McDonald's CEO forced out over 'consensual relationship' with employee
New York: McDonald's announced Sunday that its president and CEO Steve Easterbrook was forced out after showing "poor judgment" by engaging in a "consensual relationship" with an employee. He was replaced by Chris Kempczinski, the president of McDonald's USA. Kempczinski was also elected to the board of directors.
"Easterbrook... has separated from the company following the board's determination that he violated company policy and demonstrated poor judgment involving a recent consensual relationship with an employee," the company said in a statement.
"The company confirms that this leadership transition is unrelated to the company's operational or financial performance." In an email to McDonald's employees, Easterbrook said his relationship was "a mistake" that violated company policy.
"Given the values of the company, I agree with the board that it is time for me to move on," the email said. Joe Erlinger, president of international operated markets, will take over as head of McDonald's USA, the company said.
In its most recent earnings report, on October 22, McDonald's said profits dipped 1.8 percent in the third quarter from the year-ago period to 1.6 billion.
Revenues at the company, which has 38,000 restaurants in more than 100 countries, edged up 1.1 percent to 5.4 billion. The fast-food giant notched a healthy 5.9 percent increase in global comparable sales, including a solid rise in the United States. But profits were pressured by increased spending on technology and research and development.
McDonald's has invested heavily in home delivery and mobile pay initiatives in recent years, and in 2019 has unveiled a number of acquisitions to boost its drive-through operation.
Kempczinski told The Wall Street Journal on Sunday that he plans to continue the focus on technology. "There isn't going to be some radical, strategic shift. The plan is working," he said. Easterbrook had served as chief executive since 2015. Under his leadership, McDonald's share price doubled, but he was unable to stop a decline in sales.
Like other fast food chains, McDonald's is facing headwinds as consumers seek out healthier dining options. Easterbrook's pay as CEO rose with McDonald's share price, which closed last week at 194. His compensation hit a peak in 2017 at 21.8 million, including 9.1 million in incentive-based pay, the Journal said.
Workplace relationships have cost a number of CEOs their jobs in recent years, and the topic has become even more sensitive amid the #MeToo movement.
Intel CEO Brian Krzanich and yoga apparel brand Lululemon chief Laurent Potdevin resigned from their companies in 2018 following revelations of relationships with employees.
In 2016, Priceline CEO Darren Huston stepped down for the same reason, as did BestBuy CEO Brian Dunn in 2012.
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Nightclub fire: Thai authorities initiating process to send back Luthra brothers to India
Panaji/ New Delhi (PTI): Authorities in Thailand are initiating the process to deport Gaurav Luthra and Saurabh Luthra, co-owners of the nightclub in Goa where 25 people were killed in a fire on December 6, government sources said on Friday.
As the state police are probing the tragedy, a local resident who claims to be the original owner of the land where `Birch by Romeo Lane' nightclub stood claimed that the zoning of the saltpan land was "quietly" changed for the club's benefit.
AAP leader Arvind Kejriwal, meanwhile, lashed out at the BJP government over "corruption" in the coastal state, and said Chief Minister Pramod Sawant should apologise to the people over the fire incident.
The Indian embassy in Bangkok is in close touch with the Thai authorities to expedite the deportation of the Luthras, official sources in Delhi said.
The brothers have been detained by Thai authorities in Phuket following an intervention by the embassy, they said.
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"The Thai authorities are presently taking action as per local laws, including for sending the two individuals back to India," said one of the sources.
The Luthras left for Phuket shortly after the fire incident.
A Delhi court on Wednesday refused to give any interim protection from arrest to the duo, while their partner was held.
Five managers and staff members have already been arrested by Goa Police in connection with the fire that broke out at the nightclub located in Arpora, 25 km from Panaji, around midnight on December 6.
Police have recorded the statements of at least 50 persons in the case so far, said an official.
Pradeep Ghadi Amonkar, who claims to be the original owner of the land where the club stood, alleged that a portion of his property was converted from saltpan to settlement zone without his knowledge.
He had signed a sale agreement with Surinder Kumar Khosla in 2004, but it was withdrawn within six months as he allegedly did not receive the payment. Kholsa set up a nightclub on the land, and it was later taken over by Saurabh and Gaurav Luthra, Amonkar had alleged earlier.
While the case filed by him has been pending in the court for 21 years, on Thursday he discovered that "the government quietly changed the zoning of my land without informing me,” Amonkar said.
No notice was served to him concerning the zone change, he claimed, asking how salt pan can be converted into a settlement zone.
A senior Goa Town and Country Planning official said as an inquiry into this matter is underway, it would not be appropriate for them to comment.
Speaking at a public meeting in Goa, Kejriwal, campaigning for local body elections, said, "This is perhaps the most corrupt government, and the least the chief minister could do is to apologise to the people of Goa for Arpora incident and ensure safety in all the establishments."
The nightclub did not have several requisite permissions, still it could operate because it paid "hafta" or regular bribes to government officials, he alleged.
Meanwhile, the state BJP has sought clarification from two of its leaders for alleging corruption against the backdrop of the fire tragedy.
MLA Michael Lobo and former tourism minister Dilip Parulekar had alleged large-scale corruption in the beach belt, claiming that it had resulted in illegalities in the tourism sector.
“I have heard the statement by both the leaders. I have sought clarification from them for making such statements,” BJP Goa president Damodar Naik told reporters in Panaji on Friday.
