McDonald’s Fires CEO Steve Easterbrook Over Relationship With Employee

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McDonald’s said it has fired Chief Executive Steve Easterbrook because of his consensual relationship with an employee, the latest challenge for the company as it races to keep up with changes reverberating throughout the food industry.

The burger giant said Sunday that its board voted Friday to terminate Mr. Easterbrook after investigating his relationship with the unnamed employee. Mr. Easterbrook resigned from McDonald’s board as well. He wrote in an email to McDonald’s employees on Sunday that he had violated company policy on personal conduct.

“This was a mistake,” Mr. Easterbrook wrote in the email. “Given the values of the company, I agree with the board that it is time for me to move on.”

A representative for Mr. Easterbrook said he is grateful for his time at the company and has declined to comment further.

The board was alerted to the relationship, conducted a thorough investigation and acted swiftly, according to McDonald’s. The company declined to provide any other details.

McDonald’s said Mr. Easterbrook would be succeeded immediately by USA President Chris Kempczinski, 51 years old.

Mr. Easterbrook, 52, has been chief executive since March 2015. During his tenure, the company’s shares nearly doubled in value but traffic to U.S. restaurants has continued to stagnate. McDonald’s is reckoning with challenges reverberating throughout the food industry from meat producers to supermarkets as consumers switch to products that they view as more healthful and big companies sacrifice profit for technological upgrades and delivery.

McDonald’s has invested in updating its sandwiches and renovating its restaurants to keep up with those changes, but paid a price in profits. And U.S. franchisees have balked at mandated investments in digital-ordering kiosks and new menu items like fresh-beef burgers. Franchisees started an independent association last year to push back against some of Mr. Easterbrook’s changes.

Mr. Easterbrook said earlier this year that he and other top executives, including Mr. Kempczinski, had been talking to franchisees in light of their concerns and had pushed back the timeline for owners making some capital investments as a result.

“Wouldn’t life be great if everyone was happy? Of course,” Mr. Easterbrook told investors. “Am I fundamentally concerned that it will derail us from the shared vision that we have? No, not at all.”

Mr. Easterbrook also rolled back offerings including premium burgers and parts of an all-day breakfast menu after they slowed down restaurant operations. Wait-times at McDonald’s drive-throughs have climbed in recent years as the company’s menu became increasingly complex.

Mr. Kempczinski, who helped implement many of the recent changes as head of U.S. operations, said he would maintain Mr. Easterbrook’s focus on technology as CEO and believes the company’s investments will pay off.

Wall Street journal.

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