No, that's not a rhetorical question, but it does lead to two others.
What kind of mindset leads to someone authorising an annual pension of £650,000 for a man who has presided over one of the biggest banking failures in British history? And what does it say about Sir Fred Goodwin that he accepted such an outrageous pension? The answer is simple in both cases. It demonstrates that those who led RBS to the brink of failure have learned little from the experience and believe that it's business as usual.
Sir Fred Goodwin should be shamed into renouncing this pension, and if he has no shame, then Parliament should act to take it away from him.
75 comments:
Knock it off Iain - Fred has the same morals as our 'second Home' Secretary. You're pissing in the wind I'm afraid.
I think before we condemn, we consider the consequences - intended and unintended.
Where would the money go if he declined his pension and how would it be spent, versus how would he spend it. Which would be better for the economy?
Morally, maybe he does have an imperitive to do 'the right thing', but we have no place - utterly no place - in enforcing it. That way lies socialism.
I notice not a whisper on R5 this morning about Adair Turner's gobsmacking admissions yesterday?
They know a good Beeboid cover story when they see one.
The BBC is going to do a radio programme about Common Purpose on the Donal Macintyre show, Radio 5 live - Sunday March 8th at 7pm. Please spread the word.
It's a bit rich (ho hum) that he be given so much flak when I think a nice man knocked on my door this morning and asked me if I'd be so kind as to hold onto £325 billion and counting on debts relating to utter shite assets.
£650k - pah, down the sofa.
Iain,
This is a contract, and as others have said, to go in and change it is Socialism or worse*.
This chap is shameless, but then again when he got the deal it was a listed company, whereas Jacqui Smith was taking OUR money taken by force and she knew darn well it was exploiting a loophole, not a genuine compensation for outlay that would otherwise not have been borne.
To me the real issue is to look into the company's remuneration and compensation committee actions and see if anything dodgy occured. If and only if this is the case then the contract can be deemed fraudulent and then torn up.
* is there a "worse"?
The new CEO Hester said today that the terms had been negotiated in October 2008. Since we owned 70% of RBS at the time, was the Government involved in these negotiations, and if not why not?
wv flaying. Very appropriate!
Isn't there a case for considering whether RBS could sue him for negligence or the like given the disasterous nature of the decisions for which he was at least partly responsible? If there is an arguable case, mightn't he settle for a reduced pension as part of any compromise? It seems to me that just "asking" him to reduce his pension is unbelievably weak.
£650 000 a year would make me very ashamed, but for that I would learn to live with it. As would most people. Those culpable are Darling and Brown for not keeping their eye on things when the various bailouts were going through.
YOu can't blame Goodwin for waht he's doing. Hand on heart I think all of us would do the same.
Where does he live? In the absence of fairness or justice from the Courts, I think tax payers should be given the opportunity to turn up outside his house in large numbers to persuade him not to draw his pension.
£7 Billion profit in 2005
£10 Billion prfit in 2008
£9.2 Billion profit in 2007
£8.2 Billion profit in 2006
This is the real scandal. Why are they taking one single penny of MY money?
Doesn't seem that much for all the worry he has had !!
He is not alone there are many pore public sector pigs and it is public money that fills his trough
Take prize porker Clive Briault, managing director of retail at the Financial Services Authority. Now surely if there was one man who should be walking the plank it is him Not quite ...He resigned last April after Northern Wreck with a porcine £356,452 of compensation for lost salary and bonuses, £36,000 of pension contributions and a £202,500 bonus. OINK !
The sow Rose Gibb left her £150,000-a-year job as chief executive of the Maidstone and Tunbridge Wells NHS Trust just before the publication of a critical report by the Healthcare Commission into an outbreak of Clostridium difficile in which 345 patients died. She got a £250,000 severance package. £174,573 of which was, as with Mr Briault, ‘compensation for loss of office’. OINK OINK
Senior public sector workers negotiated themselves huge salary rises on the basis of comparisons with the private sector and now they want to keep them .
Ian Coucher, fat pig executive of Railtrack, was paid £1.244 million in 2007-08 , a 51 per cent increase on the year before in spite of a poor performance notably havoc on the West Coast Mainline. OINK OINK ! OINK!
