Appearing before the Treasury Select Committee this morning, City Minister Lord Myners admitted that disgraced ex-RBS boss Sir Fred Goodwin has already walked off with a £3m advance on his £16m pension pot. However, Myners pinned the blame for the fiasco squarely on the shoulders of the RBS board, who he said had ‘consistently misdirected themselves’ on the issue, and taken an ‘extraordinary’ decision. For his part, he insisted he did not ‘negotiate, settle, or approve’ the award. Which perhaps raises the question: why not?
Myners (who is incidentally rather an expert on pension funds) insisted that it wasn’t the job of a Government minister to get involved with pension awards, but said he had been ‘very clear’ with the RBS board ‘about the principles the Government expected’: i.e., that there should be no ‘rewards for failure’ (there’s the politicians’ favourite phrase again). What’s more, he added, they were perfectly entitled to reduce his pension pot - because Sir Fred didn’t jump, he was pushed. So their decision not to reduce his pension pot was ‘beyond my comprehension’, he said. In other words: nothing to do with me, guv…
The pension award does seem amazingly generous, the more you learn about it. According to Myners, RBS treated Sir Fred’s pension as if he’d joined the scheme at 20 rather than 40, and didn’t offset it against any of his previous pension entitlements. The select committee also revealed that the board never once discussed the actual size of the pension pot. Now it's obviously in Myners’ interest to hang chairman Sir Tom McKillop, non-exec Bob Scott and the rest of the RBS board out to dry. And arguably this whole affair is a pointless distraction from the important job of fixing RBS. But there were clearly some pretty alarming governance cock-ups here (particularly as the whole board allegedly threatened to resign en masse if McKillop was ousted).
Myners still seems to be clinging onto the hope that Sir Fred will have a change of heart and give back his pension voluntarily (like Jack Welch did a few years back) – but we can’t really see that happening. Goodwin has insisted on getting his full entitlement throughout, and if anything seems to be getting even more brazen (perhaps because he now has nothing to lose). According to Myners, he’s offered to pay back the £3m advance – but only if his existing entitlement, which currently stands at about £700,000 a year, is increased even further. That’s some kind of brass neck he’s got there.
For his part, Myners insisted he had done nothing wrong and had no regrets. But he clearly didn’t convince all the MPs – Labour’s George Mudie, for example, insisted that he ‘slipped up’ by not taking better care of taxpayers’ interests. Myners was in defiant form today, but the inescapable fact is that this fiasco happened on his watch...
In today's bulletin:
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