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The Goodwin pension questions

Robert Peston | 14:16 UK time, Thursday, 26 February 2009

Having looked at the relevant part of Royal Bank's accounts, it does not seem to me that the bank was obliged to pay Sir Fred Goodwin a £650,000 pension with immediate effect.

The rules of its pension fund are that it was "allowed" to pay an early enhanced pension to a member who "retires early at the request of the company".

But it was not obliged to do so.

Also, and very relevantly, if the company had dismissed Sir Fred, rather than asking him to retire, then again he wouldn't have been eligible for these generous benefits.

So why did the board of RBS feel it was proper to give a £650,000 pension for life to the chief executive that many blame for the colossal mess at RBS?

And did all board directors know about and approve the arrangement?

It would be odd if they didn't know, because Sir Fred has his own "funded, non-registered" pension arrangement outside of the main pension scheme. And the bank would probably have had to transfer an estimated £8m or so into that personal scheme to lift it to the required amount to finance the £650,000 payments (the total value of Sir Fred's pot, as I disclosed yesterday, is £16m).

Then of course there's the question of what the Government knew about all this.

Stephen Hester, the new chief executive, told me this morning that the Government approved the pension settlement with Sir Fred - which is potentially very embarrassing for the Chancellor and the Prime Minister.

I am told that the Treasury did indeed know last autumn that Sir Fred's pension pot had increased to a breathtaking £16m.

But it seems that ministers and officials believed at the time that Royal Bank had been obliged to make the payment. They claim to be gobsmacked to have since learned that the bank had discretion over whether to pay it.

They also point out that last autumn, when Sir Fred's departure terms were agreed, the state wasn't yet a shareholder in the bank. And they therefore relied on Royal Bank's chairman and non-executives to make sure Sir Fred received the minimum to which he was legally entitled.

Some may say that - if this was how it transpired - the Treasury was perhaps being naïve.

And if it were to turn out that any minister knew that Royal Bank could have said no to Sir Fred's bumper pension, well that would not be great for the image of a government which insists that it detests payments to executives for failure.

UPDATE, 15:09PM: I have learned the following material facts about how Sir Fred's pension payment was agreed.

The initial decision was taken - I am told - over the fraught weekend in October when ministers made clear that they wanted Sir Fred out of the bank.

The deal with Sir Fred was done by the bank's then chairman, Sir Tom Mckillop, in consultation with the senior non-executive director of the time, Bob Scott.

I am told the City minister, Lord Myners, was told about the pensions arrangement.

What's unclear is whether Myners was aware of the cost of the deal or that the bank wasn't obliged to pay the full £650,000 to Sir Fred with immediate effect.

The full board wasn't told about the pension settlement till January.

UPDATE, 16:52PM: Here's yet more on this tale of who agreed to give a £650,000 pension for life to the chief executive blamed by many for the colossal mess at RBS.

The initial decision was taken over the fraught weekend in October when the Treasury was bailing out our banks for the first time.

On the evening of Saturday 11 October, the City minister - Lord Myners - met Royal Bank's then chairman, Sir Tom McKillop, and the senior non-executive director of the time, Bob Scott.

Lord Myners urged that Goodwin be removed from his post - but was told by Sir Tom that the board had already agreed to do so.

The City minister told Sir Tom that it would be inappropriate for Sir Fred to receive a termination bonus or to be able to exercise his share options.

However, in the presence of a senior lawyer, Lord Myners was informed by Sir Tom that Sir Fred would walk away with a pension pot valued at £16m - and that this was a contractual obligation.

Lord Myners felt he couldn't challenge an arrangement that therefore seemed obligatory - though presumably he now wishes that he had done.

The question that now arises is what did Sir Tom mean by "a contractual obligation" - since it is now clear that the board had discretion not to give Sir Fred £650,000 per annum aged just 50.

UPDATE, 17:17PM: I am being faxed a copy of a letter from Goodwin to Myners which claims that Myners agreed the pension should be kept out of the departure negotiations. Sir Fred is not planning to volunteer to return any of his pension pot.

UPDATE, 17:30: In Sir Fred's letter to Lord Myners, Sir Fred says that he made substantial financial sacrifices when leaving Royal Bank. And he insists that Lord Myners told two senior Royal bank directors that further "gestures" would not be required, which was interpreted as meaning that Lord Myners was sanctioning the pension settlement.

Here is the letter [PDF].


Comments

Page 1 of 8

  • Comment number 1.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 2.

