Niall FitzGerald, who retired as co-chairman of Unilever in September last year, has been awarded £1.22 million (€1.76 million) as "compensation upon the termination of his employment" as part of total emoluments in 2004 of £3.74 million, according to the consumer products group's annual report.
Mr FitzGerald's pension will also be boosted. Although he retired at 59, he will be treated as if he had remained in employment with the group until his 60th birthday, in September this year.
The transfer value of his pension at the end of 2004 was £16.9 million, which would give him a pension of £852,000 a year. The group's pension fund had a deficit of £1.35 billion at the end of 2004.
The day after leaving Unilever, Mr FitzGerald was appointed non-executive chairman of Reuters, the electronic information services group, for which he is paid £500,000.
Shareholders are likely to raise their eyebrows at the payments.
Unilever said the compensation was paid because Mr FitzGerald had left the company before his normal retirement age, partly at the request of the company. His retirement was announced in February last year, seven months before he left.
The company said his departure was to enable Patrick Cescau, the group's chief executive following a board restructuring last month that ended the dual-chairmen structure, to take charge of the group's new strategy.
Mr FitzGerald had overseen the previous five-year "path to growth" strategy, at the end of which Unilever said it was "not where we set out to be". The company said 2004 was "clearly a very disappointing year".
As a result, executive directors annual bonuses were cut but were more than offset by payments made under the long-term incentive plan. Annual bonuses totalled £696,000 down from £1.23 million, but the income directors received from the long-term plan was £6.21 million, up from £526,000.
Unilever said it had ranked sixth of its peer group of 21 companies in terms of total shareholder return in the three years to end 2003 for which the long term payments were made. By the end of 2004, however, its three-year rolling ranking had slipped to 13th. - (Financial Times Service)
