UK milk processor Arla Foods has attracted some negative publicity with its decision to award its former chief executive Neil Davidson a bonus of GBP1.1m (US$1.96).

Arla spokesperson Nichola Hedge told just-food: “The renumeration committee decided that this was an appropriate sum in recognition of his successful completion of the merger and 20 plus years of service to the company.”

Davidson, who retired six months ago, received GBP1.6m in pay, bonus and benefits for 2005, including compensation for “loss of office” of GBP1.1m, the company’s annual report revealed. This is double the total of GBP820,000 he received in 2004.

Standard Life Investments, Arla’s eighth biggest shareholder, told the Telegraph newspaper that they had “serious questions” about the payout.