The waiver, which will dilute other shareholdings, allows Mr Dworkin to exercise options to buy 1.4 million Storehouse shares at favourable prices. Normally, options lapse when an executive leaves before the exercise date.
However, Mr Dworkin, who unexpectedly announced his departure from Storehouse in February and left in March, is being allowed to exercise options on or after November 1993, May 1994 and May 1995.
The waiver appears to breach the guidelines of the Association of British Insurers, which represents many large institutional investors. It says executives should forfeit options if they leave of their own free will.
The purpose of share options is to encourage loyalty and to reward executives if they succeed in raising the share price while they are with the company.
Richard Dixon, a spokesman for Storehouse, said that options normally lapsed when an executive left: 'Equally, within the rules there is discretion. Clearly the board felt he (Dworkin) had earned them (the options).'
Storehouse has also allowed five other former directors to retain their options. They stand to make large profits of on a further 1.4 million of options, exercisable at prices as low as 99p. Storehouse shares closed on Friday at 207p.
The remuneration committee on the Storehouse board is headed by Ian Hay Davison and includes Sir Christopher Bland, who stands to make a personal profit of pounds 7m this autumn from London Weekend Television's controversial 'golden handcuffs' share scheme.
The Storehouse annual report, published last week, showed Mr Dworkin was paid a pounds 2.7m bonus last year on top of his salary, which was raised from pounds 345,000 to pounds 576,000. His pay ranked him as the second highest paid executive in Britain, pipped only by Peter Wood, the Royal Bank of Scotland executive who set up Direct Line insurance.
Mr Dworkin was granted 500,000 options exercisable at 113p after three years in November 1989; 200,000 at 125p in November 1990; 100,000 at 99p in May 1991; and 615,000 at 142p in May 1992. The theoretical profit on these options at Friday's closing price of 207p is pounds 1,141,750.
The bonus was the result of a long-term scheme set up when Mr Dworkin was appointed chief executive of BhS, formerly British Home Stores, in November 1989.
(Photograph omitted)Reuse content