Chris Mellor, the ousted chief executive of the water company AWG, has walked away with a £379,000 pay-off and a pension pot worth £3.9m, it emerged yesterday.
However, in an attempt to avoid accusations of making "payments for failure", AWG, the owner of Anglian Water, said that Mr Mellor would receive only £142,575 of the pay-off as an immediate cash payment.
The rest will be paid out in monthly instalments of £26,302 over the next nine months and could be cut back or stopped altogether if he succeeds in getting a new job within that time.
Former Railtrack and Kelda executives have also been paid off on the same basis, while the previous chief executive of Amey, Brian Staples, received only half his contractual entitlement when he was ousted from the company last year.
AWG also said that Mr Mellor's pension pot reflected the fact that he had been with the company for 37 years. Even though he is only 54, Mr Mellor is entitled to receive an immediate pension of £162,000 a year under the terms of his contract.
Mr Mellor was forced out of AWG after taking it into a disastrous diversification into the construction industry and presiding over an underperforming share price. He also presided over a hugely expensive financial restructuring of the company which cost £130m in advisory fees.
AWG's annual report and accounts, which is due out next Monday, will show that Mr Mellor received £340,000 last year, made up of £316,000 in salary and bonuses and the rest in benefits.
WestLB's principal finance arm, led by Robin Saunders, backed out of a £1bn takeover of AWG last month but not before the company's chairman, Peter Hickson, criticised the fact that it had been forced to spend £3m defending itself against a "virtual" takeover bid.
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