John Demsey, the beauty executive who became an industry goliath by turning MAC Cosmetics into one of Estée Lauder’s biggest subsidiaries, spent much of the first year of the pandemic in his home doing things that befit a high-flying corporate executive: Zooming with colleagues, bringing home a goldendoodle, adding to his collection of Audemars Piguets and Rolexes.

He also posted voraciously on social media. That was where the trouble began.

Working in an industry that generates huge profits while remaining fashion’s quieter stepsister, Mr. Demsey, 66, was unusually well known, a splashy marketer with a taste for provocation. He put Lil’ Kim and Missy Elliott in ad campaigns, gave Sean Combs his own fragrance line and helped bring to market a perfume from Tom Ford with a profane name that ends in “fabulous.”

He lined the walls of his Upper East Side townhouse, which Aerin Lauder described as “more is more,” with photographs of Grace Jones, Marilyn Monroe and Nicki Minaj, and built his active social life around progressive causes and the arts, as a Democratic donor and fund-raiser, as a trustee of the Apollo Theater, and as chairman of the MAC AIDS Fund, which, through its Viva Glam Campaign, raised more than $500 million for H.I.V./AIDS causes.

By 2015, the valedictory stage of his career loomed. At that year’s FiFis — the fragrance industry’s Oscars — he received a Hall of Fame award, presented to him by Kendall Jenner.

Wearing a black Tom Ford tuxedo, Mr. Demsey approached the mic and said to Ms. Jenner: “I knew you were coming tonight, so I checked my Instagram account and I have 17 followers. I think you have 45 million. So I have a long way to improve.”

It was not entirely a joke. Mr. Demsey — clearly not ready to quietly fade away — spent the next five years getting that number to 74,000, largely by reposting memes.

He shared videos lampooning the Kardashianesque influencers proliferating on TikTok, and during the pandemic he posted jokes like “If you don’t like me, you should go get tested. One of the symptoms of Covid is no taste.” New Yorker cartoons were in abundance.

But on Feb. 21, a Monday, Mr. Demsey posted something that cost him his job.

That day, he re-grammed a parody Sesame Street illustration with Big Bird wearing a doctor’s mask, standing bedside, tending to a sick and delirious Mr. Snuffleupagus. Above them a caption said: “My n***a Snuffy done got the ’rona at a Chingy concert.”

The post, with its asterisked version of a racial slur, did not go unnoticed by Estée Laundry, an anonymous Instagram account. Mr. Demsey soon deleted the post, but Estée Laundry (which now has about 200,000 followers) reposted it, with a caption that said “How’s it OK for a beauty executive (responsible for the branding and direction of a company that claims to focus on diversity and inclusion) to post this?” and asked if it was time for him to be let go.

Over the past few years, powerful white executives have lost their jobs because of racist statements they made to employees and others. John Schnatter, the founder of Papa John’s, used a racial slur on a conference call; Greg Glassman, the founder and C.E.O. of CrossFit, posted a tweet that made light of the killing of George Floyd, and spoke belligerently to CrossFit gym owners about race in a video call.

But Mr. Demsey is an executive whose past three decades were a case study in diversity being good for business, and some of his most prominent defenders are members of fashion’s Black power elite.

“Racism may not be the way to describe everything that’s wrong with the business, but it is certainly dominated by nepotism. Nepotism toward white models, nepotism toward white actors, and nepotism toward white editors,” said Steve Stoute, who in the 1990s headed Urban Music at Sony Music and became the executive vice president of Interscope Geffen A&M and then started a marketing and branding agency, Translation, working with the N.B.A., the N.F.L., Jay-Z, Nas and Beyoncé, among others. “John Demsey was one of the first people to break that cycle.”

In the apology Mr. Demsey posted on Feb. 25, he said that he hadn’t read the meme. But no one else had posted it for him. (Although Mr. Demsey does not have a nondisclosure agreement, his financial settlement is contingent upon his not disparaging Estée Lauder, and he declined, through a lawyer, to comment for this article.)

The meme was created by Chris Taliaferro, a 39-year-old self-professed Chingy superfan, who is Black, and said in an interview that the original post was intended as an absurdist joke about the desire of people to party through a pandemic. (A good-time party rapper no edgier than Bruno Mars, Chingy’s last major hit was in 2005.)

