ACCORDING to Northern Rock, the severance terms offered to its former chief executive, Adam Applegarth, were "substantially less than the amount which he would otherwise have been due on termination of his employment with the company".

So this maths and economics graduate, who spent his entire career with the Newcastle-based mortgage bank, must make do with £760,000 (one year's basic salary), paid in monthly instalments over this year; £75,000 of his mortgage continuing to be charged at the bank's concessionary staff rate until November; £5000 plus VAT towards legal fees; and a pension which, in today's money, is worth nearly £305,000 a year but cannnot be touched until he reaches 55, in August 2017.

Applegarth doesn't even have his non-executive directorship with housebuilder Persimmon (paying £46,000 last year) to fall back on. He resigned from that position at the end of October, as his Rock was crumbling and his own position was fast becoming untenable.

But there again, in January 2007, under a share-matching scheme for executives, Applegarth saw 53,208 Rock shares vested at a price of £11.98 each. The release of these shares was not dependent on any other measure of performance. Let's hope he didn't hold on to them until the end.

Outwith the rather rarified worlds of Britain's big boardrooms and their advisers, very few will shed a tear for Applegarth's bare-bones pay-off. Not only is it a fortune few of them will ever aspire to. Whatever the contractual niceties it also looks like a rather fat reward for abject corporate failure.

This was the man who ran Northern Rock from 2001. This was the principal architect of its helter-skelter expansion, based on the premise that, if interest rates went up times might prove more difficult for a while, but when they went down the Rock stood to make a killing.

Just what price has Applegarth paid for his role in the Northern Rock fiasco? The now-nationalised bank's latest accounts are silent on why his pay-off is "substantially less" than he might otherwise have expected. Certainly, there are a whole string of share incentives, running into hundreds of thousands of units, which all lapsed on his departure.

However, by that time they were virtually worthless anyway. He is far from alone in seeing the value of his Rock shares, which stood at nearly £12 last April, shredded now. Applegarth had a big hand in that destruction of shareholder value. Many others were loyal, but misguided bystanders.

And there was no executive bonus payable in 2007, unlike the £660,000 Applegarth picked up the previous year - another 5% of salary for every 1% increase in pre-tax profit. Had he been entitled to a bonus for profits growth in the first half of 2007 and got it, after all that's happened since, the public outcry would have been even more deafening.

But in situations like this, even the smallest details can infuriate. To pay back the outstanding £24bn Northern Rock owes the taxpayer, via the Bank of England, by 2010, its new management is determined to shrink its balance sheet, from some £107bn last year to nearer £50bn by the end of 2011.

The quickest way to do that is to accelerate mortgage redemptions by offering some of the worst rates in the marketplace. New executive chairman Ron Sandler says up to £30bn of existing loans are coming up for renewal this year. Many will be encouraged to take that business elsewhere, by the simple expedient of charging them a lot more to stay.

As they get the cold shoulder from a bank that used to crow about how it rewarded customer loyalty they will, doubtless, take comfort from the knowledge, until this November, the Rock's former CEO will still enjoy its staff discount rate when paying down a £75,000 slice of his own loan.

In due course, all the well-worn arguments about the need to incentivise senior business executives if they are to deliver exceptional corporate performance will resurface. But look at the nature of Applegarth's incentives. The rewards are all short-term. Boost profits or the share-price now and you too can cash-in big-style.

But who is incentivised to take care of the long-term? Certainly, by being lucky enough to join a defined-benefits occupational pension scheme when such things were still open to new members, this one-time trainee cashier who climbed to the top of the Rock could - at the age of 45, after 24 years' service - gaze upon a pension pot of remarkable size. So, equally, could other long-serving Rock executives.

Who, however, was being rewarded for securing the long-term viability of Northern Rock as a business? No-one, it seems. For the financial rewards which made Applegarth a very wealthy man were skewed towards short-term performance at the expense of building long-term risk.

And when these risks eventually crystallised and brought a sound business to its knees, it seems right that those who drove it to that brink should shoulder their share of responsibility. But all they've got is a severance package substantially less than they might otherwise have been due. Interesting word otherwise. It can hide a multitude of sins.