Not pinching pennies at Dollar Financial…

Note: We’ve corrected an error in the post; see below for details.

Occasionally we come across executive pay arrangements that are so jaw-dropping, we’re almost at a loss for words. Almost — as it turns out, we can come up with a choice few for Jeffrey A. Weiss, chief executive of DFC Global (DLLR), the high-interest lender formerly known as Dollar Financial.

Weiss and Dollar Financial should be familiar to dedicated readers: Michelle footnoted it when the company said it had forgiven Weiss a whopping $2.3 million in interest (for a loan whose size was undisclosed; she estimated to be in the ballpark of $15 million). Also, Sonya footnoted a sweet, if convoluted, employment agreement with Chief Financial Officer Randall Underwood.

Weiss has long enjoyed lavish compensation and benefits, and they only seem to keep getting more so. His newest employment agreement, filed with an 8-K on Friday afternoon, comes less than two years after his last one — and with nearly a year left to run on that one. There’s a lot to cover, so we’ll just dive right in:

Perhaps most striking is the company’s promise to pay Weiss the equivalent of $300,000 a year for life once he leaves the company, a so-called —Capstone Award—¯that is further sweetened by an “Incremental Capstone Award” promising him another $150,000 a year for life. (His surviving spouse is entitled to $150,000 and $75,000 a year, respectively, after he dies). Based on one actuarial rule of thumb we’ve heard, $1 a year for life from age 65, at 6% interest, is worth roughly $12 — which would make these benefits worth around $3.6 million and $1.8 million. (Note: An earlier version of this section said incorrectly that the Capstone Award was $3 million a year. My apologies for the mistake.)

Weiss gets the bigger payout if he retires — which is defined broadly as “any voluntary termination by the Executive of his employment before June 30, 2012, or a termination by the Company for Cause before June 30, 2014″ (emphasis ours) — or if he’s fired without cause or quits for good reason, or if there’s a change of control; the smaller payout is payable under more or less the same circumstances, except that instead of retirement, it’s paid on “delayed retirement,” defined as any voluntary departure after June 30, 2012, “or any termination by the Company for any reason on or after June 30, 2014…” Non-renewal of Weiss’s contract also counts as a delayed retirement. As far as we can tell, Weiss is entitled to at least one payment under nearly every conceivable departure from the company — and several scenarios would see the payout of both awards.

That’s all on top of a $1 million salary, $1.25 million target annual bonus (with a maximum of $2.5 million), a target of $6 million in long-term incentive pay (cash and restricted stock) for this fiscal year and next, a supplemental $4.2 million grant of restricted stock units, and a $2 million “supplemental cash bonus” with various performance conditions in

“recognition of Mr. Weiss— service on the Company’s board of directors, including his service as Chairman, and in recognition of Mr. Weiss— prior and future service to the Company as Chief Executive Officer…”

Much of the equity, and a chunk of the cash, vests over up to three or four years, but much of it also vests on various kinds of termination and on a change in control (whether or not Weiss loses his job, apparently).

Then there are the perks: a new $4.2 million in term life (over and above what he’s already entitled to, but strangely only through July 1, 2012), up to $100,000 in cash to buy himself another $10 million in term life and/or disability insurance, unspecified club membership costs, and $15,000 in reimbursed out-of-pocket medical and dental expenses.

Should Weiss lose his job — and given how much the board seems to adore him, that doesn’t seem terribly likely at the moment — he gets even more: roughly $4.5 million in cash severance, another pro-rata bonus for the year of his termination and up to two years of health-care benefits.

Weiss also stands to get some pretty pictures to hang on his wall when he goes. In among the familiar enumeration of all the stuff he has to give back on his departure (company paperwork, secrets, etc.) there’s also a fascinating list of exceptions, including

“correspondence, personal diaries, calendars and Rolodexes, personal files, phone books and all photographs and artwork purchased for the Executive’s Berwyn, PA office…”

Prior contracts referred only to photographs and artwork “to the extent set forth on Schedule 1 attached hereto” — but we haven’t found that Schedule 1 anywhere in Dollar Financial’s filings, so it’s anybody’s guess what’s involved.

Some of this largesse is new — his Incremental Capstone Award, for example, rose to $150,000 from $75,000 (and the related spousal benefit also doubled) — while other elements have been in place for at least a few years. It’s worth noting that this guy just got nearly $1 million extra (above and beyond his salary and bonus) just for being employed another year, as disclosed in this 8-K from August 2. All in all, it’s pretty stunning.

Moreover, Weiss’s agreement isn’t the only one Dollar Financial filed on Friday. Attached to the same 8-K are employment agreements for the CFO, Underwood, as well as for Chief Operating Officer Norman Miller. These contracts, too, are pretty amazing, especially when you consider that Dollar Financial has a market-cap under $1 billion and makes its money with short-term loans, pawning goods and buying gold “primarily [from] unbanked and under-banked consumers and small business owners” to “provide customers with immediate access to cash for living expenses or other needs.”

Needless to say, it isn’t likely that Weiss or his fellow executives are likely to be Dollar customers any time soon. The company hasn’t had a say-on-pay vote yet, but it should with its annual meeting this fall. It’ll be interesting to see how that goes.

Image source: Mykl Roventine via Flickr


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