This sordid affair shows the principal character displaying the
morals of an alley-cat.
The idea that Goodwin having wrecked a multi-billion pound business
should even contemplate NOT making "substantial financial sacrifices
when leaving Royal Bank." is frankly ludicrous.
It indicates the total lack of any moral standards in the world of
these mega-bankers. And he expects us to take him at his word and
trust him.
xxxxxxxxxxxx cs
========================
BBC ONLINE 26.2.09
In full: Sir Fred Goodwin's letter
The full text of Sir Fred Goodwin's letter to Treasury minister Lord
Myners about his pension arrangements.
Dear Lord Myners,
You telephoned me yesterday and asked me to consider voluntarily
taking a material reduction in my pension entitlement as a "gesture"
to acknowledge the level of Government support being made to Royal
Bank of Scotland (RBS).
You highlighted that the absence of such a gesture would give rise to
significant adverse media comment.
I outlined to you my view of the matter, but as I had not been
expecting your call and as you expressly requested me to do so, I
undertook to reflect on the matter again.
You emphasised that I would need to provide you with an answer ahead
of the publication of the Group's annual report and financial
statements sometime next week.
It came therefore as something of a surprise to find that both
details of forthcoming 2008 financial statement disclosures relating
to my pension and the substance of our telephone conversation had
been placed in the public domain a few hours after we spoke.
In the circumstances, I feel that an earlier response to your request
is necessary, and the purpose of this letter is to provide that.
Whilst my pension is the current focus of attention, there were a
number of other aspects of my departure from RBS which need to be
considered at the same time, particularly in the context of
"gestures" and appropriate behaviour.
My contract of employment provided for a 12 month notice period,
which I voluntarily waived in October of last year.
This amounted to a loss of 1 years' (sic) salary, and I discussed
this with you at the time, when you indicated that it was both an
appropriate and sufficient recognition of the circumstances.
Subsequent to this, you approached the chairman of the group
remuneration committee to suggest that I should waive certain share
related awards which would otherwise have vested upon my leaving the
group.
Whilst difficult to value with precision, these had a value
equivalent to about 3 months' salary at that time.
During these discussions, I am told that the topic of my pension was
specifically raised with you by both the chairman of the group
remuneration committee, and the group chairman, and you indicated
that you were aware of my entitlement, and that no further "gestures"
would be required.
On this basis, I agreed to waive my entitlement to the share related
awards and proceeded to subscribe for my full allocation of shares in
the ensuing share issue.
Like you, I believed that these gestures were appropriate in the
circumstances, and sufficient, and revisiting the position today, I
believe that they remain so.
I accept responsibility for that which I was responsible for, and
recognise that my actions must be consistent with this.
I believe that they have been, and to voluntarily accept a reduction
in a pension entitlement which has been built up over many years and
in other employments in addition to RBS, is not warranted.
It is important to recognise that my pension arrangements have not
fundamentally altered since I joined the group in 1998.
Whilst the quantum of the "pension pot" figure has increased, this is
principally as a result of the assumption used last year about
retiring at age 60 no longer being appropriate. The amount which I am
due to receive as a pension continues to be calculated in a manner
consistent with prior years.
Whilst I suspect that you will not now agree with it, I hope you can
understand my rationale for declining your request to voluntarily
reduce my pension entitlement.
In conclusion, since our private conversation yesterday is now in the
public domain, I have no objection to the complete content of this
letter being made public.
Yours sincerely,
Sir Fred Goodwin
=- =- =- =- =- =- =- =-
BBC NEWS - Blogs - Peston's Picks 26.2.09
The Goodwin pension questions [continued]
. Robert Peston
UPDATE, 16:52PM: Here's yet more on this tale of who agreed to give a
£650,000 pension for life to the chief executive blamed by many for
the colossal mess at RBS.
The initial decision was taken over the fraught weekend in October
when the Treasury was bailing out our banks for the first time.
On the evening of Saturday 11 October, the City minister - Lord
Myners - met Royal Bank's then chairman, Sir Tom McKillop, and the
senior non-executive director of the time, Bob Scott.
Lord Myners urged that Goodwin be removed from his post - but was
told by Sir Tom that the board had already agreed to do so.
The City minister told Sir Tom that it would be inappropriate for Sir
Fred to receive a termination bonus or to be able to exercise his
share options.
However, in the presence of a senior lawyer, Lord Myners was informed
by Sir Tom that Sir Fred would walk away with a pension pot valued at
£16m - and that this was a contractual obligation.
Lord Myners felt he couldn't challenge an arrangement that therefore
seemed obligatory - though presumably he now wishes that he had done.
The question that now arises is what did Sir Tom mean by "a
contractual obligation" - since it is now clear that the board had
discretion not to give Sir Fred £650,000 per annum aged just 50.
UPDATE, 17:17PM: I am being faxed a copy of a letter from Goodwin to
Myners which claims that Myners agreed the pension should be kept out
of the departure negotiations. Sir Fred is not planning to volunteer
to return any of his pension pot.
