Fred Goodwin to receive £650,000 for life
This is a story that very briefly left me lost for words (and please don't say "long may it last").
Authoritative sources have told me that Sir Fred Goodwin, the former chief executive of Royal Bank of Scotland - who is widely blamed for the colossal mess it's in - is already drawing a pension of £650,000 a year.
He's only 50 and he's got it for life. His pension pot, which generates the pension, is worth a handsome £16m.
Perhaps unsurprisingly, when I informed the Treasury we were about to run this striking story, I was told that ministers were very unhappy about the generous terms of Sir Fred's early retirement package.
So UK Financial Investments - the offshoot of the Treasury which manages taxpayers' stakes in our big banks - is investigating, with RBS's board, whether there is any way of clawing back some of the pension entitlement (see below for a full copy of a statement given to me by the Treasury).
Now before you pull your hair out, I should mention that Sir Fred didn't take any money by way of compensation from RBS when he left the bank.
And his entitlement to a pension at 50, in the event that he was asked to leave RBS, was an arrangement put in place some years ago and applied to other directors too.
Even so, the disclosure that he's set up very nicely for life will spark some controversy.
After all, RBS will confirm tomorrow that it made record losses for a British bank last year of around £8bn before a massive writedown of goodwill on the takeover of the toxic rump of the Dutch bank, ABN.
And after the goodwill writedown, Royal Bank's losses could be as high as £28bn, a record for any bank.
Its woes of course have led to it being rescued by us, by taxpayers.
We have a 70 per cent stake in RBS and we're about to insure the bank against future losses on £250bn of dodgy loans and investments.
The terms of that unprecedented insurance will also be unveiled tomorrow.
My understanding is that RBS will pay a fee in the form of non-voting shares equivalent to around 2 per cent of the insured assets, so over the five-year life of the scheme we as taxpayers would receive a further stake in RBS worth up to £20bn.
But we may well incur substantial losses on that £250bn.
It's not beyond the realms off possibility that future losses on those impaired assets could be £50bn.
If RBS's existing shareholders were to take the first 5 per cent loss, which seems likely on the basis of the current state of talks between the bank and the Treasury, that would generate a £12.5bn hit for the bank and its shareholders
But 90 per cent of the rest of the loss would fall on the Exchequer, on us as taxpayers - so there could be a total loss for us of up to £33.75bn.
So it's against that background, of taxpayers giving enormous, unprecedented support to this damaged bank, that Goodwin's £650,000 for life may upset a few of you.
PS Here is the Treasury's statement:
"Since they became aware of this issue UKFI have been vigorously pursuing with the new Chairman whether there is any scope for clawing back some or all of this pension entitlement and whether the Board took the decision in the full knowledge of the facts.
UKFI has agreed with RBS that the bank will review all aspects of Sir Fred's tenure in office with a view to testing to the full any potential for legal redress, including the potential for recouping pension provision.
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 of the banks and behaviour of those who lead them."
I'm 
© MMIX~RS~q~RS~~RS~z~RS~14~RS~)
Comments
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What can Rahere say when you've already seen the analysis of the Citibank vector behind this?
They owe the UK nothing and if their circle can add to the pain, why not, that's their viewpoint.
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This is not going to go down well with the less fortunate retired people whose savings interest has shrunk by 80 per cent and who are now having to draw on capital to meet their daily needs.
I hope that the Treasury manage to claw some back - no failure needs that much to live on.
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Utterly speechless!!!
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This sort of thing is immoral and not in the public interest yet it is not illegal.
How does that work?
Jericoa
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Presumably Fred needs the money for myopia treatment. His short sighted purchase of ABN has to be the worst deal in Corporate history. Unfortunately his dictatorial arrogance and stunning self belief that he was always right turned out to be his biggest weakness. I pity the poor staff and shareholders in RBS - many have lost life savings and their lives are in tatters.
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It's been six months now since this started and not a single dossier has been opened on any of those responsible.
You can fool all of the people some of the time, you can fool some of the people all of the time, but you're not going to survive if you try that in these circumstances .
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Just remove his pension from him. Every last penny. Many normal citizens have seen their pension pots taken by unscrupulous business leaders, so there's clearly a precedent...
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This must never be allowed to happen again.
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I would let him keep his £650k provided he agreed to put up £450k of it to invest in the start-ups and spin-outs that he refused to support whilst he was at RBS.
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Well done again Robert, for bringing this to attention of (even) the owners of the bank!
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Now, now Robert, Don't think of it as £650,000 a year for life, just think of it as 'quantitative easing'...
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Robert...
Isn't this guy also on a retainer at the moment to the bank as a consultant?
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Great, lets all bring the country to its knees and retire on £10,000 a week plus. It makes you sick and where this time the bankers have to be sorted out. Absolutely disgusting considering the knock-on effect of this man's part in the huge UK job losses and the lives of tens of thousands destroyed through shares becoming more or less worthless. The man should have been be given the boot and asked to pay back losses to the taxpayer. What are these politicians all about also. It appears to me that they too live on planet zooto by allowing this, even though it was a preordained fix behind closed doors. Did the shareholders sanction this has to be the question. I very much doubt it !
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This cannot be allowed to happen.
Are we also to believe that no one in government new anything about this before today.
This is just rubbing dirt in the face of the taxpayer.
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Well, I'm upset.
There's not much that can be done when shareholders are determined to throw vast sums of their own money at an incompetent elite.
But when the bill for that incompetence is laid at my door, as taxpayer then I have every right to expect the incompetent elite to foot some of the bill too.
I earn less than 20,000 a year, which has to support a family of two adults and three children. It's already a daily struggle. Why should I face decades of massive tax hikes to sort out the shambles made by this man, while he luxuriates on 650,000 a year, tax free?
I'm still waiting for any political party or leader to suggest an alternative to the corrupt and corrupting political/economic structures of the last two decades. We've been ripped off. I hope they soon stop talking about "restoring" the system (at the taxpayers expense), and start talking about REPLACING it.
"Cometh the hour, cometh the (wo)man." But not just yet, it seems.
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Robert, are you suffering from a cold? You sounded rather muted and choked on the news.
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Yes, but once again, WHY ARE WE SUPPOSED TO BE SURPRISED, SHOCKED, OUTRAGED, BLAH, BLAH, BLAH, BY ANY OF THIS?
Just keep paying up, fellow plebs. We are utterly powerless to stop this stuff.
Ask MPs for a few tips, Fred. They'll advise you on how to add "expenses" to your package.
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Robert,
I am nonplussed by this report. Either you are completely out of touch as Goodwin's pension prospects were well known or this is a political ploy on behalf of the government in view of Thursday's RBS results announcement??? As taxpayers, we are now suffering from the fond way that business/economic journalists, investment community and govt ministers pandered to RBS over the years when the Bank was a potential bomb waiting to go off. No one complained as long as the Bank contributed billions of tax to the exchequer. Goodwin was at the heart of the RBS demise but trying to preach about his pension now when it was based on all those profits of previous years seems somewhat contrived for other reasons.
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I doubt that £16m will buy an index linked pension of £650k for life starting at age 50. Unfortunately the Pension Calculator on the FSA web site is
"currently out of service while we work on an updated version."
so your figure can't be quickly checked.
Perhaps the current version of FSA pension planning software can't deal with the size of pension and early retirement arrangements that bankers appear to need.
Don't forget that Fred can also take a tax free lump sum as well from his pension fund!
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Why do criminals bother?
Why go to all that effort and risk of burglary, shoplifting or fraud?
Just get a job in a bank.
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there are no quick fixes
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The expansion policy of RBS (key acquisitions approved by regulators) brought corportion tax profits of £16.531bn over last 10 years - source: RBS accounts. Prior to that, RBS paid £310m a year.
Had RBS not gone an expansion path, the best that could have been acheived - assuming a (generous) flat rate of 10% annual growth in taxable profits through this period - corporation tax would have been £5.2bn. In other words, the taxpayer is £11.2bn up in corporation tax receipts as a direct result of the expansion. If you add in employers NIC and tax on RBS share distributions - at one point, provided £1 in every £7 to UK shareholders - RBS still represents a net gain to the UK taxpayer. The bargain basement price of government held RBS shares will represent a substantial profit downsteam. Find me a CEO who will create an additional £11bn for taxpayers over 10 years......whatever you think of Goodwin, I suggest his pension represents a miniscule return on the overall performance - and dare I say it, a pretty good return for the taxpayer.
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Would Fred receive his £650K pa pension if we had not saved the banks? i.e. we let them go into administration?
Should we as (i.e. the country as majority shareholder) actually prefer this to happen - I would vote for administration rather than this pension being paid.
How many other pensions are being supported by propping up the banks?
Would it not have been cheaper (and fairer) for the country and the economy to have let capitalism work?
It's assumed that we had to save the banks? Did we? We had to protect depositors or there would have been a run on the banks, but other than the depositors I do not understand why we took this course of action.
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RBS Goodwin's pension of £650,000 per year equals several generations wages of most RBS customers?
I feel physically sick about this immorality.
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How was the figure of a pension fund of £16 million calculated?
If on a final salary basis, you've worked this out on the pension of £650,000 per annum, either you've got this completely wrong or the actuaries at RBS are going to have to announce some mind-bogglingly huge adjustments to their deficit in the next few months.
Do the maths, and look at annuity rates. £16 million will not buy you a RPI linked pension of £650,000 per annum with spouses benefits, at age 50. No way.
As a ballpark figure, this capital calculation is some 40% out. He might get a value of £16 million if he'd transferred his pension out, but it would take a lot lot more than that to buy an income of £650,000 per annum.
I hope he's applied for transitional protection before the final 5 April deadline for the sake of his other pension funds...
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So the punishment for destroying a 300 year old national institution and burdening the country with vast debts for generations to come is... £650,000 a year for life.
The man should be grateful he's free, which is more than he deserves. Now excuse me while I go back to work so I can earn some taxes to pay for this failure's pension.
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Unless the government actually set the ball rolling with a full investigation and giving it the powers to prosecute I see no way of them claiming back any of that pension pot, unless they make him take it in shares.
It was the job of the regulator and the people who controlled the regulators to ensure that the banks were working within reasonable guidelines
Without those guidelines is it any wonder that RBS took such a huge punt. If it had come off Sir Fred would be being greeted as a hero (aka Sir James Crosby) and Brown would be lapping up the tax from all the bonuses.
Whilst I agree with your incredulity now, when the horse is well and truly out of the county, is not really the time to click your fingers and hope that you can stop the loss
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Tricky one this. Pensions are contractual and are independent of the employer who provides it - trustees set the rules. So, any member of any pension fund is entitled to the entitlement they have built up via years of employment and final salary. So, folks, no matter how incompetent the person was in the job, their pension is ring fenced.
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in china he would have a bullet..in the UK we give him an annual pension at 50 that is more than a lot of people earn in a lifetime......Have these people no shame?
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"Fred Goodwin to receive £650,000 for life"
Why am I not surprised?
That said, further words still simply fail me...
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You know well Govt now owns only 58% of RBS and it is possible that Prefs conversion leads shareholders to take up new shares.
If so this would push govt ownership back to 48%.
Today , if 2010 resumption of dividends is at 7p / share....then that is an oportunity for 30% rate of return for those who can wait 15 months. It also points to a possible share price of around 95 P within a year. ( 380% profit on todays share price)
With toxic assets ringfenced profits of £5B in 2009 and £7b in 2010 are probable.
It is irresponsible to incorrectly announce the % govt ownership. It adds to mass hysteria.
It also reduces my chance ( as a loyal shareholder investing for my pension) of an affordable old age. The core business is sound and Goodwins efforts to have a large footprint n Asia were not stupid. It may be that dishing that prospect proves to be stupid.
It is in the interests of shareholders to prevent this dilution. It is your job to present a balanced view and point that out. With the turnaround plan clear & job nearly done, it is just possible that RBS has a template that begins to spread confidence .......throughout the banking world.
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Speechless doesnt cover it. I'm not a religious person, but greed is definitely at the root of this evil. Does this man have no self respect or is he so deluded that he believes he deserves this kind of pension? Why is the government so powerless to prevent this in light of the amount of our money they've sunk into this bank? If we were French we'd be out on the streets protesting! Mr. Goodwin probably knows we Brits will have a bit of a 'tut' and stoically move on to the next disaster, leaving him to enjoy his retirement (in the Carribbean no doubt)
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£650,000 per annum pension for RBS banker Goodwin. I have no acceptable words, just a complete state of shock and now loss of purpose or interest in our so-called society!
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Perhaps we as tax payers could sue for compensation for the losses we are suffering as a result of what might be considered hisnegligence & failure to exercise due care with the nations money and reputation.
His pension funds .. he has more than one I'd wager .. plus his houses and cars might not be much towards the huge losses but it will send a huge message to his successors.
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I am as many people gob smacked and disappointed to hear that the a Banker (Sir Godwin) is getting a £650k a year pension. What is even worse is the hand wringing of the politicians. Well I have two ideas to claw back the money:
Idea 1
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I hear that the banks are going to spin off the bad assets into a seperate bank. Well why not spin off the good assets into a new bank and leave the bad assets and liabilities including bankers bonus liability and pensions in old bank.Maybe we do what lots of companies are doing. Declaring the bank bankcrupt and then creating a new bank to buy the good assets on the cheap! Given this is probably legal under current law and everyone knows what is happening this will probably not be too risky though a radical solution
Idea 2
=====
Change the law to create a Personal Income Windfall tax! Maybe we can sell this format as we sell TV Formats (Strictly come Dancing) to the yanks and then to other countries!
--
Regards
Dilip
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Another banker bandit walking with a pension a train-robber might have dreamt of?
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RE Post 29- I agree with your comments, but could we stop this by actually letting RBS go ... would that stop the pension payments - i would be interested on better informed (than me) comments on this...
This whole crisis has been based on an assumption that we cannot let the banks go, and therefore they continue to play hard ball, look at the telegraphs headline today, Lloyds insisting that Pref shares are converted...what negotiating position should they have?
I believe if we let the market play we would not be in this mess (I'm not talking about CDO's there are clearly big issues on how on eath they were valued/audited).
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Dear God!
Are we totally devoid of morality in this country.
No wonder the police are worried about a summer of mass rioting - this all reminds me of the corrupt arrogance of the Shah & his regime.
Might we see a similar reaction, as was seen in Tehran, throughout the UK this August?
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Robert,
You are speechless, I am not speechless. This man has no shame, he leaves a Bank that has been bailed out by the public, to live a comfortable life unlike most pensioners who will not be living in the same fashion. It beats me that a person can actually accept this vulgar amount of money after creating financial hardship and chaos.
If I could find a way in which I could leave this country and live elsewhere, I would do it. This country exists in a haven of insanity.
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strongholdbarricades you've done it again!
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I am one of a number of staff/former staff members who have seen their life savings disappear because of this idiot who walks away with £650,000 a year for life.
I hope he sleeps well knowing the ruin he has caused.
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I think there needs to be a new higher higher rate of tax for retired board room bankers. I would suggest a rate of 95%.
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I'm not sure at the surprise; but grateful for the publicity. Could you ask UK Financial Investmenst why they were not aware of this (must have been in the accounts) and what they are doing to investigate other such excesses - and clawing them back.
In this context I would be interested in their thoughts of how to claw back excessive payments made over the last 10 years - which have resulted in the huge liabilities which the UK taxpayer is facing.
Or will they just investigate those which the media points out?????
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I am not sure why anyone is really surprised by this information. It is also well known that Fred Goodwin was not even the highest paid employee at RBS ? The net should be spread wider than just the board of the company to understand the full extent of the salaries and pension arrangements. If the government were to release that information, it would highlight how obscene some of the salaries were and still are.
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There is one good aspect to this: before now, the average punter didn't really think much about the remuneration of the high-flying few. As long as we were doing "ok", we didn't seem to mind too much that others were doing fabulously well. In fact we allowed it as their reward for us doing "ok". Now we see that they are still doing fabulously well, even after it is plain to see that we are NOT doing "ok". Now we see the naked greed for what it really is. Now we see the face of evil (what else can you call this sort of behaviour while the country suffers?). Rise up fellow peasants!
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Sir Fred 'the shred'.. has feathered his nest, and can live in luxury for the rest of his life.. and it is a complete scandal. Well done Robert for bringing it out into the open...
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" I did nothing wrong", "I did nothing illegal", "I didn't see this coming" So I'm off with more pension than you'll ever earn!
Sounds about right in this country.
What else could you expect from a banker?
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I'm really going to be interested in the arguments in the first 28 comments that are still being moderated when 29 gets to be published first.
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I have been serioulsy upset By the way RBS have behaved over bonus payments etc - this news re Goodwin's pension is last straw !! Am DEFINATELY MOVING MY ACCOUNT after some 40 plus years.. be interested to hear if any more feel the same
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I see #29 StrongholdBarricades is a Party member and has first right of reply...
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RBS Goodwin's £650,000 per annum crawl away pension? No way! Taxpayers have to see this man in court .. if not, why not?!
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I have been seriously upset By the way RBS have behaved over bonus payments etc - this news re Goodwin's pension is last straw !! Am DEFINATELY MOVING MY ACCOUNT after some 40 plus years.. be interested to hear if any more feel the same
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The simple answer to these excesses is to legislate to prevent company directors' receiving indirect rewards such as this. They should only be permitted to receive direct salary payments, at whatever level the shareholders approve. If shares are part of the remuneration they should be purchased in trust from the salary awarded.
