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Former McDonald’s CEO Stephen Easterbrook Getting Millions Leaving Spotlight on Pay Gap

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Stephen Easterbrook

Former McDonald’s CEO Stephen Easterbrook is getting an exit package of almost $42 million 

At first glance, it might appear that Stephen Easterbrook left his post as CEO of McDonald’s Corporation with peanuts. But a closer look reveals is getting an exit package of almost $42 million after his relationship with an employee was found to violate company policy. The size of his compensation puts a new focus on the widening gap between the pay at the top and the bottom of the corporate ladder.

According to an analysis by executive-compensation experts at Equilar, Easterbrook’s exit package totals $41.8 million, which includes six months of severance pay, shares he can cash out in the future and other equity. And that amount is in addition to $23.8 million in stock options that Easterbrook can exercise now.

“Wow, he is walking away with a lot of money,” says Cornell Law School professor Stewart Schwab, an expert on employment law. “And it comes out as part of the story of just, wow, [the] 1% getsa lot more money than the rest of the workers in this economy.”

It’s relatively unusual for a CEO to receive a severance package after being fired. But the board of directors at McDonald’s determined his firing to not be for cause — a threshold that varies by company. And litigation in a protracted dispute can be tricky and expensive.

Writing to employees this week, Easterbrook said: “I engaged in a recent consensual relationship with an employee, which violated McDonald’s policy. This was a mistake.” No further details were disclosed, but McDonald’s current policy prohibits employees who “have a direct or indirect reporting relationship” with one another from dating or having a sexual relationship.

McDonald’s latest disclosures show that in 2018, Easterbrook made $15.9 million. That’s 2,124 times more than a McDonald’s median employee — a part-time crew member working in Hungary. According to Glassdoor, a U.S. crew member at McDonald’s makes an average of $9 an hour.

McDonald’s did not respond to NPR’s inquiries, including those about median salary in the United States.

“A big story of the income inequality and explanation for it is that top executives, and in particular the CEO, does have the exploding pay compared to the rank and file,” Schwab says. “And this is an example of that.”

Easterbrook joined McDonald’s in 2015, and his tenure was praised by company watchers. The fast-food chain’s stock price hit historic highs under his efforts to revamp both the restaurants and the menu.

But Easterbrook also presided over the company as it faced allegations of rampant sexual harassment of female employees by male co-workers and managers. (To be clear, his departure does not involve harassment allegations.)

In May, workers in 13 U.S. cities staged protests against low pay and the company’s handling of alleged sexual harassment. In recent years, dozens of McDonald’s workers have filed sexual harassment complaints, alleging everything from lewd comments and groping to retaliation

“What we see all the time from minimum-wage workers is that once you complain, retaliation is common,” says Sharyn Tejani, director of the Time’s Up Legal Defense Fund, which works with victims who allege sexual harassment.

“That takes the form of losing shifts, losing your job, not being able to stay at your job, being disciplined. And … they don’t have any cushion,” she says. “And when you compare that to what happens to somebody like the CEO, it’s clear that there’s a structural problem here.”

Following worker complaints, McDonald’s announced in August that it would introduce an anti-harassment training program for U.S. workers. The program, which began in October, trains restaurant supervisors and crew members on how to create a safe workplace and defuse difficult situations.

Earlier in the year, McDonald’s also made an unexpected commitment to no longer lobby against minimum-wage hikes at the federal, state and local levels. In mid-2015, McDonald’s added at least $1 an hour more to the local minimum wage to employees of the restaurants owned by the corporation. The majority of McDonald’s locations are owned by franchisees.

In 2015, research by the UC Berkeley Center for Labor Research and Education found that more than half of fast-food workers rely on public assistance programs like food stamps. The research did not specifically focus on McDonald’s.

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WATCH: Trump’s Speech at the Economic Club of New York

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TRump's Econimc Speach Veterans DAy

Trump’s speech at the prestigious Manhattan club is expected to credit his policies for the strong economic numbers felt during his presidency.. Trump will likely highlight the low unemployment rate and high consumer confidence, as well as wage growth.

The president’s address is also expected to touch on his trade policies, the official said, amid continued negotiations over “Phase One” of a trade overhaul with China.

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McDonald’s CEO fired for consensual relationship with employee

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McDonald’s CEO Steve Easterbrook out after ‘poor judgment’ involving relationship with employee

McDonald’s board voted to remove CEO Steve Easterbrook, the fast-food giant announced on Sunday, citing “poor judgment involving a recent consensual relationship with an employee.”

Chris Kempczinski, the current president of McDonald’s USA, has been named CEO effective immediately. He will also join the board.

“Kempczinski succeeds Steve Easterbrook, who 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.

McDonald’s CEO Easterbrook, who is divorced, wrote in an email to employees that the consensual relationship “was a mistake.”

