McDonald’s Fires CEO After ‘Relationship’ With Employee, Shares Drop

Steve Easterbrook, chief executive officer of McDonald's, attends the annual Allen & Company Sun Valley Conference in Sun Valley, Idaho, on July 10, 2019. Drew Angerer/Getty Images

Shares for McDonald’s dropped after CEO Steve Easterbrook was fired after he had a relationship with an employee, which violated the company’s policy.

Chris Kempczinski, who was the head of the firm’s U.S. business, is now new CEO, the company said in an announcement on Sunday night.

But as of Monday, shares dropped 1.88 percent. Easterbrook was credited with transforming the company’s business model after he took over in 2015.

According to a press release from the Chicago-based chain, the board made the “determination that he violated company policy and demonstrated poor judgment involving a recent consensual relationship with an employee.”

And in a Sunday an email to employees, Easterbrook said, “Given the values of the company, I agree with the Board that it is time for me to move on.”

Chris Kempczinski, president of McDonald's USA, speaks at the unveiling of McDonald's new corporate headquarters during a grand opening ceremony in Chicago, Illinois, on June 4, 2018. Scott Olson/Getty Images

He added: “Please join me in congratulating Chris on his promotion. I know you will support him as you have supported me—he’s lucky to have a team of your caliber.”

Kempczinski said in the release that he is committed to providing value to shareholders and other stakeholders.

“As one of the world’s leading brands, McDonald’s makes a difference in the lives of people every day. We have a responsibility not only to serve great food, but to make it responsibly and to enrich the communities in which we operate. I am energized by this challenge and look forward to guiding McDonald’s continued success,” he said in the release.

A stock McDonald's photo. Illustration - Shutterstock

The move comes just months after McDonald’s was forced to grapple with a series of allegations from employees, who said they were sexually harassed while on the job.

The American Civil Liberties Union and the Time’s Up Legal Defense Fund also backed the complaints, which included about 20 claims to the Equal Employment Opportunity Commission. Three filed lawsuits that had alleged violations to their civil rights.

And in June, eight U.S. senators called on the firm to require franchisees protect workers from harassment.

Several 2020 Democratic presidential candidates, including Sens. Bernie Sanders (I-Vt.), Elizabeth Warren (D-Mass.), Kamala Harris (D-Calif.), and Amy Klobuchar (D-Minn.), signed onto a letter to the company in June that decried “unsafe and intolerable” conditions, Crain’s Chicago Business reported.