Fired McDonald’s CEO who had affairs with subordinates is fined $400,000 by SEC for lying to investors about the romances and claiming he was terminated ‘without cause’
- SEC hit former CEO Stephen Easterbrook with the fine in an order on Monday
- He is charged with lying to investors about his multiple employee romances
- McDonald’s fired Easterbrook in 2019 for ‘poor judgement’ in sexting employee
- But Easterbrook allegedly failed to disclose other relationships with employees
Former McDonald’s CEO Stephen Easterbrook has been charged by federal regulators with making false and misleading statements to investors about the extent of his employee romances when he was fired in 2019.
In an order on Monday, the Securities and Exchange Commission (SEC) hit Easterbrook with a $400,000 fine, and a five-year ban on serving as a corporate officer or director.
McDonald’s fired Easterbrook in November 2019 for exercising ‘poor judgment’ by engaging in a sexting relationship with an unnamed McDonald’s employee, and the official separation agreement said he was terminated ‘without cause.’
But Easterbrook failed to disclose additional secret romances with other employees in violation of corporate policy, the SEC said in its order.
Former McDonald’s CEO Stephen Easterbrook has been charged by federal regulators with making false and misleading statements to investors about his firing
Easterbrook’s former girlfriend Denise Paleothodoros (with him above) expressed shock when he was accused of carrying on romances with multiple employees
The agency also charged McDonald’s with ‘shortcomings’ in its public disclosures related to Easterbrook’s ouster, but did not impose any fines on McDonald’s due to the firm’s ‘substantial cooperation’ with the investigation, the SEC said.
Attorneys for Easterbrook, who consented to the order but did not admit or deny the SEC’s findings, did not respond immediately to calls for comment.
McDonald’s said in a statement that the settlement reinforced the fact it held Easterbrook ‘accountable for his misconduct.’
In 2021, Easterbrook returned over $105 million he received as a severance package in 2019 and apologized to the company to settle a lawsuit over the alleged cover-up.
‘We fired him, and then sued him upon learning that he lied about his behavior,’ the firm said in its statement on Monday.
‘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,’ the statement added.
In 2021, Easterbrook returned over $105 million he received as a severance package in 2019 and apologized to McDonald’s to settle a lawsuit over the alleged cover-up
McDonald had fired Easterbrook in November 2019 after he acknowledged exchanging videos and text messages in a non-physical, consensual relationship with an employee. Easterbrook told the Chicago company at the time that there were no other similar instances.
The SEC said that Easterbrook knew or was reckless in not knowing that his failure to disclose additional violations of company policy before his firing would influence McDonald´s disclosures to investors related to his exit and compensation.
‘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, the SEC director of the Division of Enforcement.
‘By allegedly concealing the extent of his misconduct during the company´s internal investigation, Easterbrook broke that trust with – and ultimately misled – shareholders.’
In 2020, Easterbrook’s former girlfriend spoke out in his defense and said the accusations against him ‘are not the gentleman I knew’, in an exclusive interview with DailyMail.com.
Easterbrook is credited with revitalizing the company after profits fell, doing so by simplifying menus, improving the quality of ingredients and introducing healthier products such as more salads, fresh fruit and juices
Denise Paleothodoros, 47, who was with Easterbrook from 2014 into early 2018, described their relationship as an intense romance, where she was whisked away on vacation on McDonald’s private plane and had plans of moving into his $2.5 million condo in Chicago.
The former PR executive met Easterbrook in 2014 while working for Golin, one of the many companies McDonald’s hired to handle its PR. At the time, Easterbrook was McDonald’s Global Chief Brand Officer.
‘Steve disclosed our relationship to the board and I told my bosses at Golin, I was taken off the McDonald’s account,’ Denise said.
She added: ‘We didn’t flaunt our relationship but we didn’t really hide it either. Our relationship was above board and McDonald’s knew about it and my company knew about it. People within both of our companies knew about our relationship.’
In light of his firing, Denise said she was ‘shocked and disappointed’, adding: ‘His actions described are not the actions of the person I knew. He was very careful about his image.’
Easterbrook’s former girlfriend Denise Paleothodoros spoke out in his defense and said the accusations against him ‘are not the gentleman I knew’
Easterbrook was credited with revitalizing McDonald’s after profits fell, doing so by simplifying menus, improving the quality of ingredients and introducing healthier products such as more salads, fresh fruit and juices.
His rise to the top of the world’s most famous fast food brand was an extraordinary one.
The Brit joined the company in 1993 as a branch manager, working his way up to become its UK chief in 2006 and then becoming president of its northern European business, putting him in charge of 1,800 restaurants.
In 2011 he became boss of UK’s Pizza Express and then Wagamama but then went back to McDonald’s as Chief Brand Office in 2013.
He then became overall boss in 2015, running the business from its $250 million headquarters in Chicago.
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