Percy Barnevik, the former head of ABB, personally approved his massive 148m Swiss franc (£61m) pension payout, with no other members of the board seeing the terms of his settlement.
Mr Barnevik, once considered one of the world's foremost business leaders, used a period in 1996 when he was chairman and chief executive of ABB to get his pension calculated and paid out.
Last week, ABB said proper procedures were not followed in determining his pension or that of his successor as chief executive, Goran Lindahl, who got Sfr85m. The Swiss-Swedish engineering giant has demanded some of the money back.
Robert Jeker, the vice chairman of ABB, said: "We realised that Mr Barnevik was being selective and misleading about his payment as well as that of Mr Lindahl. Both had a special arrangement for themselves."
The revelation will add to pressure on the two former ABB directors, who now lead two of Britain's biggest companies. Mr Barnevik is chairman of AstraZeneca, where he is up for re-election in April. On Friday last week he abruptly resigned from his chairman position at Investor, the Swedish group. Mr Lindahl is deputy chairman of Anglo-American and is due to take the chairman's job in May. Yesterday he said he would not seek re-election as a director of the Swedish mobile phone company Ericsson.
Mr Barnevik held both the top jobs at ABB between March and December 1996 when his pension was settled and approved. ABB said Mr Barnevik had failed an obligation to keep the whole board briefed and get their consent.
Mr Barnevik's pension was based on his time as chief executive, which ended that year. He quit the role of chairman in November last year. Mr Lindahl left in 2000. Mr Lindahl's payout similarly was not disclosed to the board but decided between him and Mr Barnevik. Only their signatures appear on Mr Lindahl's settlement in his case it covered a severance payout and pension. "With these two signatures on the documents, no one asked any questions," an ABB source said.
The size of the payouts only came to light by accident last year when ABB was preparing a filing for the US Securities and Exchange Commission. The former ABB directors got the money as a lump sum and Mr Barnevik moved to London, which meant he paid no tax on the cash. The duo are now willing to negotiate with ABB about returning some of the money.
Mr Barnevik expressed regret yesterday. "ABB followed the Swiss practice, but there was nothing that hindered us from having been more open about the conditions and, for instance, specified the pension benefits in the annual report," he said.Reuse content