Mattel Inc. said Wednesday it will pay former executive Matthew C. Bousquette about $5.4 million in cash severance and hire him as a paid consultant, as part of a separation agreement made nearly two weeks ago.

Bousquette, formerly president of Mattel Brands, which included the Barbie and Hot Wheels lines, left the company in October after the El Segundo-based toymaker consolidated its Mattel Brands and Fisher-Price Brands divisions into one division called “Brands.” Former Fisher-Price Brands president, Neil Friedman, was promoted to president of the division.

In a U.S. Securities and Exchange Commission filing, Mattel said it agreed to pay Bousquette a lump sum cash payment of $5.4 million under the separation deal. The amount consists of $655,605 for his annual bonus and $4.8 million, representing three times the sum of the annual base salary and bonus as required under his employment agreement.

Bousquette could also receive a portion of the long-term compensation that he would have been eligible for under Mattel’s 2003 executive incentive plan. As of his Dec. 15 termination date, he held options on nearly 2 million shares of Mattel’s common stock, which will be exercisable through March 15.

In exchange for the payments and benefits, Mattel said Bousquette agreed not to use or disclose confidential and proprietary company information, and he will not recruit or solicit Mattel employees for up to a year after receiving any payments or benefits from the company.

In addition to the separation package, Mattel said it will pay Bousquette $750,000 a year as a consultant to the company from Jan. 1, 2006, to Dec. 31, 2007.