Green pay-off puts pressure on Pitman

ITV director agrees to meet outraged investors to defend £15m deal for ousted Carlton chairman

Pressure was mounting last night on Sir Brian Pitman and Ettienne de Villiers, the ITV directors at the centre of the Michael Green pay-off storm, as shareholders broke cover to openly attack the £15.1m award.

However, as leading shareholders went on the record to vent their fury, it emerged that Sir Brian has agreed to meet investors to justify the windfall authorised by the Carlton remuneration committee. Sir Brian had chaired the committee before stepping up to the ITV board. Mr de Villiers was also on the committee before becoming an ITV director.

Investors last night attacked not just the size of the payment, which included £13.2m in shares, but also the method in which it was calculated, drawing attention to the use by Carlton's remuneration committee of "total shareholder return" as the key measure to assess executive performance.

Fire was also turned on Mr Green's separate £1.8m cash pay-off for loss of office, which Carlton authorised after shareholders had forced him to quit his job as chairman of the broadcaster last October. This was despite the fact that Mr Green had never had a contract of employment with the company. Mr Green was forced out before he could take up his planned position as chairman of ITV, the new company formed by the merger of Carlton and Granada which took effect last month. The scale of the windfall, thought to be the biggest "golden goodbye" in British corporate history, has left shareholders shocked.

Standard Life, one of ITV's leading institutional shareholders with more than 2 per cent of the £5.5bn company, issued a stark warning that it would be analysing in minute detail the award made by Sir Brian's committee. A spokesman for the insurer said: "This [award] reinforces our concern about total shareholder return as a performance measure for so-called incentive schemes. We shall scrutinise this pay off inch by inch and pound by pound."

The National Association of Pension Funds, which represents some of the country's biggest institutional investors, yesterday said it would be examining Mr Green's £1.8m cash payment on behalf of its members and asking them for their comments before seeking an explanation from Sir Brian. A spokesman said it believed the money had been paid at the discretion of the remuneration committee, even though there was no employment contract.

The cash payment was 12 months salary, equal to £690,000, plus a bonus of the same amount. In addition it paid Mr Green £40,000, equal to 12 months' benefits, plus £372,200 - equal to two years' pension contributions.

Sir Brian did not return calls yesterday but The Independent has learned that he has already arranged to meet angry shareholders to explain his position and justify the enormous payout to Mr Green.

It emerged on Wednesday that Mr Green had received shares worth £13.2m, thanks to the triggering of an option scheme put in place in 2001. The scheme, called the Carlton Equity Participation Plan (EPP), gave him control over 6.45 million shares which he took full ownership of early because of the merger of Carlton and Granada. The deal triggered a change-of-control clause in the small print of the scheme. A further 755,000 shares were also affected in a separate executive share option scheme.

Standard Life is expected to criticise the performance criteria used by Carlton to calculate the awards. These included the concept of "relative total shareholder return" which measured Carlton's performance against a basket of media groups including EMI and Reuters. Questions are also expected as to why at least a portion of Mr Green's award was not paid out pro rata instead of in full.