Weston was pushed out last year

BAE Systems has reported net losses in the past three years, and took a charge of �750m in 2002 to cover cost overruns on the Nimrod marine patrol aircraft and the Astute attack submarine contracts.

John Weston's contract with Europe's biggest defence contractor was terminated on 25 March last year.

Most of BAE's directors had pay cuts last year as the losses and plunging share price hit bonuses.

Nice work, if you can get it

Mr Weston received �520,000, one year's pay, because he was not given the required notice and �939,000 as part of an early retirement pension, the firms' annual report says.

He also received �135,000 in pay and benefits during the year.

BAE said his package was the standard arrangement for all employees leaving over the age of 50.

He was replaced by chief operating officer Mike Turner - the only executive to receive a pay rise - jumping from �570,000 to �709,000 last year.

Mr Weston became BAE's chief executive in May 1998 and guided the UK-focused British Aerospace past to its present "global" form.

Pension bomb

Company chairman Sir Richard Evans, who is due to step down in 2004, took a �141,000 pay cut to �609,000.

New accounting rules requiring companies to disclose the pension transfer value of individual schemes showed that board members were entitled to up �6.3m each.

Employees face a less rosy old age, with their pension fund �2.8bn in the red.

The shortfall caused Standard & Poor's to downgrade the firm's credit rating last week.

"The downgrade reflects BAE Systems' poor profitability, weak cash flow generation, a decline in historically strong liquidity, and a sizable pension deficit," said S&P's credit analyst Roman Szuper.