    The key thing about this is the asymmetrical reward system at work (sic).

    These guys win whatever happens so they take risks safe in the knowledge that there is no negative outcome for them personally where it would really hurt ... in their wallets.

    Same applies to the politicians, of course.

  • Comment number 3.

    Will Flash give back his pension, for lets face it he has done much worse to this country than a hundred RBS could.

    At least Fred said sorry, even if he did not know why he was saying it.

  • Comment number 4.

    Can't see what all the fuss is about.

    650,000 is quite small in Zimbabwe.


  • Comment number 5.

    Well what a surprise............not!

    When you negotiate a deal, the surely the party with the strong hand dictates the terms.

    In the case of the bailout of RBS, the Government representing all taxpayers should have contractually bound RBS to a series of covenants including but not limited to, the remuneration terms of all of its senior management being subject to review for matters of misconduct or other misfeasance by one or more indivduals.

    Otherwise, RBS should have gone the way of Lehmans and just gone bust.

    Incompetant Government, Blind Legislators, and Begging Bankers. What an unholy mess they have created for the Great British citizens.

    I am truly amazed that the masses are not protesting in the streets. We have been misled on a truly and uniquely grand scale.

  • Comment number 6.

    No direct mention of Darlings comment then Robert

    Why not, surely it is central to your blog

    http://news.bbc.co.uk/1/hi/uk_politics/7912651.stm

  • Comment number 7.

    Ahem,

    having now read this update my delight at being numero uno has subsided. Just head shaking and tutting, usual stuff.

    The tail is STILL wagging the dog!

  • Comment number 8.

    Just yet another disgrace evolving around this toxic bank..........greed and nepotism and downright incompetence from no's 10 & 11.

    When will Joe Public wake up to all these clowns ?

    We are stuck with a government unfit for purpose..........as inept as it gets.

    FG must be laughing his socks off.

  • Comment number 9.

    Goodwin had helped and payed the government and labour party for his title "Sir". This was by sponsoring election money and tax payed and other things. So it was time for the labour party to pay back it's friends bankers like Goodwin et al, with a little bit of our money.

  • Comment number 10.

    Fine, sack without pension the board members who gave fred the pension .

    The truth is Fred needs to worry more about Putin than his pension. The connections with russian mafia fronts won't be forgotten in Moscow.

  • Comment number 11.

    I'm assuming Gordon is handing in his own pension since he set up the regulation system which so spectacularly failed.

    And of course Tony Blair will hand back the £5m salary as an advisor to JP Morgan.

    Labour took the pensions off the rest of us - surely they can do the same for themselves.

  • Comment number 12.

    It sounds as though the government does not fact check. When throwing half a trillion pounds in potential insurance liabilities about, it had better start. What a bunch of amateurs.

    Also I note Comrade StrongholdBarricades continues to receive special dispensation with respect to the BBC's moderation policy.

  • Comment number 13.

    Old habits die hard.

    Scratch my back and I'll scratch yours.

    I'm sure that there must have been an 'honest' mistake.

    How embarassing in the full light of publicity!

  • Comment number 14.

    Re HMG and the Treasury....the phrase 'they couldn't organise a piss up in a brewery' springs to mind!

  • Comment number 15.

    As they are signing over billions of pounds of our money with no reference to anyone but themselves -- what else have they overlooked?

    The government are not competent to create this size of obligation (heck they aren't competent at all).

    We are being fleeced. What would tax rates be if these billions were given to the tax payer instead of the banks??

    I demand that Brown and Darling to give up a sizeable proportion of their past earnings/benefits to show contrition... (guess I can go whistle...)

  • Comment number 16.

    Ref:6 StrongholdBarricades

    This guy(gal)must hold some influence ?

    Gets posted straight off every time.

  • Comment number 17.

    Here we go again.

    The don't know anything prime minister.

    How many times will he be allowed to get away with the phrase 'he didn't know' when no-one believes a word he says anymore.

    It needs to be cleared up quickly for it could be misunderstood as the price one is paid for keeping one's mouth shut.

    Perhaps we need to hear from Fred himself and the rest of the Board just to clarify everything.

  • Comment number 18.

    The mis-management of this fat-cat's pension is another reason that shows in crude detail how RBS has been and still is badly managed internally internally and how feeble Alas!goon Darling and Goondog Brown are at controlling the bank as a UK asset and getting taxpayer value.

