Known Knowns and Known Unknowns

The RBS Pension fiasco runs on more like Freddy Kruger than Freddy Goodwin as today we hear that the Government even in hindsight got the figures wrong as Fred's pension is, in fact, £703,000 per year not the £693,000 previously stated.

Today we heard from those guardians of our lucrative investments, UK Financial Investments Ltd (UKFI) and specifically Mike Kingman, CEO, and Glen Moreno, Acting Chairman. In a Tweedledum and Tweedledee performance they revealed that the size of the pension pot for Fred was actually known by the Government but those nasty Non Executive Directors at RBS, Tom McKillip and Bob Scott, hoodwinked the Government and UKFI by apparently giving Fred a discretionary rise in his pension.

They also defended poor Lord Myners, who is very much in the electric chair for the whole fiasco, and said that he should not be expected to have known the finer details for the RBS pension scheme.

Umm, Actually - He, And They, Should Have Known

Not just Lord Myners but the whole shambolic Government should have read the RBS 2007 Annual Report which would have clearly shown how much Fred Goodwin was due. The second fact is that they should not have entrusted two Non Executive Directors to have negotiated Goodwin's exit. The Government should have been directly involved and claiming anything else is just complete negligence on behalf of the taxpayer - it is of little value that idiots like Brown, Darling, Cooper and Harman are now trying to play hardball after the event.

They should have been right on top of this, knowing full well how sensitive the situation was.

But they had been considerably delighted with PR coop that somehow Sir Fred had been persuaded to forgo his 15 month salary entitlement to look at the small print and work out how much was actually getting.

Doing It Right

Bamboozled by big numbers and banking advisers, the Government should have taken the initiative here and handled Goodwin's departure directly instead of giving the task to the very people complicit in his stupid business activities.

Goodwin should have been sacked - it's pointless Moreno saying he should have walked of his own accord, the job was there to be done not to expect some old British honour of someone taking the brandy decanter and a Colt to shoot themselves in the study; Goodwin had skin thicker than the hide of a weathered rhinoceros, no way he was going to walk without a back up plan.

If he had been sacked there would have been no pay out anyway and under the terms of the RBS pension plan would have still got £416,000 per year as a pension which still sounds excessive.

As usual, this Government has let us down and is employing its usual tactics of trying to find scapegoats and mitigate its responsibilities. As it plays with ever increasing amounts of our money, it does not instill anyone with any confidence that they have any idea what they are doing or why.

The Dawn Of A New Era

RBS finally gave us the full force of the bad news this morning. It was nothing less than what we expected, to be fair, as they clocked up UK Corporate record losses of £24.1bn for 2008.

It means the bank will be radically reformed and the first thing that will happen is that around £325bn will be sidelined as bad debt and insured under the Government's Asset Protection Scheme which will allow it get back to lending to firms and individuals.

Chairman Philip Hampton blamed the loss of 'massive turbulence' in the financial market - absolutely nothing to do with the massive over-extension of the company through raising borrowing under Fred Goodwin.

Outcomes

One of the most obvious effects of this massive loss, aside from the minor detail of largescale unemployment, is that sport will be hit big time. RBS had embarked on an unprecedented spending spree to sponsor sport and sports people making several famous individuals highly paid ambassadors to sport for RBS - some appointed just weeks before RBS' demise. These include Sachin Tendulkar, Jack Nicklaus, Jackie Stewart and Zara Phillips. Many other sports will be deeply affected by the loss of RBS money and F1's Williams Team will need a new sponsor soon as will Andy Murray to name a couple while the deal with the RBS Six Nations was recently extended. However most deals have a longevity to them so they are no way immediate cuts.

Some Things Remain The Same

But warm your heart as some things about RBS remain the same. Thankfully the £650,000 annual pension granted to ex-CEO Fred Goodwin remains in place and he can draw it merrily. He is just 50 years old and he has a pension pot worth £16m .

Sir Fred was the man at the helm when the proverbial hit the fan and he was the man who out-white-knuckle rode the competition to buy ABN AMRO Bank who were widely seen as the most vulnerable to the credit crunch, handily placing them in the taxpayers' check out trolley when the music stopped on the merrygoround. RBS is now 70% owned by a group of notsowell-heeled mugs called The Taxpayers.

Treasury Minister Stephen Timms has realised that this pension payment is slightly embarrassing when read in conjunction with record losses and so he has has UK Financial Investments Ltd, the company set up to manage our portfolio of dead donkey companies we now own, to try and claw back some of the payment.

We all know Gordon Brown was 'angry' about bonus payments being made after the Government bail outs as if he was totally unaware that banks pay them when he negotiated the clever deals to save them. Now his Ministers seem dumbstruck by the intensity of the money-siphoning bank executives were guilty of and seem once again not to have anticipated such embarrassing details coming to light later. Why Timms cannot just instruct a lawyer to go and claw the money back is beyond me but once again the dark influence of the banking advisers at the side of the Government's decision making seem to be at work.

They seem to divert the PM's attention from the obvious and make him focus on the 'Big Picture' - how to make a small number of people very rich again at the expense of smaller individuals and companies.

So Fred Goodwin has the last laugh - after being fired he had set himself up for life, we find. All very convenient, it's as if he always had his insurance policy ready and that the Ministers who presided over the incompetent bail outs never suspected.

To my mind it proves that Goodwin and others knew far more about the possible outcomes than they make out.

The Obvious

There are two things that struck me about Fred Goodwin's disgusting pension situation. One is that he should be personally appealed upon at minimum to defer any pension until he is at genuine retirement age rather than just firing age. The second, who on earth granted such a show of appalling largesse?

Company Remuneration Committees are generally the odd company executive and then a bunch of relaxed, well-heeled Non-Executive Directors who are too fat, rich and have too many other such freebie engagements with other companies to either notice or care about what is going on. They are not going to rock the boat and stop executives paying themselves ludicrous bonuses or grant daft pension rights as they can easily be voted off at the next Board Meeting - so they just nod, take the free lunch and pick up the cheques.

Something has to change. The UK must break this stranglehold of members of the Non-Executive Club who have portfolios of watchdogs and FTSE 250 companies where they literally do nothing and get fat fees - making sure their pet executives who pay them get what they want.

Defined Benefits

Goodwin argued at the Treasury Committee that he had the same pension as everyone else at the bank - a defined benefits scheme. I suspect his worked slightly better than the other thousands of staff who will shortly lose their jobs due to his incompetence.