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RBS probed over 'last-minute doubling' of Sir Fred Goodwin pension
Paul Waugh, Deputy Political Editor23.03.09
Royal Bank of Scotland was today facing a City watchdog probe after it emerged Sir Fred Goodwin's pension was doubled only hours before he was ousted.
The Financial Services Authority is looking at allegations that shareholders and the RBS board were not given the full details of the deal for the chief executive.
Evidence to the Treasury select committee shows a "compromise agreement" drafted for Sir Fred had assumed he would not take his pension until the age of 60. The agreement, drafted by lawyers Linklaters on 11 October last year, would have meant the RBS chief ended up with a pension pot of £9.6million. But the deal was changed under the instructions of former RBS chairman Sir Tom McKillop to allow Sir Fred to take his pension at 50, effectively increasing the pot to £21million. Sir Fred's departure was then agreed in the early hours of 13 October.
The FSA is also likely to look at claims that non-executive directors were not fully informed of the late changes. RBS's remuneration committee minutes claim Sir Fred's departure terms represented "contractual entitlement". However, the deal was discretionary. The RBS full board meeting, which signed it off, may have misdirected itself in claiming the package had been approved by the remuneration committee.
FSA chairman Lord Turner told BBC1's The Andrew Marr Show: "There is a duty on executives to ensure there are flows of information to non-executives."
The FSA is also looking at claims by Labour peer Lord Foulkes that former non-executive directors were pressured into not asking "awkward questions" about the bank.
Reader views (9)
One would presume that we are now as a state on the same level as Zimbabwe.
- O'Bored, London
In the 10 years that Sir Fred was in charge of RBS, the bank paid over £240 billion pounds in dividends on its ordinary shares alone. This is dividends, not total profit.
Lets stop hounding Sir Fred, unless we are going to ask the former owners of the bank to repay their "ill gotten gains" too. Even at its doubled rate, this is less than 1% of the dividends paid.
Yes, he should have known more, but so should have the share holders - 90% of whom are institutional ones and always have been.
- Richard, Buckhurst Hill
I thought this was a state bank. So where is the state, Crash Gordon??
- Peteo, London, NW1
What "City watchdog"??!? Is it not more that Crash Gordon, the "Chancellor"of the exchequor was sleeping at the wheel.
- Georgie, Islington, London
Who would have thought the stink could get any worse?
- Wen, Oxfordshire
The problem with people in the Financial Sector is that they live in a bubble. When Lord Myners was told of Goodwins salary and pension he probably thought that it was quite normal. There needs to be a total resetting of City salaries to recognise the position that the executives are in now. An eighty percent cut would be appropriate which could be reviewed when normality is resumed.
- B Nicks, Uxbridge England
This guy is amazing! He's so smart! He should be leading the country!
- John Problem, Hackney Wick, London, UK
It's time to follow the Americans' lead. 90% tax for any large bonus or pension paid to a director of a bank or financial institution that has received a bail-out from the taxpayer. And add a special clause making it 110% for anyone with a knighthood for "services to banking"!
- Nigel, London
Whilst there is this debate as to who said what and did what, which eventually led to absolutely zero happening to either Sir Fred or those involved and those involved but won't admit it, is Sir Fred receiving each month his pension money, or has it been put on hold ?
- Don Elwin, Landeleau France