    Goondog sounds like a pensioner who has lost his Christmas hamper deposit - For ****'* sake - You're supposed to be our Prime Minister!

    Hopefully, this series of governmental errors is yet another reason why Goondog and his tax sleaze bung peerage rats will be removed at the next general election!

    Trouble is now that the election looks a long while off at the moment and Goondog Trillionaire will continue wreaking havoc until he is kicked out.

    We can't blame the bank itself substantially, when a company can be controlled by as little as 15% of shares.

    Look at Hong Kong land's control of Trafalgar House plc (and its feeble board of non-exec dierctors) in the 1990's with 17-30% of shares.

    The bank's senior management are waiting for guidance from its major shareholder as they are too brow beaten as the crisis unfolds. However, it is disappointing that the present chairman does show firm leadership on this also.

    But - nearly everything now rests with Goondog and Alas!goon - effectively, they are fully responsible. We do not have time to learn more 'Nu Labour lessons' - we need action Goondog - Action!. BLeepety Bleeping Bleep!

  • Comment number 19.

    Carry on digging Robert. This needs exposing.

    You ask so why did the board feel it proper to do this? The answer is they want this to become the norm so that when it is their turn the get a similar deal. It's pigs in the trough.

  • Comment number 20.

    This beggars belief. It was widely reported at the time of Goodwin's departure his pension pot was worth c£8m and that he was to receive NO compensation.

    How the hell does he obtain another £8m if it was not contractual and not be called compensatory for loss office?

    This truly stinks and as a RBS shareholder absolutely maddening.

  • Comment number 21.

    £16m is on the low side to provide a £650,000 pension for life for a 50 year old man.

    Assuming current Annuity rates to provide an index linked pension with a pension for Lady G if he dies first, a fund of £25,500,196 would be needed.

  • Comment number 22.

    Surely this point must have been debated at the company board meeting and minuted. If not why not ? Details of board minutes need to start being released

  • Comment number 23.

    Robert your comments are confused.

    If the contributions were made to Fred Goodwin's own personal pension scheme then it is a matter of Statute (and the rules of the personal pension scheme) that permit him to draw a pension from the fund at age 50. This option is available to every person in the country who has a personal pension.This decision has nothing to do with RBS as such, so your comments are misconceived.

    The real point is why they chose to top up his pension fund with £8m ( if they did as you say) when they were well aware of the havoc he had created with the value of the bank.

    The Old Boys Club in session again!!!

  • Comment number 24.

    If they withdraw or massively reduced his pension (to say GBP 5k pa) it would be highly amusing to see how Mr Shred justifies to a Court any claim for more.

  • Comment number 25.

    The government and treasury naive!!! i can't believe it.

    Considering the fact that these people are paid and advised for the running of a country, i'm aghast at the fact that they appear to know very little about what is actually going on.

    Apparently they knew nothing of the impending financial crisis that was about to unfold. Knew nothing about the ridiculous decisions that the banks were making. And now they didn't know what RBS was planning in the way of pensions, bonuses etc after taking it over in our name. Not withstanding the countless billions thrown down into a bottomless pit.

    You couldn't make this stuff up...

    If this sort of thing carries on there is going to be serious social unrest in this country, and it won't be your usual suspects rising up...it will be so called middle england.

    Am i angry...damn right i am.


  • Comment number 26.

    why is it taking over an hour to moderate posts for 1-24 except post 6.

    the fact is

    sir fred goodwin should do the decent thing and forgo the pension pot because withotu taxpayer help.

    he wouldnt be getting it now as rbs would have collasped by now.

    but then again this is fred the shred who doesnt have a decent apology in him.

    so expect him to retire to the bahamas very soon at our expense!!

  • Comment number 27.

    I can just imagin the descussions with the board and the goverment.

    Board: We are asking Sir Fred to leave.

    Gov: Good that will please the markets

    Board: Oh under his terms of conditions we have to give him 8-10million to boast his private pension fund

    Gov: Fair enough, whats next on the agenda

    If they had done thir job right the goverment would of hired a employment lawyer to check all severance pay including the pension BEFORE they approved the plan.

  • Comment number 28.

    Even if RBS could have stopped him taking his pension given he hasn't reached the normal retirment age they couldn't have stopped him transferring it to a different providor. So the real questions relate to why they pumped additional cash into his fund if they didn't have to?

  • Comment number 29.

    In this case, friends, as I've said before:

    SACK THEM ALL & OSTRACISE THEM.

