Ex-RBS Chief Executive Sir Fred Goodwin may be forced to surrender at least some of his £650,000 a year-lifelong pension entitlement after RBS made the biggest loss in UK corporate history.
The former Chief Executive of bank-in-crisis RBS looks set to lose a substantial chunk of his £650,000 a year pension pot – either voluntarily or by force.
According to reports, the Treasury are currently looking at the legalities of ‘clawing back’ some of his £16 million pension deal which was agreed when he left his position at the bank in disgrace last year.
Sir Fred Goodwin is seen by many as largely to blame for the dire state of RBS’s (Royal Bank of Scotland) balance sheet.
The RBS banking group, already 70% owned by the taxpayer, have today made public details that confirm they made the biggest annual loss in UK corporate history last year – a staggering £24.1 billion. They now look set to receive a further £13bn of public money, in addition to the guarantee of £325 billion of toxic assets they plan to place in the Governments new insurance scheme.
Under his ‘early retirement’ deal Goodwin was granted permission to draw on his £650,000 a year for life pension at just 50 years of age.
Speaking to the BBC Chancellor, Alistair Darling commented: “I think people will find it very difficult to understand how you can get paid £650,000 a year for the rest of your life when just look at the state that RBS is in at the moment,
“You cannot justify these excesses, especially when you’ve got such a failure of this magnitude.”
UK Financial Investments, the branch of the Treasury that manage the taxpayer’s stake in part-nationalised banks, are currently working with RBS to “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.”
However, at the Chancellor’s request Lord Myers, a Treasury Minister, has also contacted Sir Fred with a plea that he voluntarily surrender some of his pension entitlement.
There has been some dispute as to whether the Government were aware of Goodwin’s excessive pension at the time of RBS’s bailout last year. However, it has now emerged that whilst certain Government parties knew of his retirement deal, they were misinformed that this was a non-negotiable obligation. It now appears that this wasn’t the case.
