Eidos, the beleaguered games company that has asked shareholders for £52m to stabilise its finances, yesterday revealed that it paid a senior director £2.5m last year.

Jeremy Heath-Smith received a royalty payment of £2,130,000 on top of a salary and benefits package of £385,021 under the terms of a long-standing agreement based on sales at Eidos's Core Design subsidiary.

Mr Heath-Smith sold Core Design, the studio that created the multi-million selling Tomb Raider franchise starring cyber babe Lara Croft, to Eidos in 1995.

The details were disclosed in the Eidos annual report sent to shareholders over the weekend. The document also revealed that Eidos was fighting two lawsuits. One was filed by the relatives of the victims of the Colombine High School shooting massacre in 1999 who claim that violent video games helped cause the shooting.

The other is a £1.5m lawsuit filed by a group of professional footballers and their clubs over the unauthorised use of their names, logos and images in a UEFA Champions League game. Both cases will be strongly contested by Eidos, which has already defeated one violence case.

Chief executive Mike McGarvey said that although there had been a concerted effort to cut costs at Eidos, Mr Heath-Smith's contract would run "in perpetuity".

The terms of the royalty payments have been altered to take into account units returned unsold. But Mr Heath-Smith could still receive as much as an extra £850,000 this year. Mr McGarvey, who was promoted from chief operating officer last year, has asked for his salary to be frozen to reflect the group's new cost-conscious approach. But he and Mr Heath-Smith have already picked up housing allowances totalling £136,585.

The company's proposed £52m rights issue will cost around £2m. It will go ahead after Eidos's stockbroker, Dresdner Kleinwort Wasserstein approves of the company's revised banking facilities with the Royal Bank of Scotland.