Row looms over Cox chief payoff

THE former chief executive of Cox Insurance has left with a pay-off of £391,000 from the Lloyd's underwriter.

Michael Dawson quit last May - only eight months after controversially receiving £265,000 for agreeing to reduce his notice period from two years to 12 months.

It is unusual for directors to pick up a payment for having their contract lengths reduced.

Investors argue that shorter notice periods limit 'rewards for failure' and they see no reason why executives should be compensated simply for doing the right thing.

Cox's latest annual report also reveals that Dawson is still being paid £70,000 consultancy fees for working only one day a week.

It also shows how much directors stand to gain if the insurer is taken over before the end of the year under a special bonus scheme designed 'to reflect the immediate release of shareholder value' if control of the company changes.

Chairman Peter Owen is in line for £3.3 million, retail chief executive Neil Utley £1.1 million and finance director James Morley £966,000 if the sale price per share is 110p.

Shares in the firm, which peaked at 244p in 2001, closed at 82 1/2p on Friday, valuing Cox at £259 million.