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Reuters is reporting that former H&R Block Inc Chief Executive, who oversaw the tax preparer’s failed subprime lending strategy, will receive a cash severance of $2.55 million and full vesting on 762,925 stock options, the company disclosed on Monday.

H&R Block ousted Ernst last month as the No. 1 U.S. tax preparer suffered huge losses on subprime lending at its Option One Mortgage Corp unit. New management then shut down Option One when its sale to Cerberus Capital Management LP collapsed.

The move, along with cutting 620 jobs, will trigger about $200 million in charges and write-downs, the company said earlier this month.

In addition to a lump-sum severance and options vesting, Ernst will receive health care coverage at the company’s expense until December 2010, H&R Block said in a regulatory filing.

“You know what really sucks is that the only thing I got when my business failed in 1990 was bankruptcy.” - Me

Some Other Dude Named Mark Ernst