Former Royal Bank of Scotland (RBS) boss Fred Goodwin has bowed to pressure to cut his highly controversial pension by more than £200,000 per year, it has been reported.
The voluntary reduction would reduce the value of Goodwin’s pension pot by at least £4m, although he would still receive a pension of roughly £350,000 per year. The offer to cut his pension came after RBS threatened Goodwin with legal action.
According to Sky News, the government will announce a deal to accept a cut in the value of the pension soon.
However, the deal would still leave Goodwin with a bigger pension than he would have received if he had been dismissed instead of leaving on agreed terms. It is therefore likely to attract criticism for not going far enough.
Goodwin did a deal with RBS in October 2008 that allowed him to receive a pension worth £703,000 a year.
City minister Lord Myners has been criticised for enabling Goodwin to receive rewards for his failure at the bank, which was bailed out by the government.