Brendan L. Hoffman
The Bon-Ton is in the red, but its new president and chief executive officer will be in the pink.
Brendan L. Hoffman will start with a $5.7 million compensation package, consisting of annual salary, various bonuses and restricted stock.
The York-based retailing chain disclosed the pay Wednesday in a filing with the Securities and Exchange Commission.
In the filing, The Bon-Ton said the former Lord & Taylor CEO will begin with a $1 million salary.
Hoffman's salary can be raised in the future by The Bon-Ton board of directors — but not decreased.
Hoffman will get a $1 million signing bonus within 30 days of his starting date, Feb. 7.
He'll also get a $1 million retention bonus on Feb. 7, 2013, assuming he's still on the job.
Besides the cash, Hoffman will get 600,000 restricted shares over three years, if The Bon-Ton hits certain fiscal targets and he stays on the job.
Based on Wednesday's closing price of $3.62 a share, the stock is worth $2.2 million.
Hoffman likewise is eligible for The Bon-Ton management incentive bonus program, which can yield him up to 200 percent of his salary.
He's guaranteed a management incentive bonus of at least $500,000 this year.
Not every item in the contract involves Hoffman's pay, though.
For instance, The Bon-Ton agreed to reimburse Hoffman up to $20,000 for attorney's fees incurred in negotiating his contract.
The hiring of Hoffman, 43, of Scarsdale, N.Y., was announced Tuesday.
The Bon-Ton, which has a store at Park City Center among its 276 locations, lost $90.3 million in the nine months ended Oct. 29.