“As for my departure, I engaged in a recent consensual relationship with an employee, which violated McDonald’s policy,” Easterbrook wrote. “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.”He also said that his time as CEO “have been the most fulfilling years of my working life.”

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Easterbrook had served as CEO since March 2015. Easterbrook, who is British, joined McDonald’s in 1993 as a financial reporting manager based in London. Throughout his career, he served as the global chief brand officer, president of McDonald’s Europe, and CEO of McDonald’s U.K. He also spent time as a McDonald’s restaurant manager. On a now-removed corporate webpage, McDonald’s said Easterbrook led its turnaround “by sparking the evolution of its company culture.”

Enrique Hernandez Jr., chairman of McDonald’s board of directors, called new CEO Kempczinski “the best leader to set the vision and drive the plans for the Company’s continued success.”

“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 a statement. “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.”

Meanwhile, Joe Erlinger, president of the international operated markets, will take over Kempczinski’s most recent role as president of McDonald’s USA, effective immediately.

Shares of McDonald’s closed down 1.4%, -$2.76, on Friday to end the week at $193.94.

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Cecile Raley Designs Brings Art Deco to the 21st Century

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The designer’s 10th Anniversary capsule collection is newly available online.

Yvonne Cecile Raley
Yvonne Cecile Raley, Founder & Owner, Cecile Raley Designs, and Joshua Lents,
CFO, Gemological Appraisal Laboratory of America

This month, Cecile Raley Designs commemorated its tenth anniversary. Celebrating in style with an Art-Deco themed cocktail party, the brand’s customers mingled with suppliers, getting firsthand impressions of sourcing from mine to market. An ethics professor turned jewelry designer, AGTA member Yvonne Cecile Raley collaborates with retailers, and sells online through her top-ranking Etsy shop. In honor of her 10th year, the company has created a 10th Anniversary capsule collection, inspired by the designer’s bestselling rings.

Dr. Yvonne Raley says, “This 10th anniversary was a huge milestone for me, and I was thrilled to be able to celebrate it in the style of my creations: New York art deco style in technicolor. My success is due to the local artists that have supported me by lending their fantastic expertise to working with gemstones rarely seen in finished jewelry. It is the collaborative spirit that made Cecile Raley Designs what it is, and each of my pieces encapsulates the story that has brought me half way across the globe to the city of my dreams.”

Josephine Ring by Cecile Raley
Josephine Ring
Featuring amethyst, pink and blue sapphire, set in sterling silver MSRP: $599
Josephine Ring by Cecile Raley Designs
Josephine Ring
Featuring aquamarine, zircon, and demantoid garnet, set in 14K rose gold MSRP: $1199

Hiring local, Cecile Raley Designs works with setters, engravers, and appraisers in New York City. This ensures exceptional craftsmanship and prompt turnaround times for clients. Her capsule collection features a selection of colorful cocktail rings blending together a unique combination of fine colored gems. The Josephine Ring, for example, is available with a vibrant, regal African amethyst center stone, highlighted by a shield of alternating pink and blue sapphires, set in sterling silver. For an equally compelling palette, a 14K rose gold Josephine sports a Madagascan aquamarine center, surrounded by zircons and stunning Russian demantoid garnets.

Cecile Raley
Clarisse Ring
Featuring Kornerupine, Mahenge and Burma spinels, set in 14K white gold

Referring to the collection’s Clarisse Ring, Raley says, “This small collection includes rarely known gems from these far away regions, such as Kornerupine from Tanzania, as well as the gems that have recently gained highest standing in our industry such as Burmese and Tanzanian Mahenge spinel. And just like my designs and gems, my clients are from all over the world, from China to Singapore, from Israel to Australia. They are attracted as much to the beauty and novelty of these gems as to the stories they tell.”

With a masterful eye for color and the ability to juxtapose unexpected
combinations, Cecile Raley Designs has garnered the highest respect within the
trade. Jaimeen Shah, Owner of Prima Gems and AGTA Board Member, says,

“Yvonne has achieved what most people dream of – an incredible supply chain
comprised of talented, professional, and most of all amazing people. This is what
makes her stand out from the crowd. Gemstones are rare, and combining her
eye for picking them, with good people to work with, makes her a great one-stop
shop for all those interested in collecting the rarest of the rare.”

Inspired by New York City, its history as a city of immigrants, and the opulent, yet elegant, style of the 1920s, Cecile Raley Designs brings to life a time only captured in black and white movies to breathtaking color—celebrating rare, earth mined gems from Madagascar, Tanzania, and Colombia, connecting small artisanal mining to the Metropolis that is both home to the designer, and much of the trade.

Read next: Cozy up with these DIY Fall Drinks

To learn more about Cecile Raley Designs visit cecileraleydesigns.com

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