Sir Bill Gammell's 2011 remuneration includes £1.4m payment for "loss of office"
Cairn Energy founder Sir Bill Gammell received more than £5 million in cash and shares last year, including a £1.4 million “loss of office” payment despite the fact he has stayed with the firm.
The £1.4 million payment to Gammell was in addition to his £312,000 salary as well as two long-term share incentive plans which have now been released worth nearly £3.5 million.
Cairn had argued the “loss of office” payment to Gammell was a necessary contractual payment following a restructuring of the company, designed to incentivise Gammell to a sale of 40 per cent of Cairn India to mining giant Vedanta.
The firm proposed a further £2.5 million share windfall for Gammell, as well as a £1 million charitable gift, as a windfall payment linked to the £4.18 billion sale of part of Cairn India.
The proposed windfall payment to Gammell was outlined in a prospectus to shareholders in January asking them to approve a £2.3 billion cash return from the Cairn India deal.
Cairn was forced to drop the £2.5 million share bonus to Gammell – part of a proposed £4 million overall bonus package - following an outcry from shareholders.
The Edinburgh-based firm was forced to withdraw the £2.5 million share bonus to Gammell, as well as the £1 million charity gift, after shareholder groups argued the payments had been agreed by the board without consultation.
However, Cairn refused to withdraw the £1.4 million "loss of office payment” proposed for Gammell, who stepped down as chief executive last July to take up a role as executive chairman.
The annual report filed by Cairn on Tuesday shows Gammell received more than £5 million in cash and shares from Cairn for the 2011 year, which included shares awarded to Gammell as part of a longer-term incentive plan.
Special bonus payments proposed for two other Cairn senior executives, Malcolm Thoms and Philip Tracy, were also paid out by Cairn last year.
The 2011 annual report shows Thoms and Tracy were paid £3.6 million total in “loss of office” payments - £1.2 million to Thoms and £923,000 to Tracy – who both left the company last June.