    EVICT THEM FROM SOCIETY.

    They can spend their millions on the mountains

  • Comment number 30.

    Keep uncovering this stuff - The government has got to either take some very quick and unpleasant decisions or there will be civil action. Take to the streets Goodwin is the tip of the iceberg of the big boys club, they are all in it..........

  • Comment number 31.

    If we as taxpayers now have a (tiny) say in how rbs is managed, then shouldn't be fully informed of all the background details concerning wee freddie's beanfeast

  • Comment number 32.

    I am indeed truly amazed. Amazed that Peston could understand a set of accounts. I tink I'm safe to assumethat Mr Peston had his usual blinkers on when it came to reading thigs objectively.

  • Comment number 33.

    Robert, wouldn't be surprised if the future way to fund the bailout is to recoup directors' pay and pensions, any problems met with machine guns. The courts had better step in quick or it'll be viva la revolución!

  • Comment number 34.

    not really on the subject but still.

    I understand britain is a bit short of cash at the moment therefore i would like to make this suggestion for the government to make a few pennies.

    We resort to a traditional british industry something we have always been good at, no not thatching, legalised piracy. And where better to start than our traditional hunting ground - Caribbean. And heres my plan me hearties shhh. Firstly we impound all bank accounts on any british own 'tax haven' territories. These include Grand Cayman, British virgin Islands, Bermuda etc. The Gov. can then make some lofty statement about clamping down on international tax evasion, that should please the US. Then we make generous settlements, with more lofty statements about the evils of tax evasion, to the likes of the US and Germany and anyone else that either has a large army or we want to stay on the good side of and some towards the Islands loss. In return we offer anonymity to those naughty tax evaders unless of course they wish to complain. We then keep the rest of the loot

  • Comment number 35.

    I am sure that part of RBS's "request" for Fred Goodwin to retire included an offer to pay his full pension.

    If they had not made this offer, surely they would have had to dismiss him and he could have fought it.

    On the face of it, there is no compelling case for dismissal - he did not behave dishonestly so far as we know, and had to make judgments on the basis of the information available to him. I think it would have been tough to make a case for a performance-related termination.

    As before, this decision was all about public perception and the 16 million was obviously viewed as a cost worth paying. More here:
    http://www.knowingandmaking.com/2009/02/fred-goodwins-pension.html


  • Comment number 36.

    This pension is an insult to all the hard working people in this country who do their job successfully and to the best of their ability. The really sad thing about these unrealistic pensions and bonuses is that the recipients can't see that there is anything wrong with them. No wonder the banks have made big losses when the people who ran them are morally bankrupt

  • Comment number 37.

    Shenanigans!!!

    Strongholdbarricade beats the mods once again!!!

    I demand an enquiry.

  • Comment number 38.

    See what happens when politicians start doing things in a panic.

    It does make you wonder just how desparate things are in Government right now as our political elite thrash about trying to save the world.

    Shame so much of what's happening, and being messed up by the day, was conceived, designed, implemented and sustained by the current Labour Government, enthusiastically led by Gordon Brown.

    Who's side is he (Brown) on exactly?

  • Comment number 39.

    #6 what the hell is going on? No not the pension issue-although is anyone really surprised about this-but the moderation tactics?

  • Comment number 40.

    Robert,

    I take everything you say with a pinch of salt

  • Comment number 41.

    Robert

    FOCUS ON THE REAL ISSUE

    GOODWIN'S PENSION IS A SIDESHOW OR MISDIRECTION FROM ANOTHER PERSPECTIVE. DEBACLE GIVEN THE ADMISSION OF THE FSA YESTERDAY.

    THIS WHOLE BANKING CRSIS MEANS THAT ALL ROADS LEAD BACK TO NO 10.

    WHY CAN'T WE DO INVESTIGATIVE JOURNALISM. THE ISSUE IS BIGGER THAN THE WATERGATE SCANDAL.............

  • Comment number 42.

    Very interesting. It seems that the legal situation may not be as clear cut as we had assumed it was.

    But let's assume for the moment that RBS are contractually obliged to pay the pension and Sir Fred doesn't agree to voluntarily forego it.

    There is still, I believe, a simple way in which natural justice could be served with a very simple action by the government. Given that taxation legislation is already unbelievably complicated, surely it would be possible to introduce a new rule to the tax system which imposes a 95% taxation rate on anyone who was the former CEO of a bank that went totally tits up and then, despite that monumental failure, ends up with a £650K pension.

