Bloomberg reports that former McDonald's CEO Steve Easterbrook is fighting back against the company's attempt to take back tens of millions of dollars in severance payments.
Easterbrook was fired last year because of a consensual relationship with an employee that violated company policy, but walked away with some $40 million in stock options and other compensation. Last week, McDonald's charged that he, in fact, had similar undisclosed relationships with other employees, and even gave one of them shares in the company - a violation of company policies.
Bloomberg writes that "Easterbrook says McDonald’s had the information about his relationships with employees when it negotiated his separation agreement.
"'McDonald’s -- a sophisticated entity represented by numerous internal and external experts when it entered into the separation agreement -- is aware it cannot credibly allege a breach of contract claim,' Easterbrook’s lawyers said Friday in a filing Delaware Chancery Court, seeking to have the lawsuit thrown out. 'Instead, it improperly seeks to manufacture claims for a breach of fiduciary duty or fraud'."
- KC's View:
It is an interesting approach. Easterbrook isn't arguing that he isn't a sleazebag. He's just arguing that they knew how much of a sleazebag he was when they gave him $40 million to walk away.
I'd argue that it is hard to gauge who is sleazier - Easterbrook or the board - except that Easterbrook still wins that contest.
But what this ought to highlight is the dubious practice of giving senior executives leaving their jobs under any questionable circumstances big payouts.