Ex-McDonald’s boss faces probe into ‘shares for lover'
A BrITISH former McDonald’s boss could face an investigation over hundreds of thousands of pounds in shares he allegedly gifted to a lover.
Steve Easterbrook, sacked over a workplace relationship last year, faces the likelihood of an inquiry by the Wall Street regulator into the unorthodox transfer.
In court papers filed this week, McDonald’s accused its former chief executive of ‘approving a special discretionary grant of restricted stock units, worth hundreds of thousands of dollars’ to the unnamed woman ‘shortly after their first sexual encounter and within days of their second’.
The Securities and Exchange Commission refused to comment on any investigation last night but a former federal prosecutor said the watchdog was likely to be ‘snooping around’.
McDonald’s is suing Mr Easterbrook over claims he covered up flings with three junior employees in his final year in the job by deleting X-rated pictures from his phone and company email. The Watford-born divorcee, 58, was fired last November when he admitted ‘poor judgement’ after consensual sexting – the sending of explicit messages – with a colleague.
He told McDonald’s there was only ever one relationship but a whistleblower came forward last month to claim there were other women.
After a search of computer servers found evidence, it says, of three other affairs, McDonald’s went to court this week to claw back Mr Easterbrook’s severance package, worth upwards of £30million.
Former prosecutor David Weinstein, who is now a lawyer, said the lawsuit was unlikely be the end of Mr Easterbrook’s troubles, with any stock market transactions being heavily scrutinised.
He said: ‘The most likely outcome is going to be an SEC civil investigation into why he gave this woman the shares. The fact that the SEC are not commenting tells me they are probably already snooping around.
‘I don’t know how restricted these stocks were or whether they were in a trust. There may be questions over whether or not they affected the value of McDonald’s stock, and the SEC will look at that.
‘Also, why was he giving this woman so much stock? We don’t know.’
Asked whether Mr Easterbrook could have given the stocks to her out of affection, Mr Weinstein, based in Miami, said: ‘That’s not how it works in the real world.’
Mr Easterbrook led McDonald’s for four years from 2015, during which time he more than doubled the company’s share price.
The New York Times reported that the woman whose claim last October led to Mr Easterbrook’s firing was worried she would be punished for the month-long relationship.
Fearing for her future in the fast food giant, she told her superiors that she and her boss exchanged sexually explicit text messages, photographs and at least one FaceTime call, but it was not a physical relationship.
Mr Easterbrook was allowed to walk away with his huge severance package to create ‘as little disruption as possible’, McDonald’s said in its court filing.
It interrogated his mobile phone but did not dig deeper
‘They are probably snooping around’
into all of his past emails, taking his word that there was just one relationship.
Brandon Garrett, a professor who specialises in corporate criminal law at Duke University School of Law, said that the company should have been more thorough. He said the electronic records should have been looked at straight away in any internal investigation, adding: ‘The concern, if an investigation doesn’t look at emails, is that it was a half-hearted investigation.’
Former McDonald’s USA chief executive Ed Rensi said that the lawsuit against Mr Easterbrook was ‘appropriate’.
He told Fox Business: ‘Any CEO knows full well what his responsibilities are or her responsibilities and to engage with subordinates in a power move is just not acceptable.’
He said the company ‘didn’t really pursue him as hard as I think they should have and now people are coming forward and the board’s doing the right thing.
‘It sends a great message to every executive of the United States: Behave yourself, do the moral thing. Don’t take advantage of your employees’.
Mr Easterbrook, who lives in Chicago, was unavailable for comment and has not yet filed his defence to the lawsuit.
‘Half-hearted investigation’