A SENIOR Royal Bank of Scotland director who presided over its disastrous collapse two years ago is to retire with an annual pension of £580,000 from next month.
• Gordon Pell, last of the ancien rgime at RBS, is leaving with an annual pension of 580,000. Picture: Complimentary
Deputy group chief executive Gordon Pell's annual pay-out, the equivalent of almost 1,600 a day, will be higher than the 342,500 a year taken by former chief executive Sir Fred Goodwin, who agreed to cut his pension after a public outcry last year. However, Mr Pell, whose annual pension sum has increased by 60,000 over the last 12 months, is taking his retirement deal in full. His pension pot is valued at 13.5 million.
The revelation of another huge pay-out for one of the bankers who was at the helm when RBS was brought to its knees prompted furious reaction from politicians. They said it was "extraordinary" that bankers who had been forced to turn to the taxpayer for support should be able to claim nearly 600,000 a year in retirement.
Had the government not propped up RBS with a 45.5 billion bail-out, and instead allowed it go bust, the maximum annual pension for employees allowed by the Pension Protection Fund would have been only 28,000.
But RBS insisted Mr Pell, who was paid 932,000 last year, was entitled to claim his pension, pointing out he had built up his pot over nearly 40 years in the banking sector.
He joined RBS in 2000 after being a director at Lloyds and was widely seen as one of Sir Fred's "right-hand men" – he is the last link at the bank to the disgraced former chief executive. He is also the last RBS director to benefit from the bank's now defunct final salary pension scheme.
Mr Pell was the subject of shareholder anger last year, when small investors demanded to know why he was still on the board, given his links to the Goodwin era. However, he has been largely unrepentant over RBS's workings, last year hailing Sir Fred's "skills and strengths" as chief executive.
The Scotsman understands UK Financial Investments (UKFI) – the body that holds Britain's part-nationalised banks to account – considered whether to challenge Mr Pell's pension, but decided it would be too difficult to unpick.
Unlike Sir Fred, whose pension was increased while he was negotiating his departure in 2008, Mr Pell's deal was organised well before the financial crisis.
Government insiders say it would therefore have been near impossible to force him to give up part of a pension, which has been accrued over a 39-year career.
But critics said the deal would only add to the public backlash against bankers.
There was a huge row over Sir Fred's pension which, under a departure deal organised with the RBS board in October 2009, was increased to 703,000 a year. That prompted a political storm, after the bank claimed ministers had been informed of the terms of his enhanced pension, and allowed it to go ahead.
Sir Fred later volunteered to reduce his annual pension by half.
Asked about Mr Pell's pension pay-out, Liberal Democrat Treasury spokesman Vince Cable said: "This is yet another illustration of the quite remarkable rewards being dished out by the leading banks, including this failed bank, to their executives – be it as salary, bonus or pension. Let's not forget that this is a bank rescued and paid for by the taxpayer."
SNP Treasury spokesman Stewart Hosie said: "This is not the first time huge pensions have been paid to senior executives in the now taxpayer-owned banks.
"It may well be the case that nothing can be done, because they were negotiated pre-2005, but that will not stop the public anger at yet another bank executive being rewarded for apparent failure. As businesses still suffer from a lack of lending and voters fear for their jobs, it is quite extraordinary that a pension of this level should be paid."
Since October 2008, RBS has shed 16,000 of its 165,000 staff globally, including 10,000 jobs in Britain. Mr Pell's deal was revealed in RBS's annual report, published yesterday.
A bank spokesman said: "He is a career banker who has worked a long time, some 39 years, in banking. He is about to retire at the end of this month. This pension relates to service both with Lloyds TSB and RBS. It is worked out at the normal 1/60th of salary, currently standing at 907,000."
However, the UK Shareholders' Association said the award would be a further kick in the teeth for investors who lost millions when RBS's share price went through the floor. Spokesman Eric Chalker said: "In terms of commitments that have been made in the past, we have to just hold them up as examples as to the way these directors have behaved with regard to shareholders.
"Shareholders will have to wait a long time to get a return for their money. At the same time, they are seeing directors who presided over the fall of the bank getting rewarded with huge sums of money."
A spokesman for UKFI said: "His pension is a matter for the board of the Royal Bank of Scotland."
Top of the pile
IN COMPARISON to Mr Pell's 580,000 a year, these are typical annual pensions (figures relate to full-career service):
FTSE 100 company director - 250,000
Major-general - 65,000
GP - 35-50,000
Police Inspector - 30-35,000
MP - 25-40,000
Fireman - 18,000
Teacher - 15-20,000
Nurse - 15,000
Average occupational pension - 8,320
State pension for a married couple - 7,800
Don't let banks become so powerful again, say MSPs
Questions raised over Crombie's RBS role
RBS top brass can reap 400% shares bonus in revamped payouts
Softly spoken opera lover and horse-rider who defended Sir Fred to the hilt in face of storm of criticism