The internal investigation that VeriFone completed earlier this year revealed
that the electronic-payments company didn’t have effective controls over
financial reporting—a deficiency that forced the company to restate most of its
2007 earnings. Now it appears that the investigation has also resulted in the
revelation of yet another juicy nugget: the going rate to rent a CFO.
VeriFone, whose former CFO Barry Zwarenstein announced his resignation in
April after the company’s probe wrapped up, has tapped an outside consulting
firm to provide it with a temporary finance chief until the company can find a
full-time replacement.
Tatum, an Atlanta-based consultancy, inked a deal with VeriFone to contract
out one of its professionals—Clinton Knowles, a former CFO for one of Oracle’s
support services groups—to serve as the company’s finance head.
The agreement, which was first hammered out in May, calls for Knowles to
receive $24,500 a month in his interim role, according to a filing VeriFone made
Tuesday, August 19, when Zwarenstein’s resignation became official.
In addition to the monthly salary, VeriFone also agreed to pay Tatum a fee of
$10,500 for every month that Knowles serves as interim CFO.
An annualized bonus has been worked into the agreement as well, which allows
the company to pay out as much as $60,000 if “certain operating objectives” are
achieved—with Knowles eligible to receive up to 70 percent of this bonus. Tatum
would collect the remaining 30 percent.
So in total, this means VeriFone could pay out as much as $480,000 over 12
months to contract out Knowles. By comparison, Zwarenstein earned roughly
$570,000 in salary and bonus in 2006 as the company’s full-time CFO (more recent
data on his compensation was not available).
How long Knowles will remain in this role, however, remains to be seen. But
there’s a clause in the agreement that would allow VeriFone to make Knowles CFO
on a permanent basis if it chooses.
VeriFone spokesman Peter Bartolik said the company is in the final stages of
its search to find a permanent CFO and that he expects the company will announce
the hiring of a new finance chief shortly.
Filed by Mark Bruno of
Financial
Week