NEW YORK – Former McDonald’s Corp. Chief Executive Officer Stephen Easterbrook, who was fired for having a relationship with an employee, was allowed to keep stock awards worth more than $37 million as well as $675,000 severance and health insurance benefits.
Easterbrook, 52, will get to keep unvested stock options worth about $23.5 million and possibly benefit from grants of restricted shares tied to the company’s performance that are worth roughly $13.8 million at their target payouts, according to calculations by Bloomberg. He’s also eligible for a pro-rated bonus for his work in fiscal 2019.
McDonald’s board voted Friday to oust Easterbrook after investigating the relationship, which was consensual but violated company policy. The termination was categorized as “without cause,” the Chicago-based firm said Monday, signaling that the transgression wasn’t severe enough to bar him from receiving exit payments. His health insurance benefits will continue for 18 months.
Not all CEOs who lose their jobs under similar circumstances fare so well. Brian Krzanich, who was fired by Intel Corp. last year after the board learned he had a consensual relationship with an employee, surrendered equity awards worth tens of millions of dollars and received no severance.
A McDonald’s representative didn’t immediately respond to a request for comment about why the board opted against terminating Easterbrook “for cause.”
As part of his separation agreement, Easterbrook promised to cooperate with the company in future investigations and legal matters, and to refrain from working for a direct competitor for two years.
Easterbrook’s successor, Chris Kempczinski, enters the job with a $1.25 million salary and annual target bonus of $2.13 million, according to the filing. It didn’t disclose details about long-term incentive compensation, which comprises the bulk of most CEO pay packages. Easterbrook’s annual salary was $1.35 million.