At least 88 Public Sector Pigs scoffed over £250,000 a year. At least six councils pay their chief executive porkers more than £200,000 a year and the trough is not confined to the top. An ‘occupational physician’ £105,725 a year, an ‘executive director of neighbourhood delivery’ who snuffles up £120,780 a year , a ‘director of customers and strategy’ £145,000 ( See Tax Payers Alliance ).. Wandsworth has a litter of 18 staff on salaries of over £100,000, including and Thurrock’s director of sustainable communities gets £113,812 a year.....
Now if all this lot were told to take a 50% cut or sod off what do we think they would do ? Meanwhile out of the mythic banking world in the private SME world we live in the average chief executive of a small company up to 50 gets £65000 .
Business question:
If RBS had been allowed to go bust by the Governemnt, would "Sir" Fred have still been able to draw his pension? Or would the pension fund have gone down with the bank?
Would the pension fund be diminished if the bank had gone bust? Or would it have been unaffected?
Yours appreciatively,
anonalon
If Goodwin is to be relieved of his entitlements so must;
Gordon Brown
Stephen Timms
Ed Balls
Yvette Balls
Assorted Treasury mandarins
John McFall
Any Minister who has served at the Treasury in the last decade.
The Top Men at the Bank of England and the FSA.
Either you are for contract law or you are not. If Goodwin's failures mean he should have his pension taken from him then so must the Ministers and mandarins equally responsible for the disaster that is unfolding.
I don't begrudge Goodwin his pension. I would also not begrudge RBS attempting to wrest some of it's value from him through the courts if incompetence or worse could be levelled at him.
I do begrudge the Government loading up the taxpayers with a massive liability without caring to do much or any due dilligence.
Shame? What's that? Anyone know?
Iain, it is shameful, but cases make bad law. But then I think the whole capitalist enterprise is one long history of shame. Still, it's better to live in a Capitalist society with the rule of law than chaos.
Are you, then, seriously suggesting Parliament should pass a law against the legal contractual gains of one individual. I believe this is what is known as a "bill of attainder" and is specifically prohibited in the US Constitution if not ours.
Still the creators of the American constitution had a real point. Lots of people have received unfair rewards, and indeed I am in favour of very high rates of progressive taxation to redistribute income.
But a law directed at one person is a travesty of the "rule of law".
Two nearby questions from Dale:
How committed is the right to civil liberties?
Blogging - a load of incontinent drivel?
Not very and yes, to judge by this outstandingly silly 'Disgusted of Tonbrige Wells' post.
Parliament, in particular Labour ministers, should set an example by renouncing their pensions due to the fact that their utter incompetence has landed the UK in the drink.
Then just maybe they could ask Fred to do the same.
Thanks for that insight Chris. I'm sure we are all very grateful for your eloquence.
Oh, come now, Mr Dale. This is small-minded bearpit commentary, unthought through and wholly unworthy of you. Sir Fred Goodwin has been vilified quite enough. His hubris condemns him to spend history as a humiliating footnote to the destruction of RBS, and its immense knock-on effects.
He ran the bank very successfully for a number of years, and his pension reflects that achievement. He took it from a regional operator to a global presence. Yes, he went mad with the acquisition of ABN Amro, which was an unsuspected can of worms, acquired at the tipping-point of the financial cycle. He lived and breathed RBS for years.
Isn't the destruction of his legacy, the evisceration of his shareholding and the loss of his position at the pinnacle of his profession, punishment enough for you? He's going to spend the reast of his life being sniggered at by smartarses. He's never going to be taken seriously, although he's clearly an immensely clever and industrious man. Even murderers have more chance of redemption than Sir Fred.
The only solace he has is the pension. Granted, it's grotesquely huge and being taken early, but that's all he has. What would you want: that he be hauled in a tumbril, wearing a hair-shirt, through the high streets of the nation, so we can all throw rotten fruit at him?
I don't know Sir Fred Goodwin. I've never been employed by, or had dealing with, RBS. I've never held shares in it. I have no direct interest in this matter, but I feel that it's open season on Fred Goodwin, just as it's open season right now on the unfortunate Lord Ahmed. The spectacle of braying thousands of the self-righteous, all yelling for blood, is an unattractive display of synchronised hypocrisy.
