- Former McDonald’s CEO Stephen Easterbrook has been charged by federal regulators for making false statements to investors about the circumstances of his firing in 2019.
- Easterbrook was fired for engaging in an inappropriate personal relationship with a McDonald’s employee, but the separation agreement allowed him to keep substantial compensation in McDonald’s stock.
- The SEC claims that Easterbrook knew his failure to disclose additional violations before his firing would influence McDonald’s disclosures to investors.
Federal regulators have charged former McDonald’s CEO Stephen Easterbrook with making false and misleading statements to investors about the circumstances of his firing by the fast food giant in November 2019, according to The Independent.
The Securities and Exchange Commission (SEC) alleges that Easterbrook was ousted for engaging in an inappropriate personal relationship with a McDonald’s employee in violation of company policy, but the separation agreement with the company concluded that his termination was without cause.
This allowed Easterbrook to keep substantial compensation in McDonald’s stock that he otherwise would have forfeited, the agency said.
The SEC has valued Easterbrook’s separation agreement at more than $40m.
Easterbrook has agreed to a 5-year ban on serving as a corporate officer or director and a $400,000 civil penalty. McDonald’s was not issued a financial penalty as the SEC cited the company’s cooperation and efforts to recover Easterbrook’s compensation.
This case highlights the ways in which capitalist corporations prioritize profits over ethical considerations.
Easterbrook was able to walk away with a significant financial payout despite engaging in misconduct and covering up relationships with employees.
Additionally, McDonald’s decision to terminate Easterbrook without cause further highlights the lack of accountability for executives in capitalist systems where they are able to profit off of their own misconduct.
The SEC’s charges against Easterbrook and the company serve as a reminder that corporations must be held accountable for their actions and that transparency and fair dealing with shareholders is crucial in ensuring a fair economy.
“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 the SEC director of the Division of Enforcement Gurbir Grewal. “By allegedly concealing the extent of his misconduct during the company’s internal investigation, Easterbrook broke that trust with – and ultimately misled – shareholders.”
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