RMC chief in line for £2.6m pay-off after less than a year

David Munro, the chief executive of RMC, the concrete group, is in line for a pay-off worth more than £2.6m, if, as expected, his employment is terminated following the agreed takeover by Mexico's Cemex.

The size of the likely payout to Mr Munro, who has only been chief executive since January, will cushion the blow when the time comes for him to step down. Mr Munro's full entitlement only became clear when the formal takeover document was quietly released by Cemex last week.

The company had no difficulty in accepting an 855p a share bid from Cemex in September as the offer was reckoned to be very generous.

While Cemex has made no formal announcement about jobs at RMC following completion of the takeover, it is widely expected that Mr Munro, along with a number of other members of the head office team, will not be offered positions in the enlarged group. There are fears at the group's Surrey headquarters of significant job losses, and employees have been told their jobs are safe only until March.

On termination, Mr Munro's share options and share grants under the long-term incentive plan (LTIP) would be triggered and he would be entitled to a year's salary, the full bonus, plus a year's worth of pension contribution and benefits payments. Under the LTIP, Mr Munro's entitlement would be 82,437 shares, worth £704,836 at the offer price. His 280,032 executive share options, granted in April at a 616p exercise price, would yield a further £669,276 in profit. His annual salary is £575,000, while the maximum bonus is £460,000. He was entitled to double these amounts at the start of his tenure. However, that entitlement diminishes by one-twelfth for each month of service, so this clause is unlikely to apply by the time the deal completes. Mr Munro's annual pension contribution is £230,000.