detrimental conduct.’

The settlement announced on Thursday holds Easterbrook accountable and affirms the board’s decision to pursue the case, McDonald’s Chairman Enrique Hernandez Jr. said in a prepared statement. 

The settlement announced Thursday holds Easterbrook accountable and affirms the board’s decision to pursue the case, McDonald´s Chairman Enrique Hernandez Jr. said

‘The resolution avoids a protracted court process and allows us to move forward,’ Hernandez said.

The action against Easterbrook came amid a larger reckoning at the company over sexual harassment in its ranks. 

Over the last five years, at least 50 workers have filed charges against the company, alleging physical and verbal harassment and, in some cases, retaliation when they came forward.

In October 2019 – a month before Easterbrook was fired – McDonald’s introduced a new harassment training program for its 850,000 U.S. employees, but franchisees wee not  required to provide it.

McDonald’s went further in April saying it would require new training at its restaurants to fight harassment and discrimination. 

The Brit credited with turning McDonald’s fortunes around after profits dived by cutting the menu focusing on quality cuts of meat 

 Under his leadership the company’s shares nearly doubled in value while sales at its US locations stagnated

Steve Easterbrook took the helm of McDonald’s in March 2015 and quickly set to work to help save the company after it experienced a 15 percent shortfall in profits the year before.  

Easterbrook helped raise the company’s profit margin by more than 12 percent in the first nine months of his takeover, getting margins from 13.62 percent to more than 25 percent. The former CEO also got the company’s share’s to double during his tenure.

‘Part of my mindset early on was, how can we organize ourselves, as a large, somewhat complex business, so we can adapt and be more nimble?’ he said in an interview with Entrepreneur. ‘Instead of using our size as an excuse, [how can we] amplify our size as an advantage and respond to customers?’ 

In the first three months of his time as CEO, Easterbrook regrouped and consolidated market segment by need, instead of by geographic region. He created four market segments for the company – the US, international lead markets, high-growth markets and foundational markets.

For example, China and South Korea markets were taken out of the Asia/Pacific/Middle East/Africa region and placed in the ‘high-growth’ category.   

Improving food quality was a top priority for Easterbrook.

‘In the last five years, the world has moved faster outside the business than inside,’ he said. ‘The business cannot ignore what customers are saying when the message is clear: We’re not on our game.’ 

Easterbrook cut several items off McDonald’s menu – including a Deluxe Quarter Pounder burger and six chicken sandwiches. He had the chain take out hard-to-pronounce ingredients and announced the limited run of the Sirloin Third Pounder. 

During the first part of 2016, He got sales to rise more than 5.7 percent. Easterbrook was also a crucial supporter of using fresh beef in the company’s burger, a move McDonald’s implemented in 2017. 

The CEO managed to get McDonald’s to increase its percentage of franchised stores from 81 percent to 91 percent in less than three years, surpassing his goal to get 4,000 franchised by 2019. This was largely in part because of a deal made to sell 2,740 restaurants in Hong Kong and China to Citic and the Carlyle Group. 

But Easterbrook was already making his mark with the company more than two decades prior to his role as CEO. 

Easterbrook joined the company’s team in 1993 as a financial reporting manager in London before becoming the executive in charge of all McDonald’s in the southern UK, according to Brittanica.

In 2006 he was selected to manage all of the UK’s operation but would move on to manage the whole northern Europe region (approximately 1800 restaurants) in less than a year.

After a brief hiatus away from the company, Easterbrook returned in 2013 as the senior executive vice president and chief brand officer.  

Easterbrook worked to repair McDonald’s reputation in China after a scandal involving sketchy meat in 2014. He helped rollout customized hamburgers in Australia and in the US. The innovator empathized on convenience, helping implement dual-lane drive-thrus at the restaurant and the popular all-day breakfast menu. 

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