April 1, 2009
First Whistleblower Action Over Executive Compensation Disclosures
– Broc Romanek, CompensationStandards.com
This is not an April Fool’s joke. Yesterday, the Chicago Tribune ran this article about a lawsuit brought against McDonald’s by a former Senior Director of Compensation who balked against signing a subcertification related to the company’s disclosure of executive compensation. The company denies the allegations. I’m pretty sure this is the first whistleblower suit related to executive compensation disclosure.
The complaint was filed in US District Court for Northern Illinois – and includes allegations of (as noted in this blog):
– Setting up a reimbursement/repayment scheme to avoid disclosing golf club memberships for the regional President stationed in Hong Kong;
– Mislabeling the outgoing CEO as a “transitional officer” so he could keep his health and other benefits, and so the millions paid to him after his last day of work for McDonald’s could be called salary and incentive pay, rather than severance; and
– Implementing a shareholder-mandated 2.99X cap on executive severance agreements with loopholes large enough to render the cap meaningless.
We’ll be closely following this development since the topic is “near and dear” to many of our members…