What happens to a junior employee who violates company policy? They most definitely get the sack, no question about it. So, is this what happens to a senior executive who’s also in violation of the organization’s policy? At McDonald’s, it is.
On November 1, 2019, the fast-food corporation’s Board of Directors voted CEO Steve Easterbrook out with immediate effect for having a relationship with one of the organization’s employees. Although it was consensual, this was still a violation of the company’s policy, and having been at the helm, Easterbrook should have known better.
Via a statement released by the multinational conglomerate, it was revealed that the board regarded the relationship a demonstration of poor judgment on Easterbrook’s part.
While not sharing other details of the now-former CEO’s relationship, the company did announce Chris Kempczinski as his replacement. Kempczinski now serves as both President and CEO of McDonald’s.
Naturally, Easterbrook had to have some sort of reaction to the board’s decision. Writing an email to the company’s employees, he admitted that he had made a mistake while also accepting the decision by the board. As he put it, it was time for him to move on.
The 52-year-old rose to the CEO position in 2015, becoming the successor to Don Thompson. Before, Easterbrook oversaw the company’s operations in the United Kingdom and countries in Northern Europe, while also being the chief brand officer in this region.
Easterbrook and Kempczinski had a close and fruitful relationship, and working together, the two have overseen a significant McDonald’s turnaround.
With the latter as the President of all operations in the United States and the former as CEO, the company’s share has exhibited a 96% rise, now selling at $193.94 per share.
As you can see, Kempczinski is a natural replacement for Easterbrook, no wonder the board went with him. In an email sent to his employees, the new CEO admitted that he was excited over his new position, and was grateful that the board felt confident that he was the right man for the job.
He went on to recognize the employees as an integral part of the McDonald’s team, saying that it is he who is fortunate to have such talent for a team to work with as they strive to build on their brand.
Kempczinski’s replacement has also been named, with Joe Erlinger taking over the management of the 14,000 McDonald’s restaurants in the United States. Before taking over from the new CEO, Erlinger was the international operated markets president.
Despite his run at McDonald’s having come to an abrupt halt, one cannot deny that on the business front, everything Easterbrook did was in service to the company.
Under his watch, McDonald’s went big on franchising, with 90% of the restaurant locations now under franchise ownership.
Easterbrook’s strategy has led to maximized profits, but there’s nothing that always perfect, right? The company isn’t bringing in as much revenue as it would want to, especially in the third quarter of 2019. Earnings fell short of projected estimates, but knowing McDonald’s, they’ll certainly bounce back.
All large corporations have their share of challenges, and for a company that has been operational since 1940, you better believe that the folks at McDonald’s have perfected the art of beating these challenges.