GCap Explains Executive Severance Generosity

28 June 2006

LONDON - The chairman of UK radio company GCap Media's remuneration committee has outlined to shareholders the reasons for authorising £2.6 million ($4.7m; €3.7m) in severance payments to ousted directors.

Alastair Ross Goobey issued an unusual "explanatory statement" for the sums paid after last year's merger of Capital Radio and GWR.

He says the payout was "a consequence of the contracts" that the former employer Capital had entered into. These stipulated that executive directors leaving on good terms were entitled to 95% of 12 months' salary plus the value of other benefits. Such contracts have now been scrapped.