November 2020

McDonald’s is seeking the return of the $42 million severance package that its former CEO received upon his departure, claiming it should be returned to the company because he lied, concealed evidence, and committed fraud relating to his termination from the company. Disputes over executive compensation or bonuses rarely end up in court. But the McDonald’s lawsuit is the latest in a series of such cases, including shareholder derivative lawsuits involving recognized companies, that have made their way to the courtroom, with mixed results.

It has been said that in every crisis lies opportunity. Unfortunately, the twin crises of the COVID-19 pandemic and the recession that followed have increased opportunities for unscrupulous employers to engage in rampant wage theft, including minimum wage and overtime violations. A recent study found that large numbers of low-wage and minimum wage workers, already vulnerable from economic upheaval and uncertainty, are likely being paid less than the law requires, or not receiving paychecks at all. 

Executive compensation trends in the United States are affected by a network of interrelated factors, including legal and regulatory requirements, market and cultural trends, and shareholder pressures. C-suite and senior executives should know the significant roles that securities and tax laws play in compensation structures.