The company is still in negotiation with Lord Young, who is thought to be demanding at least pounds 2m. A spokesman said: "We have made an offer and we are awaiting a reply."
C&W has agreed to pay Mr Ross pounds 100,000 in compensation for loss of office as well as bonuses that are likely to be between pounds 150,000 and pounds 200,000 but have yet to be calculated. He has also been given the right to exercise share options granted in 1992 which, at yesterday's share price, represent a profit of pounds 950,000. Mr Ross was on a one-year rolling contract, which in 1995/6 carried a salary of pounds 400,000. The group said the settlement worked out was "entirely amicable".
One City analyst said: "It's a nice reward for failing to see out your term of office because you could not see eye-to-eye with your boss."
Shareholders in C&W were angered by the boardroom bust-up as they believed it damaged the company.
Dr Brian Smith, C&W's chairman, said: "This settlement balances the interests of everyone concerned: the company, James Ross,our shareholders and our employees. Mr Ross will benefit from his share options in line with the very substantial increase in the share price during his time as chief executive of the company."
Dr Smith said Mr Ross provided "effective leadership" during a period of rapid change and left the group in a position of strength. The company also pointed out that Mr Ross was in any case entitled to exercise the options at November 1995.
C&W is yet to appoint a successor to Mr Ross. The company is known to have considered overseas candidates and has taken the step of changing its articles to allow a foreigner to take the job. Duncan Lewis, former chief executive of its Mercury Communications subsidiary, has also been interviewed.
Rod Olsen, finance director, has been appointed as acting chief executive of C&W, but has not put himself forward to take the post.Reuse content