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Fred tells RBS: I will not shred my pension
Nick Goodway3 Apr 2009
Sir Fred Goodwin, the ousted chief executive of Royal Bank of Scotland, will not take a cut in his £703,000-a-year pension.
He was said to be considering a voluntary reduction in his £17 million retirement pot.
But a source said Sir Fred — dubbed “Fred The Shred” for his cost-cutting — has not changed his mind and felt he had fulfilled all his contractual obligations to RBS and the bank should pay him the pension he was entitled to.
Before the bank's annual meeting in Edinburgh today, chairman Sir Philip Hampton had claimed: “I have asked Fred if he would take a voluntary reduction in his pension and he is considering it.”
The AGM follows the most disastrous year in the bank's 282-year history. RBS posted the biggest loss in UK corporate history, £24.1 billion, and is now majority-owned by the taxpayer after a £20 million bail-out last October.
Small shareholders have seen the value of their investments in the bank fall by up to 90 per cent.
On the question of Sir Fred's pension, John Macpherson, a shareholder from Edinburgh, said: “If he wants to move in polite society and wants a good future then he should do the decent thing. I have the advantage of being able to hold my head up in public without thinking what kind of shyster I am. He should get some self-respect.”
Another “small shareholder”, Andrew Kirkhope, from Hamilton, said: “I want to make sure the auditors are sacked because they did not do their jobs. All non-executive directors should go as well. They were supposed to look after our interests.”
Sir Philip had said the new board was taking fresh legal advice over whether it can change Sir Fred's contract to cut his pension.
The Government today used its 58 per cent stake in RBS to vote down the remuneration report which effectively approved the early pension pay-outs to Sir Fred and Johnny Cameron, the former head of the investment banking arm. But it was only a symbolic gesture as the vote was advisory and not legally binding.
Sir Philip opened today's meeting with a request for the “embarrassing” stories about RBS to be put behind it to allow staff to nurse the bank back to health. He said: “The majority of RBS staff in the UK earn less than £21,000 a year… They do not deserve to share the worst of the criticisms being laid at the door of their employer.”
But Sir Philip also heard shareholder John Waterson voice “grave reservations” about some of the bank's directors — particularly Gordon Pell and Guy Whittaker, who were both on the bank's previous board. “It begs the question: why are these two individual gentlemen still on the board of directors at Royal Bank of Scotland?” Mr Waterson asked, to applause.
“Far from continuing with them as members of the board — I am sure I speak for a lot of people in this audience — all of those board members should be in jail.”
Sir Philip also warned of more job losses at RBS on top of the 2,700 announced already.
Reader views (32)
What good is done by constantly opening and reopening a wound; if it is to heal we must stop picking it.
Let's move one, there are plenty of other cases of profligate spending or misuse of government/corporate funds to be investigated.
- J R J, Glen Vine, 06/04/2009 09:09
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The thing is the Gov needed old Freddie to go quietly hence the huge payout. They could have gone in hard and insisted he be sacked for gross negligence (along with all his little helpers) but in so doing all the PM's failed financial policies (of the last 10 years) would be lifted up for all to see and Mr Brown could not allow that.
- Charles, Perth, Australia, 06/04/2009 01:31
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why not implement a 90% tax rate on pension pots over £1m on nationalised banks?
- Ces, london, 05/04/2009 16:00
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I wish I were in his dilemma! Perhaps he should give some of it to charity?
- Mark, Milan, Italy, 05/04/2009 12:03
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As hard as it is to swallow, Sir Fred is probably morally right to refuse to budge over his pension. In 2008, he agreed to go quietly and not be paid in lieu of notice, as well as forego his bonus and share options. And here's another angle to consider: Would the cost of litigation and settling out of court in an employment hearing if he was fired compare with what he has now? The whole affair stinks and the real villainy is how he and others of his ilk were indulged by those who should have been looking out for us rather than pandering to these High Priests of Finance.
- Jens Winton, London, 05/04/2009 11:35
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The greedy Exbanker should be Taxed at 90%.
- Stan White, leeds, 05/04/2009 08:30
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Fred doesn't deserve a single pound that he made at RBS. He needs to give back every pence he made at RBS if he has any ounce of ethics and common sense. He should be charged with financial mishandling for his years of service and bankrupting the country and causing so much pain to so many millions of peole and put in prison. All of his assets must be confiscated. This applies to other bank execs as well.
- Kanan Krishnan, mountain view, 05/04/2009 07:39
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He negotiated his pension fair and square. The mistake was that he shouldn't have been given it in the first place. Its too late to claw it back now.
- Dhanraj, basildon, 04/04/2009 14:20
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RBS being flogged in public? Well, here's some news for RBS: 'The flogging will continue until you bring back the financial integrity, responsibility and honesty you once had'. A start would be to strip Shred of his knighthood, listen to their BRANCH employees (something they clearly don't do), stop their lavish hospitality, and show their customers that in the fetid sewer the financial services industry has become, they can lead the way forward to a sweeter smelling future.
- Joannie, London, England, 04/04/2009 11:46
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There's no way this man will ever break his neck. It's made of bloody brass.
- Jb Hove, hove sussex uk, 04/04/2009 10:09
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Freddie you will be a marked and targeted man forever, public never forget.
Do you really want to live under a cloud, do the right thing.
- C Cusano, Bedford, 04/04/2009 10:02
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Shred's case is at the heart of issue we all face.
Not only are the vast majority of us severely penalised if we fail in our jobs but we are now faced with paying in every sense for the catastrophic mistakes of bankers, Govt and regulators.
