Former McDonald’s CEO Steve Easterbrook fined by SEC for misleading investors about firing
Steve Easterbrook agreed to pay $400K without admitting or denying any claims
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Ousted McDonald's CEO Steve Easterbrook was charged by the Securities and Exchange Commission (SEC) for misleading investors about why he was fired in November 2019.
Easterbrook agreed to pay a $400,000 civil penalty without denying or admitting to any claims against him, according to the SEC. As part of the agreement, Easterbrook is also forbidden to serve as an officer or director for any SEC-reporting company over the next five years.
OUSTED MCDONALD'S CEO RETURNS $105M IN MISCONDUCT SETTLEMENT
McDonald's CEO Steve Easterbrook is interviewed at the New York Stock Exchange in 2017. (AP Photo/Richard Drew, File / AP Newsroom)
In 2019, the fast-food giant fired Easterbrook after the executive admitted to exchanging videos and text messages in a non-physical, consensual relationship with one of his employees.
At the time, McDonald’s board approved a separation agreement "without cause" that allowed Easterbrook to "retain substantial equity compensation that otherwise would have been forfeited," the commission said.
McDonald’s found through an internal investigation that Easterbrook had engaged in other undisclosed, improper relationships with additional McDonald’s employees in July 2020. The company wound up suing Easterbrook in August of that year, claiming he covered up relationships with employees and destroyed evidence.
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| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| MCD | MCDONALD'S CORP. | 298.56 | +1.21 | +0.41% |
"Easterbrook knew or was reckless in not knowing that his failure to disclose these additional violations of company policy prior to his termination would influence McDonald’s disclosures to investors related to his departure and compensation," the SEC said.
In 2021, Easterbrook has paid back more than $105 million in equity awards and cash to the burger giant for lying about the extent of his misconduct while he was its top executive.
"The SEC’s Order reinforces what we have previously said: McDonald’s held Steve Easterbrook accountable for his misconduct," McDonald's said in statement. "We fired him, and then sued him upon learning that he lied about his behavior."
A McDonald's restaurant on April 28, 2022, in San Leandro, California. (Justin Sullivan/Getty Images / Getty Images)
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The SEC also charged McDonald's "for shortcomings in its public disclosures related to Easterbrook’s separation agreement." However, the commission decided not to impose any financial penalties on the company due to its "substantial cooperation" during the course of its investigation.
The SEC "recognized the company’s substantial cooperation as well as the affirmative action taken by the company to recover value for its shareholders by suing Easterbrook," McDonald's added.
The Associated Press contributed to this report.