The Courier & Advertiser (Angus and Dundee)
Banking giants to face investor scrutiny
Investors are set to grill bosses at RBS and Lloyds Banking Group this week, with executive pay and branch closures expected to be high on AGM agendas.
Shareholders in RBS are being urged to vote against a new remuneration policy, which will face a binding investor vote at its annual meeting at Gogarburn.
Under the new pay plan, chief executive Ross McEwan would be eligible for a long-term award of 175% of his salary and finance chief Ewen Stevenson 200%.
Although the awards are a decrease on the previous 400%, investor advisory group Institutional Shareholder Services (ISS) said this was not “sufficient”, and recommended shareholders oppose the remuneration policy.
PIRC is also calling on shareholders to vote against the scheme.
In its defence, RBS has said the aim of the new policy is to “encourage sustainable longterm performance, with executive directors having significant alignment in shares both during and after employment.”
While Lloyds is unlikely to face a shareholder rebellion, the bank could still face tough questions over plans to slash its high street branch network and efforts to redress fraud victims who suffered at the hands of former HBOS staff. Chief executive Antonio HortaOsorio’s pay will be under the spotlight when investors meet at Edinburgh International Conference Centre.
Mr Horta-Osorio’s total pay package fell to £5.5 million last year from £8.7m in 2015, due to a cut in his long-term shares award after the stock took a battering after the Brexit vote.
But the group’s Portuguese boss saw his short-term bonus rise from £850,000 to £1.2m and his base salary will increase by 8% in 2017 to £1.2m, the first raise since he joined in 2011.
Under the bank’s new remuneration policy, which faces a binding shareholder vote at the AGM, Mr Horta-Osorio has the potential to earn a maximum of £8.2m if targets are met.