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New York Post/VideoElephant
We all know the catchy McDonald’s slogan “I’m lovin’ it”, but we imagine a former CEO of the fast food company probably isn’t loving being slapped with a $400,000 fine over his departure from the business back in November 2019.
Stephen J. Easterbrook, of Chicago, Illinois, had been interviewed by McDonald’s external legal team a month before surrounding allegations he had engaged in an “inappropriate personal relationship” with another employee, in breach of company policy.
At the time he admitted to sending videos and text messages in a non-physical, consensual relationship with an employee but denied any other inappropriate exchanges,
However, the business learned in July 2020 that he had failed to disclose additional secret romances with other employees, theDaily Mail reports.
In a press release issued towards the end of 2019, McDonalds’ said its Board had determined Mr Easterbrook “violated company policy and demonstrated poor judgment involving a recent consensual relationship with an employee”.
While the ex-CEO admitted at the time that “this was a mistake”, the ruling by the US’s Securities and Exchange Commission (SEC) noted Easterbrook’s contract was terminated “without cause”, meaning he could “retain certain equity-based compensation” which he would have forfeited if he was fired with a cause.
McDonalds is reported to have said it would not have made this decision if its former boss had been “candid” with them during its internal investigation.
The company sued Easterbrook in the Delaware Court of Chancery in August 2020 in a bid to recover the compensation he received in his separation agreement, before settling with the former CEO in December 2021, when he agreed to pay back his cash severance.
Although the chain was found in breach of the Exchange Act by the SEC over the whole affair, the Commission decided it would not impose a penalty on the company based on its “substantial cooperation” with its inquiry.
Easterbrook, meanwhile, in being found in breach of both the Exchange Act and the Securities Act, was ordered to pay the aforementioned $400,000 sum within 14 days.
Gurbir S. Grewal, director of the division of enforcement at the SEC, said: “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.
“By allegedly concealing the extent of his misconduct during the company’s internal investigation, Easterbrook broke that trust with – and ultimately misled – shareholders.”
The SEC added that both Easterbrook and McDonalds had consented to the cease and desist orders made by the SEC without admitting or denying its findings.
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