The Royal Bank of Scotland (RBS) held its Annual General Meeting yesterday (the 25th June). Most of the media did not even bother to report it.
There were some shareholders present who spoke against the remuneration at the company, but when it came to a vote the proxy counts were 99.81% in favour of the Remuneration Report and 99.66% in favour of the Remuneration Policy. PIRC had also opposed the Remuneration Policy before the meeting. A summary of what they said is that the maximum potential payout under the long-term incentive plan is excessive as it can amount up to 300% of salary. They were also disappointed that the bank had found a way to circumvent the spirit of the European CRD IV regulations. A new fixed share allowance is replacing the annual bonus, which they did not consider appropriate as the share allowance acts as a guaranteed bonus. They pointed out that from 2014, Executive Directors will be eligible to receive up to 400% of salary through the share allowance and the long-term incentives.
Even with the Government holding 85% of the company, and obviously voting for these proposals, it is disappointing that there was so little other opposition. It just shows how ineffective the new UK regulations on remuneration are in practice.
One other issue raised at the meeting was about the activities of the GRG business unit at RBS which was accused of killing off small firms to the financial advantage of RBS. Indeed one shareholder named Gavin Palmer apparently said RBS had been covering up for “corporate psychopaths”. Gavin is of course well known to some ShareSoc members for his vigorous approach to companies.