Simpson paid pounds 1m for seven months at GEC

George Simpson, managing director of GEC, earned more than pounds 1m last year for seven months' work. The disclosure could provoke fresh shareholder unrest when investors vote at next month's annual meeting on the group's new executive remuneration policy under which 250 senior managers could receive eight times their salary in share options.

Details of GEC's boardroom pay emerged as the defence electronics and engineering group announced that another of its directors was leaving.

Sir Richard Needham, the former Conservative minister brought in by Lord Weinstock, is departing at the end of September and will join the board of the Japanese electronics group, NEC Europe.

GEC's report and accounts, published yesterday, show that Mr Simpson, who took up the post in September, received a total of pounds 1,141,000. The sum includes a pounds 500,000 joining fee to compensate him for loss of incentive pay entitlements at his former employer, Lucas, and a pounds 230,000 bonus, of which pounds 160,000 was discretionary.

Mr Simpson's service contract also entitles him to share options worth a total of eight times his basic salary of pounds 600,000 a year under two award schemes linked to the financial performance of GEC.

The report and accounts show that the pay of Lord Weinstock fell from pounds 819,000 in 1995-96 to pounds 247,000 last year, reflecting his move from managing director of GEC to chairman emeritus. David Newlands, who resigned as finance director last month to make way for John Mayo from Zeneca, received a pay-off of pounds 390,000 as compensation for loss of office.

GEC has decided to increase the aggregate fees paid to non-executive directors from pounds 100,000 to pounds 250,000 a year. Under GEC's new personal shareholder policy, executives will be encouraged to earn long-term bonuses in shares.