Former regional boss says Centex stiffed him on bonus, fired him when he complained: Ex-boss of region says home builder stiffed him, then fired him.

Jul 22, 2008 (The Sacramento Bee - McClatchy-Tribune Information Services via COMTEX) -- CTX | Quote | Chart | News | PowerRating -- The former head of Centex Corp.'s home building operations in Sacramento, Reno and the Bay Area has filed a lawsuit against the company, alleging it failed to pay $355,000 in promised bonus money.

Doug Pautsch Jr. filed the suit in Placer Superior Court last month.

Pautsch, who joined the Sacramento division as controller in 1998, then became president in early 2006, no longer works at Dallas-based Centex. He said Monday he was terminated shortly after he filed the suit. He left the division July 11.

At the time a Centex spokesman attributed Pautsch's layoff to a consolidation of the three divisions into one based in Sacramento. In a statement, the firm said, "Doug has been a dedicated and valuable leader at Centex and we wish him the best."

But according to the lawsuit, Pautsch had assumed control of the three divisions in April.

He was replaced by Mike Wyatt, head of Centex's Central Valley division, based in Visalia.

The legal action offers an inside look at compensation practices of one of the nation's top publicly traded home builders. It also shows how those practices evolved to become less dependent on sales and earnings as the housing market began to slow.

Centex ranked third for new home sales in the United States last year, with 30,684 closed escrows, according to Builder magazine.

The Dallas home builder declined to comment on the suit. "As a matter of policy, we will not discuss matters pending in litigation," spokesman Eric Bruner said in an e-mail.

Pautsch's lawsuit states that in September 2007 he was promised a bonus of up to $500,000 for meeting certain "metrics" that included sales, finances and customer satisfaction. Pautsch said he was paid $100,000 after meeting conditions that should have guaranteed him a $455,000 bonus.

The suit alleges that Centex Chairman and Chief Executive Officer Timothy Eller "falsely claimed that the bonus was discretionary and stated that the ... bonus was being reduced based on the Company's financial losses."

Pautsch said he received bonuses in 2006 and 2007 based on a previous Centex system. It hinged more on a division's earnings and sales.

"If a division in a hot market hit it out of the market, there was potential for sizable earnings," he said. The new system, said Pautsch, was designed to "take the highs out when the market was really good and take out the lows if the market was really bad."

According to the lawsuit, it meant that even if a Centex division lost money, a president could still earn a bonus based on other corporate yardsticks.

During much of Pautsch's tenure, including all of 2007 and through May 2008, Centex dominated new home sales in the Sacramento region.

"It was a written bonus and it was very clear," Pautsch said Monday. He said he talked with his Centex superiors about the issue before filing the lawsuit.

"Shortly after that, I was let go," he said. "It appears to us it's retaliatory, and my attorney and I are considering adding legal action for wrongful termination to it."

Pautsch's Sacramento attorney Gary R. Basham said Monday that the timing of Pautsch's termination "is pretty suspect." He said Centex has yet not filed a response to the lawsuit, nor begun negotiations.

Basham said he had not heard of any similar lawsuits.

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