- Oops!Something went wrong.Please try again later.
Global fast food giant Mcdonald's Corp (NYSE: MCD) needs to make changes to its board of directors in reaction to how it handled the ousting of its former CEO Steve Easterbrook, according to Dieter Waizenegger of CtW Investment Group.
A Failure In Board Oversight? The McDonald's board offered Easterbrook an extremely generous exit package to depart amid allegations of an improper relationship with a female employee, CtW's executive chairman said.
CtW and other shareholders raised their concerns at the time, he said, adding that a payout sets a "toxic tone at the top" of the company, Waizenegger said, speaking Friday on CNBC's "Squawk on the Street."
The board failed to act, even after media outlets reported on Easterbrook's improper relationships and a broader party culture among the C-suite, he said.
"It is amazing to us you wouldn't look at all the corners in the closet to make sure you don't find the skeletons that could come back to haunt you."
Investor Singles Out Board Members: Waizenegger singled out McDonald's Chairman Enrique Hernandez Jr. and Richard Lenny, who is head of the compensation committee, as the two most senior board members that he said are responsible for the situation.
The two board members failed to conduct a proper investigation ahead of Easterbrook's official termination and now the company could be stuck with a very expensive and drawn-out litigation process, Waizenegger said.
The outcome of the litigation is unclear, and there is a chance McDonald's might not even get the money back, he said.
"We want to see consequences for the board as well."
'Enormous' Embarrassment: McDonald's faces "enormous" embarrassment, as there is reason to believe the company oversaw a "poor and inadequate" investigation of Easterbrook, Fox News senior judicial analyst Andrew Napolitano said Monday in a Fox Business interview.
McDonald's included a stipulation in Easterbrook's package that his compensation will be null and void if the former CEO is found guilty of lying to the board, Napolitano said. Yet the deal also includes a stipulation that McDonald's will pay for Easterbrook's legal fees in any lawsuit, he said.
McDonald's Has Witnesses: McDonald's is believed to be cooperating with women who had sexual relationships with Easterbrook and will testify in court, Napolitano said.
The likely outcome will be a settlement between the two sides in which Easterbrook will give "some" of the compensation back to avoid further embarrassment in the form of a public trial, he said.
McDonald's Goes After Former CEO's Severance Payment In Lawsuit, Says He Lied About Employee Relationships
McDonald's Suing Former CEO Puts All Executives On Notice
Photo courtesy of McDonald's.
See more from Benzinga
© 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.