Los Angeles, Calif.-based capital markets firm Ares Management fired its CFO-COO, Michael McFerran, last week, according to a Monday 8-K filing, for “inappropriate personal relationships and interactions with certain employees in violation of company policies.”
The dismissal of McFerran, a firm partner, entailed the forfeiture of all future compensation and un-vested carried interest, which would have amounted to more than $50 million, Ares wrote in the filing. The firm said his firing was unrelated to company operations or financial controls.
As soon as the company became aware of the allegations, it opened an investigation with an outside counsel, it said, but didn’t specify when company leaders were alerted, or what the specific actions were.
“The board took swift action upon receipt of the investigation’s findings, terminating Mr. McFerran with forfeiture of significant economic interests,” Executive Chairman and Co-founder Tony Ressler said in the filing. “Mr. McFerran’s conduct was entirely inconsistent with our values and cannot be tolerated.”
“Each of us at Ares is expected to live our core values every day,” President and CEO Michael Arougheti said. “Our over 2,000 employees around the world understand how important it is to our culture and to maintaining a respectful work environment.”
The same day McFerran was removed, Ares partner and chief accounting officer of five years, Jarrod Phillips, took the helm as CFO.
As joint CFO-COO, McFerran led all finance, accounting, technology, operations and human resources functions, The Wall Street Journal reported.
McFerran’s compensation in the 2020 fiscal year totaled $8.6 million, including almost $6 million in stock awards, Ares’s proxy statement said. He joined Ares in 2015 as CFO and treasurer after several years as a manager at KKR & Co. and Ernst & Young LLP.
Each of Ares’s business operations functions now reports directly to Arougheti, the filing said, who had performed COO duties for three years until 2017.
Representatives for Ares declined CFO Dive’s request for comment beyond the SEC filing.