McDonald's shares slide after parting ways with CEO over relationship with employee
McDonald’s fired its CEO over an inappropriate relationship with an employee. Belpointe chief strategist David Nelson with more.
McDonald’s shares were sliding Monday morning after the company on Sunday parted ways with CEO Steve Easterbrook over an inappropriate relationship with an employee.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| MCD | MCDONALD'S CORP. | 292.63 | -5.91 | -1.98% |
The fast-food chain said Easterbrook “violated company policy and demonstrated poor judgement involving a recent consensual relationship with an employee.”
Chris Kempczinski, president of McDonald’s USA, was named CEO and president. He was also elected to McDonald’s board of directors.
Easterbrook became McDonald’s CEO in March 2015 after the company posted one of its worst financial quarters in years. He was instrumental in the company’s turnaround, emphasizing a technological shift that included third-party delivery through apps and the installation of kiosks that let customers customize their orders.
FOX Business Grady Trimble discusses the departure of McDonald's top human relations executive. Bahnsen Group CIO David Bahnsen discusses why free-market capitalism is constantly under attack and the current dip in McDonald's shares.
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“While fundamentals are solid (nowhere more apparent than last week's earnings results), changes of this magnitude tend to be disruptive,” Minneapolis-based Piper Jaffray analysts wrote in a note to clients on Monday morning. They downgraded shares to neutral and cut their price target from $224 to $195 – less than 1 percent above where shares settled on Friday.
The analysts say the risks associated with the transition are “potentially short-lived” as Kempczinski was “instrumental in orchestrating current (and well-performing) strategies as well as having global CPG experience.”
Former Ted Cruz campaign pollster Chris Wilson, Stanford School of Business lecturer Dave Dodson and Politico congressional reporter Melanie Zanona discuss the firing of McDonald’s CEO Steve Easterbrook and Chief People Officer David Fairhurst over Easterbrook’s romantic relationship with a subordinate.
On Oct. 22, McDonald’s reported quarterly results that fell short of Wall Street estimates for the first time in two years. The company earned a profit of $1.6 billion, or $2.11 a share, flat from the year prior. Same-store sales rose 4.8 percent year-over-year, missing the 5.2 percent that was expected.
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McDonald’s shares were up 9.2 percent this year. They gained 96 percent under Easterbrook’s leadership.
FOX Business' James Leggate contributed to this report.