The Securities and Exchange Commission has charged former McDonald's CEO Stephen J. Easterbrook with making "false and misleading statements" to investors about his firing in 2019.
The executive entered into a $40 million separation agreement on the basis that he was fired without cause, when in reality it was related to his inappropriate relationship with an employee. At issue was Easterbrook's equity holdings. The agreement stating the termination was without cause allowed him to hold onto his shares, which otherwise would have been forfeited.
"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 S. Grewal, 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."
The SEC charges also state that Easterbook withheld the fact that he had maintained additional relationships with employees in order to give himself a better deal.
"Public issuers, like McDonalds’s, are required to disclose and explain all material elements of their CEO’s compensation, including factors regarding any separation agreements," said Mark Cave, associate director of the Division of Enforcement.
The agency said Easterbrook has consented to a cease-and-desist order that imposes a $400,000 civil penalty and a five-year ban on holding officer and director positions at public companies.
Nestlé has dismissed its CEO Laurent Freixe after an investigation into an undisclosed relationship with a direct subordinate. The company announced on Monday that the dismissal was effective immediately. An investigation found that Freixe violated Nestlé’s code of conduct. He had been CEO for a year. Philipp Navratil, a longtime Nestlé executive, will replace him. Chairman Paul Bulcke stated that the decision was necessary to uphold the company’s values and governance. Navratil began his career with Nestlé in 2001 and has held various roles, including CEO of Nestlé's Nespresso division since 2024.
Kraft Heinz is splitting into two companies a decade after they joined in a massive merger that created one of the biggest food companies on the planet. One of the companies will include brands such as Heinz, Philadelphia cream cheese and Kraft Mac & Cheese. The other will include brands like Oscar Mayer, Kraft Singles and Lunchables. When the company formed in 2015 it wanted to capitalize on its massive scale, but shifting tastes complicated those plans, with households seeking to introduce healthier options at the table. Kraft Heinz's net revenue has fallen every year since 2020.
