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Former banking bosses say 'sorry' Former banking bosses say 'sorry'
(20 minutes later)
The former bosses of the two biggest UK casualties of the banking crisis have apologised "profoundly and unreservedly" for their banks' failure.The former bosses of the two biggest UK casualties of the banking crisis have apologised "profoundly and unreservedly" for their banks' failure.
Former bosses from the Royal Bank of Scotland and HBOS are giving evidence to a Treasury Committee.Former bosses from the Royal Bank of Scotland and HBOS are giving evidence to a Treasury Committee.
They are being quizzed over the mistakes which led to the banks being bailed out by the government.They are being quizzed over the mistakes which led to the banks being bailed out by the government.
The subject of bonuses is also being raised amid reports RBS is to pay out £1bn to some bank staff. The former bank chiefs also said the bonus culture in the banking industry needed to be reviewed.
Under the terms of October's bank-bailout, no board directors at partly state-owned firms will receive any cash bonuses this year.Under the terms of October's bank-bailout, no board directors at partly state-owned firms will receive any cash bonuses this year.
Sir Fred Goodwin, former chief executive of RBS, said that he took no bonus in 2008, but that his salary was £1.46m.
Andy Hornby, chief executive of HBOS, said that he also took no bonus last year, and that he had never taken any bonus in the form of cash.
"I have never received one single penny in cash bonus," he said, referring to his time not only as boss of HBOS but also his time on the board.
Instead, he said, he had taken his bonuses in the form of shares.
"I have lost considerably more money than I have been paid," he said, referring to falls in the value of shares that he had been given by way of bonuses.
He did, however, concede that the culture of cash bonuses did need to be looked at.
SIR FRED GOODWIN Former chief executive, RBS, 50Salary: £1.3m plus £2.9m performance bonus (2007)Born and raised in Paisley, near GlasgowResignation announced in October 2008 LIVE: Bankers grilled by MPsSIR FRED GOODWIN Former chief executive, RBS, 50Salary: £1.3m plus £2.9m performance bonus (2007)Born and raised in Paisley, near GlasgowResignation announced in October 2008 LIVE: Bankers grilled by MPs
But Prime Minister Gordon Brown has expressed anger over proposed pay-outs to other workers and said he wanted employees to consider waiving their right to them. Prime Minister Gordon Brown has expressed anger over proposed pay-outs to other workers and said he wanted employees to consider waiving their right to them.
Huge lossesHuge losses
Sir Fred, former RBS chief executive, and Sir Tom McKillop, who was chairman, are appearing before the Treasury Committee alongside Lord Stevenson and Mr Hornby, respectively former chairman and chief executive of Halifax Bank of Scotland . Sir Fred and Sir Tom McKillop, who was chairman of RBS, are appearing before the Treasury Committee alongside Lord Stevenson, former chairman of Halifax Bank of Scotland, and Mr Hornby.
FROM THE TODAY PROGRAMME More from Today programmeFROM THE TODAY PROGRAMME More from Today programme
Sir Fred oversaw a number of acquisitions that made Edinburgh-based RBS one of the world's biggest banks.Sir Fred oversaw a number of acquisitions that made Edinburgh-based RBS one of the world's biggest banks.
But his takeover of Dutch rival ABN Amro late in 2007 is now seen as ill-timed and a deal too far in light of RBS's inability to survive the credit crunch without a massive injection of government funds.But his takeover of Dutch rival ABN Amro late in 2007 is now seen as ill-timed and a deal too far in light of RBS's inability to survive the credit crunch without a massive injection of government funds.
Indeed the bank has said it made a loss of up to £8bn in 2008 and will have to write off £20bn worth of assets relating to the takeover of ABN Amro.Indeed the bank has said it made a loss of up to £8bn in 2008 and will have to write off £20bn worth of assets relating to the takeover of ABN Amro.
SIR TOM MCKILLOP Former chairman, Royal Bank of Scotland, 65Salary: £750,000 (2007)Resignation announced in October 2008SIR TOM MCKILLOP Former chairman, Royal Bank of Scotland, 65Salary: £750,000 (2007)Resignation announced in October 2008
RBS is now nearly 70%-owned by the taxpayer after a government rescue package was put in place at the end of last year.RBS is now nearly 70%-owned by the taxpayer after a government rescue package was put in place at the end of last year.
Sir Fred is expected to defend his record staunchly, having reportedly complained that October's rescue plan was "less of a negotiation, more of a drive-by shooting".
Sir Tom stepped down earlier this month, two months earlier than planned.Sir Tom stepped down earlier this month, two months earlier than planned.
A former boss of drugs giant AstraZeneca, he apologised to RBS shareholders last year for the bank's problems.A former boss of drugs giant AstraZeneca, he apologised to RBS shareholders last year for the bank's problems.
No easy rideNo easy ride
HBOS was rescued by Lloyds and the merged group is now more than 40%-owned by the government.HBOS was rescued by Lloyds and the merged group is now more than 40%-owned by the government.
ANDY HORNBY Former chief executive, HBOS, 42Salary: £1.93m, including bonus and benefits (2007) Joined HBOS from Asda in 1999Resignation announced in October 2008ANDY HORNBY Former chief executive, HBOS, 42Salary: £1.93m, including bonus and benefits (2007) Joined HBOS from Asda in 1999Resignation announced in October 2008
Mr Hornby stepped down from his post as head of HBOS after the takeover by Lloyds, although his position was already in doubt. He waived a big pay off when he left.Mr Hornby stepped down from his post as head of HBOS after the takeover by Lloyds, although his position was already in doubt. He waived a big pay off when he left.
He joined Halifax from Asda in 1999, and is credited with bringing a retailer's dynamism to the more sedate world of banking. He became chief executive of the merged Bank of Scotland and Halifax in 2006.He joined Halifax from Asda in 1999, and is credited with bringing a retailer's dynamism to the more sedate world of banking. He became chief executive of the merged Bank of Scotland and Halifax in 2006.
Lord Stevenson also stepped down after the Lloyds takeover and said he would not be taking any pay off.Lord Stevenson also stepped down after the Lloyds takeover and said he would not be taking any pay off.
He joined Halifax as a director in 1999, becoming chairman in July the same year. After the merger with the Bank of Scotland, he became chairman of HBOS.He joined Halifax as a director in 1999, becoming chairman in July the same year. After the merger with the Bank of Scotland, he became chairman of HBOS.
LORD STEVENSON Former chairman HBOS Salary: £821,000 including benefits (2007)Resignation announced in October 2008LORD STEVENSON Former chairman HBOS Salary: £821,000 including benefits (2007)Resignation announced in October 2008
The bosses still in place at the helm of Britain's leading banks will appear before the Treasury Committee on Wednesday.The bosses still in place at the helm of Britain's leading banks will appear before the Treasury Committee on Wednesday.
The BBC's chief economics correspondent Hugh Pym said committees rarely offered an easy ride and it was hard to see the banking chiefs having a comfortable time.The BBC's chief economics correspondent Hugh Pym said committees rarely offered an easy ride and it was hard to see the banking chiefs having a comfortable time.