Goodwin to take home £3.5m in pay and bonuses

ROYAL Bank of Scotland’s Fred Goodwin has been paid about £3.5 million in salary and bonuses for guiding the company to its record results last year - catapulting him ahead of the pack as the country’s best-paid chief executive.

Goodwin shared the title of the most handsomely rewarded boss in Scotland in 2002-03, when he earned 2.6 million in basic pay and bonuses.

Stewart Milne, of the Aberdeen housebuilding company that bears his name, and David Murray, the former Rangers FC chairman who owns and runs Murray International Holdings, pocketed an identical sum last year.

Goodwin has now seen his pay increased by almost 1m after a performance-related bonus plan kicked in. Investors will be informed of the payout in RBS’s annual report and accounts, due to be published shortly.

RBS revealed last Thursday it had made pre-tax profits of 6.16 billion in 2003, up 28 per cent on 2002. This supported the bank’s share price, which is up about 7 per cent so far this month, and is tipped as a strong bet in the year ahead.

Goodwin also unveiled a 15 per cent hike in the dividend. Combined with the bank’s strong share price, this capped a healthy run for investors over the past three years.

A bonus plan put in place in 2001, shortly after RBS’s takeover of NatWest in 2000, guarantees Goodwin a bonus worth up to 200 per cent of his basic salary if total shareholder returns exceeded certain targets over the period 2001-04.

Those targets have been met, and Goodwin has had his pay increased accordingly. His remuneration will exceed that of Larry Fish, the chief executive of RBS’s US subsidiary Citizens.

Investors are unlikely to quarrel with Goodwin’s payout, given the returns RBS has generated in the past three years. A spokesman for the bank declined to comment yesterday, but pointed out the bonus plan was approved by shareholders at its annual meeting in 2001.