£556,000 paid at Grand Met

The long-running battle over executive payoffs was set for a further skirmish yesterday when Grand Metropolitan announced that it was paying more than £500,000 in compensation to a former director who was leaving by mutual agreement and had already started another job.

Ian Martin, a former deputy chairman of the Burger King to Haagen Dazs group, is to receive £556,000 in lieu of his contract, which was due to expire in February 1997.

Mr Martin was named yesterday as the new non-executive chairman of Unigate, the dairy products group, where he will be paid £175,00 for a two- or three-day week.

Mr Martin stepped down from the Grand Met board in 1994 but has been working as a consultant on a salary of around £450,000. One analyst said the payoff was certain to cause controversy, saying "they tend to look after themselves". The company denied that the payoff was excessive. "It was an agreement by both sides and both will benefit. We're not paying the full two years and he gets a clean break to start at Unigate."

Mr Martin retains his position as chairman of Genisla Group, established in 1994 to examine European investment opportunities for the US buyout specialist, Kohlberg Kravis Roberts.

His appointment at Unigate ends a year-long search for a new chairman by the dairy group, caused by the death of Sir Brian Kellett in January 1994. Ross Buckland, chief executive, took over the chairmanship in the interim.