Ah, of course. Now I understand. Your normally balanced and thoughtful approach to commentary has been utterly distorted by grief at your tragic loss last night. I can't stand football - more precisely, I can't stand football as demotic religion - but I always regret the loss of a southern side to a bunch of northern monkeys.
I feel your pain ;-)
You really are a populist dimwit at times.
And you are ....
So you really think public money should be spent in this way? Rewarding failure, as Gordon Brown puts it. Honestly.
Spartan, I see you have taken on prat of the week status. David David has indeed spoken out vehemently about Wilders. But you don't listen to Any Questions, I suppose.
"..it's better to live in a Capitalist society with the rule of law than chaos."
When the Law is inflexible and unjust and has been brought into disrepute by the fools who administer it then that point becomes debatable.
Iain,
Public money should not be spent in this way, but you cannot seriously be supporting *individual statutes* breaking contracts because of press pressure.
Now, if a more general law, suspending, pending review, all excessive remuneration contracts in companies saved by public funds, then I think you have a point.
But that will include the contracts of people on quite a lot less than Fred Goodwin.
Meanwhile, why is ANYONE shocked about any of this. Private Eye is the most read current affairs magazine in the UK, and has been on the tail of pigs at both the private and public trough for quite some time.
It's almost a conspiracy the way so much of the press ignores what PE digs up.
"He ran the bank very successfully for a number of years, " --- no, its clear he did not.
The policies which created profits (previously quoted) stored up the problems. He massively overbought and under investigated when he bought the Dutch bank. Did he really know what he was doing? I suggest the evidence is before our eyes.
The other point about the profits and the bonuses is that they were all taxed. This is what people are forgetting. Brown was happy at the banks largesse and policies - he was raking in his cut. He needed it because despite them his spending was running away from his abilities to pay for them. Right now the situation is getting worse by the minute.
Indeed the question everyone really ought to be asking is this.
Brown tells us we have had the biggest period of growth since records began. Well where has it gone? We start the recession - not with a surplus but a deficit. Despite this growth where have the tax revenues gone? We can see why Brown was so glad to get money from the banks.
No subsidy without equity.
We can win this one.
No. He's a failed banker. He now has now reputation and no credibility.
More is now coming out about the conditions of his removal. His pension chest of £8M was increased to £16M. So for that he seems to have resigned, but given a pension to start at 50. This by my crude calculation is the equivalent to a £15M bonus. Assuming he dies by 80. This has all the hallmarks of a hush payment, but for what? Could certain gov officials be embarrassed by the direction they wanted FRED to take the into.
Trevorsden @ 4.38
I have to disagree. He did run RBS superbly for a long time. The takeover of NatWest, to take but one example, was a brilliant coup daringly executed. His cost-cutting methods may have been unpleasant and ruthless - he fully deserves his 'the Shred' monicker - but he did a very good job for his shareholders.
He shouldn't have got sucked in by the chance to grab ABN Amro, and he shouldn't have bid the price up. Otherwise, don't forget, Barclays would be standing where RBS is now.
He had undertaken to the shareholders not to go for another big buy, but he simply couldn't help himself. Equally, none of the institutional shareholders tried to hold him to his promise.
Without ABN Amro, his standing would still be pretty high. What a graphic validation of the Peter Principle.
Apart from no one in the government knowing about this until informed by the BBC, it seems that no one in RBS thought that they should inform the government about it.
Iain,
"Sir Fred Goodwin should be shamed into renouncing this pension, and if he has no shame, then Parliament should act to take it away from him."
What? Because the man has offended your personal morals, you believe that the state should change the law so that a private contract can be torn up?
Nice one. If I think that your pension is disgustingly large, can I ask Gordo to stop your pension company paying out (no matter the amount of money that you have paid in over the years)?
Hell's teeth...
DK
Perry Neeham is absolutely right. This government has no moral high ground to ask for this.
DK, it's not a private contract. It's being funded by the taxpayer, so I think I have every right to express an opinion on the issue. And my opinion is that this is away above what is acceptable. RBS effectively tried to pull the wool over the government's eyes.
Like you I'd rather the government wasn't involved at all, but seeing as it is our money they are pledging, should we not hold a view on the rights and wrongs of this?
