Boots boss leaves with £7m pension pot

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The former Boots chief executive Steve Russell amassed a £7m pension "pot" prior to his departure in May, entitling him to an annual pension of £377,000. The details were included in the company's annual report, which was published yesterday.

Mr Russell, 58, worked for Boots for 36 years but the company sought a replacement after the failure of his "Wellbeing"strategy, which saw Boots rack up substantial losses after expanding into areas such as aromatherapy, massages and Botox injections. He is being succeeded by the former chief operating officer of Asda, Richard Baker, who joins in September.

Mr Russell received total pay last year of £786,000 and will receive a pay-off of £757,000 to compensate him for loss of office. The payment includes further contributions to his pension fund.

Barry Clare, the former head of strategic marketing who left the company earlier this year, received £528,000 compensation for loss of office. Mr Clare also decided to take a £1.2m lump sum payment from his pension plan. He was entitled to do this under the terms of Boots' unfunded, unapproved retirement benefit scheme though Boots did not know whether or not Mr Clare planned to invest the proceeds in a private pension scheme.

Other large pension "pots" were accrued by David Thompson, the former finance director, and Ken Piggott, the former head of Boots the Chemists. Mr Thompson built up a fund of £6m, entitling him to a £316,000 a year pension. Mr Piggott's pot was £3.4m, entitling him to £203,000 a year.

Boots separately revealed that Sir Nigel Rudd will be paid £285,000 a year when he takes over as company chairman in September. This compares with the £251,000 received by the outgoing chairman, John McGrath. Boots had already revealed that Mr Baker will receive a total of £1.6m in his first year as chief executive. This includes a base salary of £625,000 with a guaranteed 50 per cent bonus in his first year. He will receive £644,375 to compensate him for the loss of bonuses and share options due under his contract with Asda. He is also eligible for Boots share options worth four times his salary.

In the annual report Mr Russell eschewed a sentimental farewell, favouring a straightforward business appraisal concluded by the line: "Boots has a strong management team ... and I look forward to seeing sustained and profitable growth."