Looks like it is indeed part of a contract:
It has emerged that Lord Myners, the City minister, signed off the deal which swelled Sir Fred\’s pension pot by a staggering £8 million, leaving the Prime Minister and the Chancellor facing serious questions over how much they knew about the payoff.
Lord Myners was involved in negotiations over the terms of Sir Fred\’s departure from the bank in October. He approved the formal document setting out the early retirement deal before it was signed by the outgoing chief executive.
I agree that many won\’t or don\’t like it and it may all be down to the stupidity of a Government Minister, but if we\’re to retreat from the idea that a deal\’s a deal, a contract is a contract (especially one actually signed by a Government Minister, however appalling or stupid it or he is) then I submit that as a society we\’re going to face much larger problems down the years than whatever letting Fred have his £650,000 a year for a decade is going to cost us.