Bonuses Are Good, But Clawbacks Make Them Better

By order of the Her Majesty, the Queen, Sir Fred Goodwin—aka “Fred the Shred”—suffered an unprecedented clawback. The disgraced former Royal Bank of Scotland CEO was stripped of his knighthood “for services to banking.” Barely four years after Goodwin’s elevation, his bank—Great Britain’s wealthiest—effectively collapsed and was nationalized. “The scale and severity of the impact of his actions as CEO of RBS made this an exceptional case,” the Honors Forfeiture Committee mandarins concluded. Goodwin had brought the honors systems into disrepute; his award was thus annulled.

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