The Securities and Exchange Commission just charged former McDonald’s CEO Steve Easterbrook on January 9th for with misrepresenting his November 2019 firing, CNBC reports.
The outlet notes that Easterbrook has “agreed to a $400,000 fine,” all without admitting or denying the claims, and he “will be barred from serving as an officer or director for any SEC-reporting company” for five years.
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The SEC sued former McDonald’s CEO Steve Easterbrook for misleading investors about inappropriate workplace relationships that led to his firing. https://t.co/aGCB7vRUyh
— The Washington Post (@washingtonpost) January 9, 2023
What We Know About Former CEO Steve Easterbrook’s Firing
In 2019, the board for the fast food giant fired Easterbrook for a “consensual relationship with an employee,” which violated the McDonald’s fraternization policy.
Easterbrook, CNBC notes, wasn’t fired for cause, “allowing him to receive a severance package.”
Disgraced former McDonald’s CEO Steve Easterbrook will pay $400,000 to settle charges that he allegedly misled investors about the circumstances of his 2019 firing following a relationship with an employee https://t.co/5Xz2YEUtci
— CNN (@CNN) January 9, 2023
Months later, the company sued its former chief executive, claiming he “committed fraud and lied to cover up additional inappropriate relationships with employees.”
In December of 2021, the two parties settled the lawsuit, and Mickey D’s successfully took back Easterbrook’s severance, valued at $105 million, as the publication points out.
McDonald’s said it had reached a settlement with former chief Steve Easterbrook, resolving a lawsuit in which the burger chain had claimed that he covered up and lied about his sexual relationships with employees https://t.co/Wd4hB8Woke pic.twitter.com/upuDPpTxHG
— Reuters (@Reuters) December 16, 2021
SEC Division Of Enforcement Statement
Gurbir Grewal, director of the SEC’s division of enforcement said in a statement, “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.”
I spent the last month digging into what went down with McDonald’s ex-CEO Steve Easterbrook – who alleged had sexual relationships with 4 employees during his last year leading the company + is currently being sued by McDonald’s https://t.co/XfdK8hzqec
— Kate Taylor (@Kate_H_Taylor) September 11, 2020
The agency, as CNBC notes, also found McDonald’s violated the Exchange Act, “which prohibits companies from material misrepresentations and omissions in proxy statements sent to shareholders.”
It is not, however, imposing a “financial penalty” on McDonald’s because of its “substantial” cooperation with the agency during its investigation.
McDonald's Company Statement In Response
While McDonald’s has yet to admit or deny the SEC’s findings, the chain said in a statement that that the SEC’s actions shine even more light on what the company has previously said about its handling of Easterbrook’s misconduct.
"The Company continues to ensure our values are part of everything we do, and we are proud of our strong ‘speak up’ culture that encourages employees to report conduct by any employee, including the CEO, that falls short of our expectations," McDonald’s said.
