Williams chiefs to receive £2m each as group de-merges

The top two directors at Williams, the fire protection and security group, stand to receive payments of more than £2m each as a result of the break-up of the company, according to details released yesterday.

The top two directors at Williams, the fire protection and security group, stand to receive payments of more than £2m each as a result of the break-up of the company, according to details released yesterday.

Sir Nigel Rudd, the chairman, and Roger Carr, chief executive, will each receive compensation payments of £1m for the termination of their Williams contracts as the group is de-merged into the Chubb security business and the Kidde fire protection operation. Under the terms of a new "bonus retention scheme" they will also receive payments of up to 150 per cent of salary for the successful completion of the demerger which is expected to be finalised in November. This will amount to another £1m for both men.

The severance payments are being made despite the fact Sir Nigel will remain chairman of Kidde on a salary of £150,000 a year. Mr Carr will be chairman of Chubb on an annual salary of £180,000.

The demerger, first announced in March, will also trigger the exercise of executive share options in Williams. However, the recent weakness in the Williams share price means most of these are under water.

One major shareholder said: "[These payments] are consistent with the company's approach to remuneration issues. They are getting a bonus and a pay-off. One would have thought one payment should suffice."

The company said the directors had already reduced their service contracts from three years to one year without compensation: "You do need incentive schemes and this was put to many key shareholders at the time and they endorsed it," the company added.

Separately there was some disenchantment in the City yesterday over a forecast dividend cut of around 60 per cent as Williams gives way to Chubb and Kidde. The combined pay-out of Chubb and Kidde is being cut as the two new companies seek to transform themselves into growth stocks.

The details were released as Williams reported a disappointing set of half-year results. Chubb saw half-year profits fall from £64m to £55m. This was due to £8m of re-organisation costs and a 1 per cent fall in margins due to disruption caused by the demerger process. At Kidde profits rose buy 8.5 per cent to £42.2m. However, the residential and commercial division was hit by pricing pressure from tough customers such as Wal-Mart and Home Depot in the United States.

Williams shares closed 15.25p lower at 332.5p.