Fred the Shred is casualty of crunch
RBS chief executive stepping down
Published:
ROYAL Bank of Scotland boss Sir Fred Goodwin yesterday paid the price for the biggest banking bailout the UK has ever seen.
Sir Fred – dubbed Fred the Shred for his cost-cutting ways – is stepping down as chief executive after being forced to rely on £20billion of taxpayer funding to shore up the bank. It came less than six months after he was forced to ask shareholders for £12billion of extra funds to bolster the balance sheet.
His departure yesterday makes him the highest profile UK banking casualty of the credit crunch so far – and also one of the best paid.
Last year the law graduate and chartered accountant was paid £4.2million, including a £2.86million bonus. He has an £8.37million pension pot that will pay him £579,000 a year when he reaches the bank’s retirement age.
In a sign he has read the public mood about the banking crisis, Sir Fred has agreed to accept no severance package as part of his exit deal. Insiders suggested it could have been worth as much as £2million. He was guarded in media interviews yesterday, skating over a chance to apologise to customers and shareholders for the recent financial turmoil.
Meanwhile, it was confirmed that HBOS chief executive Andy Hornby, who will step aside when the bank is taken over, is also waiving his contractual entitlement – worth an estimated £1million.