UPDATE, 17:30: In Sir Fred's letter to Lord Myners, Sir Fred says
that he made substantial financial sacrifices when leaving Royal
Bank. And he insists that Lord Myners told two senior Royal bank
directors that further "gestures" would not be required, which was
interpreted as meaning that Lord Myners was sanctioning the pension
settlement.
========================
TELEGRAPH Blogs - Iain Martin 26.2.09
Sir Fred Goodwin 'furious' at treatment over pension
Posted By: Iain Martin at Feb 26, 2009 at 18:32:09
Fred the Shred is letting it be known that he is "furious" that
details of his pensions have been leaked by the Government. Sir Fred,
believe me, we're all furious about your pension too... but for
slightly different reasons.
As the flames from this story grow higher, the leaking last night of
the detail that Godwin gets £650,000 a year, now, for leaving, is
starting to look like the most stupid leak for many a year. Its
effect may have been to obscure the detail about the bail-out, but it
has now spun out of control.
Both Brown and Darling are in the path of the fire. What did they
know about Goodwin's deal? If they didn't know anything, why didn't
they ask?
========================
POLITICS HOME 26.2 09 - - - - -COMMENTS
=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-
BBC News at 16:40
Timms: We will take legal action if Sir Fred does not renounce his
£16m pension
["We'll huff, and we'll puff, and we'll NOT blow his house down" -cs]
Stephen Timms, Financial Secretary
Mr Timms said Former RBS chief Sir Fred Goodwin should voluntarily
"forfeit" his extensive pension arrangements and threatened legal
action if he didn't.
"Our view is that Sir Fred should forfeit the pension... We're
looking at what legal avenues we can go down, should he refuse to
forfeit it," he said. [But most immediate legal opinion is that
Goodwin has got it 100% legally sewn up -cs]
He insisted the arrangement was made before the Government became a
shareholder and that the Government had only accepted former
arrangements because they had thought it legally binding, not the
discretionary choice of the old RBS board.
He said: "The arrangement was made before the Government became a
shareholder. We now understand it was a choice made by the previous
RBS board.
"We are working with the new board to to withdraw part or all of the
generous arrangement that was made."
He added: "I think what's become apparent was that it was a choice
made - now we need to work out how to un-make it... There was not in
fact a legal obligation on the former RBS board."
Mr Timms expressed some confidence the Government would be able to
recoup part if not all of Sir Fred's pension arrangements should he
not oblige.
"There is a good chance, if Sir Fred does not agree to withdraw the
arrangement in place," he said.
16.45 Sky News
Mr Timms said moments later he hoped Sir Fred Goodwin realised his
£16 million pension arrangements were unacceptable.
"I hope Sir Fred will recognise this is indefensible... I hope Sir
Fred realises he should not be getting such a large pension pot," he
said.
He also rebuffed accusations the speed at which the bank bailout was
implemented in October had caused the Government to overlook this £8
million loss to taxpayer.
"The measures were put in with speed in October... The nature of the
[pension] arrangement - the fact that it was twice the amount they
needed to provide - was not clear to us at the time."
Mr Timms said he would not comment on Sir Fred Goodwin's character
until his decision had been made: "I think we should let Sir Fred
draw a conclusion from this," he said.
He also reiterated his earlier statement the £16 million arrangement
was in no way a "legal obligation" on the part of RBS but "a choice
by RBS to provide an overly generous reward."
"When we became shareholders - we were under the impression it was a
legal obligation," he added.
19.14 Channel 4 News
Mr Timms later said that the pension arrangement was not a legal
obligation but a matter of choice.
"This was an arrangement that was put in place by the old board of
RBS before the government became a shareholder.
"It has come clear to us that it was a choice made by the old RBS
board not in contract, it is an absolute fragrant example of the
bonus culture that has done damage to the banking system around the
world.
"Lord Myners was told about the arrangement, it was presented to us
as a contractual obligation."
[These 3 statements are full of internal inconsistencies ! -cs]
=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-
BBC News at 17:29
Salmond: The Govt should have acted earlier on Sir Fred's pension pot
Alex Salmond, Scottish First Minister
Mr Salmond said the Government was too late to act on Sir Fred
Goodwin's "unjustifiable" pension pot.
"I think most pensioners would think Sir Fred's pension is
unjustifiable," he said.
"It seems a bit late in the day, three months later, to start waving
legal measures. Is that is the best the government can do - they knew
but they were misinformed?
"The chances of legal action in a Scottish court [with that defence]
would be small," he added.
Mr Salmond also said the record losses suffered by RBS were
predominantly from the takeover of ABN Amro: "If you look at the
details, they were predominantly losses from ABN Amro. It means that
the core divisions [of RBS], the ones performing from Scotland, have
been doing well," he said.
[He seems more concerned with the reputation of Scotland than the
truth -cs]
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