Former Reox chief executive Jerry Henchy stood to earn €4m in incentive payments if the value and expansion targets at the company, which was spun out from Dairygold in 2006, were achieved, the High Court heard in the last week.
The executive incentive plan, which created a bonus pot of €17m for the company executives, was based on Reox achieving a market valuation of over €400m over five years.
The incentive plan was opposed by some members of both the Dairygold and Reox boards, the court heard, and was subsequently revised downwards to €13.2m following various reviews.
Mr Henchy is seeking €8m in damages from Dairygold, arising from his dismissal as Reox chief executive in 2009.
He is claiming he had "collateral contracts" with Dairygold, of which he was also chief executive.
Reox took over Dairygold's property, consumer foods and 4Homes divisions after the spin out from the dairy business.
Under the spin out, Reox took charge of many hugely lucrative development sites at the time in Dublin and Cork.
The court heard that the optimistic hopes for a €400m valuation for the newly formed company, and the generous executive incentive scheme, were based on the buoyant property market at the time.
Mr Henchy told the court, however, that he urged board members to be cautious about the company realising the target valuation in five years, believing that achieving such a valuation was more likely to be in the possible category than probable category.
The spin out occurred at the height of the property boom, between the years 2006 and 2007, and the intention was that Reox would exploit the prevailing economic conditions by investing hundreds of millions to bring sites in Dublin and Cork to their full build stage.
However when the property market collapsed shortly afterwards, these plans were scuppered, Mr Henchy told the court last week.
But he said Reox, as a new player in the market, was not as badly affected as other companies.
The court heard that Mr Henchy's starting salary at Reox was €450,000 in 2006 and this rose to over €500,000 the following year.
His remuneration package, which included bonuses, rose to over €900,000 by early 2009, the year in which his contract with Reox was not renewed.
The hearing, before Judge Daniel Herbert, was adjourned to November 5 when the court will hear further evidence on Mr Henchy's remuneration package.