McDonald’s has fired its chief executive Steve Easterbrook after he had a relationship with an employee.
The US fast food giant said the relationship was consensual, but Mr Easterbrook had “violated company policy” and shown “poor judgement”.
In an email to staff, the British businessman acknowledged the relationship and said it was a mistake.
“Given the values of the company, I agree with the board that it is time for me to move on,” he said.
Mr Easterbrook, 52, who is divorced, first worked for McDonald’s in 1993 as a manager in London before working his way up the company.
He was appointed chief executive of McDonald’s in 2015.
Mr Easterbrook is widely credited with revitalizing the firm’s menus and restaurants, by remodeling stores and using better ingredients. The value of its shares more than doubled during his tenure in the US.
Under his leadership, McDonald’s also expanded its delivery and mobile payment options to emphasize convenience.
He will be replaced by Chris Kempczinski, most recently president of McDonald’s USA, with immediate effect.
Kempczinski joined McDonald’s in Sept. 2015, hired by the well-regarded restaurant industry veteran and now former CEO Steve Easterbrook. One McDonald’s insider told Yahoo Finance Kempczinkski is known internally as a very detailed oriented executive. What is unclear is if Kempczinski could pullback from the details and assume more of the leadership role needed to lead and inspire a restaurant giant such as McDonald’s, the insider said.
Another potential source of concern is that Kempczinski tends to be an analytics driven executive, which has in the past ruffled some feathers of franchisees that pride themselves on relationships with corporate.
“This is McDonald’s in crisis,” long-time restaurant analyst Howard Penney of Hedgeye Risk told Yahoo Finance. Penney says McDonald’s has long been known for its succession planning, but the appointment of Kempczinski does fit the bill of a well thought out decision.
Penney echoed the concerns of the McDonald’s insider regarding Kempczinski’s poor relationship with franchisees — which are the lifeblood of the Golden Arches. Franchisees have been unhappy with Kempczinski’s initiatives to raise the average ticket at McDonald’s, which goes against the chain’s value-focused DNA.
“You need a strong relationship with the franchisees. Now you have the guy that is causing all the anxiety running the company,” Penney added.