Goodwin pay hits £3.5m despite RBS bonus cut

Fred "The Shred" Goodwin, the chief executive of Royal Bank of Scotland, famous for his ruthless cost-cutting, earned £3.4m in salary and shares for the year that saw record profits at the bank.

Fred "The Shred" Goodwin, the chief executive of Royal Bank of Scotland, famous for his ruthless cost-cutting, earned £3.4m in salary and shares for the year that saw record profits at the bank.

But despite delivering a 29 per cent rise in profits to £6.2bn, Mr Goodwin saw his cash bonus cut back to £990,000 for 2003. This bonus was a 43 per cent drop on 2002, when he was rewarded with a cash bonus of £1.73m for successfully integrating Royal Bank with NatWest.

Combined with an annual salary of £898,000, this brought his pay out to £1.9m. But a top-up of £1.5m in shares pushed his pay for 2003 up to nearly £3.5m. Mr Goodwin also saw his pension fund rise £774,000 to £2.6m. This would give him an annual pension of £325,000 a year.

Other recipients of big pay awards at RBS included Gordon Pell, the head of retail banking, who received £1m in shares, bringing his total payout to £2.3m. Iain Robertson, who stepped down as an executive director of its corporate banking division in June last year, picked up £1.2m. Larry Fish, the head of its US Citizens business, was paid £1.86m in salary, bonus and benefits last year and received $970,885 (£537,000) from a three-year incentive plan.

Record profits and generous executive pay deals at Britain's big banks have drawn fire from consumer groups, who have accused them of profiteering at customers' expense.

A spokeswoman for the company said yesterday Mr Goodwin deserved his pay packet and that staff also shared in the profits of the company. "The remuneration award reflects a fair level against a backdrop of another very successful year for the business," she said.

Mr Goodwin was the highest-paid bank chief executive for 2002, but Matt Barratt at Barclays has so far topped the banking sector pay awards. He received nearly £5m in pay, shares and pension for 2003.