Mr Alfie Kane (58), outgoing Eircom chief executive, has negotiated an exit package worth €2 million (£1.58 million). He leaves the firm at the end of the month after seven years at the helm following its takeover by Valentia Telecommunications.

The package is made up of a €1.25 million top-up to Mr Kane's pension scheme and one year's salary of €482,500. Several consultancy contracts with Eircom that will run for another 12 months bring the package to just more than €2 million. The pension top-up means Mr Kane will receive a pension of €217,000 a year when he reaches retirement age.

Mr Kane owned fewer than 24,000 shares in Eircom and had no share options because the company never put in place a share option scheme for executives. The Government blocked the establishment of such a scheme in the run-up to the company's flotation in mid-1999 for fear that the process would appear tainted if the senior management made windfall profits.

Shareholders gave approval in principle for a scheme at the first annual general meeting after the flotation but it was never put in place. Shortly after the meeting, Eircom became involved in a series of talks with various parties that led to its eventual break-up and sale.

Most of the shares held by Mr Kane represent his allocation under the Eircom Employee Share Ownership Trust (ESOT). As an employee of the company, he is entitled to a portion of the 15 per cent of Eircom that was held by the ESOT since the flotation. The ESOT has now increased its stake in Eircom to 30 per cent as part of the takeover of the company by Valentia.

As an ESOT member, Mr Kane would also be entitled to an allocation of the Vodafone shares that the ESOT received following the sale of Eircell to the British mobile group. The ESOT shares in Eircom and Vodafone will be distributed to the ESOT beneficiaries in a tax-efficient manner over the next few years.

Dr Philip Nolan, the chief executive of British infrastructure company Lattice Group, will take over from Mr Kane. Dr Nolan is currently earning more than €634,000 and has generous share options. His package at Eircom is expected to be on a par with, if not better than, his current remuneration.