They are concerned that it leaves Argos fighting the pounds 1.6bn hostile bid from Great Universal Stores with a chief executive who has only been in the job for three weeks and a finance director who is leaving.
"It doesn't fill you with great confidence," one said. "So far, they are basing their defence on the company's track record. But if the people responsible for that performance are going, that is a concern. "
Argos has increased Mr Stewart's pay from pounds 200,000 to pounds 360,000 from April and is paying him a one-off bonus of pounds 196,000.
One senior fund manager said the payments were surprisingly generous. "The sums they are handing over are quite extraordinary. They are putting his salary up, increasing his pension and bringing it forward. It could work out at pounds 2m."
However, some investors were more supportive, saying Argos did not have the reputation of being a lavish payer and that its probity should be welcomed. "I think they have been pretty straight about it," one said.
City analysts and investors have expressed concerns about the way details of Mr Stewart's departure were buried in the small print at the back of the defence document. The document itself has been greeted with a lukewarm reaction in the City which expressed surprise about the lack of detail in the current trading statement and the absence of news on a special dividend. "The defence does not seem sparkling," one said.
Stuart Rose, the new chief executive, is looking at three main areas to improve trading performance. These are improvements to the catalogue to make it more modern, improvements to the stores to make them more welcoming and shifts in the pricing structure to increase the number of higher priced ranges without going too upmarket.