McDonald’s Corp. on Monday outlined its separation agreement with ousted CEO Steve Easterbrook in federal filings, and it included planned severance pay of at least $675,000 and a more restrictive non-compete clauses than his existing employment contract.
“The separation agreement contains a two-year post-termination noncompetition covenant, which is six months longer and more expansive in scope than Mr. Easterbrook’s existing noncompetition covenants,” the company said in its Securities and Exchange Commission filing.
McDonald’s fired Easterbrook for violating policy and demonstrating “poor judgment involving a recent consensual relationship with an employee.”
In the agreement dated Thursday, Oct. 31, Easterbrook was awarded 26 weeks of severance pay, to be paid within six months. The severance plan, outlined in proxy filings in March, called for Easterbrook to receive $675,000 in salary continuation, $2.855 in benefit continuation and $24,400 in sabbatical and transition assistance.
Easterbrook’s total compensation in 2018 was $15.9 million and $21.8 million in 2017.
The company enumerated a wide number of competitive companies covered in the non-compete provisions of the severance agreement, saying it covered “any company in the restaurant industry (whether informal eating-out or ready-to-eat) that competes with the business of McDonald’s, including any business in which McDonald’s engaged during the term of your employment and any business that McDonald’s was actively considering conducting as of your termination date.
Examples, the company said, include “but are not limited to: Arby’s, Bojangle’s, Burger King/Hungry Jacks, Caffè Nero, Checker’s, Chick-fil-A, Chipotle, Costa, Culver’s, Denny’s, Domino’s Pizza, Dunkin’ Brands, Five Guys, Greggs, Hardee’s, In-N-Out Burger, Jack-in-the-Box, Jamba Juice, Long John Silver’s Quick Service Restaurant Holdings (and all of its brands and subsidiaries), Panera Bread, Papa John’s, Popeye’s Chicken, Potbelly, Qdoba, Quiznos, 7-Eleven, Sonic, Starbucks, Subway, Tim Horton’s, WaWa, Wendy’s, Yum Brands Inc. (including, but not limited to, Taco Bell, Pizza Hut, Kentucky Fried Chicken and all of YUM Brands, Inc.’s subsidiaries) and their respective organizations, partnerships, ventures, sister companies, franchisees, affiliates or any organization in which they have an interest and that are involved in the restaurant industry (whether informal eating-out or ready-to-eat) anywhere in the world, or that otherwise compete with McDonald’s.”
The agreement called for Easterbrook to consult with McDonald’s general counsel “for clarification as to whether or not McDonald’s views a prospective employer, consulting client or other business relationship you may have or have had in the restaurant industry (whether informal eating-out or ready-to-eat) not listed.”
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