It has been more than two years since Thomas Dundon was forced out of Santander Consumer USA, but the final tally on the value of his separation agreement just came in: $713 million.

The Dallas subprime auto lender laid out new details of its agreement with Dundon in a regulatory filing late Friday. Dundon was a co-founder of Drive Financial, an auto finance company that Santander acquired in 2006 and subsequently rebranded. He stepped down as CEO in July 2015 in a surprise leadership shake-up.

Under the final agreement, Santander Consumer will pay a lump sum of $66 million to Dundon, or $50 million less than a previously agreed upon amount. At the same time, the company agreed to release certain restricted shares that he held in the company.

Additionally, Santander Consumer completed its acquisition of Dundon’s full stake in the company for $942 million. Dundon used a portion of the proceeds, about $295 million, to repay an outstanding loan from the company.

The transactions were completed on Nov. 15, according to the filing. A spokeswoman for Santander Consumer confirmed that Dundon netted $713 million before taxes.

Sign on a Santander branch.
Lucrative exit
Santander Consumer bought Dundon's stake in the company for $942 million. He used nearly $300 million of the proceeds to repay an outstanding debt to the company. Dundon also received a $66 million lump-sum payment. Bloomberg News

In the years since Dundon’s departure, the company has continued to struggle. It has been dogged by questions about its accounting methods after regulators questioned a change in its loan-loss calculations. There have been other regulatory headaches, including a recent settlement with the Massachusetts attorney general’s office over the falsification of auto borrowers’ incomes.

This summer Dundon’s successor, Jason Kulas, abruptly resigned. He was replaced by Scott Powell, who is also CEO of Santander Holdings USA, the auto lender’s Boston-based parent company.

Now that the transaction with Dundon has been finalized, Santander Holdings has also taken a larger ownership stake in the auto lender. As of Sept. 30, Santander Holdings held a 58.7% stake in Santander Consumer; it now owns 68.3% of its outstanding shares, according to the filing.

Under an enforcement order with the Federal Reserve in March, Santander Holdings was ordered to keep closer tabs on compliance and operations at its auto unit.

Though Dundon has officially cut his ties with Santander Consumer, he remains active in financial serices. In early November, Dundon Capital Partners, which he leads, acquired a stake in Redpoint Capital Group in Dallas.

Redpoint is an alternative credit manager that invests in fintech and specialty finance. As part of the deal, Dundon was named to Redpoint’s board.

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Kristin Broughton

Kristin Broughton

Kristin Broughton is a reporter for American Banker, where she writes about the business of national and regional banking.