  • Comment number 43.

    Sir this, Sir that, Lord of this, Lord of that...

    It is getting a Title also written into city contracts.
    What a farce... How far this once great country has fallen, we must be the laughing stock of the world.

    Resign you incompetent lot, hand back your obscene wages, bonuses and undeserved Titles.


    How come Stronghold Barricades beat the moderation queue again?

  • Comment number 44.

    What the hell is going down here?
    I thought these massive remunerations were paid to attract the 'right' people for the job.

    Goodwin, Brown, Darling and the FSA obviously do not, so why are we still paying them.

    This is an even bigger con than the Gulf war.

  • Comment number 45.

    My Wife and I retired at the end of July and converted our private pension held with RBS/NATWEST to an annuity and lost around 30% of its value. I wonder if Sir Fred had the same problem and that his pension should have been over £1million?

  • Comment number 46.

    The frightening thing about all this is that the government, time and time again during this whole financial debacle, has demonstrated that they don't have a clue about "due dilligence" and can't seem to grasp the fundamentals of surviving in the business world.

    Their repeated failures to employ even the most rudimentary elements of normal care and diligence in business is quite unbelievable. And we are forced to depend on these same incompetent politicians to get our money back for us?

    I hope you're going to get into this 'bundling' of the RBS into two segments which we're being told will somehow make the problem go away in the long run. That should be an interesting scenario to watch.

    You say, with respect to the pension fiasco that is unfolding, "Some may say that - if this was how it transpired - the Treasury was perhaps being naïve." You are too kind. "Patently stupid" would be far more appropriate.


    JustWondering2

  • Comment number 47.

    If the bank wasnt legally required to pay his odious pension at the point of his dismissal, then can it not be retracted now?

  • Comment number 48.

    Moderation taking an excessive time. Censorship at work?

    At a time when strong decisive actions are needed our leading politicians are flapping around as usual.

    It's clear that reward for failure is unacceptable by the vast majority of "real people". The rather dubisous decision by the ex-board of RSB to agree the pension to Sir Fred should be recinded now by the Government. No one will disagree and perhaps the Government might gain back a little credibility.

  • Comment number 49.

    Isn't there usually a 'gross misconduct' clause in employment contracts?

  • Comment number 50.

    Paid off to go quietly? Boy that was a £16m mistake!

  • Comment number 51.

    How can one person pass moderation and the rest of us not?

    Is there a white list or is this an insider job? We should be told.

  • Comment number 52.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 53.

    Surely there's a case for dismissing or suing Sir Tom Mckillop and Bob Scott for not acting in the best interests of either the shareholders, or the bank, by releasing that pension?

  • Comment number 54.

    Hi Robert
    It also may have been possible to make him wait for his pension until his "Normal Retiring Age" it depends on the rules of the scheme.
    Kenmilad

  • Comment number 55.

    The reason RBS WANT to pay Fred is that the other directors are worried they will lose their pensions.

  • Comment number 56.

    Good work KP, my only critique may be to change to work naive and embarrising on behalf of the government to downright incompetence. However i suspect this would have happened with all political arties

    Surely it is a little rich to be aware of a £16 m pension pot but not realising this will lead to a heafty pension.

    What we don't know I suppose is if the pension agreement was part of a quid quo pro for his early departure.

    However the scenario of a closed door, few people agreeing to pay vast sums to a fellow clique member is a vision of the old boy network that is destroying any confidence that the british and uk banking systems have learned from the past.

    surely self regulation just cannot be trusted

  • Comment number 57.

    No doubt the obscene greed demonstrated in this case will be more than adequately aired for some time, It appears that Governmental incompetence has triumphed once again--isn't it time AD and /or GB should have the common decency to RESIGN- ( without a fat pension !)
    they can't have it both ways - if they didn't know then they show a lack of care with the Public Purse; if they did know - then who is telling porkies?
    I must admit that AD has at least got it almost right when he suggests that Mr Goodwin has the power to give up the pension - if he doesn't then why can't the Government, as a major shareholder simply say to him - NO !
    If the pension is paid then I for one , as a customer , will be writing to the Bank to make my displeasure clear - perhaps if the Bank really does want to return to old style High Street banking they may choose to listen if enough customers write/move their accounts.
    Strange how they apparently want to turn the clock back to "retail" banking when Mr "one step behind" Darling was saying pretty much the opposite very recently!
    If the pension is actually taken we can all assume that we are being given the one fingered salute -- we can only hope that what goes round -comes round !

