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Time to stop this public flogging - RBS chief
Nick Goodway03.04.09
Sir Philip Hampton, the new chairman of nationalised Royal Bank of Scotland, today firmly laid the blame for the bank's disastrous performance and Government bailout at the feet of the previous board and its chief executive Sir Fred Goodwin.
But he also called for an end to “the public flogging” that the bank has received.
Hampton told shareholders and employees at today's annual meeting in Edinburgh that they must brace themselves for further massive job cuts on top of the 2700 already announced.
He revealed that the board is taking new legal advice over the controversial £703,000-a-year pension given to Goodwin immediately on his departure earlier this year.
He said: “I understand many shareholders will wish to vote against or abstain on the advisory vote on the Remuneration Report to register strong disapproval of the pension arrangements of our former chief executive.
“Legal advice is being taken about whether the decision that was reached can be revisited. Whatever the outcome of that advice, it is in no-one's interest, least of all RBS Group's, for this issue to go on and on.”
The meeting will see the Government, through its UK Financial Investments (UKFI) holding vehicle, vote down RBS's remuneration report.
The body will reject it because the previous board granted Goodwin and investment banking head Johnny Cameron, full pensions despite them retiring early.
UKFI chief executive John Kingman said: “UKFI is not satisfied that it was in the company's interest — and therefore UKFI's as a value-oriented shareholder. UKFI therefore cannot vote in favour of it.”
This vote will not stop Goodwin's pension. It is a symbolic gesture, as it is an advisory vote and not legally binding on the company.
But Hampton made it clear that he believes Goodwin made bad decisions. In particular he blamed the £50 billion takeover of Dutch bank ABN Amro in 2007 for the UK bank's collapse.
He said: “I don't think there can be any doubt that the key decision that led RBS to its difficulties was the acquisition of ABN Amro.”
He also attacked other decisions of the previous management, including its multi-million pound sponsorship of Formula 1 and ownership of a private corporate jet which new chief executive Stephen Hester has put up for sale.
Hampton told hundreds of angry shareholders who have lost more than 80% of their investment in the company that he wanted to restart paying them dividends “as soon as practicable”.
He said he could not predict how many more RBS staff would lose their jobs, but warned that the axe would fall both in this country and overseas.
RBS made the biggest loss in UK corporate history last year when bad debt charges of £7 billion and writedowns of £16.2 billion left it with a pre-tax deficit of £24.1 billion.
That forced it to seek a £20 billion Government bailout. A separate meeting today will see the taxpayers' stake in the bank rise from 58% to 70%.
Security at today's meeting was intense after G20 protesters smashed up an RBS branch in the City of London this week.
Reader views (9)
The UK bank are all now to big, have lost focus and have removed themselves so far from reality it is embarrassing.
Being a High Street Bank and Investment Bank in the same breath is incompatible with the needs of its customers. Above all these outfits are bankrupt in every meaning of the word.
RBS similar to the other state controlled outfits should be split up, investment and retail standing or falling in their own right. Nat West, and ABM Amro for starters should be spilt away. While there are circumstances that a retail bank could own a separate stand alone investment arm, investment banks should be excluded from owning outright retail banks.
- Ian, Reading, England
This man should lose his pension and be jailed for all the lies he has told.The problem with that is NuLabour is on the fiddle too.
- Stan White, leeds
Sir Philip Hampton will make hundreds of ordinary front line branch staff redundant. These are the 'poor bl**dy infantry' of the bank. The heads that should roll are the incompetents at the top. Sir Phil, unlike the bank juniors, won't have to worry about where the cash is coming from to pay his bills, but hey, he's the kind of banker who never loses any sleep over these concerns is he? Sorry Sir Phil, RBS will continue to be flogged until someone restores some sanity and order to RBS.
- Joannie, London, England
We agree to stop the "flogging by the public" provided Sir Fred is "flogged around the fleet" ...
mike miro
- Mike Miro, London England
Sir Phillip Hampton should count himself lucky he has a bank to chair. The losses at RBS should have closed that bank. We as taxpayers will be paying for years to keep him in employment, so a little public flogging for RBS is nothing compared to a lifetime of economc misery for all of us. His associates at the bank should have been prosecuted at the very least.
- Mr S.Port, London
If only we, the public, could call so easily for an end to the painful taxation flogging we are about to embark on over the next few years, notwithstanding loss of jobs, livelehood etc etc
- Stuart, London
it's what you'd expect. one banker is not going to condone, or encourage public condemnation and further outcry and angst. sure a man would want to draw a line under the public humiliation of failure on the part of individuals, or the industry in general and hope that time would bring the dimming of memory and a return to the trust that bankers have long labored under the misapprehension that the great unwashed have in them.
sadly for them, anyone who has lived long enough and has an inkling of memory will remember banks are simply usurers and have never enjoyed wholesale approval, or trust. the dithering and vain glorious captain mainwaring is nearer the image that bankers have.
- M.O'Brien, london.uk
Another banker with a knighthood (deserved???)willing to tell the plebs about his God given right to lead and to accept no responsabilities.
- P Doff, Filey UK
Sir Philip - You are the head of an incompetent bank - It would be so easy to put all the blame on Goodwin and for you and your cronies to continue. If you had been honest you would have found a way to get back pensions etc . Let the flogging continue until the RBS disappears and genuine mutuals take control.
- Terry, Hennebont France