No
It has been said earlier but Peston is at the moment (18.06) explaining it on radio 4, but not the same way he explained it earlier. He has just stated that there should have been more oversight and this may have stopped the pension, earlier he stated that the pension agreement came about when the two senior directors ordered to 'lose Fred' (by Myners) decided to sack him and under the terms of his contract if he were let go early by the company he would then be entitled to his full pension immediately rather than at his expected time of retirement.
For anyone not keeping up(e.g. all commentators above) this means that our Fred could have been sacked and told to fight for his pension if he was feeling lucky (punk) but was offered a nice, genteel, lucrative way out. He took it.
Meanwhile, the chap yesterday who said Brown is to blame for the deregulation of the banks etc. is being ignored.
Especially by you, Iain.
STB.
Are you actually arguing for a suspension of the rule of law here?
The Government messed this situation up completely, and they should be the ones held accountable. They had the chance to do something about Goodwin's outrageous pension but failed to do so. He got his pension per his contract.
To use parliament to put this man on trial to strip him of the pension he is legally, though not morally, entitled to would be a return to the Star Chamber. We had rather a long and bloody civil war to get rid of such abuses of law.
One of the biggest problems with the current Government is it's authoritarianism, you really want to allow it the powers to summarily strip the assets of private individuals?
Many do not understand what is going on, once money has been added to the pension pot under job contract it cannot be taken back.
However, the problem started when rather than sack FRED, and there is usually a 1 year rolling contract, that would mean probable £4M payout. They wanted to stop that, but in agreeing and Myners for the Gov would have been in control, agreed to something like a £20M payout. What a bunch of incompetent tw**s.
Scots,
Indeed.
This event will sure flush out the fake Liberals and Libertarians for sure, who will be very happy to trample on the Rule of Law in a fit of pique.
William Roper: So, now you give the Devil the benefit of law!
Sir Thomas More: Yes! What would you do? Cut a great road through the law to get after the Devil?
William Roper: Yes, I'd cut down every law in England to do that!
Sir Thomas More: Oh? And when the last law was down, and the Devil turned 'round on you, where would you hide, Roper, the laws all being flat? This country is planted thick with laws, from coast to coast, Man's laws, not God's! And if you cut them down, and you're just the man to do it, do you really think you could stand upright in the winds that would blow then? Yes, I'd give the Devil benefit of law, for my own safety's sake!
We have enough laws laid flat in the pursuit of terrorists, money laundering and the convenience of bureaucrats in Westminster, Town Halls and Brussels.
Is it any more egregious than the comfortable pensions for the hopeless (and increasingly out of control) mandarins in the civil service, the quangos and ministries?
Rewards for failure all round is a general theme of this Government. Why kick up a stink about it now with an unseemly witch hunt?
It is a distraction tactic. Adair Turner and now Mervyn King have uttered some frank and eviscerating comments about Gordon's regulations.
Goodwin's is a private contract, drawn up between two private entities before taxpayers became liable. Should politicians be able to retrospectively alter a private contract? Of course they could suggest to Goodwin that it would be in his interest to renegotiate, but then it wouldn't would it.
I'm certainly looking forward to the day when Goodwin touches my scythe.
I would say from Iain's comments in his own thread that they reveal a deeply illiberal side to his nature. Perhaps it's good that he failed to become a legislator or we'd all be in danger of arbitrary use of power against individuals.
Oh yes, I have a deeply illiberal side against people who rip others off. You'd better believe it.
You're more than welcome, Iain. You might think for a second or two about what Orwell, whose eponymous prize you hope to win, would have said to your suggestion that freely entered contracts should be abrogated on a political whim. How about the contract you and your civil partner have? Fancy a homophobic government tearing that up on the grounds of public outrage? No? Well, there's a thing.
Does Gordon F Brown have no shame?
Course not...
Does Gordon F Brown have no shame?
Course not...
Well Iain, you need to take a deep breath and consider the kind of society that would result when a government decides it is free to rip up legally drawn up contracts.
I can't believe I'm reading this stuff from you, you a mate of DD too. Shame!
Two thing..as another poster raised, what would have happened with no bail out? Answer - he would have got his pension since by law pensions are protected....or would you have that changed?
Secondly, read http://news.bbc.co.uk/1/hi/uk_politics/7913582.stm and see if you are still so self righteous, or perhaps you have been swept up in another govt spin operation...
