Outgoing Federation Centres chief executive Steven Sewell will reap more than $1 million in termination payments following his shock ousting last month.
Mr Sewell, who was replaced by Angus McNaughton a month into the trust’s merger with Novion Property Group, will also officially continue working at the company for four months, earning an extra $454,535 in that period.
Given he is entitled to receive 12 months’ notice, he will be paid out $992,307 for the remainder of his contract.
Mr Sewell will also earn about $158,000 in additional termination benefits, covering “outplacement services, relocation assistance and other benefits”.
Mr McNaughton, the former chief of Novion Property Group, had been paid $4m when he stepped down as part of the original merger with Federation Centres.
He could now earn up to $4.675m annually if he hits unspecified goals in incentives plans running the mall empire, which will manage more than $22 billion in assets.
In the group’s annual report released today, Mr McNaughton acknowledged that the $11bn shopping centre trust has a big year ahead to deliver on the promised merger benefits.
“It will be a big year ahead but I am excited by the challenges and the opportunities. We will be focused on delivering the forecast synergies of the merger and finding new cost and revenue opportunities from the merged portfolio, along with achieving key integration milestones,” Mr McNaughton wrote in the report.
Chairman Peter Hay predicted an improvement in the retail environment in the medium term, despite the mixed economic outlook.
He also talked up the appointment of Mr McNaughton.
“We believe that Angus’ history of driving a high performance culture at Novion, where he was managing director and chief executive officer, our assets, people and investors have a strong stable future,” he said in the report.
Federation shares were down nearly 1 per cent today, trading at $2.70 at 2.10pm.
This article first appeared in The Australian Business Review