  • Comment number 58.

    Robert,

    Haven't we better things to be worrying about than one man's pension, no matter how ill deserved?

    Hester had it right this morning on Today. He has far better things to be concerned by. Like how to get RBS back as a bank, instead of a basket case.

    Perhaps you should be taking a leaf out of his book.

    ITAOAH

  • Comment number 59.

    I look forward to your reports of the Gulf War starting and The Beatles splitting up.

    Yawn, everything published today we already knew about and had been factored into the share price.

    Clearly the market does not share your tiresome gloom and doom views as the share price incerase of 20% demonstrates. As for a ceiling the price can reach, of course there will be a ceiling until the government is repaid and the company is back in the hands of the private sector.

    With the toxic assets hived off into a separate bank, who would bet against a profit north of £2bn this time next year?

    As for the constant use of "our money", in reality the government is just putting back into the banking sector what has been taken out via corporation tax over the last 10 years of boom.

    Please apply some perspective to your reports, I suspect that your (and my) tax contribution to RBS would not pay more than a days worth of Freds pension....

  • Comment number 60.

    #6

    If your theory is correct and your posts are always allowed immediately then you should be able to post with no moderation.

    Try making up something really henious and see whether it gets automatically posted !

  • Comment number 61.

    Fred Goodwin's pension was funded by the bank, but it is not paid to him by the bank. It is wholly unreasonable of the government to agree the settlement and then try to alter the details some months later.

  • Comment number 62.

    Somehow I cannot stop myself seeing loads of fat piggies at the trough. Of course the other directors knew. When it comes to their turn they will expect no less favours. Hang the shareholders, customers and tax payers.

    I wonder which Bank Sir Fred uses to stash away his hard earned cash? I'll bet his pension that its not the RBS!!

  • Comment number 63.

    Hmmm...a largely unmoderated thread at 4.18pm.
    Perhaps our Moderator is out on a long and enjoyable lunch, discussing the whys and wherefores, the ups and downs, the ins and outs, the pros and cons of the Great UK Banking Disaster.

  • Comment number 64.

    By the time this has gone through moderation old Fred's pension will have paid out a few more grand

  • Comment number 65.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 66.

    I wonder when we will be told how much he took as a tax free lump sum. The £650,000 per year is taxable but he would be entitled to a tax free lump sum. This could, in my opinion be anything between £0 and £3.5M
    knowing how these people look after themselves I'd guess it would be nearer the £3.5M than £0.

  • Comment number 67.

    "Also, and very relevantly, if the company had dismissed Sir Fred, rather than asking him to retire, then again he wouldn't have been eligible for these generous benefits."

    It's always been the case, resign and take your pension, get the sack and the pension goes out the window.

    The answer really is to sack this government, they are a bunch of incompetents, and take the Board of the RBS with them.

  • Comment number 68.

    Keep stirring Robert. Good on yer!

    We would all like to see Sir Fred stacking shelves in Sainsburys to make ends meet. That would be poetic justice.

    The pension is scandalous and if they knew about it then ministerial heads should roll. I feel sorry for the overworked underpaid bank staff who hardly have time to go for a pee. If they cut lots of jobs the queues at Nat West will be out the door. I also feel sorry for shareholders.

  • Comment number 69.

    #8

    "Just yet another disgrace evolving around this toxic bank..........greed and nepotism and downright incompetence from no's 10 & 11.

    When will Joe Public wake up to all these clowns ?"

    Or is it collusion dressed up as incompetence, so that when Joe does wake up, he'll vote Conservative in the mistaken belief that it will change something significant?

  • Comment number 70.

    Fred should be running the country as he is way ahead of the game compared to Brown and Darling.



  • Comment number 71.

    And while they are at it did anyone check the level on funding in the main RBS pension scheme? No doubt the taxpayer will be underwriting that as well.

    This is the government led by the man with experience He told us "this was no time for a novice".

    How much longer can we allow this "Clarkson" to run this country?

  • Comment number 72.

    #5

    "Well what a surprise............not!

    When you negotiate a deal, the surely the party with the strong hand dictates the terms."

    Precisely! And so they did.

  • Comment number 73.

    I'd like to know how many shares have been traded in RBS and Lloyds Banking Group today..............the FTSE 100 has been yo-yoing all day long.I'd like to speculate that it's a fair old few.As we say in the north"Where there's muck-there's brass".

