TSYS president getting nearly $2.3 million upon leaving company

Pamela Joseph, who agreed last week to resign as president and chief operating officer at TSYS, will receive a separation payment of $2,275,000 upon leaving the global credit-card and payment processor on Saturday, the effective date of her departure. She also will no longer be a member of its board of directors.

Details of Joseph’s departure, which were filed with the U.S. Securities and Exchange Commission on Thursday, show that she signed an agreement that also includes “non-disclosure, non-competition, non-solicitation and non-disparagement covenants.” In other words, she can’t comment on TSYS’ dealings, speak ill of the company or go to work for a competitor firm for a designated period of time, all typical mandates for an employee receiving compensation upon exiting a firm.

The SEC filing, as did the release issued late Friday by the company, says that TSYS Chairman and Chief Executive Officer Troy Woods has pledged to the firm’s board of directors that he will stay at the helm of the card processor at least through the year 2020. The board also elected Woods, 66, to serve as president of TSYS starting Saturday. That’s a position he previously held from 2003 to 2016.

Joseph, 58, started at TSYS on May 1 of last year. SEC filings from March show she received a base salary of just under $452,000 in 2016, along with a one-time $300,000 signing bonus, incentive plan compensation of about $744,000, and additional executive perks valued at $47,000. She also received stock awards valued at nearly $1.8 million and option awards of just over $1 million, although those generally are tied to vesting rules and to the firm reaching a certain stock price before shares can be be sold, or cashed in.

In last week’s SEC filings and subsequent release, TSYS did not give the reason for Joseph’s swift exit as president and chief operating officer at the company that racked up nearly $4.2 billion in revenue in 2016. It employs about 11,500 worldwide, but has been restructuring operations and staffing for more than a year.

That comes with the company having shelled out just under $4 billion since 2013 in two major acquisitions. The first in 2013 was the $1.4 billion purchase of Austin, Texas-based NetSpend, a prepaid card marketing and distribution company which is now a subsidiary of TSYS. The second and largest at $2.35 billion, completed in early 2016, was New York-based TransFirst, a merchant specialty firm that has been folded into TSYS’ own merchant operation.

Investors appeared to be taking the news of Joseph leaving TSYS cautiously on Monday, with shares initially dropping $4.39 per share, or nearly 6.4 percent, from Friday’s close of $69.07 on the New York Stock Exchange. Shares finished down $3.42, or about 5 percent, at $65.64 in an overall stock market experiencing a slightly down day. The 52-week high for TSYS stock (Ticker symbol TSS) is $70.62 per share. The low is $46.22.

Thomas McCrohan and Leonard DeProspo, research analysts with Mizuho Securities USA in New York City, weighed in Monday on the resignation of Joseph, as well as that of Western Union Chief Technology Officer David Thompson. The analysts’ report viewed both as “negative events” for the firms.

For TSYS, specifically, McCrohan and DeProspo said the “unexpected” resignation of Joseph was a “net negative” based on the generally positive feedback they had received from investors due to her being a possible successor to Woods as CEO.

“We view her resignation as an indication she lacked sufficient board support to be appointed CEO of TSS,” the analysts wrote in their report. “We believe the only reason Ms. Joseph would resign is because she figured out she was not going to be CEO. We believe Ms. Joseph joined TSS under the premise that she would be appointed CEO although no contractual obligation existed between TSS and Ms. Joseph to make her CEO. Regardless, we view her departure as an indication TSS’s Board of Directors is satisfied with its current strategy and progress.”

McCrohan and DeProspo also spoke in their report of previous investment industry speculation that TSYS is being pursued for acquisition by Fidelity National Payment Services. The analysts said they spoke with TSYS last Friday, with it saying no negotiations were under way. The analysts said they believe the firm’s higher stock performance of late was a “direct result” of the possibility of a purchase of TSYS by the larger Fidelity. They said their projected “take-out share price” in the deal would be $82.88 per share.

Mizhuo Securities now has a rating of “neutral” on TSYS shares, with a current value for the company’s stock of $65 per share.

This story was originally published September 25, 2017 at 5:15 PM with the headline "TSYS president getting nearly $2.3 million upon leaving company."