Retirement at any cost at VCA Antech …

Wearing a belt and suspenders is good insurance, and generally it’s no harm to anyone (and maybe a boon to the belt and suspenders industries). But when it comes to executive retirement planning, we’re less sanguine about the approach.

On Wednesday at a little after 5 p.m., VCA Antech (WOOF) — a Los Angeles company that runs 492 animal hospitals and a string of veterinary labs — filed an 8-K dumping no fewer than eight new contracts with four top executives. The upshot is clear, however: If the four men can hang in there a few more years, their golden years are assured.

One set of contracts gave each of them — Chief Executive Robert L. Antin, Chief Operating Officer Arthur J. Antin, Senior VP Neil Tauber and Chief Financial Officer Thomas W. Fuller — a brand spanking new executive pension plan, or SERP (for “supplemental executive retirement plan”). And the terms aren’t too shabby, either.

The pension plans for Robert and Arthur Antin kick in immediately, guaranteeing them annual income equivalent to 20% of their base salary for a dozen years after they retire. For Robert Antin, that’s $178,464 a year, assuming he retires at his 2009 salary; for Arthur it’s $113,568 at age 67.

The longer they stay, the sweeter the SERP gets, and it ramps up fast: The Antin brothers reach payouts of 50% of their salary by 2012; Tauber and Fuller get there in 2014. Then they’re locked in, and Robert and Arthur can start collecting within two to four years. Total haul over the 12-year term of the pension for the Antins if they make it through the end of 2012: $5.35 million for Robert, $3.4 million for Arthur. The others each get $2.3 million if they last through 2014. (All four men can start collecting between age 66 and 67, except for Fuller, who can start at age 62.)

That’s a decent retirement nest-egg on its own. But the other four contracts filed on Wednesday give each of the four men a nice consulting gig in retirement, also courtesy of VCA Antech’s shareholders. Robert Antin’s gives him full salary and bonus for two years, then three-quarters pay for three more — a cool $7.6 million. His brother’s, which steps down a little more quickly, is worth some $3 million. Tauber and Fuller get three-year deals worth $1.2 million apiece.

The total haul may be easier to see in a table than written out:

ExecutiveSERPConsulting agreementTotal
R.L. Antin, Chairman & CEO$5.35 million$7.6 million$12.9 million
A.J. Antin, COO$3.4 million$3 million$6.4 million
N. Tauber, SVP$2.3 million$1.2 million$3.5 million
T. Fuller, CFO$2.3 million$1.2 million$3.5 million

Of course, this may well understate the true amount they ultimately will get. That’s because we’re using their current pay for the calculations. Both the SERP formula and the consulting agreement will use the executives’ “final” pay — which is calculated generously. The SERP uses salary from the year before termination or the average salary from the highest three years in the decade before retirement — whichever is higher. Similarly, for the Antins, the consulting agreement uses salary immediately before retirement, plus the highest bonus from the prior four years — or, if it’s higher, the average salary and bonus for the two highest years of their last five on the job.

And, as you might expect, they qualify for the maximum pension if there’s a change of control, or if they’re terminated without cause (and poor management, should the board decide they aren’t up to snuff, doesn’t count as “cause”). Similarly, they get cashed out of the full consulting agreements if there’s a change in control or the company tries to end them before the term is up.

So next time you take Fluffy to the vet and walk out with a big bill for lab tests and the like, you can rest assured: You’re doing your bit for retirement security at the top.

Image source: Tony.L.Wong via Flickr


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