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Sir Fred Goodwin, chief executive of Royal Bank of Scotland (RBS), and chairman Sir Tom McKillop were under enormous pressure to leave this morning as part of the Government's £50 billion bailout plans after shares in the UK's second biggest bank fell 39 per cent yesterday over funding shortfall fears.
A spokesman for RBS declined to coment, but a source close to the company said later that there was no truth in rumours that the bank's board is discussing the possibility of forcing their resignation in the near future.
Sir Fred and Sir Tom are reported to be replaced by Stephen Hester, formerly of the Abbey, and Sir Philip Hampton, currently chairman of Sainsbury's, according to The Daily Telegraph this morning.
The emergence of an urgent need for capital had placed Sir Fred's and Sir Tom's positions under renewed pressure after the bank raised £12bn this year in the biggest rights issue in European history.
Sir Fred, nicknamed Fred the Shred after he cut 18,000 jobs following the takeover of NatWest, has also been criticised for paying too much for ABN Amro, the Dutch bank that was bought for £49bn at the top of the market last year.
RBS shares have plunged from 597p to 90p this year.
Stephen Hester is currently chief executive of British Land, a leading property company, which he joined in 2004.
For the previous 19 years, he was at Credit Suisse First Boston, holding various Investment banking roles until becoming chief financial officer in 1996, then global head of the fixed income division. He is a trustee of The Royal Botanic Gardens, Kew Foundation.
Sir Philip Hampton has deep experience of banking and was the finance director of Lloyds TSB until 2004.
Sir Fred was forced earlier this year to reassure investors that he remained the best man for the job as he unveiled first-half pre-tax losses of £691 million.
RBS is still attempting to sell its Churchill Insurance and Direct Line businesses, which it put up for sale in April.
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OK, let him stand aside, and let us see how much he is paid to go. Let's have the truth, the whole truth and nothing but the truth though.
David Cooper, Aylesbury, Bucks
In a few years time the ABN deal may be seen as a good one. Its about building long-term shareholder value.
Asian markets, China, India, Russia are where the growth will be. Lets face it they wouldn't have been able to buy ABN this year and someone else would (or it would be nationalised by now)
David, London,
Now that both McKillop and Goodwin have gone, I hope that they go without any 2007/8 bonus, or any other financial reward other than their basic redundancy entitlement. Some hope! No doubt they will walk away with hundreds of thousands of pounds, unlike their staff or customers.
pip, Croydon, uk
Anyone think these guy's deserve their pay off? after all they created a business that created jobs for thousands of people. without them there would be higher unemployment. also investors in their companies have done well over the years.
Sunny, Coventry,
Of course they will receive a £multi million pay out. It will already be part of their contract; the manner of their going will ensure they do not lose out. I challenge the Chancellor to make this otherwise!
paul, Worthing, UK
The directors are just as guilty as the CEO & Chairman. If there's any honour left amongst them then they'd all stand down.
John Bull, England,
Dave, despite your entirely valid criticisms of the RBS board, I think you'll find that the Royal Bank of SCOTLAND is quite nicely headquartered in the Scottish Capital - as it should be until bought over or dies.
What sort of iron-age dark backwaters do you think exist north of Watford?
Andy Myles, Edinburgh,
Well, even if they do go, won't they collect £Ms in golden handshakes?
JF, Canterbury, UK
As a member of staff I have total respect for the way the business is run. Yes, mistakes have been made but Sir Fred should not be made the scapegoat. With hindsight the ABN deal was wrong but the timing was very unfortunate. Sir Fred is very well qualified to steer the Bank through tough times.
Scott, Edinburgh,
from wikipedia: "In June 2004, RBS admitted that it owned a Dassault Falcon 900 jet worth £17.5m for the use of Goodwin and the board. Goodwin's salary, nominally around £3.5 million on target including bonuses, for 2006 could top £8 million in cash and shares." that's capitalism and greediness
v. mariblanca, glasgow, scotland
we've all been well and truly stitched up! Fred and Tom - party's over. You've made your millions, time to go.
Ron, Birmingham,
Isn't integrity the most important attribute that a captain of industry should have? It would appear not. It appears that ego and greed are favoured. Had the capacity for honour been rewarded, would we be in the same mess or is that just a silly thought?
Michael, Fetcham, Surrey
Sir Tom was a highly successful CEO at AstraZeneca and any problems at RBS shouldn't be allowed to detract from that. I can't vouch for whether 'Sir' Fred should keep his knighthood.
David, Manchester, UK
Its been brought about by the pure greed of the Banks, not only giving loans to people who couldn't afford them but in trying to beat the 'competition'; other clearing banks and the piggy banks e.g. former building societies and high street retailers, like M&S. Front line staff will again suffer.
graeme, newcastle,
How would Scotland have dealt with the problems with it`s two banks if it was independant from UK? Cap in hand is my guess. Get real Salmond & Co.
Ozzy, Oldham, UK
I worked for RBS in Asia a year ago for 3 years. Their management is totally out of touch. Big bosses are hardly doing anything. Bank needs to reshape its management and day to day running. They employ incompetent people on high positions.
maria, h. kong,
It is a pity some of the shareholders didn't speak up earlier. The shareholders deserve to be punished as much as the execs! Greed wasn't so good this time. I for one have no sympathy.
Gavrilo Prinzip, Bromley, UK
As someone who worked for 10 yrs at both RBS and ABN, I can assure anyone that's interested that the former paid about 49 Billion too much for the latter. Goodwin threw all stakeholders money down the drain and the only surprise to me is that he's still there.
MickyBridges, Chicago, USA
throw them out on the street. RBS is woefully lacking in good management - trust me i've worked there. the place needs all the bail-outs it can get. more skeletons are to come out the closet, just wait and see.
F Ormer, London, UK
These people are clearly incompetent and in any other industry they would have been ousted before now. I hope that this part nationalisation means that from now on bankers pockets will not be lined by the future prosperity funded by the taxpayer.
Mike Collins, Morpeth, uk
And they'll go with a nice fat package, I bet
Sarah, London,
Throw them out on the streets, strip them of their knighthoods and no pay-offs. For 20 years we have all listened to how these people were key to the weath of the country and must be treated like gods - we never believed that rubbish but we were made to swallow it. The public want retribution now.
Chris, Chipping Norton,
why not the whole country to London - and pay everyone billions of bonuses! Is that not what brought down the Finance sector? Get real and get out of London to save costs and get rid of the bonuses.
Ian, Glasgow,
When you look at the rise of RBS since the 90s; that rise was actualy it's decline. Their 'success' was based on fundementaly flawed products to the point that all profits made during this period, where in fact an overall loss.
People like Robert Maxwell was good at that game.
Sack em'
Gino Francesco, Hastings,
Fred the shed should be forced to repay the bonus awarded to him for purchasing ABN amro. Pigs in the trough rewarding themselves for gluttony.
John, Lincoln,
Dollars to doughnuts they're gone by the end of the day. And as 1 of the 18,000, I won't be shedding any tears :)
W Smith, Manchester,
These appalling people must be removed and without any pay off. The arrogance and greed of Sir Fred Goodwin has put at risk a successful and historic institution. Pure hubris led to the buying of ABN in order to beat Barclays. That 49 billion would be very handy today.
M.Paton, epsom,
I'm an RBS shareholder - I say sack both of them. They've brought the bank to its knees - Fred Goodwin with his reckless megalomania and Tom McKillop as the ultimate yes man. Bring the HQ to London or New York - it's stupid stuck up in Edinburgh - no wonder they're all so completely out of touch.
Dave, London,