Sir Fred Goodwin, 49, today announced his resignation from his role as Royal Bank of Scotland Chief Executive. He is joined in his departure by three additional major players in Scotland’s banking community – fellow RBS Chairman Tom McKillop, and Chief and Chair at rival HBOS, Andy Hornby and Lord Dennis Stevenson.
These significant departures come as the result of a massive government bail-out in aid of Scotland’s two biggest banks at a time of financial turmoil. RBS expects a hand-out of £20bn from the government, while HBOS will be receiving somewhere in the region of £17bn in new capital.
After taking RBS to the top five of the world’s biggest banks (second in Britain), a badly-timed £49bn bid for Dutch bank ABM Amro left RBS shares sagging as the world’s financial crisis snowballed. This presumably is taking it’s toll on the 16,500 RBS employees throughout Scotland.
Following last weeks fall of 25% in shares for RBS, opening shares on the morning of his resignation are at a dismal 21% and still plummeting.
Goodwin is expected to receive a payoff in keeping with his £1.2m salary, plus added pension benefits of an estimated £8.4m. Goodwin’s replacement, Stephen Hester, current Chief Executive of British Land, is speculated to receive a similar salary, after taking over Goodwin’s position. Hester, 48, was introduced to RBS over the summer as a pre-cursor to Goodwin’s departure, and could be initiated into the role as soon as today.