The news came as Sainsbury's announced that the launch of its first national supermarket loyalty card scheme will be next Monday. Called Reward, it is Sainsbury's belated attempt to win back customers from rivals such as Tesco, whose Clubcard now has 8.5 million members.
Mr Quarmby, who was on a two-year rolling contract, quit in March rather than take on a new role as managing director of group services following a radical management shake-up designed to revive Sainsbury's sagging profits and falling market share.
He received pounds 336,000 for loss of office and pounds 556,000 in lieu of pension. Mr Quarmby is also being allowed to keep options on 396,000 shares with an average exercise price of 357p - worth more than pounds 166,000 at yesterday's closing price of 399p.
Prior to the boardroom reshuffle, Mr Quarmby was number three in the Sainsbury's hierarchy behind chairman David Sainsbury and deputy chairman Tom Vyner.
Sainsbury's announcement in January saw Mr Vyner become chief executive of the core UK supermarkets business while Dino Adriano, head of the Homebase DIY subsidiary, was made chief executive designate, effectively marginalising Mr Quarmby's role.
Directors are forgoing their bonuses after Sainsbury's pre-tax profits fell 12 per cent to pounds 712m in the year to March.Reuse content