Ex-Hanson chief gets £660,000 plus pension top-up

Andrew Dougal, who quit as chief executive of Hanson at the age of 50 last year in order to "rebalance" his life, received a pay-off of £660,000 while a £636,700 lump sum was paid into his pension plan.

The details, which are included in the group's annual report, show that the transfer value of Mr Dougal's pension fund was increased by £2.15m, from £3.5m to £5.7m. The increase in his pension "pot" means Mr Dougal will be eligible for an annual pension of £202,000.

His successor, Alan Murray also saw his pension fund receive a boost. The transfer value of his fund was increased from £3.1m to £4.3m. This will entitle him to an annual pension of £230,000.

Hanson ended its final-salary scheme for its UK employees in July last year.

Mr Dougal surprised the stock market last May when he announced he was quitting to spend more time with his wife and three children and to "relearn" golf. He added that after a break he fully intended "to return to the executive business world".

Defending the payments, a Hanson spokesman said it was merely fulfilling its contractual obligations. "Andrew did a lot of good work for Hanson, leading the development of the company to a leading building materials group. This isn't a question of payments for failure," he said.

Commenting on the lump sum payment into the pension fund, the spokesman said: "It reflects the fact that under certain circumstances executives can retire at 55 rather than 60 and this applies to Mr Dougal. The payments were in accordance with his contract and the board was obliged to meet its obligations."

Hanson said the £660,000 termination payment last year was in lieu of salary and bonus payments. It meant Mr Dougal received a total of £834,000 last year.

Mr Murray saw his total pay rise from £898,000 to £1.01m last year thanks to large bonus and incentive payments. On top of his £475,000 basic pay, he received an annual bonus of £334,000, other benefits of £29,000 and long-term incentive plan payments of £175,000.

As a former head of Hanson's US operations, Mr Murray is also entitled to a $709,000 (£443,000) payment in September under the terms of the group's long-term incentive plan. This stems from "excess amounts" which remained in the "accumulated bonus banks of some participants" as a result of the strong performance of Hanson Building Materials America.

New accounting rules introduced last year mean companies must reveal the value of their directors' pensions in their annual reports. Lloyds TSB revealed yesterday that it had boosted the pension pot of departing chief executive, Peter Ellwood, by £1.15m.