The US Securities and Exchange Commission (SEC) on Monday charged former McDonald’s chief executive Stephen Easterbrook with making false and misleading statements to investors about the circumstances of his 2019 termination.
The SEC hit Mr Easterbrook with a five-year officer and director bar and a $400,000 (€377,000) civil penalty.
McDonald’s fired Mr Easterbrook in November 2019 for exercising “poor judgment” by engaging in a relationship with a McDonald’s employee, the SEC said. But Mr Easterbrook failed to disclose other additional violations of company policy he committed by engaging in undisclosed relationships with other employees of the fast-food giant, it said.
The agency also charged McDonald’s with “shortcomings” in its public disclosures related to Mr Easterbrook’s ouster, but did not impose any fines on McDonald’s due to the firm’s “substantial co-operation” with the investigation.
By allegedly concealing the extent of his misconduct during the company’s internal investigation, Mr Easterbrook broke that trust with – and ultimately misled – shareholders, Gurbir Grewal, the SEC enforcement head, said in a statement.
Two Republican SEC commissioners objected to the five-year ban, saying the decision to examine the hiring and firing discussion and analysis went beyond the agency’s mandate.
A look ahead to 2023
Attorneys for Mr Easterbrook, who consented to the order but did not admit or deny the SEC’s findings, did not respond immediately to calls for comment. McDonald’s said in a statement that the settlement reinforced the fact it held Mr Easterbrook “accountable for his misconduct”.
In 2021, Mr Easterbrook returned over $105 million he received as a severance package in 2019 and apologised to the company to settle a lawsuit over the alleged cover-up. The amount is what Mr Easterbrook would have forfeited had he been forthcoming about his actions and been fired for cause, the company said at the time.
“We fired him, and then sued him upon learning that he lied about his behaviour,” the firm said in its statement on Monday. – Reuters/Bloomberg
