McDonald's Fired CEO Is Getting Millions, Putting Spotlight On Pay Gap Stephen Easterbrook got a $42 million exit package after his relationship with an employee violated company policy. In 2018, he made 2,124 times more than the median income of a McDonald's employee.
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McDonald's Fired CEO Is Getting Millions, Putting Spotlight On Pay Gap

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McDonald's Fired CEO Is Getting Millions, Putting Spotlight On Pay Gap

McDonald's Fired CEO Is Getting Millions, Putting Spotlight On Pay Gap

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RACHEL MARTIN, HOST:

Earlier this week, McDonald's announced that its CEO had had a consensual relationship with an employee that violated company policy. Then he was out of a job, but he got a lot of money on his way out the door - tens of millions of dollars. The story puts new attention on the enormous salary of the CEO and the widening gap with the income of those on the front line flipping burgers and taking orders. Here's NPR's Alina Selyukh.

ALINA SELYUKH, BYLINE: Almost $42 million - that's how much McDonald's will pay Stephen Easterbrook, who was fired for violating company policy. He's getting six months of severance, plus stock options and other awards worth all that money, according to pay consultants Equilar. And that doesn't even include the additional $24 million in stock options that Easterbrook can cash out now.

STEWART SCHWAB: Wow. He is walking away a lot of money.

SELYUKH: Cornell Law School professor Stewart Schwab is an expert on employment law.

SCHWAB: And so it comes out as part of the story of just - wow - you know, that 1% gets a lot more money than the rest of the workers in this economy.

SELYUKH: It's actually a story that connects a few of the most controversial threads of today's corporate America. That was one - the widening income gap. Last year, CEO Easterbrook made more than 2,000 times more money than a median McDonald's employee.

The second thread is the complex power dynamic between bosses and employees in the #MeToo era. Easterbrook got fired over a consensual relationship with an employee. McDonald's prohibits dating or sexual relationships between managers and employees. I asked Schwab what would happen if this policy was violated by a worker at the bottom of the totem pole.

SCHWAB: You'd probably just be fired and out the door with nothing.

SELYUKH: At the very least, you'd never get six months of severance. The reason Easterbrook is getting such a rich deal is because McDonald's board of directors decided that he was not fired for cause, meaning his actions weren't highly egregious. The company did not respond to NPR's inquiries. Terminating someone for cause can be tricky. Each company has its own threshold. And when a lot of money is at stake, a lawsuit is very likely, says Charles Elson, professor of corporate governance at the University of Delaware.

CHARLES ELSON: And usually, it drags on for a long time. And rather than litigate it, companies will agree that if it's a pleasant, amicable departure, they'll pay the severance - problem is over.

SELYUKH: And in Easterbrook's case, the departure was likely amicable. After he joined in 2015, the company's stock price reached historic highs, as he pushed to revamp the menu and upgrade the restaurants. But his tenure also overlapped with a growing chorus of female workers alleging rampant sexual harassment by co-workers and managers at McDonald's restaurants. Most of them are owned by franchisees.

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UNIDENTIFIED PROTESTERS: (Chanting) Hey, hey, ho, ho - sexual harassment has got to go.

SELYUKH: This was in May, when McDonald's workers in 13 cities protested low pay and the company's handling of alleged sexual harassment. In recent years, dozens of women have filed complaints alleging lewd comments and groping but also retaliations. Lawyers who work with these women say speaking out against their harassers sometimes caused them to lose shifts, get disciplined, even lose jobs. Kim Lawson is a former McDonald's worker from Kansas City, Mo. Her claim of sexual harassment and retaliation is pending with the Equal Employment Opportunity Commission.

KIM LAWSON: We're not asking for them to pay us $40 million. We're just asking for them to sit down with fast-food workers like myself and find a better solution to the sexual harassment issue that their company clearly has.

SELYUKH: To be clear, former CEO Easterbrook's case is not one of sexual harassment. But his very lucrative firing is a reminder of how differently American workers get treated at the top and the bottom of the corporate ladder.

Alina Selyukh, NPR News.

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