Ex-Vodafone boss Sarin left telco giant with £8m package

Payout included £500,000 to relocate back to the US
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The Independent Online

The former Vodafone chief executive Arun Sarin walked away from the group with £8m last summer, gained through his pay and incentive schemes. Mr Sarin, chief executive of the mobile telecoms giant for five years, left in July. He was handed a basic package totalling £1.4m for his four months' work in 2009, according to the group's annual report, which was published yesterday. The previous year, he earned £3.5m.

The sum included a £500,000 "relocation payment" to help Mr Sarin, a Californian by birth, move back to the US when he left. Insiders admitted the payment was "slightly unusual". Mr Sarin had also been paid an extra £1m in relocations costs when he joined the company in 1999 from Lucent.

Vodafone paid Mr Sarin a third of his annual wage as he left after the first four months of the company's financial year; a sum totalling £436,000.

He was handed almost the full-year bonus of £434,000 and the relocation sum. Vodafone did not give him a golden handshake when he left. Since 2006, Mr Sarin had built up a lucrative share package from hitting various internal targets. He stepped down as chief executive in July – although remained as a consultant until February – owning just over 5 million shares in the company, which he earned through three different three-year medium and long-term incentive schemes.

At yesterday's closing price of 118p, as well as the £564,000 in dividends owed, the holding was worth £8m. It is unclear if has disposed of any his shares since he left the company.

A spokesman for Vodafone said: "The company paid Mr Sarin what had been contractually agreed when he joined." Sources close to the group said executives had held discussions with shareholders and said there had been no backlash and that little was expected. Vodafone has returned £5bn to shareholders in the past year through share buybacks and dividends.

Vodafone has been relatively resilient despite the onset of the economic downturn. The group unveiled its full-year results last month, with profits standing at £4.1bn. While this was more than half the previous year, the group suffered £6bn in impairment charges from writedowns at its Spanish and Turkish operations.

Vittorio Colao, the former McKinsey partner and regional chief executive for Vodafone in southern Europe, took over from Mr Sarin in July. His strategy has been less acquisitive than his predecessor and focused on making the business more efficient. He announced at the time of the results that the group was accelerating its £1bn cost-cutting drive to combat softer revenues. The annual report said his salary has been frozen for this year along with the rest of the management team. He was paid £932,000 for the year to the end of March and a reduced bonus of £881,000, down from £1.2m. Mr Sarin announced his departure in May last year saying: "I have achieved what I set out to achieve."