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Sir Shred well "impressed" by credit crunch beating company car named after him

# Senior bankers promise next company perks will include Shred cabriolets that turn on an old sixpence, which is more than they can turn, and come in yellow and black. (Lockable chain not included)


Tuesday, February 10, 2009


The former bosses of bailed-out banks Royal Bank of Scotland and HBOS offered their "profound" apologies - just hours before RBS announced plans to axe up to 2,300 jobs.


At a highly-anticipated encounter with the Treasury Select Committee, the former chiefs admitted they had misjudged the extent of the financial turmoil that engulfed both banks.


Both RBS and HBOS were brought to their knees by the credit crunch and were bailed out in the £37 billion taxpayer-funded rescue.


HBOS was bought by rival Lloyds TSB and the new entity - Lloyds Banking Group - is 43% owned by the taxpayer.

Andy Hornby, former chief executive of HBOS, and Lord Stevenson, the ex-chairman, came under heavy fire for the sacking of Paul Moore, its head of group regulatory risk, in 2005 after he allegedly warned the company it was "going too fast".


Sir Fred Goodwin, former chief executive of RBS, which is now 68% owned by taxpayers, apologised for "all of the distress that has been caused".


Sir Fred and former RBS chairman Sir Tom McKillop faced accusations of "destroying a great British bank and costing the taxpayer £20 billion" thanks largely to their decision to buy Dutch rival ABN Amro in 2007 at the peak of the market.


The pair admitted the £50 billion RBS-led takeover was "a bad mistake" and was now virtually worthless after the bank market collapse.


All four men vigorously defended their actions despite the apologies. Mr Hornby said that while he was "extremely sorry for the turn of events" that led to HBOS's rescue takeover by Lloyds TSB and Government bail out, he was "not personally culpable" for the crisis.


Sir Fred said it was "just too simple" to blame it all on him. He denied RBS had ignored warnings from the Bank of England and the Financial Services Authority (FSA), insisting that nobody had anticipated the scale of the crisis.


Committee members grilled the bank bosses over a failure to spot - or that they even ignored - the risks of trading in toxic assets and relying heavily on wholesale money markets. RBS is expected to have racked up losses of as much as £28 billion in 2008, which will mark the biggest ever loss in UK corporate history.


Sir Fred said he did not receive a bonus last year and that he put every previous bonus into shares in the bank, losing £5 million as a result. But his final salary pension pot is safe, while many people with pensions invested in shares of banks have seen their retirement funds devastated, MPs said.




Protest at HBOS fails to stop £20m bonus for top managers


By Chris Hughes, Financial Editor


Thursday, 16 May 2002

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HBOS, the UK's fifth-largest bank, yesterday won approval for its controversial executive bonus scheme despite a significant protest vote from some institutional investors.


HBOS, the UK's fifth-largest bank, yesterday won approval for its controversial executive bonus scheme despite a significant protest vote from some institutional investors.


The scheme, which could generate rewards of some £20m for 130 senior managers, was opposed by shareholders casting 25 per cent of the votes.


A spokesman for the company said it was disappointed at the result, given that shareholders had voted overwhelmingly in favour of similar schemes three times in the last five years. Two years ago a comparable incentive received 97 per cent support.


HBOS has revived concerns over boardroom excess because its scheme involves the award of free shares rather than share options, which is out of line with corporate governance best practice.


"You wouldn't thank us if we failed to hold on to the best people," Lord Stevenson, the chairman, told sharehold- ers at the annual meeting in Edinburgh.


HBOS said that the chances of the scheme generating its maximum payout were about as high as "England winning the world cup twice", although shareholders would also be better off by £6bn in such an event.


James Crosby, the chief executive, could this year receive a bonus of £1.1m, twice his annual £550,000 salary. To trigger the top payout, HBOS shares must deliver the best total shareholder return among a group of eight UK peers by 6 percentage points, rather than 8 percentage points under previous plans. The group comprises Barclays, Royal Bank of Scotland, Abbey National, Lloyds TSB, CGNU, Prudential, Royal & Sun Alliance Insurance Group and Legal & General Group.


There has never been any payout under the scheme, which HBOS inherited from Halifax after the former building society's merger with the Bank of Scotland. Even if the threshold outperformance had been set at 6 percentage points in previous years, there would still have been no award.

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Taken on April 22, 2009