Minister says did not approve ex-RBS CEO pension

A Royal Bank of Scotland branch is seen, in central London in this February 21, 2009 file photo.

LONDON (Reuters) - Treasury minister Paul Myners said on Tuesday he did not approve an annual pension payment of around 700,000 pounds for former Royal Bank of Scotland Chief Executive Fred Goodwin.

The government has faced criticism for allowing Goodwin, 50, to walk away from RBS with such a generous pension. Goodwin left RBS last October at the time of an initial government bailout and the state now has a majority stake in the company.

"I did not negotiate, settle or approve Sir Fred Goodwin's departure terms. All these issues were handled by RBS," Myners told a parliamentary committee.

"The new board of RBS, like the government, is very concerned to understand how people within the company could have made this quite extraordinary decision, clearly at odds with the principles the government had laid out, and exactly who made that decision," he added.

Myners, a former head of pension fund manager Gartmore who took office only a few days before the RBS crisis last October, urged Goodwin to forego some of his pension or give some to charity.

"I still hope there's the opportunity for Sir Fred to do the right thing and either return some of his pension or make a very substantial and long term commitment to charity both of money and of his undoubted energy and resources," he said.

The government has said it would look at legal action over the pension but Myners said he did not yet know if this would target Goodwin or former directors of RBS.

Myners said he did not feel that he had slipped up, but said he understood public anger over the case.

"I think it's quite outrageous that a man who led a bank into the largest banking failure ever -- a bank which depends on public support -- should see a departing executive draw a weekly pension of 13,000 pounds -- compared with a national state pension of 92 pounds per single person or 150 pounds or so for a married couple. This is quite unacceptable."