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For one happy moment I read 'Fred Goodwin gets life'. Seriously though, more regulations, more quangos, more complications, more overheads and they'll still all be worked around. Keep it simple - if you are or have been a director, exec or non exec of a financial institution in the past 5 years that has had to call on tax payers' money to be rescued - you are personally liable for the debts, end of story. Then they'll self regulate you can be sure of that,
Yours Aye,
Graucho
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'Since they became aware'. What is wrong with getting ahead of the curve for once, it cannot be that difficult. If you are getting rid of somebody at that level it is not hard to think, I wonder what the bill will be.
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no wonder he doesn't mind being blamed for his part in our downfall.
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Well we all know what will happen now, they will trot out there is a legal reason why they cant do anything about his pension
gets better everyday this
emergency methods are needed now
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Any CEO who has been at a FTSE 100 for some time is likely to have built up a huge final salary pension pot.
This is not breaking news!
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Long may Sir Fred enjoy his pension pot at least while it lasts - though one may well ask why the man who supposedly 'saved the world' didn't see this coming?
The sad fact for Sir FG - and for us for that matter - is that the whole world economy will soon collapse, in which case everyone's pension pots will be obliterated.
It is a sobering thought that Japan's stockmarket hit 40,000 20 years ago and then crashed, fluctuating at the 20,000 or so level before crumbling and today remains no more than 7,500, which means anybody who invested in that market over the longterm has seen massive losses, i.e. no retirement pot, nothing. Our economists have happily glossed over this fact, believing that this was an anomaly. It isn't - this will be the global reality for us all.
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Could somebody please clarify something for me.
Banks pay corporation tax on their profits with the former being circa 30%.
So do they get tax rebates in a year when they make losses?
If that is the case that means that for a bank which typically made a loss of £100 billion it would get repaid approximately £30 billion anyway without any strings - before any bailout by the government?
Please tell me there is a flaw in the reasoning somewhere!
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Just saw John McFall on Newsnight talking about the FSA hearing today at the select committee in the Houses of Parliament ....he was hopelessly out of his depth, inarticulate and didn't even know what UKFI stood for!....this is the bloke that heads up the Treasury Select Committee. He's a joke....but that's probably why he was selected for the job.
Oh...and of course...he said none of it was Gordon Brown's fault.
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Goodwin should be forced to repay some of the outrageous remuneration and benefits he has received as the accounts on which they were based were clearly a figment of imagination.
Has the man no shame?He could easily give back £10m and still live a life of luxury.
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Here are 3 things that could be done:-
1. Make the pension pot totally the responsibility of the shareholders.
2. Stop paying the pension and wait for him to have the nerve to sue.
3. or retrospectively make him personally responsible for 10% of the banks losses.
Its time for punishment and this man seems to be running blindly to the guillotine just as he blindly managed the RBS.
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Why so surprised ? All captains of industry have their pension pot sorted out as you should know . Don't be so amateur dramatic clubish ! You are being alarmish and scaremongering again Robert.
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Robert
Why just this guy, others got payoffs and have pension pots too.
Why are you surprised
do an internet search
13/10/2008 BBC article
13/10/2008 scotsman article
24/1/2009 guardian article
22/2/2009 thisismoney
I looked it up because I remember the previous discussions.
OK, so the calculations were based on 2007 fund details but the order of magnitude is there. The contributions up to 2007 cannot be questioned. They will be based on salary in previous years.
On a slightly different note, depending on how the pension arrangements are established, its quite possible that Goodwin will have to pay 55% tax on much of the payments. It depends on whether this pot is in a pension fund or whether some is unfunded. It will also depend on what was recorded at A day in 2006.
Of course any share options he might have are so far under water he might as well burn them. If there were long-dated performance share type thingies, the company won't be meeting is shareholder reward targets, so they will be worthless.
Anyway, you could write the article as
At a minimum 40% tax rate, Goodwin makes useful 260,000pa contribution to the inland revenue. Say he lives for 30 years that would be 7,800,000 in total. Not enough maybe but better than a poke in the eye with a burnt stick.
My husband tells me that the world is divided into me me me's and cleverdicks. I am perhaps being a clever dick. Sorry
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RBS £650,000 PENSION PER ANNUM? Goodwin is laughing all the way from the bank he destroyed!
There now appears little point for any citizen in the UK to pay into a pension. Why ..? .. well, come the day, someone will have cleaned it out just before they move the goal posts for us pond life (as we are described by the bankers).
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How many years did Sir Fred put in at RBS to qualify for such a handsome pension? And what kind of things might a fifty year old spend twelve and a half grand a week on?
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(Expletive Deleted) to the power n!
If ordinary legal remedies fail, then we need a special windfall failed bankers tax. Strip the knighthood, and charge him in full for the police protection he is bound to need.
For the future, make directors of any public company personally liable for losses incurred. Why should their position be any better than those who trade as an individual? Those who manage other people's money should be more, not less, careful than those who just manage their own.
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There seems to be a misunderstanding of what a pension is.
It is not a bonus people get on retirement, it is part of their pay that is kept back from them by their company while they work, and only returned to them once they stop working. For those of us with company pensions, it is money that we lend to our employers from our pay packages in the hope of getting it back with interest on retirement.
Whether Sir Fred deserved his salary over his years at RBS is a conversation worth having. Whether he deserves his pension is pointless - it is his to keep, not RBS' to give.
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I retired from my post as an RBS branch manager 12 months early (age 59) after being diagnosed with cancer. I had completed 24 years service. My final salary scheme has netted me just £7,900 per annum. If Sir Fred's retirement package has rendered Robert Peston speechless, I'm struck dumb too!
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What other comment but "disgusting" !
What needs to be actioned promptly is a some legislation which makes all senior business appointments liable long term for their actions and it has to be retrospective.
It should not be expensive for the shareholders or the business who have taken over the organisation to chase these people down either.
These guys have to answer for what they have done!
Dave
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Someone (Robert) should also ask about the financial situation of the RBS Pension Fund for the rest of the staff. We could have walked into a far bigger liability than the Government thought.
Due Diligence was not a word on Minister's lips when they "brought" RBS. It's a disgrace. Pig in a poke would sum it up.
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The government seems short of ideas on how to stop Fred from spoiling the bailout party.
I suggest laying on a special (rendition) flight for Fred to Morocco......where he can enjoy the sun and live cheaply........thus no longer needing a pension.
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Whatever they try to do, I bet he has a solid contract. He is laughing all the way to the bank
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I think you'll find it not unusual for directors of PLC's to have awarded themselves (through their tame house pets i.e. non-execs on the remuneration committee) huge pension entitlements.
In addition to of course huge salaries, bonuses and share plans.
The pensions are a bit less obvious, and when their packages are occasionally quoted pension accruals are a bit too complicated to refer to by journalists.
Afterall it's only our pension funds, which are the main shareholders in these companies, paying for it, and our gormless fund managers are not so gormless as to not realise that they have a vested interest in ensuring huge remuneration packages. Their packages, which they earn for losing our money, then don't look so obscene.
There are numerous examples of directors paying themselves millions each year for poor performance.
Look at BT's former CEO for example and compare with BT's current share price and the fiasco in its Global Services Division. BT also had a Labour baroness and daughter of a former Labour prime minister on its Board!
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What an absolute disgrace!!!!!!!!!!!!!!!!
You're shocked?
I'm speechless
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This is just another example of the greed in which we have come to expect from the failed financial system in the UK in which these selfish arrogant parasites who managed these banks still take obscene unjustified amounts of undeserved rewards while genuine hard working people loose everything. Don't expect the motley crew of Gorden Brown and his sorry army to stop this abuse of power of the bankers, the only time the government will act if there was a rumbling of civil unrest. In the coming months this will be the case when the greed of the few could be taken back by the many.
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DON’T BE FOOLED BY THE IDEA THAT THE FINANCIAL CRISIS WAS CAUSED BY A FEW UNSCRUPULOUS BANKERS’ MISTAKES. THE BANKERS’ WERE CERTAINLY NO NOVICES, THE KNEW EXACTLY WHAT THEY WERE DOING.
Let’s get it clear. The unscrupulous bankers were the geniuses who dreamed up Colateral Loan Obligations (CLOs) and all types of similar products to make them a fortune. They even awarded themselves for their innovation by accepting these massive bonuses, with no concern for the people they robbed. These guys, made no mistakes. They knew exactly what they were doing. They dreamed up the financial system in which they were operating. In order to make themselves enormous amounts of money they had to know what you are doing. Don’t be fooled by Gordon’s idea that a few bankers made a mistake or that it was all a global problem. These guys, most certainly are no Novices.
CONSTRUCTIVE NOTICE AND CONSTRUCTIVE TRUST WILL DO THE TRICK
In principle and in Law there is no excuse for their conduct most foul, they were in possession of a Constructive Notice and Constructive Trust.
Confidence and Stability will only return when there is proper regulation backed with enforcement of law.
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The system is hugely corrupt, non-execs vote in compensation packages for directors, and guess what the same non-execs get similar packages as directors in other businesses. At the same time shareholders in pension funds don't object as they expect similar. Meantime, the small investor and the "little" people are paying for it all.
Scandalous.
Well done Robert.
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Bob, you still amaze me.
Even more concerning, is the extent of auto moderation and most likely manual moderation this blog is exposed to, therefore I'll keep it clean.
-Contract with Goodwin subject to legalities will not be changeable. Signed under contract law remember.
HMRC, will it should be remembered, take 40% of said pension. Therefore the expressed figure it fantastical and emotionally charged, when discussed so generally in the press.
Not to speculate too much, but this is surely a cheap price to ensure his tight lips and prevent further political problems for the current government, given the gagging order.
Why is it that 99% of the UK population want to see a single severed head rather than a mass grave of responsibility. The other 1% appreciate that a bank with £2Trn of assets that declares losses even at £28 Bn represents small beer, but then I am from North of the border.
Move onto more relevant reporting. The horror show is now over for the bank directors and just about to start for those involved within our selected government.
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Staggering.
Even if he had proved brilliant at his job, this sort of reward is not justified. As a total failure, he should locked up in the tower.
Most of us go to work and do our best for our employers and colleagues. Even a humble cleaner, char lady or office goffer makes an important contribution.
Just because bankers handle large sums of money, why do they think they justify so much more than the cleaner or char lady? It is just a job.
This is crazy.
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OUR SOLDIERS ARE DYING ABROAD RIGHT NOW, AND RBS GOODWIN GETS £650,000 EVERY YEAR IN A PENSION.
DO YOU FEEL HELPLESS AND PHYSICALLY SICK? YES, THAT WOULD BE RIGHT... DON'T YOU THINK? BUT HOW DO YOU FIX SUCH A DISGUSTING PROBLEM? ANY IDEAS CHAPS?
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Bob, either you are we are being treated like children it appears. Excerpt from moderation explanation:-
Pre-moderation - every single message is checked before it appears on the board. All of the BBC's children's message boards are supervised in this way.
Hmm...................................
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Robert, I too am speechless.
Only £650k per annum for the rest of his life?
How's he expected to get by on that?
It's an absolute scandal.
Looks like the remuneration comittee and non-execs really stuffed him there.
The monumental failure he orchestrated should have commanded a much higher reward than that.
Who are the rubbish non-execs and remuneration comittee members responsible for short changing Sir Fred? They should be relieved of their duties immediately.
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£16m is a drop in the ocean of RBS's losses. He is being made to draw the attention of the public. The net have to be cast wider, much wider over the ABN takeover to include anybody and everyone involved or have received commissions and businesses from the deal - accountants, investment bankers, dealers, politicians, officials, lobbyists and their "clients".
Over the years, several people have been prosecuted under the Official Secrecies Act for leaks which, seem to embarrass the government, rather than undermining the stability of the country. The Anti-Terrorism Act has been very keenly applied to some good effect and it uncovered a new terrorist state, Iceland. Our cod supply is in danger.
Given the depth and breadth of damage done to this country by a few hundred bankers, lobbyists and other. Shouldn't the books be thown at them? Is it not treason to pursue money, power and vainglory at such a terrible risks and cost to the country? We were hit by the financial and economic equivalent of WMD. Both world wars ruined generations, this one may take a generation (20 years) to sort out.
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Right, I've been to lunch and got over the shock of this news.
On reflection, I think this particular 'Knight of the Realm' is going to need that 650K for his home security budget.
Either that or for all the cake he'll have to throw at disperse the peasants (i.e. 'normal' pensioners...the one's paying for his pension pot) from his front lawn.
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The new chairman should call an 'extraordinary general meeting' of the banks shareholders (thats us), and put forward proposals for a new pension scheme and the revocation of existing pensions where they are excessive or inappropriate. Proposals might also include pursuing cases of 'criminal negligence' or 'fraud' etc. The wording will need suitable 'tweaking'.
Then we vote on it. Standard procedure?
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Its utterly incredible he should be rewarded for catastrophic failure in this way.
Its also another reason why the banks should have been allowed to fail, while the government guaranteed saver's accounts.
Instead we shovelled money into a black hole we didn't and still don't know the full extent of.
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the rise in house prices over 10 years against the rise in wages for the same period is so disproportionate that there was never a chance it wouldn't cause trouble.
As for getting fred's pension back try negligence and misrepresentation. A good criminal lawyer could probably find something to pin on fred. And why not. Any jury is going to have him for lunch.
The govt aren't going to follow this course because it will inevitably lead to the disclosure of treasury and BoE reports circulated to ministers predicting the current crisis years ago. And that means incompetence or criminal culpability.
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My wife and I both work for RBS and we have lost all of our life savings and have been issued with redundancy notices.
This man should be jailed. He has ruined our lives and that of many millions and yet he continues to bleed the bank dry even after it has had a triple transfusion.
This is so, so morally wrong.
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I am convinced that the recent failure of the banking sector should be dealt with harshly. It has ruined the lives of millions of UK citizens.
Those in charge of UK banks should be prosecuted for failing to provide adequate care for the bank's finances.
It makes no difference that financial regulations governing the banks were inadequate.
Those who set up the system of financial regulations can be voted out of office.
Ultimately, The people who run our banks are responsible for their success or failure.
Had they been successful, they would have been paid excessive bonuses but, as they were incompetent, they should be penalised heavily even if it takes special legislation to claw back some of the money they frittered away by witholding a portion of their earnings, bonus and pension.
The failure of Sir Fred Goodwin to safeguard the finances of RBS should not be rewarded with an extravagant pension at the age of 50.
His failure to carry out his duties should render our contractual obligation to him null and void.
He should be held accountable for the money he has invested unwisely on our behalf. He belongs in jail.
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Please disregard all StrongholdBarricades postings - he's a moderator.
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This comment was removed because the moderators found it broke the House Rules.
#3
"That's it Robert. Keep putting up these stories to divert attention from the real architect of the UK crash."
Why would anyone not mention Thatcher, the Big Bang and City's deregulation in the 1980s that started and laid the foundations of everything that followed? Stop trying to blame the roofer for the faulty foundations!
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This makes me feel so sick, and sad too. This just rubs salt into open wounds. I wish that I could ruin my firm and walk away at the age of 50 with £650,000 per year for life.
I make in a year less than he will get in a day. I am a company director, and work all hours god sends. I expect no bonus or pension plan, and know that my state pension will be more than I make now.
This is just an extension of the bonus scheme run by the banking industry. It sickens me. I wish I could put my cash under my bed in a tin for safety, maybe I will.
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I am going to email Gordon Brown with my thoughts now... join me.
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Robert
The level of Goodwin's pension has already been reported in the news. I think what might not have bene known widely is that he can draw this immediately.
The Government's legal advisers will be cautious, hence the Government will be cautious. There will be huffing and puffing but unless they are prepared to instruct the cessation of the pension and invite Goodwin to sue, then nothing will happen. There will be talk about making changes going forward but, knowing the system from the inside, believe me, nothing will actually be done to change Goodwin's pension or to reclaim some of the Millions he was paid in salary and bonuses in the last couple of years during which he drove through the ABN deal, weakened the bank and ultimately took it to the brink of nationalisation.
I would like to think that any contract Goodwin (and the ineffectual Non-Exec Directors) had with RBS could be considered to be with RBS when it was a commercial bank and not a state-owned institution that it now is. Leave his pension UNCHANGED and invite him to obtain his pension from the insolvent RBS. Re-name and re-constitute the RBS, let's call it 'New RBS', and say that New RBS doesn't have any link with Goodwin and thus won't be paying him his pension.
Alternatively (or additionally), recover his £16M pension pot to help settle the debts of the former RBS. With nothing in the pot, his pension isn't going to amount to very much.
Yes, I know that legally this is likely to be a non-starter, but the Government can legislate and can and often does apply legislation retrospectively......so anything is possible if there is a will to do it.
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Presumably they could claw back the knighthood straight away. Or would it be too embarrassing for the Golem who nominated him in the first place?
