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Friday, March 31, 2023

Former McDonald’s Executive Fined $400,000 for His Interactions with Employees

The SEC hit Easterbrook with a five-year officer and director bar and a $400,000 civil penalty

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UNITED KINGDOM: For “concealing the nature of his misbehavior” over a connection with an employee, the former McDonald’s CEO, Steve Easterbrook, was fined $400,000 (£328,000) by the US regulator.

Following the directors’ discovery that Easterbrook had been having a covert relationship with a senior female employee, McDonald’s fired Easterbrook in 2019. The firm claimed this demonstrated “poor judgment” and “violated company policy.”

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British national Easterbrook was “charged” by the US Securities and Exchange Commission (SEC) on Monday. Easterbrook was charged for making “false and misleading statements to investors about the circumstances leading to his termination.”

“The regulatory body claimed Easterbrook and McDonald’s misled investors about the circumstances surrounding Easterbrook’s firing, which allowed him to retain substantial equity compensation that otherwise would have been forfeited,” according to the regulator.

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The SEC reported that Easterbrook, a 55-year-old native of Watford, left McDonald’s with more than $40 million in a “separation arrangement.” It continued, “McDonald’s exercised discretion that was not disclosed to investors”

McDonald’s has agreed to the SEC’s cease-and-desist order after the SEC’s order ruled that the corporation violated Exchange Act regulation 14a-3 and Section 14(a) of the Exchange Act.

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“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’s requests, as well as the remedial measures undertaken by McDonald’s, including seeking and ultimately recovering the compensation Easterbrook received in pursuant of the separation agreement,” the commission stated that it did not fine McDonald’s.

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