Eric Nicoli is to leave EMI with a £2.8 million payoff as Terra Firma, the venture capitalist, formally takes control of the British music major behind KT Tunstall and the Rolling Stones.

Mr Nicoli had headed the often struggling company for eight years, but failed to pull off a merger that would have taken EMI into the top tier of recorded music, alongside Vivendi's Universal and the SonyBMG joint venture.

Martin Stewart, EMI's finance director, is also out, as Terra Firma brings in three of its own partners, none of whom have experience of the music industry, to shake up a company still reeling from two profit warnings at the beginning of the year and a sharp decline in sales of recorded music.

Chris Roling, who had previously worked at the chemicals group ICI as vice-president, finance, procurement and logistics, becomes chief operating officer and chief financial officer. Mr Roling is effectively becoming chief executive, reporting to Terra Firma's boss, Guy Hands, who will chair a newly created supervisory board.

His appointment is a deliberate attempt to bring outsiders into the business. The venture capital group wants managers who "serve the artists" rather than "spend their time hanging out in LA", although they are willing to bring in new executives with music experience if they feel that credibility with talent is important at a senior level.

EMI faces controversy from the forthcoming release of an album from Pete Doherty's Babyshambles at a time when worries about drug taking in the music industry have esclated amid concerns about the health of Amy Winehouse. The female singer is signed to Universal's Island for her recordings, but as a songwriter she is signed to EMI.

The new team's strategy will be determined over the next few months, but Terra Firma said that the "initial focus will be maximise the value of the significant assets in EMI's publishing business and to realise the digital opportunity in recorded music". Insiders said a rapid sale of the recorded music business to Warner Music was off the agenda.

Mr Nicoli is eligible to receive 12 months pay, at £788,000, plus half his annual bonus of £394,000 and a further £471,695 in benefits, totalling £1.65 million. He also holds a further £1.17 million in shares, to be bought by Terra Firma, plus various stock option benefits.

The only senior survivor from the old regime is Roger Faxon, who remains as chief executive of EMI's succesful music publishing division, which now ranks second in the world behind Universal's business. Unlike recorded music, publishing is strong in the US, where EMI has relationships with songwriters such as Jay-Z and owns the Motown catalogue.

Helping Mr Roling to run EMI as director of business transformation is Ashley Unwin, who used to work at Deloitte Consulting. Mr Unwin's job is to asses the quality of EMI's managers – in particular its geographical chiefs, Roger Ames in North America, Tony Wadsworth in the UK, and Jean-Francois Cecillon in continental Europe – and to establish if the music company has the correct organisational structure.

The third appointment from Terra Firma is Julie Williamson, a long-time associate of Mr Hands, whose job will be to examine the company's strategic relationships with the likes of Apple and other retailers. Ms Williamson has been heavily involved in Terra Firma's pub deals, and most recently the ownership of Tank & Rast, the German motorway service station group.

EMI will be delisted on September 18. Terra Firma has lined up £4 billion to spend on EMI, £1.5 billion of which is equity, with the rest debt provided by long-time Terra Firma lender Citigroup. The takeover cost £3.2 billion, meaning that £800 million remains for working capital and bolt-on acquisitions.

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