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Fired McDonald’s CEO’s Pay Faces Protest Vote from Pension Funds

April 23, 2020, 8:52 PM

A group of union pension funds is urging McDonald’s Corp. investors to join them in protesting a multi-million dollar payout to former Chief Executive Officer Stephen Easterbrook, who was fired late last year over a relationship with a subordinate.

Investors should vote against Easterbrook’s pay package and two directors who oversaw it, board chairman Enrique Hernandez, Jr. and compensation committee chair Richard Lenny, CtW Investment Group said in a filing Thursday.

The McDonald’s board voted to fire Easterbrook in November because he had a relationship with an employee, which was consensual but violated company policy. The ousted CEO was allowed to keep stock awards worth about $37 million at the time of his departure, according to Bloomberg calculations, along with severance pay and health insurance benefits.

“The board’s light handed approach demonstrates a failure to disincentivize violations of its code of conduct,” CtW Investment Group’s executive director Dieter Waizenegger said in a filing urging investors to join in the protest votes. The group works with union-sponsored pension funds with more than $250 billion in assets under management, including shares in McDonald’s.

Waizenegger said the board could have done more in light of concerns about the restaurant chain’s handling of sexual harassment complaints. McDonald’s recently revamped its harassment policy following worker complaints about groping, inappropriate comments from supervisors, and retaliation for speaking up.

The McDonald’s board and pay packages for Easterbrook and his successor as CEO, Chris Kempczinski, are up for a shareholder vote at its annual meeting May 21. The meeting comes at a fraught time for McDonald’s, which has seen sales fall from the coronavirus outbreak and some workers walk out demanding paid sick days and hand sanitizer.

McDonald’s didn’t immediately return a request for comment.

—With assistance by Anders Melin

To contact the reporter on this story: Andrea Vittorio in Washington at avittorio@bloomberglaw.com

To contact the editor responsible for this story: Seth Stern at sstern@bloomberglaw.com

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