The chief executive of the Irish Permanent subsidiary Guinness & Mahon, Mr Peter Ledbetter, will receive a total severance payment of £723,872 when he leaves the company in March. Documentation to be circulated to Irish Permanent shareholders next week states that the payment includes remuneration, emoluments and benefits in kind due under Mr Ledbetter's contract. It also incorporates one year's additional pension payment, payment in respect of director's fees and a contribution to legal and other expenses incurred by him in respect of his resignation.

Shareholders will be asked to approve the payment of the additional pension and legal monies and other expenses, amounting to £131,168, at an extraordinary general meeting on February 19th when they will also be asked to approve the merger with Irish Life.

Mr Ledbetter, who is 55, has a significant shareholding in Irish Permanent and share options form part of his remuneration package.

He holds 162,192 Irish Permanent shares which at the close of business yesterday were worth £1.8 million (2.3 million). He also has options to buy a further 126,600 Irish Permanent shares at £1.80 each until 2004, shares worth more than £1 million in the current market.

He announced he was resigning as a member of the board last month after he was omitted from the proposed board of the merged Irish Life and Irish Permanent. Mr Ledbetter joined the Irish Permanent board in 1991. The documentation states that the remuneration of the executives of Irish Life & Permanent will be reviewed by a remuneration committee after the merger. Remuneration packages will be set by non-executive directors and will be based on the level of responsibility held and individual performances.

The new board will have an equal number of representatives from Irish Permanent and Irish Life and will include five executive directors and 13 non-executive directors.

The remuneration packages to executives at Irish Permanent have been among the most generous in the sector and are substantially more attractive than those which exist at Irish Life. Industry sources suggest the remuneration committee will be seeking to strike a balance between the two current arrangements.

Meanwhile the documentation states that it will cost the merged group £13 million in charges and expenses for the new shares to be admitted to the official stock exchange lists.