Carlton Communications chairman Michael Green is set to receive a £1.4m (€2m) pay-off when the group merges with Granada, despite not having a formal contract, it emerged today.
Mr Green is due to leave the group when the merger is complete after being ousted as chairman of the new ITV plc in October by institutional investors led by Fidelity Investments.
News of the pay-off is understood to be included in the listing particulars for the merger, which are due to be published tomorrow.
The payment is the equivalent of two years’ salary – Mr Green was paid £707,000 (€1m) in 2002.
In addition, he will receive two years’ pension contributions, and walk away with millions of pounds worth of share options.
Mr Green, who founded Carlton more than 20 years ago, has never had a formal contract with the media group.
However, the group is understood to have been given legal advice saying that after working for the firm and drawing a salary for a number of years he has an implicit contract, and should be treated in the same way as other directors who have two-year contracts.
But the move is likely to spark outrage among shareholders who called for the removal of Mr Green, who is held partly responsible for the collapse of ITV Digital, and demanded the appoint of someone from outside the two groups.
Carlton is also understood to be giving finance director Paul Murray a pay-off of several hundred thousand pounds when he leaves the company.
The group declined to comment on reports in the press, and a spokesman for Mr Green said he did not want to be drawn into a debate on his severance package.
Tomorrow’s listing particulars will also include details on Charles Allen’s contract when he takes over as chief executive of the new group.
It is thought his current two-year contract at Granada will be reduced to an annual contract when the £4.5bn (€6.4bn) merger is completed in early February.
Last month the two companies signalled there would be job cuts when they announced the combined group would make cost savings of about £100m (€142m).
The merger was approved in October by British Trade and Industry Secretary Patricia Hewitt.
She accepted undertakings from the pair in November relating to “behavioural remedies” to address their dominant position in the advertising market.
The main undertaking allows advertisers to roll over their existing contracts to the new enlarged ITV group.