Philip Milne -- chairman, president and CEO of struggling MoneyGram International -- resigned Thursday after the money-transfer company recently posted a $1.6 billion loss on bad investments. But Milne will get a severance package of nearly $10 million as he leaves the company, whose share price was at $1.15 on Thursday, down from a 52-week high of $30.67.
Anthony Ryan, MoneyGram's chief operating officer, has been named interim CEO until a replacement is found. The company's board of directors assembled a search committee and is retaining an executive search firm to help find a new CEO.
The company has lost about $1.6 billion from its investment in the subprime mortgage market. The investment loses have led MoneyGram to sell a majority stake in the company to Thomas H. Lee Partners and Goldman Sachs Group after fighting off an unsolicited takeover bid from Euronet Worldwide. The investment losses have also led to an inquiry by the Securities and Exchange Commission (SEC) and shareholder lawsuits and forced MoneyGram to suspended its quarterly dividend program.
Milne, 48, joined a predecessor to MoneyGram in 1991 and was named president and CEO in June 2004 and chairman in January 2007.
A filing Thursday with the SEC detailed a severance payment of at least $9.7 million, which included $2,054,167 as salary severance, $7.5 million bonus severance based on annual and long-term incentive plans, and $205,000 in lieu of vacation pay.
Under the agreement, Milne waived his right to lifetime medical and dental insurance coverage and the right to accelerated vesting of his stock options, though all of his options are currently underwater, with the company's stock price trading at less than $2 per share.
"The board and Phil concluded a change in leadership was in the best interest of the company," MoneyGram spokesman Michael Fox said.
Patrick Kennedy • 612-673-7926
