That payout has triggered controversy at City Hall, and Mayor Antonio Villaraigosa is right in the middle of it.
The head of the Los Angeles Housing Authority, Rudolf Montiel, was recently fired and sent packing with a $1.2-million severance package.
The mayor is out of the country but knew about the "golden parachute."
In a statement, his office said: "The mayor was aware that there would need to be a sizable settlement, given the terms of the employment contract and other liabilities."
Deputy Chief of Staff Matt Szabo says the mayor never read the contract.
City Controller Wendy Greuel calls a $1.2-million severance unfathomable.
"That's a huge amount of money. Think of how many people can be housed for $1.2 million," said Greuel.
Next year the L.A. City Council is expected to pass an ordinance that would for the first time give it oversight of the housing authority. It's sponsored by Councilwoman Jan Perry.
"Of course as a mayor I would want to review the terms of the settlement and to understand the ramifications because they are significant," said Perry.
Eyewitness News was not able to reach Montiel. But the cost of his departure has raised a lot of questions.
"I can tell you that I am just outraged by that department and we need to get a complete investigation of absolutely every inch so we can get confidence back in that department," said L.A. City Councilman Bill Rosendahl.
Next week Greuel will release the first audit of the housing agency on expenses. And she intends to ask for a copy of Montiel's contract.
Eyewitness News has learned a portion of the $1.2-million settlement, about $435,000, will be covered by insurance.