Debenhams chief Earl in line for £625,000 pay-off

Belinda Earl, the chief executive of Debenhams, is in line for a £625,000 pay-off if she parts company with the department stores group after a takeover by the venture capital groups CVC Capital and Texas Pacific.

Documents posted to Debenhams' shareholders last night show that Ms Earl's salary was increased from £600,000 to £625,000 on 1 September.

The future of Ms Earl at the group is uncertain following the revelation that John Lovering and Robert Templeman are involved with the bid by Baroness Retail, the consortium of CVC Capital and Texas Pacific which tabled an agreed £1.665bn offer for Debenhams.

Mr Templeman, a former chief executive of Homebase, is widely expected to get the post of chief executive at the group should the Baroness Retail bid succeed. Mr Templeman worked closely with the retail entrepreneur Mr Lovering on the sale of the DIY chain to GUS last year.

Baroness Retail trumped a bid of £1.54bn from Laragrove, a rival consortium of venture capital groups, which Ms Earl had been backing. Its 455p a share bid won the support of independent directors at Debenhams earlier this month.

However, Laragrove, which includes Permira, Blackstone and Goldman Sachs, is considering returning with a higher bid, and is believed to be seeking a deadline for final offers. This would see the bid battle in effect resolved by an auction of sealed bids, and would require the agreement of the City's Takeover Panel. Laragrove is being chaired by the former head of Arcadia Stuart Rose.

Debenhams shares closed up 2.25p at 469.75p yesterday, suggesting that the City expects a higher bid to emerge. A high proportion of the shares are owned by venture capital groups, which are likely to support the highest cash offer on the table.

In total, Debenhams' five directors could be in line for combined pay-offs of £1.85m should they leave following a takeover.

Debenhams has called an extraordinary shareholders meeting for 10 November.