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WINDFALL TAX. The Blair government felt able to willy nolly impose a Windfall tax on over-profiting Mobile Phone companies some years ago. Why not rush thru a new bill. A fat-cat Windfall tax. 100% on Bank employees receiving bonuses. Similar amounts on Fat Cat bosses. It's a simple solution surely? Simon Raymont
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WINDFALL TAX. The Blair government felt able to willy-nilly impose a Windfall tax on over-profiting Mobile Phone companies some years ago. Why not rush thru a new bill. A fat-cat Windfall tax. 100% on Bank employees receiving bonuses. Similar amounts on Fat Cat bosses. It's a simple solution surely? Simon Raymont
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One of the reasons i am a Socialist. Over 5 years ago, I was marching in Nice, France, singing the INTONATIONALE, a song, that encourages international co-operation, and ' Le Monde, Ne Pas Le Merchandise. Le Monde Responde, RESISTANCE!. -" Translates as: the world is not a commodity. The world responds, -Resistance!" I feel we may have had that we might have helped to hit the nail on the head that day.
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Moderators must be severly understaffed tonight, unless, as some suggest, the 2 most recent RP blogs are so contentious, the delay is am attempt to avoid fanning the flames of anger!
I have a couple of questions which may already be awaiting moderation-apologies if so.....
Why are the Treasury and UKFI so surprised? After all that's happened, surely they knew about all this? Or was this an 'off balance sheet' commitment?
Why not ask Royal Mail employees, soon to be redundant RBS employees, recently impoverished pensioners what they think about this?!
Very strange this is in the public arena the night before RBS makes it's announcement?
I don't normally subscribe to conspiracy theories, and always believed in the freedom of the press.
I'm beginning to think I'm being naive!
Morally incomprehensible!
By saving the banks it looks increasingly as if all that has been done is protect bank pensions and bonuses.
Rahere is quite right-the stench from the sewer is overpowering!
Anyone know where I can get a gas mask?!
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Sir Fred Goodwin should have this pension greatly reduced to the same level as the ordinary man in the street has to survive on. It is not his money to take unless rightfully earned. It belongs to the taxpayers. A pensioner I spoke to today is due a rise of £2 in her pension in April making it an overall pension of £57. Lets see if Mr Goodwing can live on that, and that goes to the rest of the clan including many members of parliament. Today we live in a sick society where the rich live off the poor like parasites, and look where its got us
les isherwood
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If Goodwin is short of a few bob he can always sell his neck for scrap metal - after all it appears to be made of solid brass!
Also when did we start calling bankers pay "compensation"? I suppose "pay" is too crude a word for the men resposible for ruining our financial system
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A year or two ago nobody would have bothered how much pension a banker got. Now we want someone to name, shame and blame for everything. We are nearly all responsible for this crisis...we were all greedy in various ways, e.g., lying about our salary to get a higher mortgage, demanding more and more return on our investments, cutting back on our spending when we may still be earning the same, queuing up to take money out of banks through fear, etc etc.
If this banker was your son, father, husband or brother, who has obviously been outstandingly successful through most of his career, would you call him a failure because of a global financial collapse? Would you want him forced to give up his legally paid pension?
I agree that pension arrangements need reform but it is not right to do it in retrospect. The total tax free pension pot is currently capped at 1.5 million or thereabouts. Why not make that the maximum for everyone. I'm sure the bankers could figure out a way to get a decent return from that....if not they don't deserve more!
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Thank you, Robert, once again for holding up public policy for testing and discussion while it is still relevant to discuss it.
And not ex-post facto at corpse-kicking committees.
"Yep, I think it's dead." "And when did it occur to you that it was dead?" "Well, it was purple-blue for months, but I didn't think anything of it at the time. I'd been told it was going to be our lead striker on the football team and that the swarming flies were a training technique. I had no reason to think that rigor mortis was abnormal for a world-beating athlete. Not being a medical expert, I agreed and picked him for our team."
"I repeat, when did it occur to you that it was dead?" "The second-half performance upset some club shareholders and supporters, who didn't quite understand the dynamics of the game. And I share that sentiment. Frankly, if the media had never broadcast me with a rifle standing on a grassy knoll overlooking the training ground at the start of the season, would there really have been an issue in the same way?"
[Murmurs of agreement]
Over eight hours of questioning, members of the Committee between them bought three vacuum cleaners, an Encyclopaedia, two magazine subscriptions, and an extensible floor-mop extension (for reaching awkward dirt with ease).
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Robert Preston:
I am also like you regarding the Fred Goodwin getting 650,000 British Pounds a year for the rest of his life...Utterly Speechless....
~Dennis Junior~
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I can only say once again that the Trader that broke Barings for Millions was Jailed, why under New labour is the Guy that cost us Billions getting almost 1 mill a year for life, if this stupid Govt. had let RBS crash he would get nothing. We seem to want to play Lady Bountiful to every crook in the world, why is that?
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Can't we all just feel sorry for the poor chap? Can you imagine what it must be like to wake up morning after morning nearly £2000 wealthier than when you went to bed the night before, just because you once had a big job and you screwed it up big-time? The degrading shame of it must be awful - obviously if he was good at football, we'd all feel better about it - apparently - but he's not.
Still, spare a thought for the Prime Minister / Chancellor on whose watch all this has taken place - can you imagine how utterly destitute he must feel as he looks at the carnage all about him, for which he is so responsible? He must be very close to topping himself. It would be a kindness to relieve him of all, as soon as possible. For his own sake, Gordon Brown should take note of Steven Katirai's views as expressed here - www.mywordyoudolookqueer.co.uk/?p=320
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robert peston.... business. Who's really interested?
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The long-time chieftain of Coca-Cola Roberto C Goizueta often boasted that 99% of his net worth consisted of equity in The Coca-Cola Company. If 99% of Sir Fred Goodwin's net worth was in RBS shares, he'd be a lot worse off now.
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No 114 compensation is one of those horrid Americanisms. The Yanks have been calling executive pay "compensation" for years.
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Section 5.1 of the statement released by the Treasury in January treats Eligible Assets thus:
"Assets may be denominated in any currency."
How is the Bulgarian property market these days?
Other qualifying assets proposed for inclusion: "structured credit assets, including certain asset-backed securities".
"certain asset-backed securities" held "as at 31st December 2008".
In the name of Warren Buffett, who was buying asset-backed securities in December? Should we insure 95% of what was lost on the value of a derivative product purchased on New Year's Eve? Did an office party prank go wrong? Is the office prank still going on?
Is that turning Lloyds - dearly beloved of its shareholders - into a "bad bank" for banks and counter-parties with whom the taxpayer and the Treasury have no reciprocal arrangment, vis-a-vis preference shares, quantifiable lending agreements, and optionally cash (ask your grandmother)?
And isn't a lot of the lending normally done by the banks covered by the £50 billion Asset Purchase scheme being managed by
the Bank of England?
So they also propose to insure "any closely related hedges, in each case, held by the participating institution or an affiliate as at 31st December 2008"?
We're insuring hedges. So we're insuring insurance. Hedge-Re.
Or we're insuring if the "related asset" goes down in value, and if it doesn't, we're insuring the decrease in value of the
offsetting hedge?
Or we're refusing to insure that part of the asset value that is covered by a hedge?
Not to worry. We're insuring the "major part" of the loss.
Where we are not insuring a synthetic entity being fired out the door of derivative dealers manfully working right through a frozen market into 2009, we should be able to assume that every claim made under this policy will be checked against the existence of mortgage insurance policies, as well as of income protection policies (covering periods of illness or unemployment) etc. for the
underlying asset.
This is because of the Treasury's careful stipulation that all relevant information must be disclosed inclusive of "related
hedges".
Shouldn't we?
Does that include a credit default swap taken out against the bank itself or a micro-hedge against "12 Primrose Lane -
Economic Timebomb or Nicely Decorated, 3-Bedroom, Semi-Detached House"? What's the spread between living in view of a
Hebridean anthrax test-site and a town with a sports centre and a power station?
Or does market omniscience not do boring things like actual valuation factors and the careful striation of the intrinsic and
the extrinsic? Does the cover not actually extend to "certain asset-backed securities"?
This sounds very scientific.
£150 billion of quantitative easing. Reportedly.
£50 billion asset purchase by the BoE. Matter of record.
£50 billion in claims from RBS. Admittedly, a patent-pending Pestometer estimate.
£50 billion in claims from Lloyds Banking Group. Admittedly, also an estimate.
Let me summon my professional advisers. 50 + 50 + 50 = ...
Thanks goodness for all that scientific stress-testing. Wouldn't want to end up with hopelessly simplistic figures.
Is that for the election manifesto? 5% cover. 50, 50, 50, 150. More memorable for the ordinary, hard-working families.
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I am not surprised by Sir Fred pension.
You will probably find most if not all of the heads of big companies get rewarded this way. Failed bosses get golden hand shakes and just move to the next pot of gold. Most of these people have many so called jobs, on different boards as advisers. The whole of Heads of Companies/ Chairman ( part timers ) stinks as far is I am concerned and now is the time to sorted it out, not just the Banks.
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As per usual, I'll engage constructively.
(1) Enacting a claim should require shareholder approval annually - given the government voting position in these companies that would effectively guarantee:
(a) that we can indeed amortise these losses in the event of, I don't know, a recession happening? To ensure
amortisation of the costs in the event of a recession lasting "5 to 6, up to 10" years according to Bill Gates, and certainly lasting past 2010, according to Ben Bernanke.
(b) and can keep "strategy under constant review".
(2) When a claim is made, it is subject to assessment and investigation in the fashion of an insurance assessor. The
government seem very correctly to wish to assess the situation prior to any agreement, but it would also be wise to follow normal industry practice and allow for claims to be investigated (at the level of the individual loan or asset) and allow for
claims to be rejected (on the usual panoply of grounds: force majeur, being discovered to have attempted to insure a third-party asset, under-valuation, over-valuation, etc.).
(3) Dramatically improve taxpayer repayment even if it has to be scheduled over a decade if an agreement is to be viable.
Jamie Dimon, CEO of JP Morgan Chase: "Our goal, my goal, is to make this a profitable
investment for the American people, as soon as possible."
Where are the one-pound salary Managing Directors in the UK such as some CEOS in restructured American banks and at successful companies like Apple?
(4) Does "due diligence" include requiring utilisation of the various HMG mortage repayment cover scheme for homeowners in difficulties for every mortgage generating a claim? There should be a general alteration whereby a mortgagee can make direct application to the government for consideration to be included under the various repayment cover schemes being offered by the government, without reliance upon the sunny civic spirit of the mortgage issuer.
(5) 5%. Seriously. Remind them. The fuss over the Rock split and bondholders? The Rock had been pursuing a wind-down policy. That is to say, prior to being given the funds to expand into new business, it had the same pool of mortgagees as it will have since the split. Therefore, bondholders are at no additional disadvantage compared to months ago. Though I would refuse to arbitrarily re-write terms. So, splits that aren't cack-handed and provocative can work. If the Treasury can do anything, it is subtlety and assiduous attention to investors' due rights.
(6) Having "all relevant information" prior to offering insurance is a wonderful thing. I would make that the serious and heavy responsibilty of the insured, not the Treasury. This displacement, back in favour of insurance industry norms, should
be done by a simple expedient. Respond to any incident of an apparent "lack of relevant information at the time" of taking
out insurance as forming sufficient grounds for refusal in the event of facing a claim or tranche of claims clearly centred upon a lack of precisely that. Provide explicitly and legally for that.
(7) Regulatory forbearance should cover whatever dilution factor that could be said to apply to the security of the balance
sheet. While the Government would retain its pre-ink drying pre-eminence. No creepy calculations that "Gordo is now
disposable - he has given all that he can give".
If this is about regulatory requirements (and do any of us think that it is?), would not regulatory forbearance or a more
granular re-assignment of prudential category for a sub-division of the bank be more sensible as part of a more blended, granular strategy? You know, strategies that do not make the government disposable.
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I feel disgusted with how greeding this man is. I say Robert Preston is doing such a good job in informing the British public about the truth that he should have the money instead.
J. C.
Birminjgham.
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Mr Peston I am astounded that such a good friend of Mr Gordon Brown is having to make do with such a piffling pension.
After all the Hard Work Sir Fred has put in over the years building a World Class Bank from a dull Scottish backwater of a financial institution. He had drive and insight and the most incredible talent. Would you have such untoppable skill go unrewarded ?
Sometimes I think the British despise success. Mr Peston.... Mr Peston Sir - you should be promoting the idea of a Peerage for Sir Fred.
I do hope that Mr Darling has a good pension pot...and Mr Ed Balls....and Sir Gus O'Doodle too.
And of course your very good self as well. To say nothing of the totally brilliant Tom Scholar. Like father like son etc etc.
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looks like goodwin will have briefly overtaken Gordy to become Britain's most unpopular person today
the bad timing involved in this story coming out the day before RBS announces their 28bn loss is truly impressive and Gordy seems to have permanently lost his lucky rabbit's foot
but as a few posters have said, the pension deal was presumably built in to Goodwin's contract and non-negotiable
I would however be very interested to know exactly when he turned 50 and if his friends on the remuneration committee helped him to stay until he reached that magic date in order to get better terms
Rather than getting into a lather about pulling back his pension it might be better for the newly vigilant FSA (don't make me laugh) to pro-actively get on with investigating whether a case can be built so that Fred and friends can be prosecuted; he might eventually be jailed or very heavily fined, either here or in the US, and his legal fees might eat up all of his pension
To top it all off for the accident-prone govt, whilst this public relations disaster is taking place here, the news says that China has just signed a $10bn trade deal with Germany; no sign of any China deal with Britain........
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WARNING:
BoE and FSA - may contain nuts. Decisions produced in an environment in which nuts might be present.
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Laughing all the way FROM the bank......
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Why are we persecuting this man? So he ran a business that failed. Let the man who has never failed cast the first stone, to paraphrase someone else. In the US it is considered a plus if you have run a business that went down. It is not his fault that we have a PM who has a love affair with banking and wants to keep pumping money into it.
I am sure Fred, like the rest of the nation would sooner Flash gave some extra money to the unemployed, buy reposed houses so people can stay in them, rather than just look after the banks.
Why do we have to punish people who try to do things but fail, it could easily have been us. I am sure Fred is not a man to want to sit back and do nothing for what could be the next 40 years.
I am surprised that HMG are too bothered about a £650,000 pension, as after a year of them printing money, he will be lucky to get a loaf of bread with that.
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Has this man no shame?
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The state,the government and the justice system have given tacit approval to fraudulent activity by the professional classees.Treat the white collar criminal with kid gloves.
There is a race of people that have been given the slur -"Thick Irish".
Now come to think of it ,they are not the only ones ?
The Emperor's new suit springs to mind,whenever we get more soundbites about financial corruption. When it comes to creative accounting and tax planning,you take advice from the best accountant you can find. Sure it is all most perfectly legal until someone lifts the lid off to have a look,or rather it's blown off by one of your most favoured employee's who has just been retired. Same old story selective amnesia takes hold ! Our best financial wizards are shown up for what they are !
Lad's playing russian roulette in the bookies? With our money !
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This is a democracy, isn't it? Is there a party I can vote for which will pass retrospective legislation which will (he said, modifying his language knowing that the mods will strike out what he's really thinking) correct this situation?
Sir Fred, in all the pictures of him I can find, seems rather pleased with himself. I think that we, the people, should put an end to that. Don't you?
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Surely people like Goodwin took their lead from our Politicians "corrupt" attitude to expense claims etc. Our Politicians are the moral policemen and they are devoid of integrity which is why voter turnout is so low.
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Robert or somebody with right info,
Please clarify the following on Asset Protection Scheme (ASP):
1. Who chooses which assets of banks to insure and how many years to keep them in the APS?
2. Is the insurance fee (2, 3 or 4% from asset value) paid by bank to Treasury every year or is it one-off charge?
3. How are the assets that put in APS valued? Their market value changes constantly and right now the values are very depressed
4. An example: If the value of an asset goes down say 40% this year what happens? Will the bank take hit of first 10% and Treasury pay to the bank 30% while the asset stay in bank's book? If in the next 2-3 years, the value of asset grows 50% - what happens?
As in many cases the devil is in details. Media just gives very brief info on the APS while complete mechanism is a mistery.
Robert, any chance you can explain to yoour readers the APS in details please.
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Ahh as usual it is left to the real reporters of the truth to tell it as it is:
http://www.ritholtz.com/blog/2009/02/bailout-hearings/
When the Treasury were spluttering, I wonder if you asked any of them how much of their final salary, inflation-linked pensions they are planning to give back?
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#138, i can answer some of it.
Basically it is the equivalent of a credit swap - or should be. The interim price won't matter, what you are insuring is default. So if the bond promises to pay out 10% and only pays out 1% then the bank takes a hit of either 1% or 0.9% ( not clear which ) and then the rest is covered by the government.
Basically, the reason for this sort of arrangement is regulation and accounting. Because these "unregulated" instruments are actually quite specifically regulated in terms of their risk treatment, accounting and capital requirements - which is the reason they exist. The government doesn't want to formally take on debt, by "insuring" it can put extremely rosy predictions on it losses and put off any material losses at least until after the election - and who cares what happens after that right! - the banks also don't have to sell their assets which would crystallize their losses. So everyone is a winner!
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Why isn't this man being tried for treason - crimes against the state - along with so many others of his kind.
I had some dealings with RBS some years ago and found them rude and arrogant even though they had no particular reason. Maybe he was 'The Boss' then too?
My Great Uncle who fought in WWI often used to mumble 'ought to be shot' every time something like this happened. I am beginning to agree with him!
