Fired Without Cause, or Jackpot

New Century Financial, the giant California subprime lender whose collapse heralded larger troubles in the mortgage market, has finally gotten around to firing its C.E.O.

The interesting thing is that New Century announced that it dismissed Brad Morrice last week "without cause."

It noted that under his employment contract, such a termination entitles him to the unpaid portion of his accrued bonus and benefits through the day he was fired--June 8--as well as three times his annual base salary and the highest annual bonus he received in the last three years.

Wow. Do the math, and that adds up to something like $5.4 million. For guiding the company into bankruptcy.

Unfortunately for Morrice, now that New Century is in bankruptcy court protection, his employment contract is null and void. His actual severance pay will be calculated using a court-approved formula that will be far less generous.

The Los Angeles Times, citing people close to the bankruptcy proceeding, reports that he may wind up receiving less than $40,000.

New Century has also fired Anthony T. Meola, the Executive Vice President for Loan Production. He was also due a sizable severance package, but will suffer a haircut on par with Morrice's.

To clean up the mess, New Century said it elevated its chief restructuring officer, Holly Etlin, to chief executive. It also promoted controller Michael Tinsley to finance chief.

by Mark Stein