Cordiant directors received £2m pay-offs despite financial crisis

Cordiant, the ailing advertising group, paid former directors £2m in compensation for loss of office last year, including £850,000 to former chief executive Michael Bungey. The details were included in the company's annual report, published yesterday.

Mr Bungey, who left in March, was paid £750,000 for loss of office and given a £100,000 consultancy contract which lasts until March 2004. The payments were in addition to the £810,000 total pay he received during the year to March.

William Whitehead, an executive director, received an £872,000 pay-off in March 2002. Jean de Yturbe received £342,000 for giving up his executive duties. He remains on the board as a non-executive.

The report also revealed that the debt-ladened company is currently paying two chairmen. Bob Scott stepped down in February but, after earning £252,000 last year, he will continue to be paid until December. His successor, Nigel Stapleton, is being paid £200,000 a year for a two-day week. He gets an extra £2,000 a day for additional work.

The annual report was issued to shareholders with notice of the extraordinary general meeting which has been requisitioned by Active Value, a 25 per cent shareholder.

Active Value is trying to derail the £266m takeover of Cordiant by the advertising giant WPP. It now has a big enough stake to block the proposed scheme of arrangement, which requires 75 per cent of shareholders to vote in favour. It added further to its holding yesterday, buying another 2.5 million shares at 2.9p each. It now holds 25.73 per cent of Cordiant's equity.

Active Value's resolutions include plans to remove the entire Cordiant board. It wants to replace them with the former Leo Burnett director Richard Wheatly as chairman and the WestLB vice-chairman Stephen Davidson as finance director.

Active Value wants to re-finance Cordiant, although WPP believes the fund management group has under-estimated the sums required.