Gravy train rolls on as two bosses share pounds 1.3m pay-off

Further evidence emerged yesterday that the City gravy train is still steaming ahead after two top executives received pay-offs totalling pounds 1.3m.

John Garrett, head of Rank's leisure division, is in line for a pounds 500,000 pay-off after resigning yesterday following a boardroom bust-up with Andrew Teare, the group's chief executive. Finn Johnsson, former head of United Distillers, the spirits business of Guinness, has become the latest casualty of the drinks group's mega-merger with Grand Metropolitan. He will receive pounds 800,000.

Rank admitted yesterday that Mr Garrett had left the group following a disagreement with Andrew Teare. Mr Garrett said: "It was a question of strategy. I did not believe in some of the things that Rank was doing and the direction the company was moving.

"As a shareholder I am concerned about Rank's performance and dissatisfied with the share price," he added.

Mr Garrett declined to comment further about his disagreements with the board. However, City observers believe that he became increasingly concerned that Mr Teare's investment strategy was misguided and plans to revitalise the Butlin's brand were doomed to fail. Before Andrew Teare's appointment two years ago, Mr Garrett had been seen as front-runner to replace Michael Gifford, the group's former chief executive .

Sir Denys Henderson, chairman of Rank, said he had backed Andrew Teare in the boardroom battle. "The idea that this was a boardroom coup is a load of codswallop. As far as I know no other senior management are about to leave."

Sir Denys claimed that Mr Garrett was against Rank's plans to sale and lease back some of its property and rejected strict targets for a 15 per cent return on new investment. Rank also claims that Mr Garrett was unhappy with the amount of investment made available to the leisure business, a fact that Mr Garrett strenuously denies.

Mr Garrett is considering launching a management buyout for the leisure division.

Mr Johnsson, who joined Guinness in 1994 from Euroc, the Scandinavian building products group, lost out in the battle to become head of Diageo's new spirits business to Jack Keenan, former head of GrandMet's drinks division. Mr Johnsson was known for his dynamism and boundless enthusiasm for the job. But, Mr Keenan is understood to have been given his new role due to his skills in handling mergers which he proved when integrating Kraft and General Foods.

Rank's shares rose 12.25p to 312p and Diageo's fell 2p to 552p.

Investment column, page 24

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