Mr. Taliaferro didn’t expect someone like Mr. Demsey to repost it.

“As a Caucasian executive of a multibillion dollar company, you have to have situational awareness,” said Mr. Taliaferro, who declined to provide his job title or occupation because his own employers have had issues with his posts.

Unsurprisingly, Mr. Demsey’s decision to repost the Chingy meme quickly led to comments accusing him (and his defenders) of racism.

“What I see here is a long list of privileged white people defending a white, wealthy and privileged man they claim has dedicated his life to diversity, equity and inclusion,” Jason Gong, a New York watch-world blogger, wrote in the comments, perhaps alluding to backers like Martha Stewart and the socialite Cornelia Guest. He went on to say that “wealthy white people can claim to be allies of marginalized communities while remaining comfortably oblivious to the casual racism they perpetuate.”

Conversely, Clyde Williams, the former political director of the Democratic National Committee under President Barack Obama and a former board member of the MAC AIDS Fund during Mr. Demsey’s tenure, said Mr. Demsey’s dismissal from Estée Lauder points to “what is most toxic about cancel culture.”

And Bethann Hardison, the industry’s de facto spokeswoman on matters of diversity, said Estée Lauder “should show some cojones and offer the man his job back.”

Mr. Combs said that he entered the business “with other people in power that are a little bit racist. I see them, I talk to them every day, and I have to talk to them every day. That wasn’t John Demsey. He put out a meme, he made a mistake and because of that his entire career has been thrown down the drain?”

So the chain of events Mr. Demsey set in motion in February — which culminated in his forced resignation from Estée Lauder less than a week later — turned into a thorny modern morality play.

“A situation like this is a Rorschach test where people try to determine the motives of the person. And sometimes that’s opaque,” said Jelani Cobb, who writes about race, politics and culture for The New Yorker and will soon become the dean of the Columbia Journalism School. “Is the person being coy or is he being earnest? And because of social media nobody knows your character, so the response becomes an act of interpretation about intent. I can’t say this is a clear example of the reaction being an overreach, and I can’t say that there’s not more to who this person is than what he posted.”

The Corporate Diversity Problem

Mr. Demsey started at Estée Lauder in 1991. Three years later, the company bought a majority stake in MAC Cosmetics, which had roots in the gay club scene and the entertainment world.

Mr. Demsey became Estée’s point person at MAC just as MAC started a line of products called Viva Glam, with all money earned on sales going to fight H.I.V./AIDS. RuPaul, the first spokesperson, was picked by the company’s founders. When the ad campaign with a Black man in a dress led not to boycotts but big sales and the founders departed, Mr. Demsey signed a diverse array of prominent spokespeople, among them Lil’ Kim and Mary J. Blige (2000), Missy Elliott (2004), Lady Gaga (2010) and Rihanna (2014).

Mr. Demsey also saw opportunities in underserved markets. In 1998, the model Naomi Campbell organized a Gianni Versace tribute in South Africa benefiting the Nelson Mandela Children’s Fund.

“Who supplied me with makeup for 78 models? Who was the person who was there to sponsor me?” she said in an interview. “John Demsey.”

In 2004, Mr. Combs’s clothing company, Sean John, was doing $450 million in annual sales, according to The Los Angeles Times. Naturally, Mr. Combs wanted his own fragrance, but beauty conglomerates weren’t rushing to acquire beauty brands geared toward Black people.

“John put me in front of the best people at Estée Lauder,” Mr. Combs said. “He made sure that what I got for marketing wasn’t the Black budget but the best budget.”

Within a year of its 2005 start, Mr. Combs’s fragrance, Unforgivable, was doing $1.5 million in sales per week, according to Estée Lauder. That was more than new fragrances from Calvin Klein, Vera Wang and Juicy Couture, according to the NPD Group, a market research firm, and it outsold every other new fragrance that year.

Still, Mr. Williams, the former D.N.C. political director, said it was Mr. Demsey’s success as a philanthropist — largely providing funds to communities of color battling the AIDS crisis — that was most significant.

