Sunday, 1 March 2009

Fred Goodwin should keep his pension

It's way too early for me. The trouble is that I ate too much curry last night and felt really tired, so went to bed early at 9.30. Consequently, I woke up at 3.38 this morning and just couldn't get back to sleep. Ho-hum. Still, had I not been able to take the dog for a walk at 5, I wouldn't have witnessed a guy getting out of a taxi in his underwear in the village square and going to the cash machine. Clearly one too many sherberts...

Been meaning to post something about Fred Goodwin all week but didn't have the time. There's been much outrage over his near £700,000pa pension, which understandable given that he turned one of the world's largest banks into a basket-case. Many are calling for him to give the money back and the likes of Gordon Brown are jumping on the populist bandwagon with empty threats of legal action to recover the money - how typical of a politician to divert attention from their own failings by picking on an easy target third-party. This isn't a new story, it got a few column inches last year but got drowned out in the surrounding sea of calamitous economic news. How convenient for it to be resurrected on the day RBS has to be bailed out again by the government.

Now, don't get me wrong, I don't believe that Goodwin deserved this pension. It's a stark example of reward for failure (though admittedly it's not all from RBS - his previous pension was rolled into this when he joined the bank), but I don't think he should give back a single penny.

Firstly, whether we like it or not it seems that there was nothing illegal in the RBS board giving him the pension. You could maybe argue that he was negligent or wreckless and as such in breach of contract and the law about directors' responsibilities, but that's a notoriously difficult thing to prove. He was clearly incompetent, but that's no crime.

Secondly, the government, in the form of Lord Myners, approved the pension arrangements. Why isn't he taking responsibility? He claims that he thought the arrangements were contractual, but surely it was encumbent upon him to check, particularly given the political sensitivity of the matter?

However the main reason why I think he should hang on to the pension is because of the sheer hypocrisy of those calling on him to give it back. I wonder how many of those people would give it back were they in his shoes? It's easy to claim the moral high ground when you're not the one with the money.

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