POOR SIR FRED
SIR FRED Goodwin, the former chief executive of Royal Bank of Scotland, is to hand back nearly a third of the £555,000-a-year pension he was awarded on leaving the bank.
Goodwin will now take home £342,500 a year, or a total of £9m, after a deal was hammered out between RBS, the Treasury and UK Financial Investments (UKFI) – the organisation that manages the government’s stakes in banks.
The Scottish banker had already seen his payout reduced from £703,000 a year, in exchange for taking part of it in a lump sum of £2.7m.
But he reached the new agreement after an RBS review cleared him of any misconduct relating to the use of company assets and expenses claims.
One friend of Goodwin’s told City PM that he had held off on repaying the money while he was waiting for the results of the RBS probe, with the condition that he would give back part of the pension if cleared.
The review concluded that there had been “no wrongdoing or other misconduct” by Goodwin that would offer a legal basis for the removal of his pension.
The bank’s chairman Sir Philip Hampton welcomed Goodwin’s decision, which he said would leave him with an “acceptable amount to all parties”, adding that the agreement had been long overdue.
“It had to be fixed to allow everyone to focus our energies where they should be, on getting the company back to health,” he said.
Chancellor Alistair Darling said Goodwin had done “the right thing” by giving back some of a pension he received despite leading the bank to a full-year loss of £24bn in 2008 – a UK corporate record – and forcing it to take a government bailout worth £45bn.
With calls for his head growing during the depths of the banking crisis last year, Goodwin struck a heavily-criticised deal with the RBS board that allowed him to take early retirement at 50 without taking a reduced pension under the bank’s usual rules.
City minister Lord Myners came under fire for his failure to prevent the agreement, which was masterminded by former RBS chairman Sir Tom McKillop and remuneration committee chairman Bob Scott.
A friend of Goodwin’s said last night that he would need “more time” before returning to full-time work.