Ratner resigned as producer of the 2012 Academy Awards ceremony on Tuesday following his recent 'gay slur' during a promotional event.
However, Sherak revealed that Ratner's remarks on Howard Stern's radio show, in which he discussed the details of his sex life, also contributed to the Tower Heist director's resignation.
"I felt appalled. Oh my gosh, oh wow. Thank God my wife didn't hear it," he told the Los Angeles Times of the Howard Stern interview.
He continued: "I was appalled. Brett called me the next day. He said, 'Tom, I need to resign'. I said, 'Thank you'. He said, 'I'm not going to hurt the Academy or you and I have to fix it. I have to resign'."
Sherak went on to speak about the decision to hire Brian Grazer as Ratner's replacement.
"Bottom line is when we heard from Brian [and his team], they were one of the first ones," he said. "He's really talented. I think he'll add his own touch to the show, something that I hope the audience will like.
"He understands the Academy. He's an Academy winner. I'm hoping the choice is the right one. I believe it is wholeheartedly. He wanted it and we are proud he's doing it."