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[July 19, 2014]
EZCorp ousts CEO, board members [Austin American-Statesman :: ]
(Austin American-Statesman (TX) Via Acquire Media NewsEdge) July 19--Austin-based payday lending and pawnshop chain EZCorp Inc. on Friday ousted its CEO, board chairman and a board member in a move that executives said is aimed at igniting new growth for the company.
Effective immediately, CEO and President Paul Rothamel, recently appointed Chairman William Love and board member Joseph Beal were terminated, the company said. Rothamel was ALSO removed from his post on the board.
Lachlan Given, an investment banker who served as a consultant to EZCorp and helped direct growth at an Australian software company, was appointed chairman of the board.
An interim CEO is expected to be named shortly, the company said.
The company's voting shareholder group, MS Pawn Corp., which is controlled by New York investor and Australian native Phillip Ean Cohen, made the moves in an effort to move the company in a new direction, Given said.
"The changes to the composition of the board and management have been made to address and significantly improve the operating and financial performance of EZCorp, to strengthen corporate and regulatory governance and to realign corporate strategies in support of all shareholder interests," Given said in a written statement. "We are confident that EZCorp will now be able to capitalize more effectively on its growth opportunities and return to creating significant value for its shareholders." A company spokesman declined to comment further on the moves.
Rothamel was named CEO in 2010, while Love was named chairman in May.
EZCorp on Friday did not disclose its planned severance payments for Rothamel. However, according to securities filings, the company's employment agreement with Rothamel calls for "a payment equal to one year of then-current base salary" if Rothamel terminates his employment himself or if the company terminates Rothamel's employment "without cause." Rothamel's base salary for fiscal 2014 was $1 million, according to EZCorp securities filings. For fiscal year 2013, Rothamel was paid a total of $1.27 million, according to securities filings. His total compensation for $2.38 million in fiscal 2012 and $8.56 million for fiscal 2013, including stock options and other compensation.
Rothamel was eligible for annual performance bonuses of up to 200 percent of his base salary, or $2 million, according to securities filings. The EZCorp board declined to issue Rothamel a performance bonus for fiscal year 2013, according to securities filings.
The leadership shift signals significant changes ahead for EZCorp, which has grown into one of the nation's largest pawnshop operators and one of Austin's largest publicly traded companies. Founded in 1974, EZCorp has 300 employees in Austin and 7,500 worldwide, as well as 1,400 locations and branches.
In its most recent earnings report in April, EZCorp said revenues fell 3 percent to $260 million for the second quarter ending March 31. this month, the firm said it completed a $230 million offering of convertible debt to pay off existing debt and repurchase stock and general corporate purposes.
Before the news broke of the ousters, shares in EZCorp closed up 6 cents to $11.12 on the Nasdaq exchange Friday and remained unchanged in after-hours trading. The stock's 52-week range is $9.22 to $19.44.
Given, the company's new chairman, is a board member for agricultural media firm Farm Journal Corp. and several Australian firms, including software company Senetas Corp. and financial services company Canstar Pty Ltd.
He also served as a consultant to EZCorp and subsidiary Cash Converters International Limited.
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