- A minority group of McDonald’s investors are seeking to oust the chairman and another board member.
- CtW and New York City’s comptroller say the board mismanaged an investigation into ex-CEO Easterbrook.
- McDonald’s has defended the board and said it is investigating allegations against Easterbrook.
- See more stories on Insider’s business page.
A group of McDonald’s investors has redoubled efforts to oust two members of the fast-food giant’s board.
On Monday, CtW Investment Group and New York City Comptroller Scott Stringer will release a letter calling for McDonald’s Chairman Enrique Hernandez, Jr. and Compensation Committee Chair Richard Lenny to be removed from the board.
The investors are calling for Hernandez and Lenny’s removal because they consider them “most responsible for the Board’s flawed and mismanaged investigation into former CEO Steve Easterbrook,” according to a copy of the letter viewed by Insider.
Easterbrook was terminated after the board investigated a relationship between the then-CEO and a subordinate in 2019. Easterbrook walked away with a severance package worth more than $44 million because he was terminated “without cause.”
In August 2020, McDonald’s sued Easterbrook to claw back severance, alleging a further investigation revealed sexual relationships between the former CEO and three other female McDonald’s employees that Easterbrook attempted to cover up.
CtW executive director Dieter Waizenegger and Stringer — who is running for New York City mayor — say in Monday’s letter that the board’s “poor ‘tone at the top’ that fosters a workplace culture permissive of inappropriate behavior.”
“The board hasn’t been able to take decisive action,” Waizenegger told Insider in December. “Issues started to fester. They can erupt and create much larger crises further on.”
Waizenegger and Stringer previously called on Hernandez and Lenny to not stand for reelection. Now, the investors are asking that other McDonald’s shareholders vote against the members of the board “in order to express your support for director accountability and for a ‘zero reward’ policy in cases of sexual misconduct.”
McDonald’s did not immediately provide Insider with a comment on the letter. In December, a representative said in a statement that the board is committed “to ongoing Board refreshment” and that the company is fully investigating all allegations of misconduct by Easterbrook.
The fast-food giant reports earnings on Thursday, with analysts expecting revenue to reach $5.03 billion. In a report on Monday, Stifel analyst Chris O’Cull said he expects US comparable sales to beat the lofty expectations of 10%, due to a successful chicken sandwich launch and limited-time promotions such as Pokémon trading cards.