Oh, how the mighty are fallen!
Before his fall from grace – if not wealth – Goodwin was variously named Forbes’ Businessman of the Year in 2002, the most powerful person in Scotland by Scotland on Sunday in 2003 and European Banker of the Year in 2003 as well as receiving a knighthood and an honorary fellowship by the London Business School. More recently, Newsweek named him the World’s Worst Banker and the Guardian has laid in as well.
The average weekly wage in the UK is £479 according to the ONS. Fred ‘the Shred’ Goodwin’s pension works out at £12,500 per week. In other words, despite a 98% drop in the share price of RBS and a 70% nationalisation caused in no small part by the takeover of ABN Amro at the top of the market that he drove through, Goodwin is going to receive a reward for failure pension about twenty-six times the average wage. His compensation package was, of course, put together before the calamity of the credit crunch but it does illustrate two points. Firstly, there would appear to have been either a belief that the system was going to fail so spectacularly or that people would only take these jobs if their pensions were secure against failures they themselves caused. Secondly, the moral hazard that can apply to companies being bailed out can apply to individuals.
xD.
