8 FCA Officers Get Contracts With Severance Provisions
Financial Corp. of America has granted job contracts to eight senior officers in a move to maintain management stability, the company said Friday in its annual proxy statement.
The contracts provide the executives with severance pay if they are fired or demoted after a change of ownership.
FCA Chairman William J. Popejoy is not affected by the arrangement. “I felt I didn’t need one,” Popejoy, who is independently wealthy, said in a telephone interview.
He earned $539,717 in 1987, well below what chief executives at other large California savings and loans made last year. His annual pay has increased 3.8% since he took the top job at FCA in August, 1984.
Meanwhile, regulators still have not found a way to solve the prodigious problems of Irvine-based FCA, the nation’s second-largest thrift company. It has a negative net worth and is continuing to lose money.
It is believed that private investor Robert M. Bass, part of the wealthy Bass brothers clan of Texas, is among those seriously interested in buying FCA, but a major stumbling block for any sale continues to be the amount of assistance it would require from the Federal Savings and Loan Insurance Corp.
FSLIC is an arm of the Federal Home Loan Bank Board that steps in and foots the bill when a savings and loan becomes insolvent. The government agency also insures customer deposits for up to $100,000 per account.
“We’re still talking to people,” bank board spokesman Karl Hoyle said Friday, but he declined to be more specific.
An assistant to Bass at the Robert M. Bass Group in Ft. Worth said, “We don’t discuss our businesses with the news media.” In recent years, the Robert M. Bass Group has invested heavily in real estate, retail stores and television.
Should FCA eventually be sold with FSLIC’s financial assistance, the new employment contracts would be canceled. But, Hoyle said, FSLIC could waive the cancellations.
Those who received contracts include four executive vice presidents--Merrill Butler, Michael A. Durkin, Victor H. Indiek and Kenneth W. Krause--and financial officer William E. Griscom, general counsel Donald E. Royer, auditor Charles E. Shewalter and administrator Neil N. Stolz.
Butler was the highest paid of the eight last year, earning nearly $731,000, including a bonus of $350,000 for meeting specific performance goals. He heads FCA’s asset liquidation and loan-workout operations.
Butler, whose contract runs to April 14, 1991, is entitled to severance pay if he leaves FCA “voluntarily or involuntarily” within one year of a change of control, the proxy said.
The other executives, whose pacts run mostly through April, 1990, would get severance pay if they are discharged or demoted “without cause” after a change of control.
The proxy is being sent to shareholders in advance of the firm’s annual meeting on May 24.
