Former McDonald’s CEO Charged by the SEC After Relationships with Staff

The former CEO of McDonald’s, Stephen Easterbrook, has agreed to repay more than $52.7 million in a settlement with the United States Securities and Exchange Commission (SEC).

The SEC charged Easterbrook with defrauding “the company’s investors by lying about sexual relationships with company subordinates while he was CEO, resulting in a separation compensation that he should not have received because of the alleged fraud,” according to Yahoo Finance.

Easterbrook violated McDonald’s company policy that prohibits dating or sexual relationships between employees with a direct or indirect reporting relationship to each other, per Yahoo Finance.

Easterbrook was abruptly terminated in 2019, but the key details were not made public to investors. The company fired him for having a consensual relationship with a fellow employee but did not state that in the separation agreement. He was initially paid $105m in a severance package.

However, upon further investigation, it was revealed that Easterbrook did not have just one relationship with an employee, but three relationships.

An anonymous tip-off led investigators to uncover explicit photos and messages sent from his personal email address to his company address. Investigators also found evidence in his phone that he approved a grant of company shares worth hundreds of thousands of dollars to one of the employees with whom he was involved, BBC reported.

McDonald’s was accused of violating securities laws for withholding the extent of Easterbrook’s misconduct but will not be fined by the SEC due to the company’s “substantial cooperation with the agency,” according to Yahoo Finance.