FTSE 100
Dow Jones

Wednesday, 25 February 2009

Fred the Shred is Dead (not yet but it rhymes)

“The World’s Worst Banker” (according to Daniel Gross of Newsweek, see article here), has trousered a £650,000 a year pension although he is only 50.

He says: "My pension is the same as everyone else in the bank who is in a defined benefit pension scheme. It is determined in the same way as anyone else.", except of course that everybody else's pension is calculated on the basis of payments until 60 or 65.

Goodwin doesn't seem to understand the time value of money, which probably explains his performance. A report in the Daily Telegraph puts the cost to the pension scheme of the earlier availability of his pension at an exra £ 8 million, which will have to be topped up by RBS, or in other words, you and me.

And it seems that the pension was not some historic arrangement but was agreed by UKFI when Goodwin was stood down in October 2008 and notified to Darling at the time.

No comments: