Standard Life has agreed to pay up to £1.9m to its former finance director, Alison Reed, after reaching a legal settlement over her ousting in 2006.
The settlement, revealed in the insurer's annual report yesterday, includes a £1.135m cash payment and a £97,500 contribution towards Ms Reed's legal fees. She will also get £134,482 in April in lieu of her short-term bonus for the first four months of 2007.
In addition, Standard Life has agreed to let Ms Reed keep shares granted to her in 2005 and 2006 under its long-term incentive plan (LTIP). The 2005 shares vested in March had a value of £282,327 and the 2006 allocation could be worth up to £199,131 when they vest next year. In 2010, she will receive a further payment – probably in the low tens of thousands – in lieu of an LTIP award for the first four months of last year.
Ms Reed joined Standard Life from Marks & Spencer and was finance director for less than 18 months before she resigned in October 2006 soon after the former mutual listed as a public company. At the time, she said it was not her decision to leave the company, which is headed by Sandy Crombie.
Standard Life said: "Her employment with the company came to an end in October 2006 but no agreement was reached with her at that time concerning the termination.
"Subsequently she made claims against the company and agreement on the settlement of those claims was reached in November 2007."
Standard Life's annual report also showed that Keith Skeoch, its investment chief, earned more than Mr Crombie last year. Mr Skeoch's earnings rose 13 per cent to £1.75m, boosted by a bonus of £1.3m. Mr Crombie's pay rose 5 per cent to £1.64m, including a bonus of £708,000.
The company spent £18m on its failed £4.9bn bid for Resolution last year. Standard Life lost out to Hugh Osmond's Pearl Group and investors were left questioning the bank's strategy. But the insurer reassured shareholders with strong annual results last month.
Trevor Matthews, Standard Life's head of life and pensions, is joining Friends Provident as chief executive in July and is on six months' gardening leave.
His pay dropped 21 per cent to £1.01m from a year earlier, when he received a special £322,000 payment agreed when he was recruited.Reuse content