The decision came after the Government dismissed Bank of Jamaica governor, Derick Latibeaudiere, on Friday.

Prime Minister Bruce Golding declared yesterday that the country could no longer afford him.

"The Government found unacceptable, embarrassing and repugnant the interpretation and application of certain provisions of the governor's contract of employment," the prime minister told Parliament yesterday.

The prime minister said that Latibeaudiere's compensation would have amounted to $38.3 million this year had Government granted him increases in housing allowance which he claims.

It was this housing clause that was unsettling to the Government. Under the terms of his contract, the governor is entitled to a fully furnished and fully maintained official residence, inclusive of household and gardening and related expenses.

However, with the former governor residing in his own property, the Government is responsible for paying for the rent and maintenance of the house.

Golding said BOJ was paying $2.5 million for Latibeaudiere's rent and $5.9 million for maintenance. The governor began occupying a new residence in September 2008 and was being paid the combined amounts of $8.4 million for rent and maintenance.

Contract change

However, it appears that things went sour after Finance Minister Audley Shaw indicated that Government wanted to change the contract.

"The minister of finance had some time ago indicated verbally to the governor his desire to renegotiate the housing provisions of the contract in order to arrive at a package that was more reasonable and one that the public of Jamaica would find less offensive," Golding said.

"Research shows that this exceeds the compensation package of the chairman of the Federal Reserve Board of the United States," Golding said.

Latibeaudiere's basic salary was $14.5 million at October 30, 2009. In addition, he had a fully maintained car, entertainment expenses and medical and life insurance coverage.

Golding said the decision to remove the governor had nothing to do with policy issues and was only based on the contract that Latibeaudiere enjoyed.

"I would not know how to explain it to the people of Jamaica," the prime minister said. Golding said that, in good conscience, no member of parliament could defend the package.

The governor is also provided with a fully maintained car, entertainment expenses, medical and life insurance, guaranteed pension and all other benefits to which non-contracted service employees of the BOJ are entitled.

Latibeaudiere's contract was approved and signed by former Minister of Finance Dr Omar Davies on May 8, 2007, with retroactive effect from August 1, 2006, to run for five years to July 31, 2011.

"It was a strange contract, the like of which has not up to now been found anywhere else," Golding said.

However, Davies said yesterday that there was nothing strange about the contract. He said that all deputy governors at the bank enjoy similar contracts, and that the only reason the contract appeared strange was because Latibeaudiere was the first person to be promoted to governor from within the BOJ.

Elements of BOJ governor's employment contract

Basic salary:

$11.2 million (2007)

At October 30, 2009, basic salary stood at $14.5 million

Rent and maintenance paid in 2008:

$2.5 million for rent

$5.9 million for maintenance.

A combined $8.4 million per annum.

Amended valuations after governor's move into new house:

$11.5 for annual rental but he agreed to accept $10.8

Maintenance was set for $7.2 million from September 2008 and $13 million from September 2009 - a combined total of 23.8 million.