RBS braced for battle over boss’s £350k pension

THE boss of taxpayerbacked Royal Bank of Scotland is facing an investor rebellion next week amid outrage over huge pension payments for chief executives.

Ross McEwan will be confronted by angry shareholders over annual contributions of £350,000 towards his pension.

This is equal to 35pc of McEwan’s annual salary, and way ahead of the 10pc which is typically paid into the retirement pots of RBS staff.

The bank’s annual meeting will be held in Edinburgh on Thursday and a significant number of investors are expected to protest against the deal.

Influential investor advice group Pirc is telling shareholders to vote down RBS’s pay report to make their feelings known.

And the Investment Association (IA), which represents big City institutions, is warning that McEwan’s pension payments are too high and should be in line with other staff.

RBS is 62.4pc- owned by the Treasury, which saved it from collapse with £46bn of taxpayers’ money during the financial crisis of 2008.

Luke Hildyard, of the High Pay Centre, said: ‘People are unsurprisingly appalled at a bank like RBS, which has already taken so many liberties with the public, applying such double standards to the pensions arrangements for its top executives and its frontline staff.

‘Cases like this are a massive test of shareholder engagement. People want to live in an economy where everyone is treated fairly and we don’t allow massive gaps to open up between those at the top and everybody else.

‘ Investors need to take a stand and exert some discipline over reckless and selfserving companies.’

The RBS gathering will be one of the first flashpoints in this year’s season of annual meetings, with many major firms likely to face investors’ ire over pensions deals with senior officials. Bosses should get pension payments equal to 24pc of their base salary at most, the IA has said.

But as many as 54 firms in the FTSE 100 have been breaching this threshold, meaning they are likely to face a backlash.

And banks are among the worst offenders.

Lloyds has cut the pension payment for chief executive Antonio Horta-Osorio by £154,000 a year, to 33pc of his salary, in a bid to calm critics. But it has been roundly attacked for offsetting this cut with a £175,000 increase in other elements of his pay.

It has justified this, claiming the payment has been made because a banking reorganisation has made his job more difficult.

Lloyds’ annual meeting is next month and the bank is expected to suffer a revolt.

At Standard Chartered bank, which also has a May meeting, boss Bill Winters got 40pc of his salary or £460,000 towards his pension in 2018.

But the lender is redefining Winters’ base salary to include other elements of his pay packet, so it will look as though he is only getting 20pc this year.

This is despite the fact the actual pension payments are being hiked to £474,000.

Glass Lewis has recommended that investors vote against the bank’s pay policy because of Winters’ payment.

RBS is reviewing its pay policy next year and McEwan’s pension is likely to be cut from then on.

The bank is also paying lower contributions of 10pc to new finance director Katie Murray, in line with ordinary employees.

In a report for shareholders, Pirc said: ‘ The reduction in the maximum pension contribution is welcomed but considered insufficient.’

Fellow advice group ISS is not recommending a shareholder vote against bosses’ pay at RBS, although it notes in its report that his pension contributions are significantly higher than those given to most employees.

However, the IA has given the bank an ‘ amber’ warning in a report for its members, meaning that it has concerns about the bank’s retirement payments.

RBS declined to comment.