McDonald’s ousted chief executive officer, Steve Easterbrook, will receive 26 weeks of pay, but forfeit millions in unvested stock options as part of his severance agreement.
McDonald’s Corp. announced Sunday that Mr. Easterbrook was fired for having a consensual relationship with an employee. McDonald’s forbids managers from having romantic relationships with subordinates.
Mr. Easterbrook’s 2018 compensation totalled US$15.9-million. That included US$1.3-million in salary, and the rest in stock options and incentive payments.
Under his severance agreement, Mr. Easterbrook will be eligible for a prorated incentive payment for the 2019 fiscal year. He can also exercise stock options that have vested or will vest within three years.
At the end of 2018, Mr. Easterbrook had unvested options worth US$21.8-million.
Mr. Easterbrook is also forbidden from working for a competitor for two years.
McDonald’s board named Chris Kempczinski as the company’s new president and CEO. Mr. Kempczinski most recently served as president of McDonald’s U.S. division.
McDonald’s said Monday that Mr. Kempczinski’s base salary will be US$1.25-million, or 58 per cent higher than his 2018 compensation.
Analysts said Monday that Mr. Kempczinski – who joined McDonald’s from Kraft in 2015 – will likely follow the path laid out by Mr. Easterbrook, including redesigning U.S. stores to make them more digitally savvy and testing voice-based technology at drive-thrus.
“We believe these initiatives will continue largely unchanged and Mr. Kempczinski’s legacy will hinge on his ability to generate traffic growth in the U.S., which neither of his two predecessors were able to achieve,” BTIG managing director Peter Saleh said in a note to investors.
McDonald’ shares fell 3 per cent to US$188.72 in early afternoon trading.