The RSPCA has received an official warning from the charity watchdog after a six-digit notification to a former president.
A probe was launched in the animal welfare organization after acting head Michael Ward left in May, while reporting that he received a sum more than his £ 150,000 salary.
The Charity Commission has criticized RSPCA trustees for failing to ensure that the decision was taken correctly, "especially in view of the large amount of money involved".
The regulator noted that a group of the RSPCA trustees failed to ensure that they were properly informed before offering a settlement offer to Mr. Ward and said they were "not negotiating with reasonable care and skill" with the former executive acted.
An official warning, which Mr. Ward did not mention or details of his payout, concluded that the shortcomings amounted to "maladministration in the management of the charity".
The RSPCA refused to comment on the settlement, but said that the governing council "is fully committed to the highest governance standards".
The Deputy Chief Executive of the Charity Commission, David Holdsworth, said: "The RSPCA is a very popular national institution that plays a crucial role in animal protection, where its staff and volunteers are of vital importance.
"The public, and the many members and sympathizers of the RSPCA, need it to succeed and offer important benefits for society, and rightly expect that its administrators will lead to the highest standards.
"Unfortunately, that has not been the case and the governance of the charity has failed, which has led to people who asked legitimate questions about the disbursement to the former executive.
"Official warning signs tell the trustees that we expect them to resolve this important issue and take immediate steps to improve the governance of the charity."
Mr. Holdsworth described the use of formal legal powers as an "important step", and added that the committee would not hesitate to make further regulations if the trustees did not act according to the official warning.
He said that the appointment of the RSPCA of a new chief executive, the election of a new board and the introduction of a new code of conduct provided an opportunity for a "new start" for charity.
A spokeswoman for charity said: "The RSPCA-ruling council is fully committed to the highest governance standards.
"The Board continues to implement the recommendations of the governance review, of which more than 90% has been completed, and is working hard with our new chief executive on the outstanding items.
She added: "The Council remains united in its commitment to ensure that the RSPCA is a modern, outward-looking organization that is fully focused on the pursuit of our goal of creating a more animal-friendly world for animals. . "