    And there sure is a lot of muck.

    The uber rich will have made some dosh no doubt.

    The next 7 days are v.important to measure if the new found confidence in our glorious banks still remains or whether the shine rubs off on the new ball.

  • Comment number 74.

    If you think that 650K a year is uncommon, think again!

    Many 'pension pots' for lawyers, accountants and other city folk are not a mile away from Sir Fred's...

    Are these people so very special? Absolutely not! What you can be sure of is that right now they are trying very hard to reduce their profile...

    What say you to a 'pensions amnesty'? All pensions over 100k to be put into a 'social fund' to better the lives of those who have nothing...

    I can hear the rumble of the falling guillotine already!

  • Comment number 75.

    Trouts in the Snough

    What other income does this other poor man have?

  • Comment number 76.

    The lights would have been burning late in George St. Edinburgh to get this through unannounced

  • Comment number 77.

    Thanks for the update Robert.

    But this must be the final proof if any were needed that this sorry lot of which Fred is a small part are just in it for themselves.

    It makes you think why bother going to work on Monday or any day of the week. Why not stay at home and get the state to keep me. Afterall the state will never give me £650,000 in my lifetime never mind £16 million.

    Whats the point when these guys can take us all down and at the same time walk away with pockets stuffed full of our cash. This is the very same cash that we won't have when we lose our jobs. THe same money that we won't have to keep a roof over our heads.

    The world hasn't just gone mad, but we have finally been able to take the lid off; the last few months have given us all the evidence we have all along suspected existed.

    Now we are angry and later when the crisis starts to bite many more will become angry....only what then?

  • Comment number 78.

    Should be a sign above nos 10 and 11..................ClownsRus.

    Buffoons,the lot of 'em.

    Couldn't run a free raffle.

    These are our "leaders".........god help us.

  • Comment number 79.

    I work for RBS and this disgusts me!

  • Comment number 80.

    This shows in the clearest possible light what motivations were at play at RBS and who was to blame.

    Greedy Fred had control of the till and only cared about how much he could take out of it regardless of share holders, pensioners, employees who now face losing their job and the country.

    I hope justice catches up with him and he gets his just deserts for placing himself first second and last in every decision. I have nothing but contempt for this power mad parasite.

    As a footnote it goes to prove what they say about accountants, which Goodwin is by profession to pretending to be a banker. They know the price of everything and the value of nothing. HMM ABN Amro.. HMM Subprime investments.

  • Comment number 81.

    Why should we expect anything better from Alistair Darling?

    After all he was the man who made such a success of the clean up of Railtrack to become Network Rail

    http://news.bbc.co.uk/1/hi/uk_politics/2015042.stm

  • Comment number 82.

    I don't understand anymore, can somebody explain me... These people have knowingly gambled someone else money and now the whole nation needs to pay for it!
    If I ride recklessly with my car, I can be fined, or even be jailed! What about these people, they are still getting bonuses and pensions! I don't get it!!!

    I am ashamed of this nation, that we just let this happen without a protest! We deserve this...

  • Comment number 83.

    Robert, you've got more chance of finding evidence of the Higgs boson particle than any clue about who really knew about this infernal pension!

    We're watching a farce as those responsible are busy passing a hot potato round and round in circles. It reminds me of Saddam Hussein's antics, running rings round everyone, denying he had any weapons of mass destruction!

    Tell AD we don't want an enquiry, we just want an answer.

  • Comment number 84.

    After cleaning up BCCI you would have thought Sir Fred would know how to deal with a failed bank.

    http://en.wikipedia.org/wiki/Fred_Goodwin

  • Comment number 85.

    Well done Mr Peston for explaining this, especially the account of who is to blame for awarding such a huge sum of money to a proven failure.

    Like a lot of people my main reaction to this episode is anger that a man who has failed so completely is nevertheless able to make off with a fortune of other people's money. I can see only one, small, glimmer of a positive.

    For many, many years any questioning of extravagant executive pay has been dismissed with claims that it is justified by "exceptional performance" or the need to "attract and retain top talent". What Fred Goodwin has shown, is that none of that was ever true. His bloated compensation is not rewarding exceptional performance. It isn't even rewarding mediocre performance. It is lavishly rewarding utter and complete failure. Fred Goodwin was not top talent. He wasn't even mediocre talent. He was just a failure. Furthermore, the people that appointed and over-paid him were themselves neither performing nor talented.

