The former WH Smith director who was sacked after last year's disastrous Christmas will have earned close to £600,000 in salary this year.
Beverley Hodson, who was fired as managing director of the group's UK retail operations after WH Smith issued a swingeing profits warning in January, cost the group £866,000 overall in the past year.
Only Kate Swann, the chief executive, earned more last year - £1.3m - the group's annual report and accounts for 2004 revealed yesterday.
Ms Hodson's remuneration package includes £569,000 she received in compensation for her salary for the year to 31 January 2005. It also includes the £112,000 bonus Ms Hodson was paid to stay on last Christmas after she was passed over for the chief executive's post, and a £100,000 cash injection for her pension.
Richard Handover, who became chairman after Ms Swann was appointed, saw his total pension pot soar to £5m last year, up from £4.7m the previous year.
WH Smith said it planned to update the market about Christmas, when it makes two-thirds of its profits, on 19 January. Its shares leapt 8.75p to 305.5p.