Sir Fred refuses to sacrifice pension

Former Royal Bank of Scotland chief Sir Fred Goodwin has refused to give up his £650,000 a year pension in a move which Treasury minister Lord Myners was quick to slap down as ‘unfortunate and unacceptable’.

The battle of words over Goodwin’s pension continued last night with an exchange of letters between the ex RBS chief and Myners. Goodwin’s refusal to forgo the payout made the front pages of many national newspapers this morning, overshadowing RBS’s record UK corporate loss and move further into the clutches of the government.

The furore over the scale of Goodwin’s pension kicked off yesterday morning when chancellor Alistair Darling decried the payout and said the Treasury was talking to Goodwin. Later on in the day, prime minister Gordon Brown intervened, arguing no one should be rewarded so much money at a time when the bank itself is making record losses, while hinting that legal action may be taken.

Goodwin then sent his letter to Myners in which he outlined the sacrifices he had made after leading RBS to such huge losses, including a voluntary waiving of his 12 month notice period and the salary that came with it.

Goodwin said that Myners had previously indicated that he was aware of the scale of his pension ‘and that no further "gestures" would be required’.

‘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.’

Myners retorted in his own letter that for Goodwin to forfeit his pension ‘would be an appropriate recognition of the failings of RBS under your tenure and the subsequent support the government has provided’.

'I hope that on reflection you will now share my clear view that the losses reported today by the bank which you ran until October cannot justify such a huge reward,' Myners wrote.