This man should think himself lucky he wasn't working in one of the African States. They'd be playing football with his head by now.
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brownwatch---460 days to go
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#128, Maybe one should look at the return Mr Goodwin gave over the span of his career as opposed to one year? RBS lost around 3-4 years worth of profit this year - a large portion of it an accounting loss - and Goodwin has been CEO for 8 years maybe? I don't have the figures but maybe the real comparison should be what RBS was making when he took over multiplied by 8 and what they actually made. I suspect it will turn out to be a difference wildly in excess of 16million GBP.
Another interesting experiment would be to compare GDP per capita growth under Mr Brown vs what it was before he came into power.... Then look at the pension he will get, I wonder if that will make Mr Peston splutter?( rhetorical question... )
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This comment was removed because the moderators found it broke the House Rules.
#112, you mean the employees at Royal Mail that needed to be given bonuses to simply turn up to work? Or the ones with such a gold plated pension fund that it is billions in deficit - a deficit you are going to have to make up. Or working for a company that has sucked billions in money out of the government for decades? You really want to compare the contribution of RBS in corporation tax receipts, VAT, NI, income tax, rates - net of the money pumped in - with Royal Mail?
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#16, well if you feel so bad all you need to do is take a going nowhere bank and generate billions in profit year in year out. Simple really.
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this country is moving similar to interwar germany, corruption ,political parties basically the same, its a mix for the rise of the bnp.as a labour voter for a life time how can i vote for brown!!! hes the worst pm in 280 years and thats saying something, to be honest good luck to goodwin if he can get away with it, i do exactly the same and i daresay if you are honest anybody on here would.
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This comment was removed because the moderators found it broke the House Rules.
We have something in common with Robert Mugabe.Folks we are busy destroying our beautiful country. (newbie to the UK).
Shame on those responsible.Its a DNA issue therefore we have a serious cancer that is going to destroy GB unless we find people who have the intellect and moral fibre to restore reasonable normality.This problem is a national threat to the security of GB
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As a tax payer I'm actually very happy with this provided the retirement is final and compulsory. Compared to the damage he's done to the banking industry and the UK's reputation, 650k/year is a small price to pay to keep him from doing any more harm.
I also think that we should buy him an island - say Elba or St Helena - where he can live out his days in peace playing Fantasy Tycoon with the other failed financial Napoleons....
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Frankly Robert I wish you would consider the impact of your self righteous indignation a little better before you write these things.
Pension schemes are protected for very good reason but by writing pieces such as this you push our political lords and masters into a position where they feel they have to do something.
If however they do manage in some way to make RBS claw back some or all of Fred Goodwins pension how does that benefit any of us. All I can see is that any employer could then use poor performance as an excuse to reduce the amount paid to any retiree.
As many wiser men have told me over the years think carefully what you wish for you may just get it.
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RBS should have been allowed to fail.
There should be a public enquiry into why the taxpayer ended up taking the wrap.
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#150
We should thank Robert for clarifying in his interview with Sir Stephen Hester that this is but the first of many. Hester just confirmed that because this happened on the previous watch, he's not going to do a blind thing about it, even though there's sufficient evidence in the 16bn goodwill write-off (goodwill being the technical term for the difference between the price paid for a subsididary and the value recognised in the books) that the ABN portfolio was an even bigger disaster than we thought hitherto.
Therefore, your proviso has not been met.
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Nataliejen, you are quite right. One of the big problems for the UK is that for the last 40 years or so, anyone with any shred of integrity has been ridiculed by the media and then by the public at large. It's a poisonous combination of traditional British cynicism combined with the anti-establishmentarianism of the PC liberal classes. Now it's difficult to say what British values really are. The likes of GB, Darling and the bankers are really just holding up a mirror to the public showing the real state of the moral and morale decline of the institutions of the country. I don't think ANY of the current crop of career politicians are up to the job. If the monarchy is unwilling to intervene then I fear that Britain is rapidly moving toward a revolutionary situation.
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The government should pass the necessary legislation to remove this pension from this individual, and also to anyone else who received similar benefits at that time.
Yes the shareholders voted for it but they thought that it was a reward for providing huge profits for everyone. They were misled!!
That fact is that it was a really bad business decision that has almost destroyed RBS and damaged the economy of the UK.
This government has passed laws before to take excessive profits from companies.
They should do the same to this individual to get the £50 million back to repay the taxpayer.
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Somewhat blows the popular perception that these senior bankers are incompetent failures. Quite the opposite I would say.
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@ PedantPhil (comment 75):
"There seems to be a misunderstanding of what a pension is... it is money that we lend to our employers from our pay packages in the hope of getting it back with interest on retirement... it is his to keep, not RBS' to give."
It is also a risk we take. We contribute part of our salary into an investment pot. The value of that investment may go down as well as up.
Given that most people retiring at the moment (including RBS employees) are finding that their pension investment has all but evaporated, we should investigate just what Sir Fred's arrangements are. Perhaps he has discovered some miraculous technique for ensuring that the value of HIS investments doesn't go down!
It is unlikely that this investigation would truly happen, due to the danger that similar arrangements might be uncovered for ministers, civil servants, etc.
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Simple solution here - just revalue his pension pot of £16m against share value at time of accrual and then revalue against todays share price!
As an ex RBS employee I was going to transfer my pot to a Self Invested Pension Scheme. Went through the motions only to find that the £200k value had been reduced to £140k by the trustees. Clearly there is currently a hugh pension deficit at RBS! Another thing fotr the taxpayer to address no doubt.
I would really like to see some form of personal investigation of this man.
Having worked for NatWest/RBS for 23 years up to 2006 I can only comment that the lending practices employed at the time that I left were absolutely shocking.
In my division it was actively encouraged to take on the book very poor quality lending propositions on the basis that there was an opportunity to levy large fees in the case of insolvency. This practice was most unscrupulous and basically robbed a return to the unsecured creditor and Revenue.
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Back in manufacturing where I worked, we did a lot of defect analysis when things went wrong and products failed. One technique, learnt from the Japanese of course, was to ask the question "Why did this happen" five times to get to the root cause. It would be interesting to start with the question: "Why did Sir Fred Goodwin get a pension of £650,000 a year at the age of 50 from the Royal ( aka Rubbish) Bank of Scotland?" and go from there. After 5 questions, you usually have the answer.
The idea in manufacturing was to learn and not do it again. I'm not sure if the same philosophy applies to banking. There are probably other Sir Fred's out there who would love to do the same thing again with our money.
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Bankers like to call their bonuses 'compensation' because they're now trying to make out that they're somehow also just the victims of an unforseeable natural disaster, rather than the guilty parties, (aided and abetted by their friends in government). I do my job to the very best of my ability, because that's what I'm paid to do, and I also take personal pride and satisfaction in doing it well. I don't expect a flat fee just for turning up at the office, and then a massive cheque on top for actually doing any work when I get there.
They also started calling mere interest rates, and their dodgy paper pushing schemes 'products' years ago when New 'Labour' decided to mortgage our future by turning the UK into a Shylock economy. What tax they actually contributed to the public purse in the good years, was, in any case, (after reductions by varying avoidance and/or evasion schemes), a tiny fraction of what they have already cost the average taxpayer, which will continue to be a massive burden for decades to come. Simon Jenkins' closing statement to the Select Committee hearing on the role of journalists in the crisis was spot on - "Why does New 'Labour' have this infatuation with banks and bankers?" The taxpayers' billions that have been wasted in propping up these failed institutions, (who've simply sat on the money), could have been better spent in areas that would have more chance of actually staving off the worst effects, and maybe even restarting the economy. It's time we had some real stocks in the stock market, and the share pushers and bankers were locked into them.
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what Hester did say about the subject was "the pension was negotiated with the past directors and the GOVERNMENT..........." you didnt pick him up on that one Robert check your tapr, this is a smoking gun if the government have their fingerprints on this one!
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Robert Peston lost for words! Wow things are looking up for the nation and the economy. Hopefully if he stays quiet people will gain some of that all important "confidence" that the oh so sensitive and damaged bankers and traders seem to be lacking.
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Something fishy here.
Accourding to the New Chairman (Today Program this morning), his leaving package and pension was arranged with the old board AND the treasury when the goverment became a major shir holder.
But you state that the treasury didnt realise that he was on a 600k pension?
Were they just told to replace him what ever the cost by Grodan or did they fail to do their job properly.
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In my opinon this guy is a LOSER(a rich one). It makes me so mad I haven't read all the details yet so apologies if anything I say is factually inaccurate.
It appears that essentially Fred Goodwins contract is such that if he is 'asked to leave' (fired for doing the worst job in British corporate history (could definitely argue this is true in pure monetary terms)) he can still draw on a lottery win (admittedly on a week where the jackpot is shared) every year for the rest of his life.
He is 50.
It can not even be argued that in his career as a whole he has demonstrated success deserving anywhere near that kind of reward. His age dictates that he still had another 20 or so years to show whether he is any good or not.
To finish working at that level at the age of 50 is I believe testament to a career that can be seen as nothing other than a monumental failure even if up until his time at RBS he had been the greatest decision maker of all time!
That such a package could ever be agreed in the first place is more evidence to show that this kind of remuneration does not attract 'great' people. It attracts VERY, VERY, GREEDY people.
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Whilst we are on the subject of reward for failure....Robert, can you please summarise the pension entitlements of Tony Blair, following his years as PM, and of Gordon Brown, following his years as Chancellor and PM.
I suspect there will be more disbelief. Perhaps the Treasury can be encouraged to sweep away these rewards for failure.
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Off with their heads !
Off with their heads !
Come shouts from the public gallery
Demonstrators and MP’s
As former bank bosses are led
Into a ‘live’ Court of Evidence
Before the Treasury Select Committee
Billed to be grilled
Over their mistakes and banks' losses
Recklessly risky deals - why oh why ?
Gambling stakes so high
And guilty for stealing bonus-filled tarts
Yet instead of jail terms
They are set to earn
- in their bailed out terms -
Jam-filled pension pots
And retreat to mansion plots
While the economy rots
( Extract from Cheshire Cats, Fat Pigs, Rabbit Holes and Tea Parties )
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This news turns my stomach. This man is beig rewarded for failure. How was this figure arrived at?and who sanctioned the amount? Could it have been his croney friend Sir Tom McKillop?. This needs to be investigated. Mr Goodwin has commited gross misconduct in his role as the CEO and this has been done in the name of GREED.
In my opinion along with the other Chairmans or CEOs of the banks who have knighthoods should have these taken away as I believe the actions they have taken amounts to negligence. The Government needs to start a FULL investigations into the perpritartors of this crisis and initiate legal proceedings against them. Sir Freds pension payment should be scrapped and challenged as it seems some underhanded dealings has happened to enable him to receive this obscene amount
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The government states that the bailout is backed by the tax payer......As a tax payer I don't remember being asked to vote bailing out a scotish bank in a country that claims independance, someone remind me when the voting took place?
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Hello Robert,
There is an old saying that we should reflect on -
To those who have it will be given - To those who have not even that which they have shall be taken away !!
This bonus payment is obscene to say the least - A bonus is a reward for a job well done - not corporate failure.
Ok bonus payments will always be given - fair enough - but not these obscene amounts of money for Life !!
You are the only commentator as far as I can see who talks truth and sense ! - Keep it going but harder !!!
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Givern a 3% anuity rate.
£650k would be a 21.66million pension pot. Or around a pound for every UK worker. Can i have my pound back!
Given his age and that i susspect his pension is index linked with a min annual increase as well. I would be shocked if an equlivant anuity rate was as high as 3%
Not a bad pay off for a few years of running a company and arguably the country to the ground.
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Contrary to opinion expressed on here I'm not a moderator nor paid for by the BBC, but after last nights performance I'm available if there is a vacancy.
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Emm, well Fred and RBS operated at all times within the laws and regulations. Perhaps it's the laws that need looking at, not free market bankers trying to make a profit and timing things wrongly.
Fred lost his job, which seems to be as harsh a punishment as anyone could have had. Now because he's indpendently wealthy, we're suddenly to be shocked and appauled.
I'm sure if RBS hadn't employed him, another big FTSE 100 plc would have given him a generous package.
In fact, I'm sure when things pick up another big FTSE 100 plc WILL give him a generous package.
Certainly the level of pension is well above the current lifetime allowance limits, but could have been generated prior to A-day in 2006 when there was no limit and pension contributions were determined by earnings, of which Fred would have had plenty.
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It makes you want to scream! Who the hell is listening to the ordinary punter out there. How many other discredited financiers etc. are going to end up doing a 'Goodwin'?
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Exactly where did all these bankers invest all their hard earned cash?
Surely not in banks, or were they really that stupid?
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obscene!
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For those who are saying "so what?", I would say this.
This man was incompetent and imprudent. He lacked the wisdom to run the bank that he was given charge of with an appropriate degree of responsibility.
The net result of the actions of him and those like him, i.e. these greedy, arrogant self-seeking, egotistical individuals is that many, many people have been severely harmed - I mean had their whole lives ruined - by the consequences and sequels of action of these foolish people. (I include in that group incompetent regulators, spineless politicians, and others).
Politicians talk about dishing out ASBO's to delinquent 'out-of-control' adolescents. Perhaps we need to find some such mechanism to deal with people who recklessly run their businesses with no thought of the risks to the rest of society.
Their actions may not be technically illegal, but they were significantly maverick and they have had a devastatingly effect (that is still ongoing) on our society. That is, lots of other people are now 'picking up the costs' of his incompetent brinkmanship.
Indeed, many people will never get their financial lives back on track within their working lifetimes, thanks to the like of Fred pushing RBS (and other banks) to the very edge of oblivion for their own gain.
Isn't that 'anti-social behaviour'?
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Not much being mentioned about the US Treasury official who stated yesterday that the reasion that the US reduced bank regulation over the last ten years was because of the total lack of regulation in the CITY of London since the FSA came into beaing. And NewYork were very worred that all the major banks would leave and becode registered in the london stock market.
Is this a smoking gun pointing at Grodan I wonder
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A fund of £16 million? Surely £2m is enough for a bloke of 50 who is supposed to be such a hotshot he will be in such high demand for the next 15 years. If Fred Goodwin was a gentleman, he would give up £14million. If he divded his "gift" into 0.5% parcels, it would benefit 200 people to the tune of about £70,000 each. This would go someway to making up the huge losses which he and his like have caused me and my like in the last year. I would like to nominate myself as one of the recipients, so that I could sleep at night instead of wondering how my depleted fund will get me through the next 20 years of retirement. (God willing and money lasting.)
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A key feature of his pension package is the extent to which it is index-linked.
The point is that with quantitative easing the value of any sterling denominated pension is likely to fall to zero when hyperinflation takes off.
Even the 'gold-plated' public sector pensions will become worthless since the amount needed to be paid out to keep up with inflation will quickly exceed the total government tax revenues.
Anyone relying on a sterling pension to support them over the next decade should be very worried and think about some kind of plan B. I certainly am.
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Robert
Isn't it time that the government started talking tax-free compensation payments to every UK citizen ?
And I'm thinking in the 10,000's.
Seriously.
And a prison term for the guilty parties.
It's actually clear-cut when you think about properly.....and fairly.
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Robert,
The final salary pension schemes in the entire country is a huge smoking gun. Not just in the banks, the rest of the financial sector but also in the public sector.
An issue often raised in the past (Insurance industry, FSA etc.) and just as quickly swept under the carpet has been a cap on the highest paid. However, the people who run these schemes are well paid and turkeys don't vote for Christmas!
In the public sector it is well documented that MPs get a gold plated pensions even if they only serve 4 years in the job! Senior management in the BBC have SEVEN figure pension pots as well.
A big concern is that the pension pots of many companies are not funded as well as they should be. Having a maximum cap on an individual's pension payout would ensure the longetivity of the entire pension scheme to the benefit of all its members. For those with smaller pension pots any shortfall will be a lot more significant than those with larger pots.
The authorities have been found wanting. Yet again!
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GOODBYE LABOUR! HELLO CONSERVATIVE
Does Gordon Brown not realise that by ignoring the public he is going to lose at the next election, now if Gordon was to get a hard line and go after these "robbers" his popularity would be boosted and his chance of getting labour another term would be greatly increased,
But i forgot, the goverment dont listen, if they did then we would never be in this mess! and we would not be heading for the poorest country in the world award 2009.
Enjoy your last days in office Gordon, i for one dont think you will be there again,
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Just a thougt, we all know how the scotish parliment are keen to have their own taxes etc and that on average they receive 1-2k more per persion than the UK.
Can the cost of bailing out their national bank be included in the next barnet fornula review?
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Robert,
I'm sure the treasury was rather pleased you ran with this story on the Ten O'Clock news, rather than the more fundamental revelations from the FSA.
Either you have succumbed to tabloid journalism, or you (or your editors) were "encouraged" to lead with this tittle tattle by someone from Gvt.
Neither of these is particularly reassuring.
P.S. Fortunately, Newsnight did cover this topic. I recall that it was raised that the treasury / UKFI must have known about Fred's pension for a few months. So why make capital out of it now?
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26
FSA Website now
http://www.moneymadeclear.fsa.gov.uk/tools/pension_calculator.html
Pension calculator
The pension calculator is currently out of service while we work on an updated version. We apologise for any inconvenience this may cause.
