A nice safety net…

September 10, 2004

Back in May, I wrote a story for Slate about the massive growth of the payday loan business. A growing number of people have come to rely on these loans that typically charge high interest rates, simply because they need the money and don’t have any other place to go. Luckily, the executives who run these companies don’t face similar straits. Ace Cash Express (AACE), one of the larger players in the payday loan business, recently eased out its CEO, Donald Neustadt, who had been in the job for the past 10 years. For the next year, Neustadt, 54, will take a sizable pay cut in his new, undefined role under a transitional employment contract and will remain a member of Ace’s board. But the contract also gives him a $19,000 monthly “allowance” over the next six years. If he decides that new CEO Jay Shipowicz, 40, is driving him crazy and winds up leaving the company before next June, the money is desribed as a severance payment. If he sticks it out through next June, the money is called a consulting contract. Either way, it’s a six-year deal worth $1.37 million.

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