Thursday, June 18, 2009

Goodwin hands some of his huge pension back

Fred Goodwin, the disgraced former CEO of our largest state owned bank - RBS - has graciously agreed to surrender £361,000 of his unjustified £703,000 annual pension.

What inspired this sudden generousity? Could it have been the army of lawyers that RBS employed to find a potential loophole in Mr. Goodwin's contract?

Whatever the reason, it is a gesture that has come too late to save Mr. Goodwin's reputation. The British public has come to a settled view about Fred the Shred and today's news changes nothing.

Moreover, Lord Myners still looks like a mug for agreeing to the pension, and Mr. Brown still looks stupid for appointing Lord Myners.

In fact, the only beneficiary from Mr. Goodwin's belated givaway seems to be the UK taxpayer.


  1. Bad move: You can get away with being crooked but once you show weakness, it is over!

    Hated and Despised together is a deadly combination according to Machiavelli.

  2. This is all to do with where power lies when we do not have full employment. Without some effective restraint on management, which is apparently only possible when full employment gives works councils and unions some effective say in how companies should be run and remuneration calculated, 'management' gives itself a ridiculously large slice of the available remuneration pie.

    It's not about the market value of good management (as is rather obvious in Fred Goodwin's case). It is just about the power of management to act in its own interests by pushing up remuneration in the upper management grades while pushing down remuneration amongst the rank and file.

    It's the same in the public sector. For example, how can the VC of Nottingham University really be worth, at £600,000 annually, ten times the remuneration of a professor of theoretical physics or many other subjects. Are these somehow rather less valuable, rather less talented people making a smaller contribution to the University? Not at all, especially from the student (i.e. 'customer') point of view, and from an income-generative point of view (fees and research grants/sponsorship).

    It's just about the power of management and remuneration committees to do as they please.

    B. In C.

  3. B. in C.'s example is perhaps not too convincing. Vice-Chancellors do something that a professor of theoretical physics would by and large consider a waste of time. The absurd V.C. remuneration is perhaps necessary to bribe someone not entirely contemptible into doing it. Even so, candidates for Vice-Chancellorships are often rather undesirable (remember the Monash business?)