SEC Charges Former McDonald's CEO For Misleading Investors About His Termination

(RTTNews) - The Securities and Exchange Commission Monday charged former McDonald's Corporation (MCD) CEO Stephen Easterbrook, with making false and misleading statements to investors related to his termination in November 2019.

McDonald's also was charged for shortcomings in its public disclosures related to Easterbrook's separation agreement.

Easterbrook has agreed to pay a fine of $400,000, without admitting or denying its findings. He has been barred from serving as an officer or director for any SEC-reporting company for five years.

McDonald's fired Easterbrook for engaging in a personal relationship with a McDonald's employee, which violated company policy.

However, McDonald's didn't fire Easterbrook for that reason, which allowed him to retain substantial equity compensation that otherwise would have been forfeited.

Subsequently, in July 2020, McDonald's discovered through an internal investigation that Easterbrook had engaged in other undisclosed, improper relationships with additional McDonald's employees.

According to the SEC's order, 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.

"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," said Gurbir Grewal, Director of the Division of Enforcement. "By allegedly concealing the extent of his misconduct during the company's internal investigation, Easterbrook broke that trust with - and ultimately misled - shareholders."