Goodwin named banker of the year

FRED Goodwin, chief executive of Royal Bank of Scotland, was named European banker of the year by a group of journalists in Frankfurt. But despite the accolades, critics are beginning to wonder whether the legendary cost-cutter has lost his will to shred.

Goodwin, who was paid £1.9m in 2003, plus £1.5m of options granted in 2001 under a medium-term incentive scheme, has come under fire over the bank's Paris-based private jet. The plane has a price tag estimated at nearly £18m and running costs reckoned to be in the region of £7,700 an hour.

The purse-proud Edinburgh financial community has also been raising eyebrows at the bank's lavish new 'world headquarters' on a 78-acre site at Gogarburn, west of the Scottish capital, once the home of a psychiatric institution. It will house 3,250 workers and is due to open in 2006.

'To be fair to Fred, you can't fault his performance so far in running the bank,' said one finance industry insider. 'But the new building is going to be grandiose.'

Tittle tattle over the new site has reached such a pitch that RBS officials were forced to deny rumours that Goodwin - nicknamed 'Fred the Shred' for his cost-cutting - had ordered a special 'scallops kitchen' to ensure that his seafood was at its most flavoursome.

The state-of-the-art development will incorporate an urban street running down the middle of the building with a shop, a hairdressers, a coffee bar and a restaurant.

The bank, which is not disclosing the cost, said it will also incorporate a swimming pool, gym and creche. 'We want to make ourselves an employer of choice,' it said.

RBS has even paid for an overpass road to channel traffic on to the site from the congested A8. Fans of the scheme say it will provide a major boost to Edinburgh's economy and help preserve the City's status as a financial centre.

Shareholders are unlikely to gun for Goodwin over the jet or the new HQ so long as the RBS results remain exemplary.

But there have been concerns about spending by - and on - top executives in other companies. M&S investors were less than delighted at the company providing chairman Luc Vandevelde with the use of a suite in Claridge's hotel, on top of his £1.73m pay package for a three-day week.

Ordinary parents gasped with envy on learning that Lloyds TSB boss Eric Daniels got £210,000 of benefits on top of his £1m salary, partly to help with school fees.

And Rose Marie Bravo, £1m-a-year chief executive of Burberry, caused jaws to drop with her lucrative deal. It was not so much her chauffeur-driven car or even the free luxury London apartment with maid that annoyed Bravo's less fortunate sisters, but her £10,000-a-year clothes allowance.