Nationwide hands Davis £1.1m golden farewell

Brian Davis, the former chief executive of Nationwide who left the building society after implementing a damaging strategy on mortgages, received a farewell package of £1.1m.

Mr Davis resigned in December, saying he wanted more free time and also to make it easy for Nationwide to choose a successor from other senior executives at the society. But the surprise resignation prompted speculation that Nationwide's board wanted Mr Davis to leave to take responsibility for his radical mortgage policy, introduced last Spring. The policy gave existing customers as fair a deal as new customers, but it led to a dramatic fall in business in the first half of 2001.

Nationwide has stressed that Mr Davis retained the support of his board. Yet it emerged in Nationwide's annual report that his package included three months "severance pay".

A spokesperson said the appointments and remuneration committee awarded the payment because the timing of the resignation was agreed between Mr Davis and the board "for succession planning reasons".

Under his contract, Mr Davis would have had to stay on for three more years if he had been re-elected this year. The building society wanted to make the change now in order to secure a new chief executive for the long term. Mr Davis' successor, Philip Williamson, boosted his pay package to £530,000, including a bonus of £209,000.