Michael R. McFerran was “involuntarily terminated” by Ares Management Corp. as a partner, chief operating officer and chief financial officer for “inappropriate personal relationships and interactions with certain employees,” according to documents filed with the Securities and Exchange Commission on Monday.
Mr. McFerran’s termination was effective Aug. 4, following an investigation by an outside law firm, and was unrelated to Ares’ operations or financial controls, the SEC filing said.
As a result of Mr. McFerran’s termination, he has forfeited all future compensation, all unvested restricted units and all unvested carried interest. The forfeitures include performance-based equity awards and special time-based equity awards valued at about $50 million that would have vested over the next five years through 2026, the document said.
“As soon as we became aware of the allegations, we began an investigation and retained outside counsel to assist us in this process,” said Antony Ressler, co-founder and executive chairman of Ares in the SEC document. “Mr. McFerran’s conduct was entirely inconsistent with our values and cannot be tolerated.”
Jarrod Phillips, a partner and Ares’ chief accounting officer, replaced him as chief financial officer.
“I have had the pleasure of knowing and working closely with Jarrod since he joined Ares over five years ago and look forward to our continued partnership,” said Michael Arougheti, CEO and president in the SEC document.
Each of Ares’ business operations now report directly to Mr. Arougheti, who had performed the COO duties for three years until 2017.
Mr. McFerran joined Ares in March 2015 as executive vice president, chief financial officer and treasurer. He had been a managing director and CFO of the credit business at KKR & Co.
Ares declined to comment beyond the SEC filing, spokesman Tom Maginnis said in an email.
Mr. McFerran could not be immediately reached for comment.
Ares had $247.9 billion in assets under management as of June 30.