McDonald’s newly minted executive leadership have worked this week to adjust to their new positions while assuaging concerns of employees still stunned by the abrupt downfall of now-former CEO Steve Easterbrook.
Chris Kempczinski, named CEO on Sunday, along with Chairman Enrique Hernandez, held a town hall meeting Wednesday with employees at Chicago headquarters and around the world. There, Hernandez defended the board’s decision to fire Easterbrook for having a consensual relationship with an employee.
“It tries to keep the workplace about work,” Hernandez said of the no-relationship policy. “An honest and open interaction with people, and a place where people can believe that decisions are made not for personal reasons but for professional reasons, for the best interests of the company.”
Kempczinski, the son of a doctor and a kindergarten teacher and an avid marathon runner, told employees to “reenlist” in the company’s mission.
“The mission I’m asking you to reenlist in is to make this company an example for the world and to do the right thing each and every day,” he said, according to quotes provided by the company.
The decision to fire Easterbrook came as a shock to people inside and outside of McDonald’s, which suddenly faces a leadership crisis despite strong results in recent years.
Four C-level executives have left the company in recent weeks, including Easterbrook, Chief People Officer David Fairhurst—who was let go Monday in the wake of the firing—Chief Marketing Officer Silvia Lagnado and Chief Communications Officer Robert Gibbs.
The suddenness of the change was accentuated Wednesday when Kempczinski bought $500,000 worth of McDonald’s shares.
Company rules require its executives to hold a certain amount of company shares. Most executives have to hold 4 times their annual salary in McDonald’s stock. The CEO has to hold 6 times their salary. In Kempczinski’s case, that would equal $7.5 million worth of shares, given his $1.25 million salary.
But he didn’t own a single share of stock when he was named CEO, having sold his shares in the spring for $4.4 million.
Kempczinski has five years to buy up his stock and has options he could exercise at any moment, but the lack of shares held by the person tabbed to be the next CEO proved to be a bad look.
There were multiple reports in the media of that lack of stock ownership, and the company was quick to point out Wednesday that its new CEO bought up 2,580 shares at $193.81 per share.
Kempczinski’s replacement as president of McDonald’s USA, Joe Erlinger, was set to begin meetings with the company’s operators this week as he takes the helm of the company’s biggest market.
For Erlinger, these meetings are vital given the generally tense relationship company executives have had with franchisees of late. Operators, upset over the way McDonald’s pushed remodels and frustrated over traffic declines, formed an independent franchisee association last year.
While the company has made some concessions to operators and has noted that operator cash flow has increased each of the past 11 months, that tension remains.
Franchisees we spoke with were cautiously optimistic about Erlinger, noting his extensive history with the company—he’s been with McDonald’s since 2002—and his background in operations.
Their views on Kempczinski were more mixed, though one franchisee said “He’s better suited to be CEO” than president of McDonald’s USA because he is more of a big-picture executive.