Ex-McDonald's boss fined £328k after relationship with employee

Not lovin’ it! British former McDonald’s boss is fined £328,000 and banned from being a director in America for five years after claims he ‘lied about sexual relationships with employees’

• Ex-McDonald’s boss Steve Easterbrook was fired after employee relationship
• An internal investigation claims he lied about three relationships with other staff
• The 55-year-old Brit was fined £328k for ‘misleading statements to investors’

The former boss of McDonalds has been fined £328,000 by American regulators after allegedly lying about the extent of his sexual relationships with employees. 

Steve Easterbrook was charged by the Securities and Exchange Commission (SEC) over ‘false and misleading statements to investors’ about his November 2019 departure.

The fast food chain fired the 56-year-old Brit after finding he had entered a consensual relationship with a senior female employee.

However he initially received a severance package worth more than £86million following an agreement with McDonald’s that concluded his termination was ‘without cause’.

The SEC said Easterbrook and McDonald’s were both not honest with investors about the cause of Easterbrook’s termination.

Steve Easterbrook has been fined £328,000 by an American regulator for ‘concealing the extent of his misconduct’ over a relationship with an employee

Following Easterbrook’s departure, McDonald’s conducted an investigation and then accused and sued the businessman over having lied about three secret relationships with other staff.

In December 2021, after some legal proceedings, Easterbrook returned equity awards and cash, worth £86million, and apologised for having failed ‘at times’ to uphold the firm’s values.

Gurbir Grewal, the director of the SEC’s division of enforcement, said: ‘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.

‘By allegedly concealing the extent of his misconduct during the company’s internal investigation, Easterbrook broke that trust with – and ultimately misled – shareholders.’

Easterbrook returned equity awards and cash, worth £86million, and apologised for having failed ‘at times’ to uphold McDonald’s values

The SEC said it found that Easterbrook violated the anti-fraud provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934.

‘Without admitting or denying its findings, Easterbrook has consented to entry of the SEC’s cease-and-desist order, which imposes a five-year officer and director bar and a $400,000 civil penalty,’ it said.

The SEC’s order also found that McDonald’s violated Section 14(a) of the Exchange Act and Exchange Act rule 14a-3, and the company has consented to the SEC’s cease-and-desist order.

However, the agency said the firm had ‘substantially co-operated’ with the investigation and would not be hit with any fines as a result.

McDonald’s said the SEC order reinforced the fact it held Mr Easterbrook ‘accountable for his misconduct’.

‘We fired him, and then sued him upon learning that he lied about his behaviour,’ it said.

‘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.’

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