£2m a day cost of Cadbury deal – plus £12m for the boss | chief executive of Cadbury stands to pocket cash and shares worth

Todd Stitzer celebrating Cadbury’s 100th anniversary in 2005. Photograph: Graeme Robertson/Getty Images

The chief executive of Cadbury stands to pocket cash and shares worth £12m from the company's £11.9bn sale to the American food giant Kraft in a deal that also hands fees of at least £250m to legions of City advisers.

The scale of the payments for Todd Stitzer contrasts sharply with the uncertainty faced by thousands of Cadbury factory workers, after the group's chairman Roger Carr admitted he had put shareholders first and job losses were inevitable.

Carr said the board did not feel guilty about selling Cadbury. "We have done nothing wrong. We have done the role that is required of us," he said. "We don't own the company - the shareholders own the company and the board has a fiduciary duty [to recommend an offer] when appropriate value has been paid."

Investment bankers, lawyers, accountants and PR advisers racked up fees at a rate of more than £2m a day during the acrimonious £12bn battle for control of Cadbury in the latest sign that it is business as usual in the City, barely 15 months after the fall of Lehman Brothers brought the financial system to the brink of collapse.

The robust defence mounted by Stitzer and Carr, makes job offers from Kraft's boss, Irene Rosenfeld, unlikely. If Stitzer leaves, he will be entitled to a bumper payoff comprising a year's salary, in his case £985,000, a bonus worth almost £2m and the right to cash in cheap and free shares worth £8.6m.

He also owns a personal stake in the company worth £5.5m, according to its most recent annual report. After more than 25 years at the firm, 56-year-old Stitzer is also sitting on a £15m pension pot that promises to pay out £1.5m a year when he retires.

The demise of Cadbury as a flag carrier for corporate Britain prompted fears that thousands of jobs are now at risk. Cadbury, based at Uxbridge in Middlesex, employs 6,000 people in the UK, and unions are worried that jobs will be lost as Kraft wants to cut annual running costs by $675m (£413m) after the takeover, which is being funded with £7bn of debt.

Unite national officer Jennie Formby said the Cadbury workforce was shocked and angry at having been "sold out". She added: "This is a leveraged bid and Kraft will eventually have to repay the debt, meaning a great deal of uncertainty for the workforce in the UK and Ireland."

Carr, who previously sold Thames Water to the German group RWE, said agreeing the deal was a "bittersweet moment". He admitted Kraft was bound to pursue cost savings and that job losses were an inevitability.

Gordon Brown, however, said the government was determined that the company would continue to invest in the UK. When it first approached Cadbury last year Kraft said it would reverse the decision to close its factory in Somerdale, near Bristol, and would invest in its Bournville site.

Rosenfeld has written to the business secretary, Lord Mandelson, to reassure him that Kraft will have respect for "Cadbury's heritage and employees". Mandelson said he had invited the Kraft boss to a meeting to discuss her plans.

Cadbury agreed to the £11.9bn takeover in early morning, ending a five-month battle to keep the American buyer at bay. The board surrendered when it became clear that short-term investors were willing to accept Kraft's 850p-a-share offer.

Some analysts and shareholders expressed disappointment that Cadbury had thrown in the towel. Peter Cumming, head of equities at Standard Life, said: "Kraft is getting a good deal. It is sad that Cadbury is gone, but business is business."

Cadbury's second largest investor, Legal & General, reluctantly accepted the bid. "We believe the increased and final offer for Cadbury by Kraft Foods fails to fully reflect the long-term value of the company," it said. "We are disappointed management have recommended the offer for this iconic and unique British company, but are grateful for the constructive way they have engaged with us."

Swallowing Cadbury will make Kraft the world's largest sweetmaker with sales of $50bn, with famous British names such as Bournville, Bassett's Liquorice Allsorts and Green & Black's to join a stable of brands that includes Philadelphia, Maxwell House and Ritz crackers.

Source: Guardian News UK

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