Paul Walsh, who stepped down as chief executive of Diageo last month, is set to walk away from the spirits giant with shares worth a potential £27.6million.
The drinks boss, who has grown the market value of the Guinness to Smirnoff firm from £20billion to £47billion during the past three years, has also accrued a pension pot worth £18.4million.
Details set out in Diageo’s annual report show Walsh, who is staying on for a year as an advisor to successor Ivan Menezes, has also negotiated a handsome package as a consultant.
In his first six months he could receive a maximum award of £1.2m topped up to £600,000 in the second six months.
The firm said he will also represent Diageo over the next five years on a Scotch whisky trade body, earning at least £80,000 per annum.
Such largesse would usually raise eyebrows but Diageo has been a star of the stock market in recent years, acquiring a host of local brands and investing in emerging markets.
Walsh who has been chief executive for the past 13 years has seen the shares rise 80 per cent from 1042p in 2010 to 1880p in 2013. He owns 784,660 of stock worth £15.4million at an average £19.68 price and if targets are met could also get £12.2million in shares and options from incentive schemes – which together produce the £27.6million figure.
The firm says Walsh will not receive any lump sum compensation payment in connection with the termination.
But the attractive terms for his role as adviser are part of a growing trend among FTSE 100 firms.
Some corporate governance groups have raised concerns about the quantum.
Deborah Hargreaves, director of the High Pay Centre, said: ‘Paul Walsh was very good at Diageo and was paid extremely well for it.
‘I do not see why he needs to hang round being paid more than the new chief executive.’ Menezes’ total reward will actually be more than Walsh’s because it is related to long-term performance, given that he is in a position to influence that as chief executive.
Finance director Deirdre Mahlan’s salary was lifted 5 per cent to £714,000, while Menezes got a 8.6 per cent hike to his £1million to reflect his increased responsibilities at the company.
