Fired McDonald’s CEO Steve Easterbrook fined $400k for sexting lies
Federal regulators charged former McDonald’s chief executive Steve Easterbrook with making false and misleading statements to investors about the extent of his employees’ romances when he was fired in 2019.
In an order Monday, the Securities and Exchange Commission (SEC) hit Easterbrook with a $400,000 fine and a five-year ban from 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 unidentified McDonald’s employee, and the official separation agreement said he was fired “without cause.”
But Easterbrook did not disclose additional secret affairs with other employees in violation of corporate policy, the SEC said in its order.
Federal regulators have charged former McDonald’s CEO Steve Easterbrook with making false and misleading statements to investors about his firing.
Easterbrook’s ex-girlfriend, Denise Paleothodoros (with him above), expressed surprise when he was accused of having affairs with several employees.
The agency also accused McDonald’s of “deficiencies” in its public disclosures related to the removal of Easterbrook, but did not impose any fines on McDonald’s because of the company’s “substantial cooperation” with the investigation, the SEC said.
Easterbrook’s lawyers, who accepted the order but neither admitted nor denied the SEC’s findings, did not immediately return calls for comment.
McDonald’s said in a statement that the settlement reinforced the fact that it held Easterbrook accountable for its misconduct.
In 2021, Easterbrook returned more than $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 Monday.
“The company continues to ensure that our values are part of everything we do, and we are proud of our strong ‘speak up’ culture that encourages employees to report the conduct of any employee, including the CEO, who does not meets our expectations,” the added statement said.
In 2021, Easterbrook returned more than $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’s had fired Easterbrook in November 2019 after he acknowledged exchanging videos and text messages in a consensual, non-physical relationship with an employee. Easterbrook told the Chicago company at the time that there were no other such cases.
The SEC said Easterbrook knew or was reckless in not knowing that his failure to disclose additional company policy violations prior to his firing would influence McDonald’s disclosures to investors related to his departure and compensation.
“When corporate officials corrupt internal processes to manage their personal reputations or line their own pockets, they are failing in their fundamental duties to shareholders, who have a right to transparency and fair treatment of executives,” said Gurbir Grewal, director of the Enforcement Division of the SEC. .
“By allegedly concealing the extent of his misconduct during the company’s internal investigation, Easterbrook broke that trust with shareholders and ultimately misled them.”
In 2020, Easterbrook’s ex-girlfriend spoke out in his defense, saying the allegations against him are “not the gentleman I knew”, in an exclusive interview with DailyMail.com.
Easterbrook is credited with reinvigorating the company after falling profits by simplifying menus, improving the quality of ingredients and introducing healthier items such as more salads, fresh fruit and juices.
Easterbrook’s ex-girlfriend, Denise Paleothodoros, spoke in his defense, saying the allegations against him are “not the gentleman I knew.”
Denise Paleothodoros, 47, who was with Easterbrook from 2014 to early 2018, described their relationship as an intense romance, where she was taken on a vacation on McDonald’s private plane and had plans to move into her $2.5 million Chicago condo. .
The former public relations executive met Easterbrook in 2014 while working for Golin, one of the many companies McDonald’s has hired to handle its public relations. At the time, Easterbrook was McDonald’s Global Brand Director.
“Steve disclosed our relationship to the board and I told my bosses at Golin that I was removed from the McDonald’s account,” Denise said.
She added: ‘We didn’t flaunt our relationship, but we didn’t hide it either. Our relationship was honest and McDonald’s knew it and my company knew it. People within our two companies knew about our relationship.’
In light of her dismissal, Denise said she was “shocked and disappointed”, adding: “Her actions described are not the actions of the person she knew.” She was very careful with the image of her.
The couple even had plans to move in together, and in 2017, Easterbrook shelled out $2.5 million for a sprawling 3,500-square-foot, 19th-floor, 3-bedroom, 3.5-bathroom luxury condo in Chicago.
Steve Easterbrook and his daughters, Rebecca, Katie and Lauren, are seen on Chicago’s Miracle Mile after leaving their $2.5 million 19th floor luxury condo.
Easterbrook, was seen in January 2022 after he agreed to return the cash and stock he had been given after the fast-food chain discovered he had been having affairs with company subordinates.
Easterbrook was credited with revitalizing McDonald’s after falling profits, by simplifying menus, improving ingredient quality, and introducing healthier items, such as more salads, fresh fruit, and juices.
His rise to the top of the world’s most famous fast food brand was extraordinary.
The Briton joined the company in 1993 as a branch manager, rose to become its UK boss in 2006 and then became president of its northern European business, putting him in charge of 1,800 restaurants.
In 2011 he became head of Pizza Express UK and then Wagamama, but then returned to McDonald’s as Brand Director in 2013.
He then became CEO in 2015, running the business from its $250 million headquarters in Chicago.
Easterbrook was seen in January 2022 for the first time since he agreed to repay the massive severance package.
The girls, from Easterbrook’s marriage to Susie Jennings that ended in divorce in 2015, had flown in from England to spend the holidays with their father.
According to published reports, the two eldest, Katie and Lauren, attended the University of Bristol in south-west England.
They stayed with him in his luxurious $2.5 million penthouse condo on the 19th floor overlooking Millennium Park, the very spot he had planned to move into with Paleothodoros years earlier.