Henderson veteran attacks payoff for Gartmore's Jeff Meyer

One of London's top fund managers says he is "staggered" and "incandescent" at the pay-off granted to Gartmore chief executive Jeff Meyer in the wake of the firm's fire sale to Henderson for £366 million.

Stephen Peak, a 35-year City veteran, and senior Henderson employee, has written letters to both the Gartmore board - which is in the process of being wound down - and to Meyer himself suggesting that the money is withheld or given to charity.

It is highly unusual for one City insider to criticise another on the issue of pay in such a public manner, and comes as public anger at rewards to the financial sector continues to grow.

Gartmore floated last year at 220p a share, but almost immediately ran into crisis. There was an FSA investigation into a star fund manager, the departure of industry leading light Roger Guy and a collapse in funds under management as investors took fright. Henderson bought the company at 92p a share.

Meyer is walking away with £11 million - a clear reward for failure according to Peak. Of the total, £6 million is for the sale of Garmore shares, with the rest in bonuses and pay.

In particular, Peak, who runs several Henderson funds and held chunks of Gartmore stock, is furious about a £1.2 million bonus payment.

In a letter to Gartmore's ex-chairman Andrew Skirton, Peak described the decision to honour the bonus as a "significant payment for ultimate failure". The board, he added, "lost the plot" and "should hang their heads in shame".

Peak held around 14% of Gartmore through his funds, and saw the value of that shareholding tumble under Meyer's stewardship.

Gartmore was eventually sold to Peak's employers in a cut-price deal.

Henderson had no particular comment on the matter, but confirmed that Peak has written the letters.

"A fund manager who just happens to work for Henderson has expressed his concern.

"This just demonstrates his independence," said a spokesman.

Henderson became the legal owner of Gartmore on April 4.

Calls made to Meyer's office near Fenchurch Station were not returned.

Gartmore's arch-rival Jupiter Fund Management continues to thrive. It took in £333 million pounds of net new money in its first quarter, helped by demand for its fund-of-fund range and growth of inflows from international investors. That leaves its assets at £24.5 billion. Jupiter, which floated successfully last year, saw its shares rise 5% to 302p today.