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McDonald's sues former CEO to recover severance

McDonald’s Corp. filed suit against its ousted leader Steve Easterbrook, alleging his termination last fall over a relationship with an employee shouldn’t have included severance pay because he “concealed evidence and lied about his wrongdoing.”

Easterbrook — who was fired as chief executive officer in November “without cause” — had originally admitted to having a consensual relationship with an employee. But information the company received from an anonymous tip in July led the company to further investigate. It concluded he had been involved in sexual relationships with three additional company employees before his exit, according to a company filing Monday.

The evidence also shows Easterbrook approved a special discretionary grant of restricted stock units worth hundreds of thousands of dollars to one of the employees after their first sexual encounter — and just days before their second, the company said.

As a result, the fast-food chain filed a complaint in the Delaware Chancery Court to recover any compensation and severance benefits that he received when he left his post. The company has also taken steps to prevent Easterbrook from exercising any stock options or selling any shares.

Chris Kempczinski, who took over as CEO when Easterbrook was pushed out, alerted company employees about the action Monday.

Easterbrook got $675,000 in severance and health insurance benefits and stock awards that Bloomberg valued at more than $37 million last November.

McDonald’s shares were little changed in premarket trading Monday in New York. McDonald’s fell 3.5 percent this year through Friday, roughly in line with the S&P 500 Index.

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