Nobody should expect to learn more about former Tim Hortons CEO Donald Schroeder’s sudden departure from the company, at least not from the horse’s mouth.
Schroeder was appointed chief executive in 2008 and analysts say he did a good job leading the coffee chain through the recession. But he abruptly left the company in mid-May, just days after hosting a conference call with industry watchers. Hortons chairman Paul House, who was Schroeder predecessor as chief executive, returned to the corner office on an interim basis.
According to a company statement, the unexpected departure of this 20-year company executive resulted from a failure of Schroeder and the board to reach a transitional arrangement. But analysts were taken by surprise because nobody knew that Hortons was looking for a new CEO.
With speculation running wild, industry watchers have been hoping to learn more. But Schroeder has now agreed to resign from the board and keep mum about what happened as part of a severance agreement that will see Hortons pay him $5,750,000, including a lump sum payment of $2,250,000 and monthly payments totaling $3,500,000 over 24 months. According to regulatory filings, Schroeder will also be paid to stay on as an advisor for two years and continue to serve in his capacity as a director on the Tim Horton Children’s Foundation.
Although he is leaving his executive post quietly, the ex-CEO doesn’t have to walk away because the coffee chain will also transfer the ownership of his former company car.
In return, Schroeder agreed not to talk about his departure to the media or “make, publish or provide, or encourage or induce others to make, publish or provide, any statements, comments, or remarks, whether oral or in writing or electronically transmitted, that are or would reasonably be considered to be disparaging, derogatory, or defamatory, or that criticize Tim Hortons.”
Anyone who wants to find out more will not have a paper trail to follow since Schroeder agreed not to “initiate against Tim Hortons any dispute, complaint, action, claim, suit, statement of claim, demand or proceeding whatsoever.”
In addition to giving up potential claims against the company, Hortons former leader waived his right to submit a written statement to the board concerning his departure as a company director. He also will not “furnish to Tim Hortons or to a director, officer, employee, franchisee, or agent of any of the foregoing, any written correspondence concerning the circumstances regarding the termination of his employment or resignation as a director.”
Schroeder agreed that his termination of employment shall be considered a “retirement” and gave Horton’s the right to “determine the public descriptions and disclosures” of related payments.
As part of the deal, Hortons did not admit liability “in connection with any matter” related to the exit. And Schroeder agreed he has “no knowledge” of any accounting concerns, broken laws or breach of standards “that has not been resolved.”