Sir Fred considers reducing RBS pension

Jim Moore
03.04.09 11:51

Royal Bank of Scotland (RBS) chairman Philip Hampton has revealed that the company's former boss Sir Fred Goodwin is now thinking about a voluntary reduction in his �703,000 pension.

It came as he warned of more jobs losses at the beleaguered banking group, saying said the 2,700 redundancies already made "will not be the end of the story".

Sir Fred is widely blamed for bringing down the bank he built from a regional player to a global giant as a result of the disastrous acquisition of Dutch bank ABN Amro.

Mr Hampton told shareholders that were it not for this the bank would have turned an operating profit. The company unveiled Britain's largest corporate loss on February 26 - some �24.1 billion.

"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. That is the painful reality that we can now do nothing to change. With the benefit of hindsight it can now be seen as the wrong price, the wrong way to pay at the wrong time and the wrong deal," he said.

While Sir Fred is "considering" a cut, he has not yet got back to Mr Hampton with his final decision although there has been dialogue since Sir Fred wrote to City Minister Lord Myners telling him he would hold on to the entire fund.

The bank is talking legal advice on whether some of Sir Fred's �16.9m pot can be clawed back after it created a public outcry drawing across the board criticism including from Prime Minister Gordon Brown.

Sir Fred has since had his home attacked by vandals. In angry scenes earlier this week demonstrators also broke into RBS's City offices, causing damage there although no staff were on the premises.

Mr Hampton appealed for an end to the "public flogging" of the bank, subject to a �20 billion taxpayer funded bail-out.

He also sought to deflect some of the torrent of criticism facing the bank from its staff. He said: "They deserve better from their top management and they do not deserve to share the worst of the criticisms being laid at the door of their employer and their industry." He said most earned less than �21,000 a year and were not "fat cats or city slickers".

Mr Hampton said only a "tiny minority" were responsible for the bank's spectacular fall. Most of them have since left the group.

But he did raise fresh criticisms of some of the bank's spending - such as its �20m sponsorship of the Williams Formula One team and the decision to buy a �35m private jet.

"Would we choose Formula 1 sponsorship if we were starting from here? No. Should we retain a corporate jet? Of course not and (current chief executive) Stephen Hester put it up for sale immediately on taking up his post."

Questions are also being asked over why three independent directors, Colin Buchan, Archie Hunter and Joe McHale, who presided over the bank's near-collapse, are still on the board where they receive fees of �100,000 each.

Sir Fred considers reducing RBS pension

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