Morrisons’ ousted former boss, Dalton Philips, is to receive a £3m pay-off despite presiding over a period of tumbling sales and profits.

Morrisons is expected to unveil Philips’ bumper package inclusive of more than £500,000 in bonus payments this week when the grocer reveals its slump in profits, The Mail on Sunday reported.

The payments due under his contract – and severance negotiation – include a car allowance, an iPad and iPhone, as well as 12 months’ salary, pension contributions and medical cover, giving him £99,000 a month until January 2016.

The company has also agreed to pay more than £25,000 in legal and advisory fees that he incurred during his severance negotiations. Philips could also receive a bonus estimated to be more than £1m this year after his personal targets were reset in line with the reduced internal profit forecasts.

Morrisons is expected to reveal a 50% fall in profits on Thursday and is also expected to reveal that it will cut its dividend payment to shareholders next year.