NEW YORK (Bloomberg) - Brian Duperreault, named on January 30 to head Marsh & McLennan Cos., the world’s largest insurance brokerage, will get almost $5 million in severance from Ace Ltd.

Mr. Duperreault, 60, stepped down this week from the board of the Bermuda-based business insurer, which awarded the cash severance as “compensation for his past service,” according to a regulatory filing on Friday.

Mr. Duperreault was Ace’s chief executive officer from 1994 to 2004.

Ace’s stock rose more than fivefold during Mr. Duperreault’s tenure as CEO, after he presided over a series of acquisitions.

Mr. Duperreault transformed Ace from a niche insurer into a global franchise, his successor, Evan Greenberg said.

Mr. Duperreault has not been an Ace employee since June 2006.

He remained non-executive chairman until last May.

“Compensation is supposed to incentivise people to create value for shareholders,” said Patrick McGurn, senior counsel at proxy adviser Institutional Shareholder Services, a unit of New York-based RiskMetrics Group Inc.

“He’s gone, so how does that help? Whatever happened to the good old gold watch, or dinner in his honour?”

Robert Grieves, an Ace spokesman, declined to comment or say whether the company had ever paid severance to an outgoing board member who was not a company employee.

Mr. Duperreault received compensation worth $7.9 million in 2006, including a $2 million cash bonus for his final five months as Ace’s executive chairman and for serving as non-executive chairman the remainder of the year, according to a proxy filing last year.

His compensation was valued at almost $6 million in 2005 and almost $7 million in 2004. Changes in executive pay disclosure rules for 2006 may distort comparisons.

At Marsh, Mr. Duperreault replaces Michael Cherkasky, the former prosecutor who cleaned up relations with regulators after a bid-rigging scandal and then proved unable to regain the lost clients and profit.

Mr. Cherkasky received compensation valued at $8.01 million in 2006, the most recent year publicly disclosed.

Ace rose $1.08, or 1.9 percent, to $59.32 in New York Stock Exchange composite trading. Marsh rose 40 cents to $27.95.