MCD stock is in the red on Monday after McDonald’s Corporation (NYSE:MCD) dismissed CEO Steve Easterbrook due to what the company described as a “recent consensual relationship with an employee” that violated company policy.
MCD Stock Drops 3% on CEO Sacking
Easterbrook, who had been in office since 2015, was fired as both CEO and President of the board on Friday due to the breach of company policy and will be replaced by Chris Kempcizinski, who had headed up the company’s US operations. McDonald’s described its former CEO as having “demonstrated poor judgment involving a recent consensual relationship with an employee.” Easterbrook released his own statement saying he agreed with the company’s decision and requested his right to privacy. MCD stock is down nearly 3% following the dismissal.
Under the terms of Easterbrook’s sacking, he cannot take up a position at a rival company for at least two years but will be paid 26 weeks severance as well a prorated bonuses. He had been leading the company in a highly progressive strategy of modernization, which saw the introduction of self-service kiosks into restaurants across the world, as well as trials of voice-activated technology in drive-thrus. Kempczinski has promised to carry on with this strategy, which has seen MCD stock more than double in value during Easterbrook’s four-year tenure.
More Bad Press Drags Down MCD Shares
The dismissal is a further blow to MCD shares after the company courted controversy last week with a promotional campaign in Portugal that inadvertently referenced Bloody Sunday, an event during The Troubles in Northern Ireland in which 14 unarmed protestors were killed by the British Army. The campaign slogan “Sundae Bloody Sundae” was intended to promote two for one ice cream sundaes over the Halloween period, but social media criticism led to the company pulling the campaign and issuing an apology to those offended.
MCD shares are currently trading at $188.66, down nearly 5% following a week of bad news.
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