“People know about MAC’s ad campaigns with Missy Elliott and Mary J. Blige. That was good, that was groundbreaking,” he said. “The work at MAC AIDS was life and death, and the work speaks for itself.”

A ‘Performative Act’?

From the time it was founded in 1946 until 1998, Estée Lauder was a privately held, family-run business; Mr. Demsey became an extended member, a kind of third son to Leonard Lauder.

After it went public that began to change.

In November 2007, William Lauder, then the company’s chief executive, announced a succession plan at Estée Lauder Companies.

Leonard, his father — then 74 and the chairman — would become chairman emeritus. Its new business architect would be Fabrizio Freda, who came from Procter & Gamble’s snacks division. William ultimately became the company’s executive chairman.

Mr. Demsey, who once said, “to the suits I’m a creative and to the creatives I’m a suit,” sometimes struggled with the increasingly corporate culture.

He derisively called Mr. Freda the “Pringle Man,” behind his back. In 2018, he had to apologize for sending a member of Mr. Freda’s staff an email that said Mr. Freda “is very unfair,” and “shows respect to people who least deserve it.” A slew of people in the company were accidentally cc’ed on it. (The New York Times saw a copy of the email.)

By most metrics, however, Mr. Demsey and Mr. Freda succeeded together. In 2009, Estée’s market capitalization was $6 billion. Today, it is more than $90 billion.

The company regularly posts its diversity statistics, the most recent of which say that 15 percent of its executive officers identify as Black, 11.7 percent of its U.S. work force (including sales associates) is Black, but only 6.4 percent of the overall corporate work force is Black. Eighty-four percent is female.

After the George Floyd killing, Estée Lauder Companies set up a racial equity steering committee and pledged $1 million to fight racial injustice. To many, however, that seemed hypocritical, given the support of Ronald Lauder (a board member, the chairman of Clinique, and Leonard’s brother) for Donald Trump and various right-wing SuperPACs. Mr. Demsey himself had described MAC, in Harper’s Bazaar, as the first global beauty brand that truly embraced the idea of beauty “for every gender, every size, every shape, and every color.”

Irate Estée employees organized a public internet petition to have Mr. Lauder removed from the board and obtained nearly 7,000 signatures, with most coming from retail employees or customers, not corporate staff.

In response, the company increased its pledges to civil rights groups to $10 million and issued a statement saying that members of the family have supported a variety of candidates and have the right to do so.

But Ronald Lauder remains on the board, and that makes it hard for Rashad Robinson of Color of Change — a watchdog group that has led campaigns to fire media personalities like Pat Buchanan and Bill O’Reilly — to view Mr. Demsey’s dismissal this year as being much more than “a performative act” designed to “shift the conversation” away from the support of one of its family members for causes that “have way more serious effects on people’s day to day lives.”

Still, Mr. Robinson thought it made no sense that Mr. Demsey ever could have believed this was his joke to tell — perhaps all the more because of his history as a pioneer on matters of diversity.

This week, William Lauder provided The Times with a statement standing by the decision to force Mr. Demsey’s resignation: “We expect all leaders within our company to exercise sound judgment that doesn’t harm the Company’s reputation. John’s actions on Instagram were offensive to our employees and to many communities, damaging to our company, and to our long-term efforts to drive inclusivity and racial equity.”

Enter the Instagram Watchdog

Publications that principally cover beauty often have a tangled relationship with the leaders in the field, who are both subjects and advertisers.

But in 2018, Estée Laundry popped up. Like Diet Prada, it saw itself as a “watchdog” unconcerned with “making money or collaborating with brands or influencers,” as one of its founders put it in an interview with WWD.

Despite the name, the focus went beyond Estée Lauder. It called out Glossier, a young brand, for erroneously labeling its products as vegan, ridiculed Kylie Jenner for falsely claiming to be a billionaire, and promoted environmentally friendly companies run by women and people of color.

Mr. Demsey’s Instagram was another target.

One early pandemic post he put up was a Photoshopped image of Prince Harry hand in hand with Yoko Ono. “Not a good look to be openly #misogynistic when most of your customers are women, #EsteeLauder,” read the caption underneath Estée Laundry’s repost.

Occasionally, a member of the Estée Lauder communications team would call Mr. Demsey about a questionable meme and he would take it down, according to people at the company.

