The Securities and Exchange Commission charged former McDonald’s CEO Steve Easterbrook on Monday with misrepresenting his November 2019 firing.
Easterbrook has agreed to a $400,000 fine, without admitting or denying the claims, and will be barred from serving as an officer or director for any SEC-reporting company for five years.
McDonald’s board fired Easterbrook in 2019 for a consensual relationship with an employee, which violated the company’s fraternization policy. However, he wasn’t fired for cause, allowing him to receive a severance package.
Months later, the fast-food giant sued its former chief executive, claiming he committed fraud and lied to cover up additional inappropriate relationships with employees. In December 2021, the two parties settled the lawsuit, and McDonald’s successfully clawed back Easterbrook’s severance, valued at $105 million.
A representative for Easterbrook declined to comment to CNBC.
“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 Grewal, director of the SEC’s division of enforcement, in a statement.
The agency also found McDonald’s violated the Exchange Act, which prohibits companies from material misrepresentations and omissions in proxy statements sent to shareholders, but is not imposing a financial penalty on McDonald’s because of its “substantial” cooperation with the agency during its investigation.
McDonald’s has not admitted or denied the SEC’s findings. In a statement, the company said that the SEC’s actions reinforce what it has previously said about its handling of Easterbrook’s misconduct.
“The Company continues to ensure our values are part of everything we do, and we are proud of our strong ‘speak up’ culture that encourages employees to report conduct by any employee, including the CEO, that falls short of our expectations,” McDonald’s said.