If Southmark Corp. succeeds in its efforts to acquire control of embattled Care Enterprises of Laguna Hills, at least one of the principals in the deal, dissident Care co-founder Ted Nelson, stands to be handsomely rewarded.
According to filings with the U.S. Securities and Exchange Commission, Nelson would be installed as chairman and chief executive if Dallas-based Southmark takes control. Nelson left the nursing home company last year in a dispute with his half-brothers and fellow co-founders, Dee R. Bangerter and Lee R. Bangerter.
A tentative five-year employment agreement between Nelson and Southmark calls for Nelson to be paid a $250,000 base salary in the first year, with 10% annual adjustments in each of the remaining four years. In addition, Nelson would be eligible to receive annual bonuses ranging from a minimum of 50% of his base salary up to a maximum of 150% of that salary if the company generated sufficient profits to cover the bonus payments.
The bonus provision, in essence, would give Nelson first call on any Care Enterprise profits up to a maximum of 1 1/2 times his salary. In the fifth year of the contract, when the base salary would be $365,000, the bonus could reach $547,500, for a total payment of $912,000.