{"id":596181,"date":"2023-01-10T13:49:26","date_gmt":"2023-01-10T19:49:26","guid":{"rendered":"https:\/\/news.sellorbuyhomefast.com\/index.php\/2023\/01\/10\/mcdonalds-ex-ceo-is-paying-an-extra-400000-for-obscuring-the-reason-behind-his-termination\/"},"modified":"2023-01-10T13:49:26","modified_gmt":"2023-01-10T19:49:26","slug":"mcdonalds-ex-ceo-is-paying-an-extra-400000-for-obscuring-the-reason-behind-his-termination","status":"publish","type":"post","link":"https:\/\/newsycanuse.com\/index.php\/2023\/01\/10\/mcdonalds-ex-ceo-is-paying-an-extra-400000-for-obscuring-the-reason-behind-his-termination\/","title":{"rendered":"McDonald\u2019s ex-CEO is paying an extra $400,000 for obscuring the reason behind his termination"},"content":{"rendered":"
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\"Whose<\/p>\n<\/div>\n

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Whose fault is it anyway?<\/figcaption>
Photo: Scott Olson (Getty Images)<\/figcaption><\/p>\n<\/div>\n

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The Securities and Exchange Commission found that McDonald\u2019s dismissal of its ex-CEO Stephen J. Easterbrook was not by the book\u2014but only the former business executive is facing repercussions for the affair.<\/p>\n

In 2019, McDonald\u2019s abruptly fired Easterbrook, but key details leading to the decision were left out in the initial briefing to investors. The company ousted him for having a consensual relationship with a subordinate but did not say so in his separation agreement.<\/p>\n

Since Eastbrook\u2019s firing was initially deemed to be \u201cwithout cause\u201d he remained entitled to a cushy equity compensation. More than half a year after Easterbrook was ousted, an internal probe found that he had engaged in not one but a string of undisclosed, improper relationships with other McDonald\u2019s employees. Easterbrook\u2019s failure to disclose these additional violations of company policy\u2014McDonald\u2019s prohibits<\/a><\/span> dating or sexual relationships between employees with a direct or indirect reporting relationship to each other\u2014influenced the accuracy of the fast-food giant\u2019s disclosures to investors related to his departure and severance package. <\/p>\n

The SEC yesterday (Jan. 9) charged Easterbrook with \u201cmaking false and misleading statements to investors\u201d about the circumstances leading to his November 2019 firing. McDonald\u2019s was also charged for holes in its public disclosures related to the termination.<\/p>\n

Without admitting or denying the SEC\u2019s acquisition of fraud, Easterbrook agreed to enter the SEC\u2019s cease-and-desist order. He has to pay a $400,000 civil penalty, and he has been banned from serving in officer or director positions at any firm for five years.<\/p>\n

<\/a>McDonald\u2019s ex-CEO broke trust and misled investors, the SEC says<\/h2>\n
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\u201cWhen 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. By allegedly concealing the extent of his misconduct during the company\u2019s internal investigation, Easterbrook broke that trust with\u2013and ultimately misled\u2013shareholders.\u201d \u2014Gurbir S. Grewal, director of the SEC\u2019s division of enforcement.<\/em><\/p>\n<\/blockquote>\n

<\/a>The money in Easterbrooks\u2019s exit from McDonalds, by the digits<\/h2>\n

$41.8 million:<\/strong><\/a><\/span> Easterbrook\u2019s severance package<\/a><\/span> including six months of pay, shares he can cash out later, and other equity.<\/p>\n

$23.8 million:<\/strong><\/a><\/span> Value of stock options he could exercise at the time of firing<\/p>\n

$12.37:<\/strong><\/a><\/span> Average hourly pay for a McDonald\u2019s crew worker in the US<\/p>\n

$105 million:<\/strong><\/a><\/span> How much Easterbrook repaid, in cash and stock, in December 2021 to settle a lawsuit McDonald\u2019s brought against him in August 2020, alleging he had inappropriate relationships with subordinates and covering it up. <\/p>\n

<\/a>Why is McDonald\u2019s not being fined?<\/h2>\n

Often, in cases where executives violate its anti-fraud rules, the company is fined, too. To name a few:<\/p>\n

\u2708\ufe0f <\/strong>Last September, the SEC levied penalties<\/a><\/span> of $200 million and $1 million on Boeing and then-CEO Muilenburg, respectively, for sharing misleading information about the Boeing 737 Max which was involved in some deadly crashes;<\/p>\n

???? In May 2022, the federal authority charged<\/a><\/span> New York-based SCWorx upwards of $600,000 in penalties and disgorgement, and sought an officer and director bar against Schessel, for lying about the planned distribution of their covid-19 rapid testing kits;<\/p>\n

???? Publicly-traded asset manager Medley Management and its former co-CEOs, Brook B. Taube and Seth B. Taube, were together told to pay<\/a><\/span> a total of $10 million in April 2022 after the SEC accused them of \u201cmaking misrepresentations to investors and clients that created the illusion of Medley\u2019s likely future growth.\u201d<\/p>\n

In McDonald\u2019s case, though, the key difference is that the misrepresentation wasn\u2019t about the business itself. And for some of the incidents, it could not disclose Easterbrook\u2019s consensual relationships with subordinates because the company itself was not aware of them. Plus, it tried to remedy the situation.<\/p>\n

\u201cWe fired him, and then sued him upon learning that he lied about his behavior,\u201d the company said in a statement<\/a><\/span>.<\/p>\n

Taking all this into consideration, and then the \u201cthe substantial cooperation it provided\u2026including voluntarily providing information not otherwise required to be produced in response to the staff\u2019s requests,\u201d the SEC rebuked McDonald\u2019s, but chose not to impose a financial penalty on the fast food chain.<\/p>\n<\/div>\n

Read More<\/a>
\n Ananya Bhattacharya<\/p>\n","protected":false},"excerpt":{"rendered":"

Whose fault is it anyway?Photo: Scott Olson (Getty Images)The Securities and Exchange Commission found that McDonald\u2019s dismissal of its ex-CEO Stephen J. Easterbrook was not by the book\u2014but only the former business executive is facing repercussions for the affair.In 2019, McDonald\u2019s abruptly fired Easterbrook, but key details leading to the decision were left out in<\/p>\n","protected":false},"author":1,"featured_media":596182,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[24979,5008],"tags":[],"class_list":{"0":"post-596181","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-ex-ceo","8":"category-mcdonalds"},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts\/596181","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/comments?post=596181"}],"version-history":[{"count":0,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts\/596181\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/media\/596182"}],"wp:attachment":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/media?parent=596181"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/categories?post=596181"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/tags?post=596181"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}