McDonald’s lost its top human resources executive on Monday, days after the company’s CEO was fired for having a relationship with an employee.
The Chicago-based burger giant said that the departure of Chief People Officer David Fairhurst was unrelated to the exit of President and CEO Steve Easterbrook. The British businessmen are close friends; Fairhurst was promoted to his position in 2015 after Easterbrook became CEO.
I have decided the time has come for me to move on to my next career challenge, Fairhurst said in a statement posted on his LinkedIn page.
McDonald’s announced on Sunday that Easterbrook was fired for violating company policy by having a consensual relationship with an employee.
In an email to employees, Easterbrook who is divorced acknowledged the relationship and said that it was a mistake.
Given the values of the company, I agree with the board that it is time for me to move on, Easterbrook said in the email.
McDonald’s would not provide details about the employee with whom Easterbrook was involved. An attorney for Easterbrook declined to answer questions.
In a filing with the US Securities and Exchange Commission, McDonald’s said that Easterbrook will receive six months’ pay but forfeit millions in unvested stock oons as part of his severance agreement.
Easterbrook’s 2018 compensation totaled $15.9 million. That included $1.3 million in salary and the rest in stock oons and incentive payments.
Under his severance agreement, Easterbrook will be eligible for a prorated incentive payment for the 2019 fiscal year. He can also exercise stock oons that have vested or will vest within three years.
At the end of 2018, Easterbrook had unvested oons worth $21.8 million.
Easterbrook is also forbidden from working for a competitor for two years.
McDonald’s board named Chris Kempczinski as the company’s new president and CEO. Kempczinski most recently served as president of McDonald’s U.S. division.
McDonald’s Corp. said on Monday that Kempczinski’s base salary will be $1.25 million, or 58 per cent higher than his 2018 compensation.
Analysts said on Monday that Kempczinski who joined McDonald’s from Kraft in 2015 will likely follow the path laid out by Easterbrook, including redesigning US stores to make them more digitally savvy and testing voice-based technology at drive-thrus.
We believe these initiatives will continue largely unchanged and Mr. Kempczinski’s legacy will hinge on his ability to generate traffic growth in the US, which neither of his two predecessors were able to achieve, BTIG Managing Director Peter Saleh said in a note to investors.
McDonald’ shares fell 3 per cent to $187.60 in afternoon trading.