In the Press
January 18, 2023

McDonald’s, SEC Saga Creates Reporting Headaches for Companies (Bloomberg Law)

The SEC’s unprecedented finding that McDonald’s didn’t disclose enough information about a CEO firing is prompting questions about whether companies have sufficiently clear guidance on what to tell investors in similar situations. “It raises a lot of questions that companies are going to need to grapple with that will be difficult,” ERISA partner Alexandra Denniston said to Bloomberg Law. When an executive leaves under a cloud of misconduct allegations, the disclosure language can be heavily negotiated. While investors may want to know if the company is paying an executive severance when it might not have to, “just providing that ‘we used our discretion not to terminate somebody for cause’ is information that could be misleading to investors without additional facts that the company may not be able to disclose,” Denniston said. Details about internal deliberations, for example, can be restricted because of confidentiality or privilege concerns.