(HedgeCo.Net) The Securities and Exchange Commission today charged Stephen J. Easterbrook, former CEO of McDonald\u2019s Corporation, with making false and misleading statements to investors about the circumstances leading to his termination in November 2019. McDonald\u2019s also was charged for shortcomings in its public disclosures related to Easterbrook\u2019s separation agreement.<\/p>\n\n\n\n
According to the SEC\u2019s order, McDonald\u2019s terminated Easterbrook for exercising poor judgment and engaging in an inappropriate personal relationship with a McDonald\u2019s employee in violation of company policy. However, McDonald\u2019s and Easterbrook entered into a separation agreement that concluded his termination was without cause, which allowed him to retain substantial equity compensation that otherwise would have been forfeited. In making this conclusion, McDonald\u2019s exercised discretion that was not disclosed to investors.<\/p>\n\n\n\n
Subsequently, in July 2020, McDonald\u2019s discovered through an internal investigation that Easterbrook had engaged in other undisclosed, improper relationships with additional McDonald\u2019s employees. According to the SEC\u2019s 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\u2019s disclosures to investors related to his departure and compensation.<\/p>\n\n\n\n
“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 S. Grewal, Director of the Division of Enforcement. “By allegedly concealing the extent of his misconduct during the company\u2019s internal investigation, Easterbrook broke that trust with \u2013 and ultimately misled \u2013 shareholders.”<\/p>\n\n\n\n
“Public issuers, like McDonalds\u2019s, are required to disclose and explain all material elements of their CEO\u2019s compensation, including factors regarding any separation agreements,” said Mark Cave, Associate Director of the Division of Enforcement. “Today\u2019s order finds that McDonald\u2019s failed to disclose that the company exercised discretion in treating Easterbrook\u2019s termination as without cause in conjunction with the execution of a separation agreement valued at more than $40 million.”<\/p>\n\n\n\n
The SEC\u2019s order finds that Easterbrook violated the anti-fraud provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934. Without admitting or denying its findings, Easterbrook has consented to entry of the SEC\u2019s cease-and-desist order, which imposes a five-year officer and director bar and a $400,000 civil penalty.<\/p>\n\n\n\n
The SEC\u2019s order also finds that McDonald\u2019s violated Section 14(a) of the Exchange Act and Exchange Act Rule 14a-3. Without admitting or denying its findings, McDonald\u2019s has consented to the SEC\u2019s cease-and-desist order. The Commission determined not to impose a financial penalty on McDonald\u2019s in light of the substantial cooperation it provided to SEC staff during the course of its investigation, including voluntarily providing information not otherwise required to be produced in response to the staff\u2019s requests, as well as the remedial measures undertaken by McDonald\u2019s, including seeking and ultimately recovering the compensation Easterbrook received pursuant to the separation agreement.<\/p>\n","protected":false},"excerpt":{"rendered":"
(HedgeCo.Net) The Securities and Exchange Commission today charged Stephen J. Easterbrook, former CEO of McDonald\u2019s Corporation, with making false and misleading statements to investors about the circumstances leading to his termination in November 2019. McDonald\u2019s also was charged for shortcomings […]<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[16,3,16048],"tags":[],"class_list":["post-83592","post","type-post","status-publish","format-standard","hentry","category-hedgeco-networks-press-releases","category-hedgeco-news","category-hedgecovest-news"],"_links":{"self":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/83592","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/comments?post=83592"}],"version-history":[{"count":1,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/83592\/revisions"}],"predecessor-version":[{"id":83593,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/83592\/revisions\/83593"}],"wp:attachment":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/media?parent=83592"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/categories?post=83592"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/tags?post=83592"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}