But that didn’t seem to have anything to do with why Mr. Demsey’s portfolio was downsized somewhat in early 2020.

The official position of Estée Lauder is that the changes made to Mr. Demsey’s duties were the result of Estée Lauder’s multiyear growth, but it also was the case, according to numerous sources inside Estée Lauder who were not authorized to speak on the matter, that Mr. Demsey was less close to William Lauder (the company’s executive chairman) than he’d been to Leonard.

Then, lockdown arrived. Without society benefits to attend, or the office to go to, Mr. Demsey began posting up to 30 times a day.

The Chingy image went up this year on Presidents’ Day. A few hours later a member of the communications team who worked with Mr. Demsey called to express concern and recommended that Mr. Demsey take it down. He quickly did so.

The illustration has Mr. Snuffleupagus in bed with a polka-dot item on his head that may be an ice pack or may be a head wrap. From the beginning, Mr. Demsey said to friends and to people within the company that he thought Mr. Snuffleupagus looked in the illustration like “a granny,” that he scanned the meme quickly and mistakenly thought the N-word was “nanna,” though he understood he shouldn’t argue that publicly.

But Estée Laundry had a screenshot of the meme and reposted it with a caption that noted having called him out in the past for offensive content. “Is it time,” the post said, “for #EsteeLauder to part ways with 🦖[dinosaurs] like him who don’t reflect their values?” (Estée Laundry did not respond to requests for comment.)

The next day, the problem metastasized.

Numerous employees — many of whom are Black — reached out to human resources, saying that the post was simply inexcusable. Employees posted just that on Estée Laundry, several with their names attached.

That afternoon, Mr. Demsey was suspended.

Members of the Estée communications team advised him to stay off social media until an apology could be hashed out. Instead, the next day, on Feb. 23, Mr. Demsey posted an image from a 2022 MAC campaign that he’d overseen and that featured a Black model, but he took it down after being criticized in the comments for using that as a distraction.

That afternoon, Mr. Demsey spoke by phone with Mr. Freda and walked away believing that if he followed the company’s advice to stay quiet, he might keep his job. But no one involved claims promises were made.

Over the next 48 hours, members of the company in legal, communications, human resources and the board were consulted on next steps.

On Feb. 25, Mr. Demsey posted an apology in which he claimed not to have read the meme before reposting it. “I hope that in time, people will judge me, not for this awful mistake, but for my lifetime of words and actions, which demonstrate my respect for all people,” he wrote.

This didn’t fly with people like Chris Mello, a spokesman for influencers. In the comments, he called Mr. Demsey’s claim not to have read the meme “pathetic,” and added, “may your career/name be forever ran through the mud and belittled.”

Mr. Demsey’s prominent Black backers also got scorched. Teri Agins, a former Wall Street Journal reporter who was among the first Black journalists to cover fashion full time for a major newspaper, called Mr. Demsey a “brilliant” leader whose commitment to racial diversity had been “way ahead of the pack.” “Your heartfelt apology is accepted by me and a chorus of all who know you!” she wrote.

When blowback followed, Ms. Agins hit delete. (She declined to comment for this article.)

On the afternoon of Feb. 25, Mr. Freda and William Lauder scheduled a virtual meeting with the board. It took place Sunday and lasted under an hour. At the outset, Mr. Freda and Mr. Lauder recommended dismissing Mr. Demsey.

According to a person present, there were Black board members who attested to the belief that Mr. Demsey is an ally for racial equity. Yet no one would or could defend his judgment.

How, people asked, could the company make good on its commitments to Black employees and customers and rationalize the use of a racial slur by a top-level employee?

Regardless of intent, the post had damaged the company’s reputation with employees and consumers. All were in support of Mr. Freda and Mr. Lauder’s decision to let Mr. Demsey go.

Mr. Demsey hasn’t gone out much since his dismissal the next day. In April, Naomi Campbell asked him to be her date at André Leon Talley’s memorial but he was away, she said.

He has, however, been posting frequently. One of the first memes he put up after his dismissal was an illustration of a lonely cat sitting in front of a laptop. Across the top of the screen it said: “Mail.” Beneath it were three categories: “In Box, Outbox, Litter Box.”