More Pension Money For RBS's Sir Fred Goodwin

Published on UK Telegraph.

Anger over £8m pension top up for Sir Fred Goodwin

• Royal Bank of Scotland’s disgraced former chief executive has picked up an £8m pension top-up after being sacked by the lender for leading it to a £28bn loss last year, the largest in UK corporate history.
  
  The payment was made despite RBS and Sir Fred’s insistence that he received no compensation for loss of office after the taxpayer stepped in to rescue the bank. It means he is already drawing a pension for life of £650,000 a year at the age of 50.
  
  The revelation, by BBC business editor Robert Peston, comes on the day that RBS’s new management unveils the full horrors of its performance last year. New chief executive Stephen Hester has already said the bank, now 70pc owned by the state, made up to £28bn in losses in 2008. He will today detail plans to dump £300bn of bad and “non-core” assets into a ringfenced unit.
  
  Sir Fred is understood to be in discussions with the Treasury, UK Financial Investments – which manages the taxpayer’s bank stakes – and RBS about amending the pension top-up. The Treasury said in a statement: “This is another example of the culture of rewards for failure that we are determined to sweep away for the future.
  
  “We are committed to cleaning up the banking system – both the financial balance sheets and the behaviour of those that lead them.”
  
  Sir Fred’s payment, which almost doubles to £16m the £8.4m his pension had earned by 2007 after 10 years on the board, was agreed by the previous management. An RBS spokesman said: “The company is taking further legal advice in respect of certain aspects of Sir Fred Goodwin’s contractual arrangements and continues to discuss the position with UKFI.”
  
  Before the Treasury Select Committee this month he said: “My pension is the same as everyone else in the bank who is in a defined benefit pension scheme.” However, it is believed he and other board members were given special terms that boosted their pension from the age of 50.
  
  The Treasury added that it has been “vigorously pursuing with the new chairman [Sir Philip Hampton] whether there is any scope for clawing back some or all of this pension entitlement” and has “a view to testing any potential for legal redress”.
  
  The bank’s new management will today reveal plans to use taxpayer insurance for £300bn of toxic debts under the Government’s “Asset Protection Scheme”, full details of which are expected alongside the results. In return, RBS may have to meet draconian targets such as monthly lending levels. The Government will apply the same pressure to Lloyds Banking Group and any other bank which uses its insurance for toxic assets. The issue of forced lending has been the subject of intense debate with some banks claiming there actually is considerable credit available – the problem is now demand.
  
  Banks may put up to £600bn of toxic assets into the scheme. Given the enormous sums involved, politicians are determined to extract meaningful promises from banks to increase lending, in the hope it will help reverse the economic downturn.
  
  RBS will also announce that Nathan Bostock, a senior executive at high street bank Abbey, will run a new subsidiary. Mr Bostock is a former colleague of Mr Hester.

The horror stories simply continues!