    What better time to fix the decades old problem of British executive management - massive over-payment for massive under-performance?

  • Comment number 86.

    RBS's Chairman Hampton told the press briefing today that Sir Fred's pension is in fact £693,000

  • Comment number 87.

    Any solicitor would have spotted that. What's with these people?

  • Comment number 88.

    I think parliament should adopt the 3 brass monkeys as its symbol. The speaker 'was not told' about the police entry without a warrant, Darling 'was not told' that Sir Fred's pension was optional. Clearly it's beyond these people to ask questions that would be obvious to everyone else. I think it may be a side effect of the party system. People get used to just doing what they are told, and are not expected to think for themselves.

  • Comment number 89.

    Hi all.

    Can anyone help with some figures.

    What is the total amount of bonuses, pension top ups and settlement packages paid to employees and executives of all the banks we have had to bail out (this should include the ridiculous FSA bonuses as well, as I belive they are funded by the banks).

    Just thought it would be nice to know how much the government has paid to silence these people, and stop them exposing the real culprits behind this mess.

  • Comment number 90.

    Excellent work Robert, good punchy, informative updates.

    Would you mind taking over the political editors job? The current incumbent isnt anywhere near as dynamic!

  • Comment number 91.

    #37

    "Shenanigans!!!

    Strongholdbarricade beats the mods once again!!!

    I demand an enquiry."

    Yes, let's get the peasants fighting among themselves as a diversionary tactic.

  • Comment number 92.

    Sorry, that should read:

    Just thought it would be nice to know how much of OUR MONEY the government has paid to silence these people, and stop them exposing the real culprits behind this mess.

  • Comment number 93.

    Good old Paul Myners- the man behind all good things good in pensions governance.

    Surprising that he didn't know that the cost of a pension for a youngster like FG is at least 25 times the initial payment.

    Bob Scott- wasn't he head of Norwich Union? Aren't they reasonably au fait with the cost of annuities?

    What did FG slip in their coffee that they should have been so absent minded.

  • Comment number 94.

    Finally, a return to something resembling good old fashioned investigative journalism by Robert Peston. Keep the morsels coming.

  • Comment number 95.

    Sir Fred has just announced that he isn't going to give up any of his pension.

    looks like the ball is firmly in Darlings court

    Shame Darling didn't launch an enquiry or have him sacked...but instead allowed him to stay until his 50th birthday so that he could draw a larger pension

  • Comment number 96.

    Whatever way you look at this, Darling was asleep on the job and has to go-hopefully this will be before the budget has to be presented to an increasingly sceptical house by and increasingly hapless Chancellor.

  • Comment number 97.

    This is very poor.

    When taking this bank under its' wing, the government should have had lawyers crawling all over the paperwork. Things were done in a hurry and important things seem to have been missed. Again.

    While I don't think that the entire senior management is at fault, clearly someone at the bank is. A number of the senior managers should be sacked with no compensation and their pension arrangements should be reviewed.

    Personally, I think that the fall-out from the nationalisations (which is what they will become if the banks continue to haemorrage money at this rate) is going to last several years. This probably means several years of headlines about these brilliant people being rewarded for absolutely shocking levels of performance.

    Tens of billions of taxpayer's money is already gone and it's looking like several hundred billion more will go. We haven't even got to the end of the house price crash yet, so how much further will the banks' balance sheets fall?

  • Comment number 98.

    What irony, I understand that Sir Freds' dad was a postman. Bit of a contrast in the fortunes (sic) of these two "pensioners".

    Perhaps we should use Sir Freds pension fund to help fill in the gap in the post office pension. Then give him the same pension that his dad got.

  • Comment number 99.

    Fred's pension is a common "fiddle" practised by many pension schemes to avoid paying higher transfer values to early leavers. The scheme claims that there is no "right" to a pension on leaving at age 50/55 but, in practice, everyone who is asked to leave at that age gets an immediate pension. The scheme claims it's discretionary but nearly always gives the pension anyway. So no surprise Fred got his.

    If they didn't do it this way they'd have to increase transfer values to those who leave before 50 too!!!!

    Usual schoolboy stuff from the actuaries and pension lawyers but as I said a common fiddle played all the time. This time it's just for bigger numbers than usual.

  • Comment number 100.

    If we are now insinuating that Pensions are performance related should we not insist that Gordon Brown turn down his Prime Ministers 50% final salary until death when he leaves office.
    I can't see that he has done a great job whilst in charge.

 

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