I have today published two posts on ShareSoc’s blog, expressing different opinions on RBS’s proposed resolution to buy back shares from HM Treasury. One from our chairman and another from senior ShareSoc member Roger Lawson.
Firstly, the facts. You can find full details of the General Meeting and proposal here: https://investors.rbs.com/shareholder-centre/shareholder-meetings.aspx. If you are a shareholder you should study the circular available from that webpage before deciding how to vote.
ShareSoc encourages its members to make their own minds up on matters such as this and hence we hope you find it helpful to see both sides of the argument. As Roger points out, the 62.5% of RBS’s shares held by HM Treasury via the vehicle “UKGI” will not be voted. In addition, this is a special resolution requiring 75% of votes cast to be voted in favour for the resolution to be passed. Therefore only 9.4% of total shares in issue need to be voted against the resolution for it not to be carried. Hence the votes of individual shareholders could really make a difference in this case and – whatever your view – we urge you to vote.
It is shocking that according to statistics we have seen, only 6% of individual shareholders’ shares are typically voted at general meetings. We believe that a significant factor in this is the difficulty many shareholders have in voting due to information rights not being passed on by investment platforms (and hence many individual shareholders may not even be aware that this meeting is taking place) and that platforms do not make it straightforward to exercise your vote. Please support our shareholder rights campaign to improve this situation.
Note also Mark Northway and Roger’s comments that this whole matter could have been better handled with a shareholder committee. It is notable that the resolution does not place a cap on the price paid for the UKGI shares nor specify a minimum core tier 1 ratio that should be reached after any buyback (though there is some protection in that any buyback will require PRA approval). A shareholder committee would have been able to discuss these matters with the board which may have resulted in a better resolution. Moreover such a committee would review the proposal independently and be able to make an independent and consensual recommendation. Please also support our campaign to install a shareholder committee at RBS – and vote in favour of our resolution at the AGM in May.
Mark Bentley, Director ShareSoc