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Home / Business / McDonald's dismissed CEO gets millions, and puts spotlight on pay gap: NPR

McDonald's dismissed CEO gets millions, and puts spotlight on pay gap: NPR



Stephen Easterbrook was fired as CEO of McDonald's after his relationship with an employee was found to be in violation of company policy.

Richard Drew / AP


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Richard Drew / AP

Stephen Easterbrook was fired as CEO of McDonald's after his relationship with an employee was found to be in violation of company policy.

Richard Drew / AP

Former McDonald's CEO Stephen Easterbrook receives an exit package of nearly $ 42 million after his relationship with an employee was found in violation of company policy. The size of the compensation puts a new focus on the growing gap between the salary at the top and bottom of the corporate ladder.

According to an analysis by executive compensation experts Equilar, Easterbrook's exit package amounts to $ 41.8 million, which includes six months of severance pay, shares he can pay in the future and other equity. And that sum comes in addition to $ 23.8 million in stock options that Easterbrook can exercise now.

"Wow, he goes away with a lot of money," says Cornell Law School professor Stewart Schwab, a labor law expert. "And it comes out as part of the story of just, wow, [the] 1% getting a lot more money than the rest of the workers in this economy."

It is relatively uncommon for a CEO to receive a fee package after being fired. But McDonald's board decided his shoot was not for reason – a threshold that varies from company to side. And litigation in a protracted dispute can be difficult and expensive.

When he wrote to employees earlier this week, Easterbrook said, "I had a recent consensus with an employee, which was in violation of McDonald's policy. This was a mistake." No further details were revealed, but McDonald's current policy prohibits employees who "have a direct or indirect reporting relationship" from going out or having a sexual relationship.

McDonald's latest disclosures show that Easterbrook in 2018 earned $ 15.9 million. That's 2,124 times more than a McDonald's employee – a part-time member working in Hungary. According to Glassdoor, a US crew in McDonald's earns an average of $ 9 an hour.

McDonald's did not respond to NPR's inquiries, including on median pay in the United States [19659008] "A great story about income inequality and the explanation for it is that top executives, and especially the CEO, have the explosive pay in terms of rank and file, "says Schwab. "And this is an example of that."

Easterbrook joined McDonald's in 2015, and his tenure was praised by the company's viewers. The fast food chain's share price hit historic highs during his efforts to revamp both the restaurants and the menu.

But Easterbrook also led the company when it faced charges of violent sexual harassment of female employees by male colleagues and executives. (To be clear, his departure does not involve allegations of harassment.)

In May, workers in 13 US cities staged low-wage protests and the company's handling of alleged sexual harassment. In recent years, dozens of McDonald's workers have filed complaints of sexual harassment, claiming everything from nasty comments and groping to retaliation.

"What we see all the time from minimum wage workers is that when you complain, retaliation is common," said Sharyn Tejani, director of Time's Up Legal Defense Fund, which works with victims who allege sexual harassment.

"It takes the form of losing shifts, losing a job, not being able to be at your job, being disciplined. And … they don't have a pillow," she says. "And when you compare that to what happens to someone as CEO, it's clear that there's a structural problem here."

Following complaints from employees, McDonald's announced in August that it would introduce a harassment training program for American workers. The program, which began in October, trains restaurant supervisors and crews on how to create a safe workplace and diffuse difficult situations.

Earlier this year, McDonald's also committed to an unexpected commitment to no longer lobby for minimum wage increases at the federal, state or local levels. In mid-2015, McDonald's spent at least $ 1 an hour on the local minimum wage of company-owned restaurants. The majority of McDonald's locations are owned by franchisees.

In 2015, research from the UC Berkeley Center for Labor Research and Education found that more than half of fast food workers rely on public utilities such as food stamps. The research did not focus specifically on McDonald's.

NPR's Peter Talbot contributed to this report.


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