He has a three-year rolling contract and, as stated in the last published report and accounts, earned pounds 103,000 in 1992.
The company refused to elaborate on his departure, specifically declining to comment on whether the board had bowed to institutional shareholder pressure and asked for his resignation. Mr Torday was not available for comment yesterday.
Peter Ryan, non-executive chairman, is leading the hunt for a new chief executive. Mr Torday, who has spent 18 years at the firm founded by his grandfather in 1946, will remain until a replacement is found.
Two non-executives are also being sought following the boardroom rows last month that culminated in the resignations of Sir Michael Carlisle and Michael Denny.
The first tangible signs that big boardroom changes were on the way became evident on Wednesday with the internal appointment of three executive directors.
Those appointments lifted Torday's shares 5p to 31p. They gained 1p yesterday.
Torday has been plagued by problems since it defeated an pounds 18m takeover bid in 1991 from Dowding & Mills. The latest price for the shares, which made their market debut in 1990 at 155p, values Torday at just pounds 5m.
In 1992 Torday lost pounds 13.3m before tax and failed to pay a final dividend for the first time in a decade. And last November it warned that trading remained difficult and there would again be no dividend.
The problems that have beset the company come a decade after Paul Torday saw the company through the devastating recession for the engineering sector in the early 1980s.
But since the onset of the post-bid problems the company has only enjoyed partial success in selling assets. Oldham Signs had to withdraw from the market in late 1992 although Elfab Hughes, maker of pressure relief devices known as bursting discs, was sold last November for pounds 4.7m.Reuse content