Until these entities are publicly made to pay for their mistakes (job losses/jail? - loss of power - replacement by effective regulation body), individually and collectively and stop hiding behind each other and the global nature of the problem we will not move on effectively.
- Mike, london, 04/04/2009 05:06
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Ying-Hui this Nation should never allow politicians to implement laws for past events, especially when it is to punish one person, no matter how guilty he might be, as this is persecution and how long before they come up with another scapegoat for their mismanagement
- Dave Filton, Bristol England, 03/04/2009 22:04
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Sir Fred Goodwin was not responsible for this crisis. At the time he was trying to maximise returns for shareholders, which mainly included pension funds. With hindsight he and the other directors became over ambitious for the bank, but he was not dishonest. The real culprits were dishonest American mortgage brokers and the incompetent Credit Reference agencies upon whom banks like RBS relied when buying assets.
- Glen, Milton Keynes, 03/04/2009 21:12
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But a source said Sir Fred — dubbed “Fred The Shred” for his cost-cutting — has not changed his mind and felt he had fulfilled all his contractual obligations to RBS and the bank should pay him the pension he was entitled to.
Aside from all the other hubris, I wonder whether he felt that under his contract he was obliged to risk running the bank, his employer, the shareholders etc. into the ground and disgrace the UK/International finance industry to boot? If so, he succeeded and rightfully deserves his pension. However, lets not let forget the Board members who encouraged and permitted him to do what he did.
- Johnw, Ottawa, Canada, 03/04/2009 17:26
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if the US government can change legislation to claw back bonuses in a new 90% tax why cant the UK do the same in something that is only applied to old Fred?
- Ying-Hui, london, 03/04/2009 17:17
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You have to admire his brazenness in the face of massive opposition.
- Neil M., london uk,, 03/04/2009 16:46
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A greedy banker - is anyone surprised? One person who deserves as much contempt as Goodwin is Lord Myners - he of the government "of all the talents" - who signed the pension off. As an RBS pension recipient himself, he should have known the details, or at least, realised how generous the company is in certain circumstances.
- Graham, Ilford Essex, 03/04/2009 16:08
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Fred will be able to enjoy his annual pension thinking of how many lives were ruined by staff redundancies that his pension funding could keep employed. What a disgraceful and immoral act by a shameless person. At his age he could defer his pension for 15 years and take board appointments elsewhere. Now he is tarnished and will not be approached. Still, he has the money so what would he care. A national disgrace and his family will suffer as a result of his action.
- Steve, London, 03/04/2009 15:58
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I went with the (first) RBS offer because I thought that ABN Amro was risky, but a 'fair trade risk' (as things looked just then). So I backed Fred with cash. In hindsight I was wrong, and so was he. That's life - and he had better security (money, if not reputation) than I did - no hard feelings now.
- Steve, London, England, 03/04/2009 15:32
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'Sir' Fred is a disgrace.
He has milked the system, you cannot condone violence but he deserves everything he gets.
He makes me sick.
- Chris H, City, 03/04/2009 14:52
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"(Sir Philip Hampton) pleaded for an end to the "public flogging" of the bank"
Until such time that the public can see that those who profited from this financial collapse are punished and not rewarded the bank(s) will continue to be "flogged". These bankers seemed to be completely unaware of the chaos and suffering they have cause and seem to want "business as usual".
- John David, East London, 03/04/2009 14:09
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I just want to know where Fred has his pension invested. Unlike everyone else who has seen their's decimated by the actions of the financial industry, he seems to have been privy to some better advice. I presume he didn't have it invested at RBS!
- Ag, London Village, 03/04/2009 13:38
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Sir Fred Goodwin should not be the one to call the tune!!
- Pt, London, 03/04/2009 13:14
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Its amazing that an incompetent teacher can be dismissed but a banker gets an increased pension . It is easy to see where values lie.
- Terry, Hennebont France, 03/04/2009 12:58
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The govt should seize all assets of banking and financial executives and after investigation , return them to those they robbed
- Beljamine, uk, 03/04/2009 11:30
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"The Government today used its 58 per cent stake in RBS to vote down the remuneration report ..."
Desperate back pedalling by an incompetent government.
Preachy rich socialists make me sick.
- Frank, Home Counties, England., 03/04/2009 11:23
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Considering that millions of hard-working people have been robbed of their entire savings and pensions by the bankers, diligently acquired over many years of hard work, I don't see why any money should be paid to Goodwin at all.
- Neil M., london uk,, 03/04/2009 11:07
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Good to see Fred re-considering his daylight robbery pension. About twice the average UK wage ought to be right. That's more than the average retiree would be geting and about all Fred deserves.
- Len, Perth, Australia, 03/04/2009 10:59
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I presume Gordon has been in touch with the civil servants who were responsible for the Dome, the NHS computer,which still does not work, and all the other complete fiascos that this Goverment has sqandered billions on, asking them to cut their gold plated index linked pensions.
I also presume he has asked all the MPS who have been milking their expenses to refund the money.
Of course he has !!
- Steve M, London, 03/04/2009 10:37
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I agree with Nat, it's amazing that the politicians like Crash Gordon have almost come out of this smelling of roses with their pensions intact. Not only does Fred need to have his pension trimmed but so does most of the public sector and we most definitely need more transparency regarding expenses. This whole situation is more Brown's fault than it is Fred's.
- Mcw, London, 03/04/2009 10:10
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Great. I think all the politicians from Gordon Brown to all the ministers and MPs should also consider a voluntary cut in their pension as they were the ones who failed in supervising the banks.
- Nat, New Malden, 03/04/2009 09:53
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