The Rewards of Failure
As if we needed proof of the bare-faced arrogance and greed of the senior bankers behind the current financial crisis, Sir Fred Goodwin gives us more than we could have hoped for. Having sat at the helm of the Royal Bank of Scotland (RBS) as it ploughed merrily towards the rocks, this 50-year-old knight of the realm can retire on a pension of nearly three-quarters of a million pounds a year. Sir Fred Goodwin has no qualifications in economics or banking. Terry Wogan is more qualified in the field (many thanks to Private Eye and its reader William McHugh) and so are the vast majority of the former employees of RBS who are now unemployed. Investors and shareholders in RBS have seen their savings, investments and pensions destroyed through the misguided policies enacted under Sir Fred’s inept captaincy.
When he was allowed to “take early retirement” last October, he magnanimously gave up his right to up to 15 months’ salary (approximately £1,300,000) and was praised by Alistair Darling for “doing the right thing”. Normal people would at best get one month’s paid notice if their work was found to be as flawed as Sir Fred’s leadership. However, he accepted the addition of around £8,000,000 to his pension pot, taking it to around £16,000,000, ensuring he would receive £693,000 every year until he dies. He is 50 now, so, if he lives to 80, he will get £20,800,000. If he makes it to 100, he’ll get £34,700,000.
This is a ridiculous amount of money for any man to be paid for digging the garden, especially if his actions help bring about the financial ruin of so many. It’s not as if he needs the money. In the last year before the RBS collapse he received a total of £4,200,000, including a bonus of £2,860,000. Surely the bonus he was paid was based on inaccurate accounting as many of the assets held were worth virtually nothing. He also leaves with 2,530,000 shares in RBS, although these are now worth considerably less than he expected; Just ask any RBS shareholder how much they have been devalued! If Sir Fred was accepting bonus payments based on company profits calculated from inaccurate or misleading accounts, perhaps there may be some grounds for legal action and recovery of his assets. Sir Fred Goodwin received his knighthood, on the suggestion of then Prime Minister Tony Blair, for services to the banking industry. It would seem only reasonable for him to be stripped of his title in light of the true nature of his service to the banking industry and the the thousands who are now suffering in his wake.
This whole fiasco could have been averted, if only we hadn’t got such an inept Government. It is all well and good making noises about taking legal action to block the pension payments, but Alistair Darling and, presumably, Gordon Brown could and should have stepped in to ensure Sir Fred would not profit further from his time running RBS from the outset. Apparently, it was believed that Sir Fred’s entitlements were legally binding. Well they should have read or got someone to read the small print. When the reins of power are held by such greedy financiers, devoid of any conscience and self-interested politicians of such ineptitude, what chance do the little people stand.
