Northern Rock is giving disgraced former chief executive Adam Applegarth a £760,000 pay-off, a £346,000 pension top-up and continuing to honour his cut-price staff mortgage.
Mr Applegarth, who was responsible for devising and implementing the bank's disastrously flawed strategy, is being paid the golden goodbye in 12 monthly instalments of £63,000, according to the annual report published today.
The value of his pension pot increased by £346,000 last year, the annual report also reveals, and now stands at £2.6 million. The accrued pension entitlement is £305,000 a year.
Mr Applegarth, 45, will also continue to enjoy a concessionary staff interest rate on £75,000 of his mortgage from the bank, Rock said, without disclosing the precise terms.
The pay-off is equivalent to a year's base pay for Mr Applegarth, who finally left in December after announcing plans to step down in November. He had run the bank for the previous six years.
Mr Applegarth has in the past refused to shoulder the blame for Rock's flawed over-dependence on wholesale funding and its over-aggressive expansion of its mortgage book. Last October he told MPs the collapse was the fault of the Bank of England, which failed to approve a potential rescue bid from Lloyds TSB.
New chairman Jew Ron Sandler also warned that he expected the bank to continue to make losses for the next three years before breaking even in 2011.