You could not make it up
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Now that's become clear that Goodwin and his cohorts couldn't run a tap much less a bank can't the govt. stop all his perks with immediate effect and charge him with gross negligence therefore nullifying his contract, after we the taxpayers more or less own this toxic bank and why should these incompetents have any of our money because at the end of the day that's exactly what is now, OUR money. Also, how much did Brown and Darling know about the scale of these loses before this bank was bailed out? It seems to me that 'Rotten Bank of Scotland' was in a mess for a long time before we the public were informed and those shareholders need to asking some questions about this as well. If Goodwin was given any payments by the RBS when it was obvious that it was sinking under a mountain of debt then that should be taken back straight away. "NO rewards for failure" the words of Brown & Darling, lets see some action and not just words here. Enough is enough!
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What a surprise, so he is getting a large pension, these folk have been hosing other peoples money over sports people and their ventures along with themselves.
Of course some of the money found its way into many types of dodgy deals what would you expect from the incompetent after all they can't be crooks the FSA have looked after that on our behalf, fair makes you grin, now they are hosing our money all over the place too, you could'nt make it up.
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The feeling now appears to be that Fred Goodwin has failed in his duty of care (and on a massive scale). If this is the case, then the goverment should now think about prosecuting him for this failure.
If he is found guilty, then (and only then) he should be stripped of all his illegal gains that he has ripped off the people of this nation (and people around the world) and thrown in jail.(along with all the others who have been acting in a similar manner). We should be carefull that this dose not become a witch hunt and, we the people become as bad as them, but with that said, justice should be done. We are all part of the problem and need to take responsibility for our actions, but there is a diffreance. We are not in a position of responsibility like Fred Goodwin and the like. They must have understood what that position holds......and as Spidermans farther said. ".....with great power comes great responsibility".......now it's time for these people to stand up and face the consequences of the responsible positions they have held and are holding.
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At the last count I was told by a reliable source that Sir Fred was down to his last eigth gardeners.
I am sure Voltaire would approve
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Fred Goodwin was unfit to be the CEO of an international banking organisation - and most of the board of RBS were either incompetent or negligent in agreeing huge compensation packages for him and other senior people in their organisation and for not recognising his limitations. As majority shareholders, we must call on the current managers of the business to challenge the pension or sue Fred and other board room cronies for recompense for all that they did to wreck their business - not as a result of "unprecedented market turbulence" as today's statement claims - but because of gross mismanagement for which we are having to pay.
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Doubt if UKFI will be anymore effective at
dealing with the ill gotten gains of the thieving
Fred the Shred than the FSA were at curbing
his nefarious activities when he was CEO of
the RBS. Both quangos were Treasury
creations. Incidentally, how large a bonus has the UKFI awarded itself. And how many more are there of these Treasury backed money machines for members of the "good old boys club". How does one qualify to become a member?
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No problem in the govt stopping /reducing these payments.
Let Jack Straw have a look at the small print in the contract,he will find a loop hole and allow the Govt to act as they keep shouting ,in the interest of the taxpayer ,or when it suits them in the Govts interest.
Would it be too much to ask Sir Fred the shred to make an honourable return of his knighthood and part of his pension.
I cannot believe that for his part in the RBS
fiasco he cannot be prosecuted or his assets frozen.In the US he would be facing a jail sentence.
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18. At 10:22pm on 25 Feb 2009, Zootmac wrote:
Yes, but once again, WHY ARE WE SUPPOSED TO BE SURPRISED, SHOCKED, OUTRAGED, BLAH, BLAH, BLAH, BY ANY OF THIS?
Just keep paying up, fellow plebs. We are utterly powerless to stop this stuff.
~~~~~~~~~~
One feels that the French might take a more proactive approach to showing their displeasure to such a piece of news.
We didn't feel "utterly powerless" when a previous goverment imposed the perfectly equitable local Community Charge.
We didn't feel "utterly powerless" when it seemed that goverment might renege on a pledge to ban fox-hunting.
But, of course, those were protests orchestrated by what are now the ruling elite, so maybe you are right Zootmac.
Additionally, any attempt to protest now would clearly be seen as a form of terrorism and the new elite have nice pristine laws ready to deal with that sort of behaviour.
YES, we REALLY ARE utterly powerless to stop this stuff.
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Sir Fred's windfall is at least an order of magnitude too much. What's more, this is just the tip of the iceberg. There will be other executives who left over the last decade and those still to leave that have pensions way beyond what they deserve.
After the FSAs admissions of complete and utter failure yesterday, how can any bonuses be paid there?
Why is the architect of this mess still in his job and what will be Gordon's pension when he is finally dragged screaming and kicking from Westminster. I think we need to know.
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This is getting to be beyond a joke. It's getting very nasty. How long before the first lynching parties form? Actions speak louder than words.
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If Fred Goodwin had initially been sacked for negligence, and he patently was negligent, there would be no contractual obligation to pay him this vast sum as pension for life. What are the lawyers doing?
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I run a small company, have worked my way up to where I am now, and saved for a (money purchase) pension for 30 years. It's just lost 25% of its value due to the banking crisis and consequent loss of market confidence.
If the government fails to act on these breathtaking rewards for incompetence every working person in the UK will suffer.............let's hope SIR Fred has a conscience, but I doubt it.
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I presume this is what the Governor of the BofE means by moral hazard - some Morals, some Hazard! Fred the Shred wins whether RBS did well or did badly. We know what has happened subsequently.
However instead of disincentivising the great(?) and the good(?), why not set up a framework in their employment contract that gives them a reduced payout for their mistakes?
It didn't take a genius, at the time,to see the ABN Amro takeover was chancing it for RBS. Barclays saw it, why not Fred?
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47
95 per cent tax rate still gives him
32500 after tax.
I would like that as an income BEFORE tax and NI
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By definition SIR Fred is an HONOURABLE man.
No doubt he will do the HONOURABLE thing and hand all the money back.
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The Simple answer is NO that Sir Fred Goodwin should receive a pension of £650,000/ year for life.
However one consilation is that each year when he files his TAX return.
We the TAX payers will get back 40% which amounts to £260,000.
Oh dear that leaves him with £390,000 for his pension.
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I think the whole country should be in despair and its about time we prioritised the important issues affecting us all and Miss Goody is NOT ONE OF THEM!
Its news like this that should make us all really consider what is happening in our society today.
This pension is an absolute scandal of huge proportions and i think its about time the clocks were moved forward and that summer of discontent so worrying the police should be brought forward imediatly.
There should indeed be mass protests at this latest news and yes we all shoud take part, not just those in thier comfort zones in work etc . But all should show thier utter disgust at the way us ordidary folk are being treated and how we are supposed to manage on the hollow words from this goverment and all other parties.
None of them have a clue! empty words from them all.
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We are continually reminded that it is necessary to offer very attractive remuneration packages, including pension rights, in order to attract the very best talent to run our major organisations.
With this in mind, there is clearly something very wrong indeed when a chief executive can preside over the largest ever corporate loss and still enjoy a pension, the size of which is larger than the pension pot itself that most individuals will ever see.
It is irrelevant that he took no severance pay following his time at RBS - that is a mere token. What would clearly be far more appropriate is for him to forego most of his pension, save sufficient for him not to become a burden on the State. In addition, and to give some force to the desire of aligning reward to the success (or absence of it) he has delivered, a mechanism should be seriously considered to separate him from the assets that he has acquired during his tenure as CEO.
This would act to focus the minds of those who may in future be tempted to pursue a similar ideology.
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How about a tax rate of 90% on pension payments in excess of £50,000 a year made by institutions in receipt of Government aid?
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So when are we, who have done the right thing by contributing to a private pension, going to get bailed out by the Govt? Have you seen your latest valuation yet?
That'll be never then. But we will have to stump up as taxpayers to ensure all stae employees will get theirs, including Gordon Brown and Sir Fred Goodwin.
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You make constant references to "...the toxic rump of the Dutch bank, ABN...." in your blogs, but what you neglect to mention is that ABN AMRO was and still is, by and large, a profitable bank. (Legal separation to the consortium members has not yet been completed.)
Far from being the "toxic rump" that you so often refer to it as, the fact is that RBS had to offer far above the market value of ABN AMRO in order to prise it away from the preferred ABN AMRO "merger" partner of Barclays Bank. The only party to blame for that is RBS itself and they are now reaping the benefits.
The desire to takeover ABN AMRO was not necessarily a mistake in itself but the price they paid to do so was wildly excessive. Former ABN AMRO shareholders who chose to accept the RBS offer rather than the significantly lesser value offer from Barclays must be very pleased with themselves now...
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1 Can't say I'm surprised at this one, but how did HMG manage to rescue the bank and not insist on renegotiating these sorts of arrangements? I thought they were supposed to be experts at spin and presentation, so surely someone must have seen this one coming for those reasons alone?
2 Surely the Goodwin pension pot should have been linked to RBS's performance under his masterly guiding hand? How come he got into a Final Salary scheme when he hadn't been there very long?
3 Mr P, please don't make us laugh by saying "he didn't take any money" as compensation as he left! How much money did he "take" in the years leading up the moment his chickens came home to roost? And, judging by today's results, when he left and for along time before there actually was no "money" to take.
4 Pensions are a big political issue for everyone now and the Government has mishandled them from the moment GB stuck his mits into the pension pots of millions of people who never have a hope of seeing £6,5000 a year, let alone £650,000. MP's pensions will come under scrutiny next - unearned and gold-plated in the eyse of the masses I'm afraid.
5 Anyway - pensioned off at 50, nice work if you can get it, given that most of the population (who have never overseen a company making a loss of £26Bn), will have to work until 70.
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“I’ve done nothing wrong” How many more times are we to hear this? Its uttered daily by the Great and the Good, who are paid vast sums of money, supposedly because that is what is required to get right calibre of person…to do a good job. The question is have they done anything right? To warrant such payments/perks.
This is happening time and again all the country. Here in Lancashire where the LA pension pot deficit is the largest in the country (£2.5bn by end March) we have lost many millions in naive Icelandic investments, the council is facing 400 redundancies and cuts in service…but those responsible seek praise whilst trying to exit on generous pensions before the enormity of the situation is fully reported.
Where was the Scrutiny and Audit? Same as FSA asleep on the job because that is what they thought their political masters wanted.
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The capital value of his pension is worked out using a HMRC formula that is standard for all of us. I doubt that the actuaries and trustees of the scheme are too happy about him taking it now but I doubt that they can do anything about it either.
The two questions that spring into my mind are;
whether he took a lump sum (that would have been a biggie); and
how long he'll remain UK resident for tax purposes. That's the real coup, at least he's gonna pay back 40% in tax (although no National Insurance).
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I am utterly disgusted by this! How is it allowed to happen? We the public seem to have no say in anything in this country anymore. He is only 50, let him be like the rest of us who lose our jobs - go to the job centre and seek 'job seekers allowance'.
There must be something to be done to stop all this rot, the government just seem to be throwing money away - and its our money. Oh I am seething!!
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Mr Darling has told us via the BBC that "You cannot justify these excesses,"
I might be missing something here (or stating the obvious), but aren't these the same excesses that were permitted during the current PMs time at the Treasury under the guise of "prudence" and "good governance"? Confused.......
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This comment was removed because the moderators found it broke the House Rules.
The French solved similar problems back in 1789 in Place Vendome. Draw some inspiration?
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What's the betting that the government will come to some 'voluntary' arrangement over this obscene reward for failure, and Freddy 'Kruger' Goodwin will 'agree' to some face saving deal for both, which will be imposed on the private assurance that once the heat is off, he will be left no worse off? (Remember the Ernest Saunders case?). That way, no legally binding reduction of his pension will be imposed. Voluntary codes of conduct are always the option the government adopts for it's own members and its friends. No matter how egregious the failure, skulduggery or fraud, (bribes for amending legislation, the second-Home Secretary, rife insider dealing etc), no meaningful sanction is ever applied. What rules exist, date back to the times when the shame of being proved to have lied to the House was considered sufficient punishment, and at least would result in a resignation. (N.B. That meager punishment was only for lying to fellow MPs, not for lying to the electorate, which is standard practice). These days we're lucky if we get a weasel worded 'apology' along the lines of "I'm sorry if people think my actions were in any way improper," and then repeated insistence that, "I've already said I'm sorry.", if the subject is raised again.
As Brown's policy of continued deregulation has proved SO successful, and given the lack of public money available, (thanks in part to futile gestures like the minuscule VAT reduction), why not
save some money by abolishing all traffic laws - especially speed limits? Police would be freed from traffic duties to invade more MPs' offices and prevent peaceful protests under the catch-all anti-terrorist legislation, while commercial drivers of taxis and lorries could be incentivised to increase efficiency by paying them large bonuses for every minute they shave off their journey times. Of course, this would inevitably result in a massive increase in road deaths, and gridlock in cities, but the government would bear no responsibility whatever for the foreseeable chaos and death caused by reckless drivers and their employers seeking to maximise profits; that's just
the free market, where profit is privatised while risk remains public and taxpayers pick up the resulting bills. After all, if we continue to impose such restrictive laws on our roads, all our best and brightest drivers will be lost to countries with less traffic
regulation, such as India and China.
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Presumably Robert the Treasury read RBS's 2007 accounts which clearly state that at the end of Dec 2007 Goodwin was entitled to a pension of £579 k per annum which had increased by over £100 that year. Why are they surprised that he is getting what apparently you have found out by amazing skill when it was written down in the company they now own's accounts. Is it not more likely that Mr darling can't read as well as his other problems?
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Fred Goodwin was awarded a Knighthood for services to banking. The only one he seems to have served well is himself!
Surely he should now be stripped of the knighthood? If you agree go and sign the petition on the Downing Street website.
It might make you feel better!
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I'm not surprised by this at all - what arrangements do the other failed bankers get?
Lest we forget, don't failed MP's get something like £13,500 per year after 10 years service? What about New Labour MPs surrendering their pension benefits for lies, cheating and failure (alleged of course)?
I think if Gordon Brown took the lead with this magnanimous gesture, the historians might just finish their character assassination of him on a high note.
Blair will hopefully wind up in prison when the extent of his actions in the 'war on terror' are revealed - still not punishment enough but it will do.
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Robert - That is a stunning piece of research, and I fully understand your shock and astonishment at unearthing this hidden shocker.
Of course, those of us who don't have access to inside information could always look at the "Directors Remuneration Report" of the 2007 annual report, where his pension is reported (as it is for all other RBS direc tors and as it is for all directors of all public companies). By extrapolating between 2006 and 2007, I predict that Sir Fred's pension at the end of 2008 would be --- £648,000!
For fun, let's take a company not in the news. Patrick Cescau, Unilever's CEO, had accumulated an annual pension of €1.03m by the end of 2007 - and extrapolating to the end of 2008, he should be on €1.06m. Anyone want ot get breathless on this one?
Oh - and does this discovery mean I get to become a sex symbol, too?
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I may be very naive here but I firmly believe in simply solutions. If we can have windfall taxes for companies that make excessive profits, can we not have windfall taxes for people who take excessive reward for poor management.
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WHO AUTHORISED SIR FRED GOODWIN’S GROTESQUE PENSION?
Who ever was responsible for this decision whether it was made by one person or collectively by a number of persons, they took it upon themselves to authorise this obscene pension, and as a private company each one of them are individually liable and culpable for their own decision. RBS is in effect bankrupt.
There is no mandate and no authority by which any politician or Government can initiate such legislation to bail out pensions or bonus contracts of a private company, the effect of which transfers its liability onto the taxpayer. At no time did the taxpayer give such authority or mandate to any individual, bank, institution or to any government. To initiate legislation to give such authority is, in principle and in law, unlawful.
Fred Goodwin’s contract was made between himself and RBS when it was a private company which in effect is bankrupt, in liquidation. Sir Fred Goodwin, may feel he is a creditor, he should therefore bring sequestration proceedings against each of the individuals who, in the first instance, decided to give him such a pension of £650,000 per year for life.
Should Sir Fred Goodwin receive a pension out of taxpayers money, the taxpayer can bring proceedings against the Government and against the legislation, Orders and decisions that they made.
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Genius Scoop by Pesto at the BBC. This story was in the Times Newspaper 3 weeks ago.
Robert, you need to stop believing that all financial news must only come through your good self.
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I heard AD on the Today programme saying that Sir Fred was being asked to consider waiving some of his rights on this (alongside moves to recovery through more formal means).
Watch out for the spin on this as AD claims the credit for getting some of "our" money back, when Sir Fred has probably been lying awake at night thinking of doing the same thing anyway, but just wondereing ho much to "waive".
Perhaps we should start a sweep to guess the reduction he takes?
By the way, AD sounded very impressive and in-control. Almost up to tap operation, whelk-stall management or party organsiation inside brewing facility levels. Biggest problem I can see is that he did not appear to know what insurance is.
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Two points:
(1)If this were China I suspect that Fred Goodwin and others like him would now be in chains facing life in prison or execution. Thankfully, this is good old Great Britain. But wouldn't it be just and proper simply to confiscate this undeserved pension pot - even if it required an act of Parliament?
(2)If RBS had been a local authority then Fred, as top man, would have been personally liable for any losses sustained. One sure way of making banks take care with our money would be to make board members personally liable for losses - up to say 80% of their renumeration package. The remaining 20% would still be far more than most of us would earn in a lifetime.
