RBS mounts defence of pay plans for top bosses

Bosses at Lloyds confirm return to private ownership imminent

The Royal Bank of Scotland has defended pay plans for its top bosses, saying it had been a sector leader when it comes to “showing restraint” over executive pay.

The lender hit back after facing criticism from investor advisory groups, including Institutional Shareholder Services (ISS), which urged investors to oppose a new RBS remuneration policy on the grounds that its efforts to reduce pay awards were not “sufficient”.

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%, both a decrease from the previous 400%.

Speaking at the bank’s annual general meeting (AGM) in Edinburgh, Sir Sandy Crombie, chairman of the remuneration committee, said: “You may be aware of the press commentary following the publication of proxy advisor reports, in particular the recommendations against the new remuneration policy by ISS and PIRC.

“We disagree with the conclusions reached in these reports and strongly challenged the view from ISS that the level of discount was insufficient under the new construct.

“We subsequently re-engaged with a number of our major shareholders, and I am pleased to say that the vast majority indicated their continued support for our proposals.

“In addition, Norges Bank, one of our major shareholders, has recently issued a public statement confirming support for the new policy highlighting the simplified structure and reduced maximum award levels.”

The comments came as the bank also moved to address concerns about the lack of female representation on the board by announcing that Yasmin Jetha had joined as a non-executive director.

RBS also announced former KPMG auditor John Hughes would join as a non-executive from June 21.

UK taxpayers are expected to make a profit of at least £500 million from the government’s bailout of Lloyds Banking Group, shareholders have been told.

Bosses at Lloyds’ annual general meeting (AGM) in Edinburgh confirmed the UK Government’s stake in the group now stands at 0.25%, meaning the group’s return to full private ownership is “just days away”.

Chief executive Antonio HortaOsorio described the development as a “major milestone” in efforts to turn the banking group around from the “crisis” it faced a few years ago.

Picture: Getty. Under the new pay plan, chief executive Ross McEwan, above, would be eligible for a long-term award of 175% of his salary and finance chief Ewen Stevenson 200%, both a decrease from the previous 400%.