Ex-McDonald’s USA CEO sides with shareholders in Steve Easterbrook lawsuit
Ed Rensi called the lawsuit 'appropriate'
Former McDonald's USA CEO Ed Rensi told “Varney & Co.” on Tuesday that he sides with shareholders in the lawsuit against Stephen Easterbrook, the CEO ousted last year over an inappropriate relationship with an employee.
McDonald’s said on Monday that the company is suing Easterbrook for allegedly covering up relationships with other employees and destroying evidence.
When host Stuart Varney asked Rensi on Monday whose side he is on Rensi said, “I’m not on either side.”
“I’m on the side of the shareholders and the employees and customers of McDonald’s,” he explained. “Any CEO knows full well what his responsibilities are or her responsibilities and to engage with subordinates in a power move is just not acceptable.”
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| MCD | MCDONALD'S CORP. | 292.63 | -5.91 | -1.98% |
Rensi also noted that “most boards in their compensation committees have instituted clawback provisions so if there is any kind of fraud or damage done to the brand by the CEO or any other executive that they have the right to go back and clawback any benefits that they may have reaped during that period.”
McDonald's is looking to regain the tens of millions in severance and benefits that Easterbrook received, claiming he lied about other relationships he had with employees prior to being terminated in November, according to The Wall Street Journal.
MCDONALD'S SUING FORMER CEO STEVE EASTERBROOK, ALLEGES HE LIED ABOUT EMPLOYEE RELATIONSHIPS
McDonald’s fired Easterbrook last November after he acknowledged exchanging videos and text messages with an employee. Easterbrook told the company that there were no other similar instances.
At the time, the company said Easterbrook demonstrated poor judgment and that McDonald’s forbids managers from having relationships with direct or indirect subordinates.
Based on what the company knew at the time, McDonald’s board approved a separation agreement “without cause” that allowed Easterbrook to keep around $40 million in stock-based benefits plus 26 weeks of pay, amounting to compensation of about $670,000.
“Steve Easterbrook got a kiss when he left because they didn’t really pursue him as hard as I think they should have and now people are coming forward and the board’s doing the right thing,” Rensi said.
OUSTED MCDONALD'S CEO EASTERBROOK RECEIVES 6-MONTH SEVERANCE PACKAGE
Rensi pointed out that he knows the chairman of the board.
“He came on the McDonald’s board when I was still there,” Rensi said. “He is a great guy. He is smart, very capable and I think he’s doing the right thing by having the board investigate this thoroughly, getting down to the basic points.”
Rensi called the lawsuit “appropriate,” adding that it sends a “great message.”
“It sends a great message to every executive of the United States: Behave yourself, do the moral thing. Don’t take advantage of your employees,” Rensi said.
McDonald’s says in a lawsuit that since Easterbrook’s firing the company has become aware of sexual relationships between Easterbrook and three other employees prior to his termination. The company said Monday that Easterbrook removed evidence of those relationships from his cellphone, preventing investigators from learning about them prior to his firing.
If the company had known about the additional relationships, McDonald's says it would not have terminated Easterbrook without cause.
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Now, the company is trying to block Easterbrook from exercising his stock options and will seek compensatory damages.
FOX Business’ Daniella Genovese and the Associated Press contributed to this report.