Former McDonald's CEO misrepresented his 2019 termination to investors, SEC says
The U.S. Securities and Exchange Commission charged former McDonald's CEO Steve Easterbrook with lying to investors about the circumstances of his 2019 termination after he had a consensual relationship with an employee.
Without admitting or denying the claims, Easterbrook agreed to pay a $400,000 civil penalty and a five-year officer and director bar, the SEC said Monday.
McDonald's fired Easterbrook for violating company policy by having "an inappropriate personal relationship" with an employee. His separation agreement from the company, however, said his termination was without cause, allowing him to receive a multimillion-dollar severance package he otherwise would have forfeited, according to the agency.
A McDonald's investigation in 2020 found he had engaged in sexual relationships with three other employees prior to his firing. The SEC said Easterbrook knew, or was reckless in not knowing, that his failure to disclose the relationships would influence the company's disclosures to investors about his termination and compensation.
"When corporate officers corrupt internal processes to manage their personal reputations or line their own pockets, they breach their fundamental duties to shareholders, who are entitled to transparency and fair dealing from executives," SEC enforcement director Gurbir S. Grewal said in a statement.
"By allegedly concealing the extent of his misconduct during the company’s internal investigation, Easterbrook broke that trust with – and ultimately misled – shareholders."
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McDonald’s board sued Easterbrook in 2020, and he agreed to pay more than $105 million in equity awards and cash. Easterbrook said in a statement at the time that he "failed at times" to fulfill certain responsibilities as leader of the company.
The SEC also charged McDonald’s with "shortcomings" in its public disclosures related to the former executive's separation agreement, but decided to not impose a financial penalty due to the company's "substantial cooperation" in the agency's investigation.
McDonald’s said in a statement that the SEC's decision "reinforces what we have previously said: McDonald’s held Steve Easterbrook accountable for his misconduct."
"We fired him, and then sued him upon learning that he lied about his behavior," the company said.
This article originally appeared on USA TODAY: SEC fines former McDonald's CEO for misrepresenting his 2019 firing
