Share options are normally exerciseable only after three years, and lapse if the executive leaves before then. However, Mr Ellis's contract specified he could exercise the options early if he left for any reason.
The arrangement appears to breach the guidelines of the Association of British Insurers, which represents institutional shareholders. The ABI says executives who leave voluntarily and before their options' exercise date should forfeit them.
However, Mr Ellis is credited with restoring Amber Day's ravaged credibility in the City, after the departure last September of its controversial former chairman and chief executive, Philip Green.
Shares in the company, which owns the What Everyone Wants discount stores, closed last week at 71p, boosted by news that the US investment group Warburg Pincus had taken a 10 per cent stake. Mr Ellis's options are exerciseable at 28p.
It is not known whether he is to receive any compensation for loss of office. He was on a salary of pounds 75,000. He is also sitting on a substantial profit on 500,000 Amber Day shares he bought at the time of his appointment, when the share price was beneath 30p.
Mr Ellis resigned after a boardroom dispute over who should be the new chief executive. Two of the directors were themselves candidates for the job, and four others were choosing their own new boss.
The only non-executive director, Peter Carr, was a prospective candidate for chief executive, but in the end was appointed executive chairman. The chief executive post went to David Thompson, who had been acting chief executive.
Mr Ellis had mooted Paul Taylor, formerly of House of Fraser, as a candidate, but backed down in the face of resistance from other directors. One observer said: 'Ellis was simply outmanoeuvred by Carr and Thompson.' It is understood that Mr Ellis, previously with the trading group Inchcape, suggested in June to fellow directors that he might leave, handing over to someone with retailing experience.Reuse content