Tim Hortons to pay former CEO $6.5-million

Mr. Schroeder stepped down late last month after a 20-year career at Tim Hortons – he had been CEO since 2008. He will receive $2,250,000 up front, and the rest paid out over two years.

He will be compensated for consulting efforts about sustainable coffee: The company will pay him $175,000 for his time. He’ll also receive a fuel card good for $500 a month, and his medical and dental benefits will be in effect until June 2013. In all, his package is worth $6.5 million.

The company said it would take a second quarter hit “as a result of the severance and consulting arrangements with Mr. Schroeder” and warned it could affect quarterly profit.

“In addition to the payments, benefits, and other arrangements this amount includes the corporation’s estimate of professional advisory fees and other related costs and expenses,” the company stated in its filing. “The corporation did not contemplate this additional expense when setting its 2011 EPS target in February 2011.”

Analysts called the deal a high price for Tims to have to pay for Mr. Schroeder to leave and stay silent.

The agreement “did not come cheap,” Kenric Tyghe, retail analyst at Raymond James, said in a note on Monday.

The total cost, and the “imputed negative impact” on this year’s profit are “material negatives,” Mr. Tyghe said. “It affirms that initial fiscal 2011 guidance of $2.30 to $2.40, which appeared stretched after [first quarter] results, will likely be reset lower.” In 2010, Mr. Schroeder received $3.5-million in compensation including his base salary of $646,144. The deal doesn’t shed any light on his reasons for leaving, and contains a clause that prohibits him from discussing his decision.

The company said Mr. Schroeder’s termination of employment “shall be considered a retirement.”

Mr. Schroeder has agreed to stay on as an advisor for the chain, focusing on “sustainable farming for small holder coffee farmers in South and Central America, and will be available to work on other matters at the request of the board for a two-year period, renewable at the board’s option. He will also continue to serve as a director on the Tim Horton Children's Foundation Board.

Catalyst Notebook :: For the Record: Schools CEO salary

I am so sick of CPS bringing in more people to take over of our Schools for more pay off the backs of our childrens.Do every one have to hvae more money to do the job.Please will you think about the future of our childrens first than money all the time.Money is the the main problem.CPS is a joke to me. Cathy LSC MEMBER Douglass High School.

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