Ousted Pru chief could net £1.8m pay-off

Jonathan Bloomer, the ousted chief executive of the insurance giant Prudential, is in line to receive a payout worth as much as £1.8m, it emerged yesterday.

Jonathan Bloomer, the ousted chief executive of the insurance giant Prudential, is in line to receive a payout worth as much as £1.8m, it emerged yesterday.

Company sources said the final deal was still being hammered out but the range of his compensation package was between £1.5m and £1.8m.

Prudential is determined that Mr Bloomer, who was forced to step down last Thursday after five turbulent years at the helm, receives no more than his contractual benefits.

He is entitled to one year's notice. In 2003 he earned £1.36m, including a £850,000 salary and a £306,000 bonus. His package for 2004 could be worth as much as £1.3m, while his payout will be based on his 2005 terms that would not need to be made public until spring next year.

Speculation of Mr Bloomer's pay-off will come to a head in a fortnight when the 2004 annual report is published. Sources at the Pru said the company might use that as an excuse to draw the issue to a close by divulging details of the compensation package.

Mr Bloomer was forced to quit after a turbulent six months that saw rifts develop between the Pru and its major investors. Anger peaked when he shocked the City in October with a surprise £1bn right issue to fund the expansion of its UK business, after failing to find a buyer for the online bank Egg despite a prolonged auction. He will be replaced by Mark Tucker, the finance director of HBOS, who takes over on 6 May.

The Pru's board is thought to be determined that the issue will not lead to a dispute with shareholders, meaning Mr Bloomer will receive only contractual benefits. He is not expected to receive a payout from a restricted share plan after shareholder return failed to meet the required level.

Last week's move sent the company's share price higher as investors looked forward to calmer relations and a possible change in strategy. Shares in Egg also advanced on hopes that the business would be offloaded.

Separately, millions of Barclays customers were unable to withdraw money from cash machines yesterday after technical difficulties paralysed part of the network.