There's a lot more to this methinks.
Firstly, has he no shame? Course he hasn't. All he now has is the pension. He has no reputation.
Can the pension be taken off him? Only if pension law is overturned or he renounces it.
Should it be taken off him. No, it was arranged when the bank was solvent or rather kept in being as a business by the government. If they had let RBS go bust (as I maintain they should have done) then he would not have got it.
Why did Myners agree to this? Does Fred know something about Gordon?
Should Fred be sued to recover the pension? Ooo that would be a goody. Can you just imagine how the case would develop. He'd just have to ask for Gordon to be questioned wouldn't he? So the government is not going to take action.
Might the government seek a cats paw to sue him for the money? Yes, but same answer - Gordon ends up in court.
If we are castigating Sir Fred for being paid for a job he failed at why aren't we doing the same for dear Gordon? It was his failure with the money supply and his failed regulatory system that gave the green light to bankers to behave like this and hosed them with massive amounts of money wildly underpriced.
If Sir Fred is culpable, Gordon is more so. He's not just ruined a bank. He's ruined a country.
Having thought about this for a few minutes, I've changed my mind. Why should Goodwin give up his pension? Yes, it's true that he well and truly left RBS in deep shit. No, he doesn't deserve his pension money. However, would you honestly give up part or all of your pension entitlement if you were asked to? I sure as hell wouldn't. When you consider that the government wants him to give up his pension simply to cover up their own incompetence, all the more reason for Goodwin to tell the Treasury to get lost.
Also, you've got to laugh at the idea of Gordon Brown - he who stole billions from the pensions system whilst Chancellor in a scam that would have made Robert Maxwell blush with embarrassment - saying "nobody could support" Goodwin getting such lavish pension entitlements. Says the man who's on a final salary scheme pension who will be a millionaire a few years after leaving office.
Never thought I'd say this, but I support Fred The Shred on this one. It's a pity Iain doesn't.
Small mod to my previous post:
"Should it be taken off him. No, it was arranged when the bank was solvent or rather kept in being as a business by the government. If they had let RBS go bust (as I maintain they should have done) then he would not have got it. At least he would not have got the uplift agreed by Myners, but he would have got the benefits already earned as the pension fund is ring fenced from the banks creditors."
Sir Fred should keep all of his pension. Or should Alistair Darling and Gordon Brown give up theirs, equally generous, also? Their crimes and misdemeanours are much greater than Sir Fred's. This is mob rule at its worst, incited by politicians and their followers in the media, including bloggers. Shame on you all.
Anyway it's all rather more complex than that - take a look at the letter from Goodwin to Myners (currently on Guido's patch). That's pretty entertaining stuff.
Suffice to say that Myners (as anointed by Brown) knew the detail some time ago, the deal was OK'd by everyone and now Brown has been forced into blaming Goodwin for everything by various revelations as to his own sheer incompetence.
Take a look at what's going on in the Treasury Select Committee. Certain amount of bloodletting there....
Let's face it, Goodwin's pension was not conditional upon performance. Maybe it should have been. But until recently Brown was hell bent on bigging Goodwin up, wasn't he? Shows how much Brown knows (nose?) or understands.
It looks like it's coming home to roost.
Fred missed a trick here. He should have made the offer to give up the same amount (% wise) of his pension as that given up voluntarily by any of the following: T Blair, G Brown, A Darling, E George, M King, and whoever were the heads of the FSA from '97 onwards.
Think of the pressure on Tony & Gordon to 'do the right thing'!
While I have no great respect for Sir Fred Goodwin, and think that he has been very fortunate, it appears (see Fred's letter on order-order.com) that Lord Myners agreed his severance package with RBS last October. I suspect that Lord Myners wanting to revisit the agreement is all about news management rather than the matter of the pension.
As for Parliament acting to punish one man, retrospectively - that is poor government and poor law. In any case Sir Fred is rich enough to challenge any such action - he would almost certainly win, while exposing the incompetence of the current Government.
I am suprised at you Iain for considering such action as acceptable. If they go for Fred's pension for 'good reasons' (spin), what is to stop them going for civil service pensions for 'good reasons' (spin), and then ordinary private pensions? Once a government starts dipping into private money because it suits them where does it stop?
