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McDonald’s fires CEO Steve Easterbrook, citing employee relationship

Burger giant names Chris Kempczinski as successor in president, CEO role

mcDonald's easterbrook 200.jpgMcDonald's Corp. said Sunday that it had “separated” CEO Steve Easterbrook from the company for violating policy and demonstrating “poor judgment involving a recent consensual relationship with an employee.”

In an email sent to McDonald’s employees, Easterbrook admitted to breaking a company policy by becoming involved with an employee. "This was a mistake. Given the values of the company, I agree with the Board that it is time for me to move on. Beyond this, I hope you can respect my desire to maintain my privacy."

The Chicago-based burger giant said its board named Chris Kempczinski, most recently president of McDonald's USA, as CEO and president, effectively immediately. Kempczinski has also been elected to McDonald's board of directors. Joe Erlinger, most recently president of International Operated Markets, replaces Kempczinski as president of McDonald’s USA. 

Easterbrook had served as CEO since January 2015.  

Under his leadership, McDonald’s became a more nimble and agile company. His turnaround plan involved streamlining operations, pursuing industry leading innovation and improving the quality of the menu. The biggest menu moves made by Easterbrook included adding all-day breakfast and introducing fresh ground beef patties on the brand's legacy Quarter Pounder.

"It’s up to us to make the big moves to catch people’s attention,” he told NRN last year when he was named a 2018 Golden Chain winner

Kempczinski is tasked with keeping that momentum going. In his letter, Easterbrook said Kempczinski has worked closely with him over the last four years, making him an "ideal person to take on the role of CEO."

"He’s driven and forward-looking, and I am confident he will lead with great purpose and guide McDonald’s to even greater heights," Easterbrook wrote.

Kempczinski, who previouisly held jobs at PepsiCo, Kraft and Proctor & Gamble, first joined McDonald's in 2015, overseeing global strategy, business development and innovation. Kempczinski took over as president of McDonald’s USA in January 2017.

“I am committed to upholding our rich heritage of serving our customers and driving value for our shareholders and other stakeholders,” Kempczinski said in a statement.

In a letter to employees, he called Easterbrook a mentor. "Steve brought me into McDonald’s and he was a patient and helpful mentor. I wish him all the best in his future endeavors."

Enrique Hernandez Jr., McDonald’s chairman, said in a statement, "Chris takes the reins of this great company at a time of strong, sustained performance, and the board has every confidence that he is the best leader to set the vision and drive the plans for the company's continued success.

mcdonald's chris Kempczinski 200.jpg“He has the right mix of skills and experience to lead us forward having run our U.S. business, where franchisees are delivering strong financial and operational results, and overseen global strategy, business development and innovation,” Hernandez said. “In particular, Chris was instrumental in the development of the company's strategic plan, which has enabled global growth and leadership, and has overseen the most comprehensive transformation of the U.S. business in McDonald's history.”

Erlinger, who has held various leadership positions at the chain since 2002, is now responsible for operations at about 14,000 McDonald’s restaurants in the U.S.

“Our U.S. business is the heartbeat of McDonald’s,” Erlinger said in a statement. “I look forward to working with our franchisees to build upon the transformational progress in our largest market. With a talented team that is committed to running great restaurants, we have tremendous momentum to deliver on our brand promise to all of our customers.”

McDonald's said “this leadership transition is unrelated to the company's operational or financial performance."

In its latest quarter, McDonald's reported a 5.9% increase in global same-stores sales, the 17th consecutive quarter of growth for the brand. In the U.S., same-store sales increased 4.8%, 11th consecutive quarter of positive growth at domestic units. McDonald's reported net income of $1.61 billion for the third quarter ended Sept. 30, down from $1.64 billion in the same period last year. Revenue for the quarter was $5.43 billion, up 1% from $5.37 billion in the prior-year period.

McDonald's has more than 38,000 locations in over 100 countries.

Contact Ron Ruggless at [email protected]

Follow him on Twitter: @RonRuggless

Update: This story has been edited to add additional details about the leadership changes at McDonald's Corp. 

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