Marconi ends £1m Mayo row

John Mayo, the former finance director at Marconi who was ousted after last summer's disastrous profits warning, has settled his £1m payoff dispute with his former employer.

Mr Mayo, who was paid £600,000 in lieu of notice following his dismissal in July, has been in dispute with the debt-laden telecoms equipment maker over his pension entitlement.

Marconi is said to have been refusing to hand over the money because of a disagreement over how much Mr Mayo was owed. Marconi is thought to have increased his pension substantially when he arrived from drug company Zeneca in October 1997.

Unlike former chief executive Lord Simpson, who received £300,000 in compensation for loss of office and future pension contributions, and chairman, Sir Roger Hurn, who waived his entitlements completely, Mr Mayo has been pressing for a full payout.

The two sides reportedly reached an agreement early last week shortly after which Mr Mayo started giving his view of events at the troubled company in a series of articles in the Financial Times.

In another interview this weekend, Mr Mayo, who appears to accept little or no blame for the fact that Marconi now finds itself on the corporate critical list, revealed that he was in talks with several private equity groups and had started his own consultancy firm, Mayo & Co.

Marconi refused to comment on the payoff yesterday: "We disclose the details of any settlements in our annual report," it said. The company also moved to dampen speculation that it will win a significant concession from its bankers in the critical negotiations to refinance its £4.5bn borrowing facilities this week.

Marconi described as "routine" today's meeting with the syndicate of banks behind its two existing credit lines, which expire in March and May next year and are keeping the loss-making company afloat.

"We see them regularly and this is a meeting to update them on last week's trading statement. There is no particular agenda to it," a spokeswoman said.

Reports this weekend claimed the banks would not insist on securing the new overdraft facility - rumoured to be worth about £3bn and extended to 2005 - against the company's assets.

Last week Marconi, which has debts of £2.9bn, announced that its core communications division had an operating loss of £130m in the three months to December 31 as sales plunged from £893m to £706m.

It also cut an additional 4,000 jobs, a move aimed at enabling the company to break even with quarterly sales of £675m, rather than the £800m it had targeted earlier.