(Bloomberg) — Former McDonald’s CEO Steven Easterbrook has been awarded $400,000 in response to U.S. regulators’ allegations that he failed to disclose improper relationships with his employees. agreed to pay
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The Securities and Exchange Commission said on Monday that Easterbrook had not fully disclosed company policy violations leading up to his 2019 dismissal. Easterbrook’s attorneys, who neither confirmed nor denied the SEC’s allegations as part of the settlement, did not immediately respond to an emailed request for comment.
This penalty is the latest twist in the year-long saga surrounding Easterbrook’s tenure. In late 2021, he agreed to return $105 million in cash and stock compensation to settle a lawsuit filed by his fast food chain. That amount would have been forfeited if Easterbrook was approached about his actions and fired for good cause, the Chicago-based company said at the time.
The SEC said it did not impose a financial penalty on McDonald’s given the “substantial cooperation” and corrective actions taken by McDonald’s.
“Easterbrook’s concealment of the extent of its wrongdoing during the company’s internal investigation led to a loss of trust and ultimately misunderstanding with shareholders,” SEC executive director Gurbir Grewal said in a statement. board.
As part of the settlement, in addition to his financial penalties, Easterbrook agreed to a five-year ban from serving as an officer or director. It opposed the resolution, stating that a decision to consider “analysis” is beyond the SEC’s authority.
“The SEC order reinforces our earlier statements that McDonald’s held Steve Easterbrook accountable for misconduct. When I found out what was going on, I sued him.”
McDonald’s shares fell 0.4% in New York trading at 10:37 am.
Easterbrooks’ messy exit more than three years ago remains a legal headache for McDonald’s. Three of his pension funds that hold stakes in fast food companies have sued, and last month he will return $105 million to settle allegations that Easterbrook had sexual relations with subordinates. He said he didn’t get enough money from Easterbrook when he agreed to do so. Investors allege McDonald’s should have dug Easterbrook for tens of millions of dollars in legal fees the company has spent on lawsuits.
A judge in the case has yet to rule on whether their case can proceed.
According to published reports, Easterbrook still had a net worth of about $40 million after handing over $105 million, including about $40 million in stock options for McDonald’s.
— With the help of Stephanie Stoughton and Leslie Patton.
(Adds McDonald’s statement and background to investor lawsuit.)
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