Now Sir Fred's right-hand man pockets £½m RBS pension

Published on Wednesday 6 May 2009 22:02

THE last member of former Royal Bank of Scotland boss Sir Fred Goodwin's failed top team is set to leave the group with a £517,000-a-year pension.

Deputy chief executive Gordon Pell – who earned 908,000 last year – will retire from the part-nationalised bank early next year at the age of 60 with a pension pot worth 9.8 million.

Mr Pell, who joined the bank in 2000 after it took over Coutts, where he was chief executive, was seen as one of Sir Fred's right-hand men.

At the annual general meeting last month, furious shareholders who had lost millions of pounds between them angrily demanded that Mr Pell should be sacked.

Their other target at the meeting, finance director Guy Whittaker, departed on Tuesday.

The bank's new chairman, Sir Philip Hampton, said at the time that Mr Pell could not be blamed for the bank's collapse.

And he added that Mr Pell was asked to stay on to provide continuity.

Yesterday there was anger that Mr Pell is being allowed to retire normally, which will entitle him to the maximum pension built up over 39 years of service.

Roger Lawson, of the UK Shareholders Association, which represents small investors, said: "I was present at the shareholders' meeting and it was clear there was a lot of anger about Mr Pell continuing on the board.

"Certainly, there needed to be some collective responsibility about what happened and he should have gone as well.

"I think there will be a lot of unhappiness about his pension deal, which seems to be excessive in the circumstances."

He said shareholders were still seething over the way RBS was forced to write off billions of pounds on the purchase of the Dutch bank ABN Amro and soaring bad debts.

As a result, the taxpayer now owns more than 70 per cent of the bank – and the RBS share price has plummeted.

The taxpayer was also exposed to billions more in potential losses after RBS placed hundreds of billions of pounds of toxic debts in a Treasury-backed insurance scheme. This could see the taxpayers' stake in the bank rise as high as 95 per cent.

RBS, which will give its latest trading update tomorrow, announced in April that there would be up to 9,000 job cuts in April as the firm looks to make 2.5 billion in cost savings over the next three years.

Meanwhile, RBS announced yesterday that it was bringing in three new directors.

Mr Pell will be replaced by Brian Hartzer, who joins from Australian bank ANZ.

Paul Geddes, the current chief executive of the UK retail division, will lead its insurance business, which includes Churchill and Direct Line.

Insurance boss Chris Sullivan will move to become chief executive of the corporate banking division.

Chief executive Stephen Hester said: "I am extremely pleased to have been able to move rapidly to assemble a strong leadership team. We have many challenges ahead but really great businesses on which to build."