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Doesn't anyone in Government or within the financial services read the papers? Reference to size of Sir Fred's pension pot has been published for months!!
No wonder our Masters are forever in the dark about what is going on in the real world outside their cosy enclaves!!
Also, what about the Mega pension terms and pots (Barrels!) of the previous Directors of Equitable Life, Bradford & Bingley, Cheshire B Society, etc etc - OH and MP's and MINISTERS????? The common denominator - ?????!!!!!
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#206, we are trying to build a good head of outrage and deflect blame, you think facts matter?
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Just to add what will surely be the best attended blog subject,
Fred - you should be given two choices, pension or jail?
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I also find this pension payout disgusting. But we have to remember we have an ex-prime minister now earning millions, and he not only complied in this financial mess but also dragged us into wars that we needn't have got into - another three soldiers killed yesterday.
Don't let these politicos divert attention from their own misdeeds!
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Robert, I think your estimate of his pension pot is a bit low, at age 50 even with the best of pension schemes the pot would have to be £26 million.
Senior executives have a habit of giving themselves huge payrises in their last year which can put millions into their pensions, a point that often is missed by the newspapers!!
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There are just over 30 million taxpayers in the UK which means Sir Fred's pension is going to cost the equivalent of £21 for EVERY taxpayer for EVERY year until Sir Fred dies - this is clearly outrageous - the new RBS board should have the guts to refuse to pay his pension and let him take them to court if he dares - he won't win
Richard Brown, Redhill
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I think we should nip this in the bud too. It was reported bankers are now after significant wage increases to 'compensate' for their loss of massive bonuses in the future.
They will accept a 'smaller' bonus of perhaps 3 or 4 times earnings. Of course this would be 3 or 4 times the new massive earnings. These guys just see it as their right. Money is all the crave and they believe it is their just right - no matter what - in life.
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It may seem immoral but at the end of the day it was the contract whoever employed him offered when he took the job, it can’t now be changed in retrospect. I have more problems with all the professional breeders / teenage parents / the lazy and feckless who use the benefit system to get a free ride at taxpayer’s expense and cost far more.
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Stable door,,,,,,
There is no point in trying to take Fred Goodwin to the cleaners on this one. That should have been done at the time of writing his contract, an agreement signed by two parties on which the basis of all our trade and business is done.
If it is now going to be a case of every time an agremeent ends up differently to how it was envisaged at the time of signing that we want to cancel it, we may as well return to stoneage clubs and mob rule.
Also would the high and mighty media and politicians apply the same conditions to themselves in that every time they got it wrong, they would pay back the money they were paid at the time?
Lol. The bill for that would be several trillion on it's own :)
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I agree he should volunteer to reduce his pension and as a show of solidarity Gordon Brown should resign with no pension, for acts of Goodwinesque ineptitude in selling the gold reserves of the UK at rock bottom prices. How much has he cost the country in this one act alone?
Why is there no acocuntability for MPs but they are holloring for sanctions against business leaders they have openly courted and cowtowed to in recent times?
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The government are asking him to give up some of his pension?
Asking him? How about telling him.
Some of his pension? How about 95% of it.
Don't give me the contract obligation nonsense, that went right out the window when the government took majority shareholding of RBS.
The man failed, and he was the CEO. As much as he would like to pass the buck around his board at the time, ultimately it stopped with him.
Weak governence from one of the worst Chancellors/PMs to date.
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Please may we have Newgate Gaol back? There are plenty of candidates to fill it, starting with Fred Goodwin for what smells like a partly fraudulent bankruptcy of a big bank.
As many posts have said, any financial calculator can tell you that a pension pot of 16 million pounds can never provide an annuity of 650 grand for life. Where is the shortfall coming from? Whoever actually makes the cash over to Goodwin every month? He/she simply doesn't get it!
From start to finish, whenever that may be, the standards of scrutiny of the UK banking system have been laughable.
Whoever approved such an arrangement in the first place, no matter how well RBS might have done but didn't, was foolish. Whoever was responsible for approving the acquisition of RBS for the taxpayer wasn't paying due attention to such politically sensitive issues.
Newgate gaol for the lot of them! I wish, and I'd enjoy watching them go there!
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admirable though this blogg is and some very interesting comments from some very knowledgeable people with far more expertise than I about finance etc
What are we all going to do about it?
sit in our comfort zones moaning and penning mere words? or
are we all as a nation going to stand up and say enough is enough or do we only have the stomach for a fight when that fight is far from our shores and thus makes us all feel proud to be British pround that we poke our noses in another countries affairs and cause more problems than we actually solve.
I suggest we all have a good long hard look at our priorities!
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I'll never believe a politician again when they talk about a fairer, more equal society.
Not that I ever really did, but I once hoped..
What they seem to mean is an equal division for people at the bottom, of the crumbs left after the bankers and politicians (with their £116,000 a year 'second home allowance') have had their fill.
Why should people struggle to pay taxes when they can see them being used by the 'ruling classes' to gamble with and to pay themselves huge amounts of money?
RBS say they are now going to cut their operating costs by 2bn a year, resulting is the loss of thousands of jobs.
Shouldn't 'Sir' Fred have lost his? Shouldn't he have been sacked for such gross incompetence that caused the bank to lose 24bn last year? Especially given that he sacked his risk assessment manager who warned him of the dangers.
In a 'fair society' he'd have to return all the money he's taken and join the other 'job seekers' at the dole office.
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#183
"Just a thougt, we all know how the scotish parliment are keen to have their own taxes etc and that on average they receive 1-2k more per persion than the UK."
How about making Scotland solely responsible for their 'National banks' and by implication their debt?
Had the SNP got their wish(es) they would now be in the same state as Iceland, the SNP has gone awfully quite recently on the subject of national banks and/or independence...
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The solution is simple.
1) Total transparency with director remuneration and pensions information immediately put in the public domain; no skeletons in cupboards.
2) All director remuneration packages must be sanctioned by shareholders and/or a separate independent body.
3) Directors pensions only to be made in the form of share options; no pension pots or final salary schemes.
4) Share options only to be cashed at specific ages and only after a reasonable number of years after they have left the company, if they leave before normal retiring age.
Under this system if the company fails the share price falls and Goodwin and co would get what they deserve -very little -and it would not being paid now!
Finally, what about failed politicians. Can anyone devise a system that would downgrade their pension entitlements?
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the govt problem with the banks is that they are the 'unofficail' collector of taxes from everyone who is on paye (most of us who pay).. its not as though they can send horses and carts round guarded by the knights templar is it?? well not round here anyway..
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I think the GBP16m pension pot figure is wrong - this assumes he retires at 65. It would cost around GBP28 million to buy an index linked annuity / pension of GBP650K pa starting at age 50.
Difficult to be sure as most of the Internet annuity calculators don't handle such large figures!
Presumably the trustees of the RBS pension fund when agreeing to Fred's pension arrangements made sure it was properly funded .
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#206
[ re ABN AMRO ]
I think the point Robert is making (and it's how I read his comments) is that ANB became a "toxic rump" upon RBS's resources, not that ABN was (or is) a toxic rump before or after the take over.
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#211
We the public seem to have no say in anything in this country anymore.
Have we ever, the only time we have any direct say is once every four or five years, the closest the ordinary person had for 'having a say' was with the Trade Union movement but even that got abused (by all sides) to the point of self-destruction...
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Robert, are you aware if the civil servants bemoaning Sir Fred's pension are going to alter the little bit of legislation converning PM's benefits?
To the best of my knowledge our PM is granted full pension rights after only one day in office?
Perhaps they want to look at how he will be judged for running our economy [in his previous life as treasurer] and suggesting that his future benefits will be clawed back?
All this is very much 'horse has already bolted' stuff.
Executive pay and benefits will not be the same as prior to 2007 for a long time to come. He is benefitting from a contract that the shareholders will have agreed to in order to secure his services.
He may/ may not have discharged his duties well but he has contractual entitlement and that would seem to be the end of the matter.
Can we all not just move on and discuss how we can work our way out of the mess in which we find oursleves?
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I would refer you to the Facebook Cause "Punish the Bankers" which proposes a solution to the big fish who have wrecked the banks and the world economy.
In summary:-
Confiscation of passport
Seizure of all assets
Made to live on National Minimum wage for 5 years
Might make future banking heads slightly more cautious
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Mr Nick Leeson seems to have been a bit of a spendthrift by comparison with this man. Leeson of course ended up in prison and bankrupt. Leesons bosses knew nothing of the debt that he had piled up to sink the Bank and the parallels with RBS show that we have learnt nothing in the interim. What makes it all the more ridiculous is that Goodwin is being criticised by MP's and Ministers who have their own snouts firmly in the trough of expenses. Is there anybody in public life who is clean ?
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THE PEOPLE OF BRITAIN ARE SICK OF BANKERS AND POLITICIANS HANDLING OF THE BANKING CRISIS. THERE MUST BE A PUBLIC INQUIRY AND NO WHITE WASH.
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#224
"Genius Scoop by Pesto at the BBC. This story was in the Times Newspaper 3 weeks ago. "
Care to point out were either Mr Peston or his line editors have used the word "Scoop" or any such branding, in fact Mr Peston implied that this blog was in response to another story, but for all those who don't read the Murdoch press this is indeed 'news' and worthy of a blog.
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What is the problem with the pension entitlement of one guy?
Yeah it´s not very nice because he´s incompetent and very rich. So what´s new?
What is the proposal that all people who can be demonstrated as incompetent have their pensions sequestrated? Or is it only some people - like the people that the media choose to profile?
He has a lawful entitlement to this money. If people didn´t like it, there was plenty of opportunity to complain at the time the pension pot was being amassed.
His pension is not the problem - it´s a symptom of a wider malaise. There are people you´ve never heard of walking around with 10 times or 100 times more money than he has.
Why pick on him? What´s so special about him? In the US 500 individuals have aggregate wealth of $5.3 trillion. How do you think they came to possess so much? and why aren´t you complaining about them?
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He has been wth the RBS since 1998! His pension pot has been built up over this period. It is pot, it is not like civil service pension where pensions are paid for by todays tax payers. His pot is safe! If we make it precendence that one problem today over shadows the prevous 10 years of work, then all of use who are building up pension pots should think again and hide our money under the matress. If he had continued to build up his pot he would have been getting even more of pension. His income form his pension will be subject to tax, if he does not move it offshore, as I would advise, with these vultures circling. All this fuss is down to jealosy.
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If he gets £650,000 per year then its very likely he will have claimed a tax free lump sum in the first month he started receiving his pension. Normally this is 3 times annual pension but Gordons pension reforms allowed some scope to increase this to 25% of pension pot. TAX FREE
...longer term as the country begins to cut public spending its quite possible that future lump sums could be taxable; however Fred will have done OK as he will have already got his. TAX FREE
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OK original post apparently breaks rules.... changes highlighted.
#207, Goodwin has been head of RBS for nearly 10 years. Whats your definition of "not very long" and had he retired 18 months ago he would have been a "genius" but overstayed his welcome.
1 - The UK government is desparate for the lending bubble to reinflate. The Brown era is being shown up for what it is - a **brilliant success***. It isn't like Brown is going to have to pay for any of the ***brilliant world saving initiatives*** he is now carrying out, his pension is final salary and inflation linked.
2 - I am sure it is linked or was when it was set a few years back. Lets keep it in perspective, 650,000 is just over half what a MEP ***legitimately claims*** on his expenses and is 6 Jacqui Smith ***wholely legitimate and reasonable claims***. You want to claim Ms Smith or random MEP made as much of a tax contribution and others to the UK?
3 - Again most of this loss is an accounting one and if you look at the trading losses, they are less than what it made last year. So you'd have to go back about 10 months... Not really that far into his tenure but hey who cares about facts when you can build a real head of outrage.
4 - 100% agreement with you. Pensions where always a ponzi scheme, a tax abetted transfer of wealth from individuals to fund managers.
5 - You should go work in the public sector then.
All this faux outrage to cover up for the man who really **saved*** the UK economy... but unlike the bankers can't even admit it is his fault let alone say sorry, even an insincere one. ***Not that he needs to because this problem started in the US, he say it coming in 1998, he wants rigorous regulation and always did, interest rates were 15% under the Tories***[did i miss any out?]
Hopefully this enhanced post is acceptable to the BBC.
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I have totally had enough of this!
Can someone please organise the revolution and post on here the relevant dates, times and places so I can attend.
Much obliged
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#223 FORENSIC-DEBATE
Good point and to answer your question, the shareholders.
It may sound simple, however, many of us are obviously shareholders but don't realise it - although those who manage our pensions do!
They're also on big salaries, big bonuses and big pensions so don't generally object on our behalf - it's a disgrace.
THOSE OF US WITH PENSIONS HAVE MADE LOSSES TWICE.... once as pension/shareholders thanks to our pension fund managers and once as taxpayers.
Henderson, one such pension fund manager has 'moved' to Dublin so it can pay less tax in the UK.
What was this government doing???????
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Whatever it takes - even an act of parliament this mans pension AND all his assets must be seized and his titles revoked. Unfortunate as it may be to stick him and his family into council accommodation but until a shocking example is set to all the other masters of greed then they are all laughing at the destruction they have wrought not only to this generation but others to come. Surely a zero tolerance to bonuses and pensions that exceed the lowest paid worker in any organisation must be put in place - IT MAKES ME SO ANGRY!!!
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One really has to have some sympathy for the hapless SIR Fred Goodwin. As he is a mere 50-year old, he will have to wait another 15 years before he can receive his Winter Fuel Allowance and Xmas Bonus.
But then, one should not feel too much concern for him because he is bound to be able to make ends meet when he is eventually appointed as a consultant to the Treasury, or the FSA, or both, to advise on how to run a viable, trustworthy, financial services sector. After all, he is a highly experience EXPERT and that is why he has been able to justify his remarkable remunerations packages, along with his other cronies.
Also, there is of course the proposal to create that 'Super FSA'. As a highly rated and important banking figure, SIR Fred must surely be in the front line for an appointment with such an august body, along with all the other poachers turned gamekeepers.
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#232, you must be confusing him with post office workers. People with productive jobs don't have final salary pensions only the tax funded sector has that.
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Pass a law.
Seriously, pass the "Fred Goodwin's Pension Act" and seize it from him that way...
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I'm somewhat disturbed that journalists and politicians have yet to glean any of the basic forensic skills when it comes to remuneration. All you have to do with a publicly quoted company is go to the Report and Accounts and review the "Directors Remuneration" section.
Fred's likely pension position should come as no big surprise. For Mr Darling to claim that he was only aware of it "a few days ago" suggests he or his advisers have been a bit remiss.
No wonder the bankers are running rings around the politicians (and journalists). This is truly amateur hour in Dixey.
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So the govt has 'asked ' Sir Fred to give up his pension - bearing in mind that would not have been built up as the result of just the last 12 months service. OK, using the logic that we can claim back someone's pension - come on then Gordon Brown - are you going to give up your pension everytime you 'make a mistake'? MP's have a gilt edged pension scheme but I don't see Tony blair handing his back for the 'error of Iraq' or Gordon Brown for his 'error of mishandling regulation on banks'! The MP's are shouting hard because they want to hide the fact the regulatory system they designed has failed. And all those people out there saying Sir Fred should give back his pension - next time you make the wrong decision at work - write out a cheque for part of your pension benefits and hand them back...oh and as far as the unions are concerned calling for this to be returned - imagine if he was the member of a union - do you think they would argue the same way? Of course not.
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...of course; Sir Fred is not the first Scotsman to have bankrupted not just a bank, but an entire country...
http://people.few.eur.nl/smant/m-economics/johnlaw.htm
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#229
"#206, we are trying to build a good head of outrage and deflect blame, you think facts matter?"
There is more hot air within these blogs than found within a hot air balloon in full flight!
Without facts all that is left are rants...
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Being one of the businesses that have had the overdraft pulled by the RBS group how can he look in the mirror every morning and be proud of what he has done.
Creating a problem that he is running from is a cowards way out where the rest of his customers are fighting to survive with no help from his legacy.
I am sure his golf club is very proud to have him as a remember !
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#243 jazzmantoo
"4) Share options only to be cashed at specific ages and only after a reasonable number of years after they have left the company, if they leave before normal retiring age."
Interesting idea but a couple of problems, how long a period after leaving the company would a retired director's pension fund be 'free' of what you suggest and what about directors who resign because they disagree with the policies being put in place - how can either of those two groups be held responsible for actions taken after they have left the board?
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If it is true that the government only learned this week that Sir Fred Goodwin had been awarded this huge pension what have the National Audit Office been up to? As a Chartered Accountant and auditor I am obliged to inspect the company Board Minutes as a part of my audit. Surely if this pension payout was approved by the Board, as has been stated, it would have been recorded in the Board minutes and therefore been available to the NAO to report back to the government? So somebody has not been doing their job - or someone is not telling the truth. In my opinion Sir Fred should do the right thing and knock a zero off of his pension - after all £65,000 is reward enough - and even then it would be too much to pay for failure?
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#251
"Leesons bosses knew nothing of the debt that he had piled up to sink the Bank"
So were were told, the opinion at the time (from people who worked in the City) was that either they did know or were turning a blind eye.
But even if they didn't know, why didn't they know, isn't that even more damming that either of the above two?....
