Sacked AMP chief Batchelor receives £770,000 pay-off

AMP, the Australian financial services giant that owns Pearl and NPI in the UK, yesterday paid off its former chief executive, Paul Batchelor, with 2.1m Australian dollars (£770,000) after sacking him last year.

Mr Batchelor is understood to have been demanding a pay off in the region of A$18m after leaving AMP in September, when the revelation that Pearl was in breach of its solvency requirements led to an investigation in to the company by Australian regulators.

Mr Batchelor has been wrangling with the company's new management since his dismissal and was yesterday delivered a "take-it-or-leave-it" cheque.

His stewardship of the company, which also owns London Life and Henderson Global Investors in the UK, saw the once cash-rich Pearl Assurance raided over a number of years to fund expansion. It was left facing financial difficulties last year and has now been closed to new business. Annual bonuses to 2 million of its policyholders have been scrapped this year, and the remaining 400,000 have had their fund values cut substantially.

AMP reported a loss of A$896m for 2002, after taking a A$1.2bn write-down on its UK businesses and injecting A$1.4bn in to Pearl to keep it solvent.

Shares in AMP climbed 6.5 per cent in Sydney, their biggest gain in six months, as investors welcomed the clampdown on executive payments. Peter Willcox, the company's chairman, said the board had considered giving Batchelor nothing.

"Despite protracted discussions and negotiations, Mr Batchelor and AMP have failed to reach an agreed settlement," Mr Willcox said. "If he believes he is entitled to any additional payments, he is free to take legal action."

Mr Batchelor yesterday said he was considering the options available to them, saying that the payment does not reflect his contractual rights.