Just read the Dear Lord Myners letter on GF. Excellent. Sir F is not going to give up without a fight is he? And although he cocked up RBS big time he is a smart cookie and will know just as well as we do how much Gordon's idiot policies have led to this crisis. The letter also makes clear that the pension pot accrued from previous employments as well as RBS, so why the bloody Hell should he surrender it.
If they take him to court, or if he goes bankrupt they could attempt to make an order agianst it, but as it looks like a final salary scheme (defined benefit) it is not a personal asset like a PP and cannot be attacked by his creditors or as far as I know attached by some sort of court order.
Anyway all this is just diversion tactics by Gordon.
The noose is getting tighter. The hounds are closing in. Will Gordon escape the net?
Brown said on Sky tonight that they were going to go to court to get it back.
Iain,
"DK, it's not a private contract. It's being funded by the taxpayer, so I think I have every right to express an opinion on the issue."
*sigh*
No, Iain: when the man signed the contract, the bank was a private company. Actually, it still is a private company: the government has nought shares, not nationalised the bank.
What you are saying is that the state should basically abandon the rule of law: Timmy explains it rather well, actually.
"Oh yes, I have a deeply illiberal side against people who rip others off. You'd better believe it."
Iain, I'm very happy that you are willing to abandon private contracts in order to express your outrage at the fact that my £6k of savings are now worth about £200, but I am not advocating such measures: why should you decide that the government should be above the law when I am not?
DK
Chris, you can take comments like that away from this blog. If you want to call me things like that you can do it elsewhere. Dear oh dear.
Woa - censord by da man - what an honour! It's called satire, Iain. I don't really believe you wish you were a what I said that people mustn't be allowed to read. You're a national treasure, even if you aren't very bright. I visit your blog many times a day, and even when you're as silly as you're being now, I enjoy reading it. Keep up the good work, and let's be friend on the right, even when one of us is seriously wrong. (And it's not me!)
If you are going to do satire, then it should at least be vaguely funny. That wasn't, and as you are probably aware from reading this blog, I have a fairly well developed sense of humour.
You may think so. Thousands wouldn't.
You may be right. But I doubt whether I would have the readership I do if you were in fact right.
That depends on whether they read you for your edgy, stand-up humour or your incisive oolitical analysis. Let me stress one more time that yours is one of my must-read blogs, Iain; but let me also stress that when you channel your inner 'Daily Mail'. I'm gonna say so. A propos, I note your complete lack of response to my earlier query:
'How about the contract you and your civil partner have? Fancy a homophobic government tearing that up on the grounds of public outrage?'
Why isn't anyone asking if Goodwin really was lied too by Myners as he claims in his letter? There was no denial in the reply.
'oolitical'? Sorry, mustn't type when drunk! Politica.
Tearing up Fred the Shred's contract, however much the population (especially the Daily Mail wing) would enjoy it, would be wrong and could open the floodgates to the government doing the same to anybody they like about anything. We'd be a step closer to Zimbabwe if we did that.
If some aspect of the contract can be shown to have been unlawful when it was signed, or that Fred broke some of its terms, then OK it can be rescinded. I'm sure that's the way the US would go about it, if they felt the need.
In cash tems its a pinprick against the trillions Gordon is pissing up the wall, that is the news that affects us all.
The rule of law is more important then one bank bosses golden goodbye. Iain, I think you called this one wrong.
P.S. I am an RBS shareholder too.
"and as you are probably aware from reading this blog, I have a fairly well developed sense of humour"
Ah, that explains this moronic post then!!
The smokescreen of Sir Fred Goodwin's pension arrangements is being used to obscure the real story which is the accusations made by Lord King and Lord Turner to the Treasury Select Committee. The BBC in general and Robert Peston in particular are doing their best to "run interference" for Gordon Brown and Alistair Darling; how can we stop them?
Conservatism 101.
The State SHOULD be bound by law.
What an absolute sh*t of a man to run the taxpayer so far into debt, then stand smirking and dare the government to take his milloins from him.
Robber Baron springs to mind.
You may all disagree with me and my pension but if you want pension advice then please do get in touch with me www.sirfredgoodwin.com or at pensionadvice@sirfredgoodwin.com
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