Federal regulators have charged former McDonald’s CEO Steve Easterbrook with lying to investors about why he was fired from the fast food chain. Easterbrook was fired in 2019 for violating company policy by having a relationship with a McDonald’s employee.
The divorce agreement stated that Easterbrook had been let go without cause. This allowed him to keep more than $40 million in stock compensation that he would otherwise have lost.
When he was fired, Easterbrook told McDonald’s that he had no other relationships with subordinates. However, a later investigation revealed that he had been untrue. McDonald’s sued Easterbrook, alleging that the former executive destroyed evidence and concealed his other relationships.
The Associated Press (AP) reports that, as far as the Securities & Exchange Commission (SEC) is concerned, Easterbrook “knew or was reckless in not knowing that his failure to disclose additional violations of company policy before he was fired would affect the disclosures of McDonald’s to investors regarding his departure and compensation.”
The AP quoted Gurbir Grewal, SEC director of the Department of Enforcement, as saying that Easterbrook, “[by] allegedly concealing the extent of his misconduct during the company’s internal investigation…ultimately misled shareholders.”
Without denying the results of the SEC investigation, Easterbrook accepted fines, including a $400,000 fine and a five-year suspension of his ability to hold new leadership positions such as CEO or director.
McDonald’s issued a statement in response to the Easterbrook action, stating in part that “the SEC’s order reinforces what we’ve said before: McDonald’s held Steve Easterbrook accountable for his misconduct.”
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