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177. At 08:12am on 26 Feb 2009, wombateye wrote:
Not much being mentioned about the US Treasury official who stated yesterday that the reasion that the US reduced bank regulation over the last ten years was because of the total lack of regulation in the CITY of London since the FSA came into beaing. And NewYork were very worred that all the major banks would leave and becode registered in the london stock market.
Is this a smoking gun pointing at Grodan I wonder
ARE YOU SUGGESTING THAT GORDON BROWN SHOULD BE EXTRADITED TO THE US ON TERRORISM CHARGES?
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Goodwin. Who will rid us of this pest? We need some doughty knights who, unlike those in Henry II's time, can cover their tracks ... Taxpayers would benefit to the tune of millions and some slight sense of justice would be restored to the battered British population
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Theres a whiff of collusion here,the terms of Fred the Shred's retirement package were clearly known by Darling Brown and Bank Board last Autumn , why the pretence of shock horror ? The shred should be prosecuted , he is a national disgrace. Who was the guy who recommended his Knighthood anyway ? Fine judgement again Gordon !
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Fascinating to hear Stephen Hester admit live on radio that the government were involved in the negotiations!
Alastair Darling can rant and rave all he wants, but there is no way he can sue for this one. Firstly the government were allegedly involved, and secondly, you cannot leglislate against things that have happened in the past.
There'll be a lot of noise about it, and the government will rattle their sabres noisily before putting up another target and hoping it all goes away without them having to do anything.
If a legal precedent were set that enabled the government to claw back pensions from company directors that the government itself had helped organise, then there are going to be an awful lot of red faces and complications.
Don't think for a moment though that I am taking Goodwin's side on this. I am absolutely shocked by what he is going to receive and am totally against it, but also must recognise the futility of trying to institue a legal precedent based on perfectly legal financial dealings in previous years.
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Presumably a board of executive and non executive directors were jointly responsible for voting for Sir Fred Goodwin's pension arrangements and presumably they also agreed amongst themselves their own greedy pay and conditions. Why didn't the government (Gordon Brown in particular) and the FSA and all the other incompetents do something about it. There's no point in Brown appearing all hurt and huffing and puffing about his old mate Sir Fred and his pension. Brown should not have allowed these thieves to have these outragous pay, bonus and pensions in the first place.
Let's have a government act to take back the pension funds of Sir Fred and the others and also take back the knighthoods. Let us also have an act that will impose legal limits on salaries and bonuses and if these are broken then prison and repossession of assets would be called for.
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I'm sure noone would have complained if Sir Fred had retired to this pension when RBS was one of the world's strongest banks. There is no way anyone can pinpoint the blame of the credit crunch on one man, no matter how powerful he is. £650,000 a year is a fraction of a fraction of 1% of the UK economy, an absolutely minute sum in the bigger picture. It's yet another example of a man who's been working so hard for so much of his life being victimised when things went wrong. It's yet another example of a media storm over a personal financial agreement. The media should be ashamed of themselves. I feel very sorry for Sir Fred this afternoon - he's being punished for being brave enough to make big decisions and whose hard work in the banking sector has earned him a nighthood. Why on earth shouldn't he be entitled to a pension that he's been awarded by his employers for his dedication and hard work?
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His pension payout is all part of the agreed contract to employ him in the first instance. Where were the complaints when he was making a profit for the bank?
Perhaps what we need is a set maximum on any contract and relate the eventual payout to the profit/loss made. This could also be related to MP's pensions (this lot gave themselves a 50% increase as soon as they gained power in the house)
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Fred The Shred where is he? Just don’t pay him his pension. That'll flush him out!
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Re:
250. At 11:19am on 26 Feb 2009, bryanjames
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Unlike Sir Fred's pension, then?
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IVE NO DOUBT MY LAST POST WILL BE REMOVED BUT AT LEAST I WAS TRUE IN MY BELIEF
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#261
Why not bring back the village stock, the ducking stool, or even the lynch-mob?...
All this talk of retribution is missing the point, punishment doesn't put the problem right, what we need is to find out whys and wherefores so that the same problems can not happen again - all this talk of retribution does is to make those who know but might have been involved (implicitly or otherwise) keep their cards very close to their chests.
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In the regular protests that have occured outside parliament in Reykjavik, somebody has been there every Saturday carrying a sign with a series of Icelandic expletives written on it, the first word is 'helvitis' (the other two words sound too much like the english words to escape moderation).
To me it somehow neatly summaries that the sheer number of events and the utter rage felt at the great and good can only be expressed by something so simple and crude, as there are just too many other things from outright fraud to complex financial time bombs too complex for even their creators to understand, that one can only express a undirected and generalised sense of rage at events, as to pick on one event is to miss the whole picture.
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Maybe you should add an update now Robert now that a little perspective has been added
http://news.bbc.co.uk/1/hi/uk_politics/7912651.stm
Who found out and made him tell?
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Get the bonuses paid back!Get the bonuses paid back!Get the bonuses paid back!Get the bonuses paid back!Get the bonuses paid back!Get the bonuses paid back!Get the bonuses paid back!Get the bonuses paid back!Get the bonuses paid back!Get the bonuses paid back!
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What has to worry Greedy Goodwin and WILL be worrying Gordon Brown is that the reactions on this site are biased (I always imagine) to the moderate, coping, quiet, majority side...
I don't see what th problem is...Guantanamo Bay is being emptied...so we move them in (and as well know there will be many, many more rolling in the swill in the trough behind Goodwin.
We came up with a reason for invading Iraq and conjure up something to charge them with.
Then as they'd be criminals we sequester their assets...ater that we can magnamously let them out with a pension for life of the median average of the ordinary people of this country.
They'll have the memory of the private jets and expense account living while they pretending to know what they were doing...... but they'll be living just like ordinary people from now on.
When they need a Law this Govt can always find one , so they can find one here and start the process.
There isn't much I can do...but I have stripped him of his knighthood..... that is the least of it all but boym it does really annoy me every time I hear it
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Wow!
Is that the bluntest ever public statement from the treasury?
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Lets not get bogged down with emotion and morals, you only have to look at our Home Secretary’s expenses to see that will get us no-where. Let’s chase down the culprits.....who signed off on these pension payments?
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Instead of letting Sir Fred leave with his pension could RBS have found him a job of handwriting letters of apology to each and every taxpayer?
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#259 largebenny_fitfraud. You seem to misunderstand the nature of revolutions - they are not ogranised events!!
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Hahaha... Is it just by chance that today, for the first time in years, our Mobile Bank (yes, a VAN, from RBS Ullapool) apparently "broke down" and cannot come to us today, or are they desperately saving fuel costs to help find the cash needed for Freddie the Fox's outrageous pension, and not have to dispense cash to the pensioners?
[Err, well, yes, we live in a remote area, at least 45 mins drive each way from ANY bank (that's RBS in Ullapool) or 80 mins drive to Inverness)... ]
A serious post, but with laughable intent...
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Hey guys how about passing a law removing pension entitlements for everyone who the media decides are not worthy.
Why should anyone convicted of a criminal activity ever be entitled to a pension under any circumstances?
What about Doctors whose surgical procedures go wrong - surely their entitlement to any form of pension should be removed.
How about people that are deemed culpable in accidents - If you take their pension away it may make them think more carefully in future.
How about teachers whose pupils fail to pass all their exams - could be a sign of incompetence. Have it away with their pensions I say.
What about lawyers whose clients get convicted - maybe some of them were innocent. Can´t be too careful, whip their pensions away.
What about rubbish bin inspectors - not much value to anyone really, have it away with their pensions. Alternatively you could just remove pension entitlement from litter louts, or anyone who doesn´t sort their rusbbish correctly.
What about fat people, drug users or alcoholics. They will only spend their pensions on burgers, drugs and beer, and then burden down the NHS. Just take their pensions I say.
How about you? Why shouldn´t I take your pension from you? Are you the most deserving person in the world? Do you deserve your pension more than someone (anyone) else deserves your pension?
...and thus is populace led into ever increasing barbarity and poverty. Ah the joys of democracy.
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Surely, the answer here is an escalating windfall tax on pensions above average earnings received from a final salary scheme.
Final pension schemes carrying risk for employees is a benefit in kind and is therefore taxable.
There is then no need to look for the loopholes in pension schemes; and it moves the pension situation to a more equitable footing for pensioners who could not belong to a final salary scheme and of necessity carried their own investment risk.
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Wow!
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My grouch is quite tiny in comparison with those who lost either pension or life savings. However, as a Scot, and an expat, I am now the butt of many jokes and innuendoes. The image of Scotland and the canny Scot has never been lower.
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Surely if the taxpayer had no stepped in RBS would have failed and therefore the Pension Scheme would have been discontinued - the liquidation of the assets in the market fall created by the failure of RBS would have not been enough to meet its liabilities and therefore Sir Fred ( who at this time would not be in reciept of a pension ) would not be being paid such a silly income for the spectacular results he acheived.
Therefore it is only the taxpayers money that has enabled him to draw his current pension - to which he is morally ( if legally) entitled.
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The only thought that comes to my mind is that many of us have to work a good part of 30 years to earn the £650k a year that Sir Fred Goodwin is getting as a pension; add to that that most of us will not see a 50% of final salary pension at the end of it.
Of course, he will be in the higher tax band so will only see about £25k a month in his bank statement.
Possibly even more galling is that thought that he has retired at an age when (again) most of us still have 15 years of work left ahead of us - some of us more, since I fully expect to probably have to work until I'm nearer 70 to get my pension.
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Back to the usual. Lots of ranting, little reasoned opinion, selective journalistic slant. If only Peston, and his avid (or is it rabid?) fans, would remain speechless, lost for words, or whatever, forever.
For those surprised by the size of the pension pot - you clearly have little idea of how these things work and therefore should just do us all a favour and keep quiet. It's no surprise really. 30m earned in 10 years, 16m pension pot, 650k per year pension. Easy maths really (oh sorry - only if you can read more than the Sun / Murdoch rags I should say)
23 puts it rightly - the pot is a drop in the ocean of what RBSG has paid to the government over the last 10 years. The treasury has made tens of billions from RBS and the orther big banks in recent times. Shame we have to prop them up now, but better that and we learn the lessons, turn them round (so they start paying big taxes again) than risk economic anarchy.
Bored now. Lets move on. Lets fix, re-regulate, whatever and try and get through this instead of blaming everyone except ourselves (and we're all in some way guilty as investors).
Oh and while we're talking pensions. At least Goodwins is funded. No-one want to talk about the unfunded civil service pension schemes? Now that's a real disgrace.
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#286
"http://news.bbc.co.uk/1/hi/uk_politics/7912651.stm "
That is an extraordinary admission - Osborne is quite correct, the excuse is "pathetic" - makes you wonder what else they don't know or haven't realised...
In fact it leave me even more speechless that the worth of Fred pension, lets face it, in normal circumstances the sum would have been the norm for someone retiring from such a senior position.
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It would take me over 30 years to earn what this man is going to get annually!
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actually it is £693,000 and he can take a tax free lump sum of 25% Goodwin is entitled to the pension because he was asked to take early retirement, triggering a clause in the company's employment contract, rather than "fired for cause". if anyone should have been fired for cause surely it was Sir fred.....
Sir Philip Hampton, RBS's new chairman, clarified today that Sir Fred is drawing £693,000 rather than the £650,000 reported.
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#16 Well if you feel so bad all you need to do is take a going nowhere bank and generate billions in profit year in year out. Simple really. (#146 LaughingBlackSheep).
Sounds excellent LBS my friend - I can do that - especially if its THAT simple - Sign me up.
Just one thing...those billions in profit...
...at whose expense?
Which substantial group of people or individuals should we shaft to make these billions?
Shareholders?
Taxpayers?
Pensioners maybe?
You see...Millions of people in the UK are already very familiar with those few who TOOK A NOWHERE BANK AND MADE BILLIONS IN PROFIT...!
And many hundreds of thousands of them are now looking for work...
And (sadly) so endeth the lesson.
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#295
Hey guys how about passing a law removing pension entitlements for everyone who the media decides are not worthy.
Why should anyone convicted of a criminal activity ever be entitled to a pension under any circumstances?
What about Doctors whose surgical procedures go wrong - surely their entitlement to any form of pension should be removed.
How about people that are deemed culpable in accidents - If you take their pension away it may make them think more carefully in future.
How about teachers whose pupils fail to pass all their exams - could be a sign of incompetence. Have it away with their pensions I say.
What about lawyers whose clients get convicted - maybe some of them were innocent. Can?t be too careful, whip their pensions away.
What about rubbish bin inspectors - not much value to anyone really, have it away with their pensions. Alternatively you could just remove pension entitlement from litter louts, or anyone who doesn?t sort their rusbbish correctly.
What about fat people, drug users or alcoholics. They will only spend their pensions on burgers, drugs and beer, and then burden down the NHS. Just take their pensions I say.
How about you? Why shouldn?t I take your pension from you? Are you the most deserving person in the world? Do you deserve your pension more than someone (anyone) else deserves your pension?
...and thus is populace led into ever increasing barbarity and poverty. Ah the joys of democracy.
I wish I could afford a pension to be included in your rant...!
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How is drawing £650k a year from a derailed gravy train any different to claiming £20k a year in benefits you're not entitled to?
How is writing yourself contract with a guaranteed income of £650k a year for life any different to putting your hand into your employer's accounts to gamble or have a 'nice' holiday?
The only difference that I can see is the latter, in both cases, will end up with their accounts frozen, assets seized and be the subject of a highly publicised court case from with HMRC and the Benefits Agency will emerge joyously with a conviction, and some of the money back.
As for the former? They endure toothless moral outrage, the upturned noses of disgust and talk of obscenity. In short, nothing too unpleasant.
The point I'm making is that the tools are already there for government departments and the House to deal with executive bonuses and payoffs proportionately. Members of the crisis select committee sitting back and twiddling their thumbs, while voicing their 'unhappiness', smacks of Victorian social deference.
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#296
Rules around pension contributions and pot sizes changed in April 2006
Until then there was a pensions cap of about 100,000 for approved schemes. Approved schemes provide for tax deductible contributions up to the cap.
Now you can contribute up to 220,000 per annum or thereabouts but there is now a cap on the size of your total pensions pot that can be tax efficient. I think its about 1,500,000. Beyond that you'd be paying 55% tax when you draw down your pension. (I know its all a distant dream)
This pension arrangement appears to be funded but unapproved so I have no idea how it works
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Completely immoral of course - and from a knight of the realm !
However I am surprised that people are surpised by the pension arrangements. This is a direct result of the system of these board directors sitting on each other`s remuneration committees - scratching each other`s backs
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Any chance of this guy losing his knighthood? It bothers me that evertime he`s mentioned on the news they have to say "Sir"
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I don't get angry. I think it must have been 1977 since the last time. To think that the most INCOMPETENT human being (no carbon form) in British Corporate history is being rewarded in this manner only serves to confirm the buddy buddy corruption that exists and permeats throught our society.
I would urge the Government to do anything for this NOT to go through. Secretly, I think this man's (this carbon form)
life is in danger.
We will find out in due course if money is more important than life.
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For the first time in my life so far I really feel ready to get out on the streets and riot. I'm a lifelong Labour voter and supporter, and I never thought that I would feel this incensed while any party was in power, least of all this one.
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#307 Ragjunkie69. It´s not really a rant - it´s designed to get you and your ilk to think on what basis you want to take this mans pension away from him.
I agree it is not fair that people get rewarded to such excess - but either they have a legal entitlement to the money or they do not.
The law is not fair - sometimes innocent people are locked up, and sometimes for very long periods. does that justify the wholesale vilification of the legal profession? Should Judges have their pensions taken from them?
If you want to take his pension away why stop there? Why not take his house, his wife, his life?
Don´t you see the crass stupidity of allowing the BBC to stir up this manufactured rage in order to divert attention away from the real issus.
There are 500 individuals in the US with aggregate wealth of $5.3 trillion. How do you suppose they got that rich? Can you name these people? Are you outraged by that level of obscene wealth? What are you going to do about it? Why pick on one individual whose wealth has been leaked into the public domain by a nefarious government intent on stirring up rabble type emotions?
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It would be interesting to know and maybe someone like Robert Peston could find out whether Sir? Fred Goodwin had share options in RBS, and if he had; has he cashed them in; and if so when?
Regarding Gordon Prentice's question of Gordon Brown as to stripping Goodwin of his knighthood, Brown's response was:
"The authority to grant and cancel honours is contained in the statutes of the various orders of chivalry."
I'm sure the majority of people including those at RBS, who may lose their jobs because of his incompetence would like to see Goodwin stripped of his 'Services to Banking" knighthood as I consider Sir? Fred Goodwin has not acted in a chivalrous manner and hence should not be entitled to hold such a rank.
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This mans Sir Fred Goodwins pension should not be paid under any circumstances.
The british public should stand up to this outrageous amount of money being paid.
The credit crunch has affected us all and this notion that he can receive £12,000 a week for the rest of his life is immoral.
i doubt this would be allowed to happen in Europe.
I am self employed is my tax going to pay this man. ? if it is i will refuse to pay , we must stand up and not let this happen.
i feel very fustrated and would like to protest to the government about this issue. am i alone or are there like minded people who feel this is all wrong.
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Why is this man not in JAIL.
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It's time we sharpened the guillotine for Sir Fred and others like him.
