LONDON BRIEFING:Excessive rewards for failure are still rife throughout the banking industry, writes FIONA WALSH

IS THERE no end to the excess in the banking industry? The unprecedented public anger over the greed of disgraced bankers has been stoked still further by fresh revelations this week of massive payouts to failed executives.

At the centre of the storm, once again, is Sir Fred Goodwin of Royal Bank of Scotland. The 50-year-old Goodwin, who brought the bank to its knees with a series of disastrous takeovers, is refusing to give up a penny of his £693,000-a-year (€752,500) pension – a pension he is already allowed to draw, despite being more than a decade away from normal retirement age.

But now it has emerged that he boosted his pension by £10,000 a year – taking it to £703,000 – by staying on at the bank in January, one month beyond the bank’s financial year-end. It doesn’t take a mathematical genius to work out that this handy little top-up is, on its own, more than double the state pension that millions are forced to live on.

Astonishing as it may seem, however, Goodwin is not the highest paid RBS retiree. Included in the bank’s 300-page annual report released on Monday were details of an even more lucrative pension package – worth more than £1.6 million a year.

The lucky recipient is Goodwin’s former colleague Larry Fish, who once headed the bank’s US operations. At 64, Fish is at least nearer retirement age than Goodwin, but his massive pension, which he has been drawing since last May, is equivalent to £135,000 a month before tax.

As the former head of a US bank – Citizens, which RBS bought in 1988 – Fish’s payout is not out of line with his peers across the Atlantic. But it ranks as the largest retirement package in British corporate history and, following the government bailout of RBS, is effectively being funded by the British taxpayer.

It is Goodwin, not Fish, who continues to feel the full weight of public anger over the spectacular rewards for failure in the banking industry, however. He has become the focus of intense anger felt by the British public over the near-collapse of the financial system and the economy’s head-long fall into deep recession.

Piling on the emotional pressure last week was the head of a children’s hospice, who wrote to Goodwin suggesting he donate £100,000 of his pension to help care for terminally ill children. The hospice, Naomi House, has been caught up in the banking crisis, with £5 million of its funds at risk in collapsed Icelandic banks.

The demonisation of Goodwin has seen placard-bearing demonstrators parading outside his Edinburgh home and there has been a vitriolic campaign waged against him in the blogosphere. The former RBS chief executive took his two children out of school some weeks ago because of fears for their safety and there are reports that he is considering taking his family abroad to escape the scandal.

According to the London Evening Standard, Goodwin now has no fewer than three top public relations men working for him, including David Burnside, the combative Northern Ireland politician and former head of communications at British Airways. One can only imagine how bad his press would have been without the spin doctors at hand.

It may be hard to feel much sympathy for Goodwin as he draws his £700,000-plus annual pension, but is the relentless vilification of a single banker a reasonable or constructive response to the banking crisis? After all, excessive rewards for failure were – and still are, as other annual reports will no doubt reveal – rife throughout the industry.

Even the new regimes, brought in to clear up the mess, are finding it hard to adjust to the supposed new age of austerity. Here’s one example: it emerged in the Scottish press at the weekend that RBS is still providing a £1.6 million Georgian townhouse in Edinburgh, free of charge, for the exclusive use of the new chairman, Sir Philip Hampton.

Hampton, who replaced Sir Tom McKillop, is paid a salary of £750,000 a year, plus share options, and one imagines he could afford to put himself up in a hotel on the days he needs to attend RBS board meetings in the Scottish capital.

The five-bedroom house, in one of the most expensive streets in Edinburgh, apparently stands empty when not in use by the RBS boss. Given the current state of the property market, it might not quite raise the £1.6 million RBS paid for it, but selling the property would release much-needed funds to the bank. More importantly, perhaps, it would also serve as a declaration that the age of excess really is at an end.

Fiona Walsh writes for the Guardiannewspaper in London