Pero well rewarded: Prospectus
The Mike Pero Mortgages prospectus shows its founder is being handsomely rewarded for creating a successful business way beyond just the purchase price.
Monday, May 3rd 2004, 7:25AM
by Jenny Ruth
Mike Pero sold the business to George Gould for $15 million and then paid $1.5 million to buy back 10%.
And up to the sale, he has been taking increasing amounts of dividends since 2001 when $240,000 was paid out. The following year, the company paid $340,000 in dividends, $900,000 in 2003 and then $1.358 million for the eight months ended March 5 when the sale occurred. That was considerably more than the $865,567 net profit the business made in those eight months.
Pero’s future rewards from the business go considerably beyond any future dividends he may receive from his 10% stake and his director’s fees.
Understandably, since he is synonymous with the company’s brand, Gould has signed Pero up to a 10-year marketing and consultancy agreement.
Under this agreement, Pero will receive 15% of the sale price for facilitating the sale of any new franchise. That’s $10,500 for every Auckland and $7,500 for other areas.
He will also be paid $150 an hour for his marketing and consultancy services and attendances for radio and television advertisements.
He won’t be paid anything for attending company conferences this year, but after that he will be paid $2,500 for attending each conference of a maximum of three days.
He will also get 50% of the transfer fee for facilitating the sale of any existing franchise.
And the company will continue to sponsor Pero’s beloved motor sports through to June 2006. It is paying $160,000 this year, $176,000 next year and $193,000 in 2006.
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