UK bank executives' payouts under spotlight

Huge payouts to executives at banks bailed out by the British government were under scrutiny tonight amid legal moves to claw back any unnecessary payments.

Prime Minister Gordon Brown said he was angry that people whose mistakes forced the taxpayer to prop up banks were able to “run off” with entitlements.

Today he renewed the threat of legal action to recover some of the “unacceptable” £693,000 (€782,000) pension being paid to 50-year-old former Royal Bank of Scotland chief Fred Goodwin.

And UK Business Secretary Peter Mandelson said Goodwin was in a “state of denial” and should do the “right thing” for the sake of his “self-respect”.

Tonight it was revealed that Lloyds Banking Group was examining pay-offs to former Halifax Bank of Scotland (HBOS) directors to check they had been paid no more than necessary.

Beleaguered HBOS announced annual losses of £10.8bn (€12.2bn) today as new owners Lloyds warned of a slide into the red for the combined organisation this year.

A spokesman for UK Financial Investments – which manages the taxpayer stakes in part-nationalised banks – said Lloyds had agreed to ensure ex-directors had got “no more than was legally necessary”.

“We understand that this process of thorough legal assurance is nearly complete,” UKFI said.

The British government owns 43% of Lloyds and 70% of RBS.

The UKFI checks came as Goodwin came under mounting pressure to forego his generous early-retirement package which Mr Brown said was “unjustifiable and unacceptable”.

Mandelson told ITV News: “I think Sir Fred Goodwin undoubtedly should give it, or the bulk of it, back.

“I think in a sense he’s in a state of self-denial about the state of public opinion. I don’t think he quite understands how people feel about this – how angry they feel and how outraged they feel – and I think that for his own self-respect really he should do the right thing.”

Goodwin has rejected ministers’ calls for him to waive his entitlements as “not warranted”.