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I haven't seen the new film Slimefrog Zillionaire yet but I think it's the tale of a young lad who follows a simple Paisley pattern - apparently he does not have much intelligence, nothing in the way of qualifications, yet armed only with good looks and a baseball bat he takes on everything that comes at him. Eventually he gets the chance to sit in a high chair in front of Chris Tarantula for the game of his dreams, and he still has all his lives intact - he has 650-650, Ask the Treasury Select Committee and Phone an RBS Acquaintance.
In the studio there is an expectant hush as Tarantula tells the viewers, "In the chair tonight we have Fred, he's doing rather well, he is one question away from the biggest pot of all, that would be a really Good Win if he got this question right.
Here we go," - he looks to the side - "quiet in the Committee please." The cameras pan round the Committee, Fred's partner - Sir Tom - is about to buzz A, even before the question is asked!!
Tarantula reads the question slowly and deliberately, "What reward should you get for causing the biggest bank losses ever? .....Is it A - an annual pension of £650K, B - shot at dawn, C - solitary confinement, or D - a seat in the House of Lords?"
There are gasps from the Committee at this difficult question. Tarantula says, "There are no trick questions.... but it's your choice." Fred decides to Phone an RBS Acquaintance but there's nobody home and for 30 seconds only gets a recorded message : "Blazing Apostles, can I help you?....... Blazing Apostles, can I help you?........ "
"Can I Ask the Committee, Chris?" The Treasury Select boys sit up, Tarantula goes through the familiar routine, but ends up querying their intelligence as there is so little to choose between their answers. Fred looks glum. "Can I take the 650-650, Chris?" "OK. Computer, take away two of the wrong answers, please."
Whoosh.......options C and D disappear from the screen. A bright smile fills Fred's face. "I thought I'd made a mistake there, Chris, it's A, an annual pension of £650K ..... final answer."
The tension rises, as armed revolution is heard on distant streets amid flame-red skies..........Tarantula smiles at the camera and says, "We'll take a break....."
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The failure of a rich banker to accept that he should not profit from failure is symptomatic of the mindset of a selfish group of society that are essentially unethical. Money comes first.
Unfortunately though we have a sovereign parliament that could legislate to claw back such moneys and cap all excessive payments, wages, pensions or bonuses.There is no political will. Ultimately when many politicians leave parliament they want a plum directors job or something similar which will give them just those excessive perks , for very little real work and obviously as we have seen no real accountability or, responsibility.
Classical economics fails to account for personal greed and collective sleeze.
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Is the BBC about impartial journalism and freedom of speech???.
Why are so many comments rejected/ removed?(This comment was removed because the moderators found it broke the House Rules. )
Wouldn't it be a lot easier / better just to have a very obvious catch all that the following is not is not necessarily the view of RP or the BBC.....
I had a comment removed .....it still remains a mystery to me quite why ....it was not personal or rude in anyway....it merely QUESTIONED THE COMPETENCE OF ALL THE PAST DIRECTORS AND SENIOR MANAGEMENT (OVER THE LAST 5 YEARS) OF RBS and QUESTIONED WHY IT WOULD NOT OR SHOULD NOT BE POSSIBLE FOR THEM TO PAY BACK BONUSES FROM THE LAST FIVE YEARS.
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Fred Goodwin may well argue that he has the contractual right to his pension. But this is the Government we are talking about here - no ordinary shareholder.....can't they bring in and pass a special law - The Removal of Fred Goodwin's Pension Act of 2009 ???
IF NOT, WHY NOT ??
It would be one of the few popular things this Government has done of recent times if they were to do it.....i.e. it's a sure vote winner.
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# 325 A very good point.
Just a little surprised the BBC sensors let you make it.
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interesting reading....I just checked Robert Preston's book WHO RUNS BRITAIN?...and who's to blame for the economic mess we're in. Interesting indeed. The paperback edition published in September 2008 has not one mention of Sir Fred Goodwin.
Indeed it is a book with an odd title and having read it I have to say it is a very poor book with little to do with the actual title - most of it is what business journalist do it at least did do very well - hero worship various business leaders. About half the book seems to be taken up with Sir Philip Green and M & S.
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With regards to the ex chief of RBS's pension, it will cost even more of tax payer's money to take him through the courts.
Let him keep his pension, but tax him at 98% every year.
Don
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Does Fred the Shred = Public Enemy Number One?
I'm not sure how someone with morals and principles could live with this, oh silly me he's a banker.
Lousy greedy bankers, lousy incompetent politicians, there is a trend developing, what is next I wonder?
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Lord Myners and Gordon Brown knew about this arrangement at the time of his departure. Peter Hain could barely raise a defence for The Government on Question Time last night. For Brown to know about the one off payment but not the pension arrangements defies belief and is frankly unbelievable. Lord Adair himself says that The Government okayed his payments. It beggars the question 'Was the PM fibbing about his part in all of this?' If he wasn't then he faces the charge of incompetence which judging by his past record is perfectly feasible.
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332:
Sorry I meant Fred The Shred not Lord Adair who is of course the head of The FSA and who also laid the blame firmly at GB's door.
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Robert,
Why have you boys on the Press not stated the obvious on this : The Directors of this Bank, which is a Limited Company, were knowingly Trading this Bank while Insolvent ,an Offence,thats it all Contracts between Company and Staff are void.
Nick Leeson went to Prison for a much lighter Crime than this Fraud ,where are the Regulators once again.
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I suppose one thing the "government" could (and should) do is strip Fred of his knighthood.
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Why does no one ask about the income tax that this man pays in a year?
I have an occupational pension that is taxed at source and what I then receive is added to my OAP and other pensions/earnings I receive and taxed again at 40%.
I do wonder if the so called "fat cats" are registered off shore or set up as a foreign company thus reducing their tax liability.
I would love it if someone investigated.
Besides if I was being critised for receiving a pension of £600K I would quickly point out that I was paying the govt. back £240K of it.
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Sir Fred should have been sacked. Anyone else doing any job with this level of incompetance would have been. However, I think Sir Fred should keep his pension. RBS have made a mistake and the Gov't were poorly advised on the issue. However the deal was agreed and legally cannot be reneged on however much we would all like to. The moral is get more than one opinion on such matters.
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This is shocking but I must admit if I was in Fred Goowin's position I wouldn't consider giving up a penny.
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The ultimate greedy banker.
The probem with this payment and with all the bonus payments is that once a contract has been made it is very hard to break . Preventing payment may require retrospective legistlation - difficult, bad practice and would create a debate that the Government would not want to have.
Solution - 97% tax for Sir Shred and his greedy coleagues - easily implemented in the next budget.
Their responsibility for the problems is greater than the average tax payer so let their payments be greater too
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I noticed that he turned down his share options. It would be preferable if these bankers had to take share options rather than a pension. That would ensure that they operated with the long term interests of the bank in mind and would also ensure that their bonuses and pay actually reflected their performance.
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It is a simple matter to claw back Fred Goodwin's pension - simply tax it at 100%. Provisions to do so could be enacted in the next Finance Bill. Just make sure it remains taxable even if he becomes non-resident.
The Government could do the same for other excessive bonuses paid out in banks that have required taxpayer support. I doubt if anyone in Parliament would object!
Incidentally one should also consider the position of the other directors of RBS who let Fred get away with it for so long.
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Dear Mr. Preston
As a former Trustee of a Company Pension Scheme, I would be intrested to know how the Trusteesof the Lloyds Pension Scheme dealt with this matter.
In my experience, the Trustees would certainly have had a chance to vote on the application being made for early retirement.
Normally there is at least one Member Elected Trustee from the Company.
Was Sir Fred a member of a company scheme?
If so how many contributing years had he earned?
In other words how much was of the amount being paid actually due to him?
Look forward to a response if you do have a momebr.
Regards
Ann Bush
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A few points we should not forget in this arguement:
Would we expect someone retiring early with a £6500 annula pension to forego half?
How much did RBS make for its shareholders in the form or profits and the governement in the form of taxes in the period Sir Fred was involved?
Given that Gordon Brown has presided vua the Treasury and PM-ship over a catastrophic loss for UK PLC why is he not being forced to resign and hand over his pension pot?
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The government are now saying they were misled into believing that Goodwin’s pension was discretionary by the RBS board.
Members of that board are still in place why?
Neil Roden the HR Director who is responsible for the sick bonus culture and who should have advised the government clearly on Goodwin’s pension is still in place and glibly talking about the future.
Surely by still acting as Goodwin’s poodle he must be got rid of and this time can we make sure he does not get his pension!
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Vince Cable has got it right again.
Restrict all pensions from the failed banks to £27,000 a year. This is the pension protection schemes amount for failed firms.
This would be fair to all employees and the tax payer.
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Fred's Pension is well above anything that could have been an approved Pension Benefit. Therefore someone would have to pay tax on the provision of this.
Had it been Sir Fred - surely this would have been his first line of defence - could it be that we have picked up the Tax too!
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what about his duty of fiduciary care to shareholders. Isn't he liable for breaching this ?
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As citizens we should be wary of a hue and cry from the public leading to the government operating a kangaroo court. We depend on the government to follow the rule of law. The anger of the public should be directed at any minister or senior civil servant who was asleep at the switch. The government will in any case get 40% of this pension as income tax. The present government has presided over the destruction of pension schemes for ordinary citizens and yeoman employees, who have every right to protest, using the ballot box. But there is a danger here of allowing the government to make one person a weapons grade lightning conductor for sending all the angst to earth. If the banker concerned had one ounce of respect he would offer to give a large fraction of this payment annually to a charity. Dream on!
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This is B.S.
Sure, Sir Fred probably doesnt deserve his hefty pension, however, people who dont deserve the money, win the lottery every week and end up with £ millions.
Similarly, there are countless other businessmen out there who have made a shed load of money personally, only for their businesses to later go bust and for the taxpayer to end up picking up the pieces - dole money etc for redundant employees.
It is pathetic that everyone is getting sidetracked by one mans pension scheme, from the main issue which is that we have a small number of banks which collectively have £5,000,000,000,000 of assets and liabilities and they could potentially ruin the entire country.
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Nobody complained when RBS was profitable and making money for shareholders and the Government. Rightly Sir Fred should be held accountable for the current situation, but to try and take away what has already been agreed smacks of a Government in a panic and attempting to turn the attention away from thier own performance in the matter. This may come back to bite them, particularly as it was Government incompetence rather than a CEO's greed that has led to this situation.
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Yes and lets get the facts straight the current PM has presided over a stealing/ destruction of pension value for almost every pensioner in this country that makes Goodwins deal look like its quite good..... Gordon Brown lets get real - you have a lot more to answer for...
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Rewinding the clock, no-one in government put the brakes on when RBS went head to head with Barclays over the purchase of ABN AMRO, least of all Mr Gordon Brown. We all watched from the sidelines as these heavyweights slogged it out and congratulated RBS - hindsight is a wonderful thing!
Why are we making a scapegoat of Sir Fred with a media smoke-screen hiding the incredible light touch tripartite approach to our financial industry?
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The issue is not whether Sir Fred deserves his pension, nor whether it is a reasonable or obscene amount of money. The issue for me is that anyone should be so dishonourable as to want to take from someone else what they have legally negotiated.
Prescott wants to do it. So do many people writing here. But it's too late for that. Why should anyone ever again trust a government that seeks to break up legal contracts? All they are going is finding a scapegoat for their own past lack of thoroughness. They are sowing the wind and they will reap the whirlwind.
When people stop and realise that if the government can break trust in this way to someone else, any individual, it will only be a matter of time before they break trust to the British public in general and, perhaps, to them in particular.
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Be of good cheer! Like many others I received a communication today from HMRC in relation to my PAYE code for the year 2009/2010. From the information given on how the code was calculated it was a simple matter to calculate that the State Pension will increase in April not by a mere 5% or so but by a colossal 7%. Poor old Sir Fred will have to wait another 15 years before he can share in this extraordinary largesse.
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If I understand this correctly, for failing at RBS, Sir Fred Goodwin gets a £650,000 pension from age 50 for life.
For failing as Chancellor and now Prime Minister, Gordon Brown gets TWO pensions, one for being an MP and one for being Prime Minister.
Meanwhile us taxpayers have lost money, face losing our jobs and the propspect of repaying billions of pounds of bank losses for future years.
I can't see any difference between the integrity of either Bankers or politicians - they both get rewarded for failure whilst we pick up the bills.
Why aren't we protesting on the streets???
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No doubt Fred Goodwin can win the legal argument about his pension. So lets turn our attention to some more practical sanctions. Firstly he should be stripped of his knighthood, which was for an utterly laughable "services to banking". Secondly he should be barred from being a director of any company ever again. And finally he should be humiliated in the media, which has yet to really hit its stride, and be held up as a example of how badly a human being can go wrong when incompetence and greed set in.
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"The DNA of Failure": Part I
Rewarding Failure ...
Blair fed from the 'trough' - taking his lucrative job in investment banking on leaving office.
Will Brown do the honorable thing and say now he will never do the same? ...
The re-integration of investment banking (little more than 'gambling') and 'utility banking' was done on his watch, and sanctioned by Blair, reversing the decision made after the last great depression (the repeal of the Glass-Steagall Act carried out in 1999).
If he is honorable he will renounce any such action by himself in the future now.
If he is honest he will admit to his own failings, and that the above was his mistake.
If he does neither, it would suggest he is also looking to feed from the same 'trough' of personal self interest as Blair did.
These 'leaders' should never be forgot, and never forgiven, especially by our children, and our childen's children.
They are reward their own failures ...
How can anyone trust such 'leaders' to do the right thing, or fix the problem, when they are themselves engaged in benefiting from it?
Is politics now a very lucrative lifestlye, with unrivalled 'perks', 'pensions' and 'passports'?
It doesn't take long to see the fundamental flaws in the UK plc plan. Let's hope it survives a little longer, but don't 'bank' on the support of the young, or assume long term survival is a given ... because it most certainly isn't!
A pragmatist, optimiist and realist.
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Worldwide the governments of the day are failing to govern, they are assisting explicitly and tacitly the few to make fortunes at the expense of the many.
Citing and upholding laws made to protect those few by those few.
Are we in or heading into a virtual, or a real revolution?
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..."Worldwide the governments of the day are failing to govern, they are assisting explicitly and tacitly the few to make fortunes at the expense of the many. Citing and upholding laws made to protect those few by those few. Are we in or heading into a virtual, or a real revolution?" ....
I agree with comments made by Braeburn8 (360 above), and I think it'll be a real revolution - and many Governments are planning for a summer of discontent already.
However, the real 'battleground' will be one of 'wills' and take place in areas like the 'internet'. Ordinary people have the 'power' now, it's just most people haven't realised it yet! The 'genie' is out the bottle, and it will be difficult to put it back...
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why is it not possible for the government to put RBS into administration and then "buy" back the liabilities and assets excluding these ridiculous pensions? Recently, a famous chef was able to carry out this type of exercise and did not miss one days trading, but managed to dispose of all his debt.
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what a wonderful man surely he derserves more than this paltry sum. sir fred and his ilk are the backbone of britain. come on £693.000 per year is peanuts!! utility bills are going up all the time...three cheers for sir fred a true british gentlemen....
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This comment was removed because the moderators found it broke the House Rules.
Perhaps unsurprisingly, when I informed the Treasury we were about to run this striking story, I was told that ministers were very unhappy about the generous terms of Sir Fred's early retirement package.
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They were probably wondering where he got it, and how they could change the rules so they could get one too.
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I know this may be a stupid question, but... The world's banks have "lost" hundreds of billions of £/$/euros/yen/whatever. Where has this money gone? Or did it only exist in theory?
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353 alexmason,
Are you referring to the ACT stealing of pensions which was bad or the current quantitative easing which has totally decimated the funds of pension funds and every private sector pension in the UK?
What the government has done to pensions and savings makes the Equitable Life fiasco seem like a passing shower. We will all soon find out that our savings have been decimated by this "government of irresponsibility" together with the companies that run them for their staff.
Sir Fred is nothing compared to the culpability of our current Prime Minister. How he has the nerve to remain in politics is completely beyond me. The Labour Party and this government should be consigned to the dustbin of history. How much longer can the "me culpa" continue?
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Fred Goodwin is minor league compared to Ireland's Michael Fingleton of Irish Nationwide. 28 million euros pension from a relatively small building society. Ireland leads the way !
http://www.youtube.com/watch?v=48N-XbuYiso
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It is really nice know that after all the hassle, he agreed to give some of it back, but it will not make a tremendous difference. Majority of hard working people are now facing diminishing pension funds, when his is not even dependent on any performance, it is fixed, fixed for life. Never mind that he run down the mighty bank, he didnt pay his contributions all of his life, he was given this pension as a part of the deal. Was it only Sir Goodwin, who got this sort of pay? No, we all know there are quite a few losers who are actually turned out to be winners as their pay doesnt depend on performance of the investment. They dont need to worry that it will not be enough to pay their bills. It is amazing that RBS was allowed to give out residential, [Unsuitable/Broken URL removed by Moderator]buy to let mortgages and then sell them on without thinking about consequences and then when it all went wrong go home with a chunky bonus. Now to save straggling bank we accept the fact that several thousands of employees will be made redundant, but majority of them are only paid between £12,000 and £14,000, so is it not better to cut these pay packages and save ordinary people from starvation? After all, £650,000 will save about 50 jobs.
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