Resolution on Pension Arrange

RNS Number : 1286U

Royal Bank of Scotland Group PLC

18 June 2009

 



The Royal Bank of Scotland Group plc

18 June 2009

RESOLUTION BETWEEN RBS AND FRED GOODWIN

ON PENSION ARRANGEMENTS

RBS is pleased to announce that Fred Goodwin has volunteered to make a substantial reduction to his pension which has been the subject of unprecedented media and political attention over the past few months. His annual pension will now reduce to £342,500. 

Commenting on the resolution the Chairman of RBS, Philip Hampton said:

'On any measure this represents a very substantial reduction to Fred's pension and is an acceptable amount to all parties to the discussion. I am very pleased that we have resolved a situation that has been a difficult and unhappy one for all the parties involved, and it is to  Fred's credit that he has done this on a voluntary basis. 

'This pension arrangement became a symbolic issue, and the focus of unprecedented media and political attention.  It had to be fixed to allow everyone to focus our energies where they should be, on getting the company back to health.  

 'I have been in dialogue with Fred about this issue since I became Chairman in February. He understandably wished to wait until the conclusion of an internal inquiry into his pension arrangements, conduct, expenses and the use of Company assets, before addressing this question. This inquiry concluded recently, finding that there was no conduct on Fred's part that would justify reducing the pension. Following this, Fred made an approach to revisit the pension arrangements and we have been working with him to change them. A resolution had to be found for the sake of all concerned and we thank Fred that this has now been achieved. 

'Fred Goodwin was a respected CEO of RBS during its sustained growth over many years during his time in office. He expressed his deep regret over the position RBS found itself in when the global crisis hit last year and fully accepted his share of responsibility as Chief Executive. This issue has been a serious distraction from allowing us to focus on the real causes of the problems facing the Company and many other banks. I am pleased that common sense has now prevailed and I hope that most reasonable people will welcome that.  Serving our customers better than our competitors is our goal and is the best way to restore confidence in the Company, that must be our focus. '

Notes to Editors

• Under the departure arrangements agreed in October 08, Fred Goodwin was due to receive an annual pension equivalent to £703,000 per annum. This payment was available immediately to Fred Goodwin on retirement at age 50 without discount, i.e. as if he had retired at age 60. As was his right under the rules, in February 09 Fred Goodwin elected to exchange part of his enhanced pension for a lump sum with a remaining annual pension of £555,000. Fred Goodwin has now volunteered to reduce his annual pension to £342,500 reducing the total value of the pension by £4.7 million.

• In March 09, the Chairman of RBS initiated an internal inquiry into Fred Goodwin's conduct in relation to expenses and the use of company assets to assess whether this would provide the Company with an opportunity to revisit the original pension arrangement. The Group has concluded this review and found there was no wrongdoing or other misconduct on Fred Goodwin's part in this regard that would justify reducing the pension. 

Contacts

Andrew Wilson, Head of Group Corporate Affairs

Tel:      [phone]

Neil Moorhouse, Head of Group Media Centre

Tel:     [phone]

Mob:   [phone]

 

END

 

 

MSCFVLFFKQBEBBF