Accounting Headaches Continue at Santander Consumer

Santander Consumer USA Holdings in Dallas is expected to make a cash payment of about $115 million to its former chief executive, a payment that was prematurely recorded last year due to an error with its accounting.

The payment is tied to a severance package for Thomas Dundon, who stepped down in July 2015 in a surprise leadership shakeup that elevated Jason Kulas to CEO. Santander Consumer, a unit of Banco Santander of Spain, mistakenly recorded the payment in 2015, before the necessary regulatory approvals were obtained, according to regulatory filing Thursday.

Dundon's payment was removed from revised 2015 results and now would be recorded as a one-time cash expense, because his vested stock options have expired. No additional details about the timing of the expense were provided.

The correction is part of a new set of amended reports filed by the subprime auto lender — its third round of accounting corrections in the past year. The company last month restated results for 2013, 2014 and 2015, as well as the first quarter of 2016.

In March, Santander Consumer restated its results for 2013 through 2015, as it faced questions from the Securities and Exchange Commission about the way it calculated its allowance for problem loans.

The latest round of corrections — which the company describes as not “material” — cover the first, second, and third quarters of 2015, full-year results for 2015, as well as the first quarter of 2016. They fix errors in the way Santander calculated its loan-loss allowance, dealer discounts and impairments with troubled debt restructurings.

Santander Consumer will report its third-quarter earnings on Nov. 9, according to the filing. The results were initially scheduled for Oct. 26.