McDonald's Calls Ex-CEO's Case 'Morally Bankrupt'

The fast-food giant says former CEO Steve Easterbrook's case against the chain is "morally bankrupt."
Author:
Publish date:

McDonald's  (MCD) - Get Report blasted former Chief Executive Steve Easterbrook's arguments against the chain as "morally bankrupt," as the hamburger giant urged a judge to allow its case against the former top executive to continue.

Shares of the Chicago chain at last check were little changed at $213.90.

McDonald's wants to claw back at least $37 million in compensation it paid to Easterbrook, claiming he lied about four alleged sexual relationships with subordinates to fool the company's directors into letting him leave with stock awards as part of his severance.

“If the independent directors had known the full extent of this misconduct, they would not have approved the separation agreement and would have terminated Easterbrook” in a way that denied him the grants, according a filing Monday in Delaware Chancery Court, Bloomberg reported.

Easterbrook stepped down in November following revelations of an improper relationship with a fellow employee.

“When McDonald’s investigated, Steve Easterbrook lied. He violated the company’s policies, disrespected its values, and abused the trust of his co-workers, the board, our franchisees, and our shareholders,” McDonald’s said in a statement to CNBC. 

“His argument that he should not be held responsible for even repeated bad acts is morally bankrupt and fails under the law.”

Earlier this month, the hamburger chain said it would pursue legal action against Easterbrook, accusing him of lying about multiple 'inappropriate relationships' with company employees.

The company said Easterbrook had been involved in sexual relationships with the employees in the year before his termination" and had approved an extraordinary stock grant, "worth hundreds of thousands of dollars," for one of those employees during their relationship.

Easterbrook responded, claiming in a court filing that McDonald’s knew about his other in-house dalliances when it agreed to his separation terms, which included stock awards of more than $37 million and $675,000 of severance and health insurance benefits. He demanded that McDonald's case against him be dismissed.