Standard Chartered, the London-based emerging markets bank, has ended a longstanding row with its former chief executive over his compensation by offering him £3.2m in a settlement broadly welcomed yesterday by the corporate governance lobby.
Rana Talwar left the bank in November amid talk of a culture clash with other senior board members, including the veteran chairman Sir Patrick Gillam.
He is to receive a one-off sum of £590,000 next month, followed by five payments of £349,459 every three months up to August 2003. There will also be £700,000 to cover expatriate allowances and a £200,000 bonus payment in respect of his performance in 2001.
The aggregate award is 24 per cent lower than the £4.2m full value of Mr Talwar's contract, which entitled him to 24 months' worth of his emoluments in 2000, his last full year of employment with the bank.
A spokesman for the bank said the settlement had been agreed after negotiation, but was "amicable". The sum was within a provision included in Standard Chartered's year-2001 operating costs.
In 2000, Mr Talwar received $2.15m (£1.48m) in salary, bonus and benefits, with a further $480,000 in allowances on top of pension contributions totalling $418,000.
The bonus payment in respect of 2001, at 23 per cent of Mr Talwar's basic salary, is lower than awards to his former boardroom colleagues, who received bonuses of between 80 per cent and 120 per cent of their salary last year.
Mr Talwar is dutybound to find work elsewhere, and any payments from new employment will be deducted from Standard Chartered's compensation awards. The staggered pay-off won plaudits for Standard Chartered from the Association of British Insurers, the National Association of Pension Funds, and PIRC, the corporate governance action group.Reuse content