SIR FRED Goodwin, the former chief executive of Royal Bank of Scotland (RBS), has agreed to hand back more than a third of the controversial pension he was paid after leaving the stricken bank last year.
Sir Fred was pilloried for accepting a £703,000 (€827,000) annual pension from RBS, which was brought to the brink of collapse last October by a number of rash acquisitions that he spearheaded, including the purchase of Dutch bank ABN Amro in 2007.
The banker and his family have been in hiding since news of the pension payment broke and his Edinburgh home was attacked in March. He is thought to have been in the UK for most of the time, although he has spent time in Turkey and Spain.
Sir Fred left RBS, now 70 per cent state-owned, in October and was granted early retirement at the age of 50 from the bank, which needed a £20 billion UK government bailout.
It later emerged that part of his £16.9 million pension pot was discretionary.
He had already reduced his £703,000 annual pension to about £555,000 by taking a lump sum of £2.7 million earlier this year but, under a new agreement announced yesterday, he will cut his annual pension by £200,000 a year to £342,500. The total value of his pension pot is now £12.2 million.
Sir Fred made the offer following the conclusion of an internal legal review by RBS of his expenses and use of company assets, which concluded that the former chief executive had done nothing wrong.
Sir Philip Hampton, new chairman of RBS, said recently he had employed “more lawyers than you can shake a stick at” to see if Sir Fred’s pension contract was watertight.
Sir Fred, who had made it clear he wanted to wait for the outcome of the review, made the decision voluntarily to hand back part of the pension in the past few days. – (Copyright The Financial Times Limited 2009)
