Investor group calls for RBS pay report rebellion

Speaking ahead of the meeting, Pirc said there were “important concerns” over what it says is excessive remuneration for executive directors at RBS, which is still 73 per cent state-owned following its £45 billion government bailout in 2008, including that of chief executive Ross McEwan.

“The changes in CEO pay over the last five years are not considered in line with the company’s TSR (total shareholder return) performance over the same period,” the group said.

“While the disclosure level is in line with best practice, there are important concerns over the excessiveness of the remuneration arrangements for executive directors … ” wrote PIRC in a report.

It went on: “There are also important concerns over the level of variable pay of the CEO which exceeds 200 per cent of salary and which comes in addition to the fixed share allowance (worth 100 per cent of salary).”

PIRC said the use of a fixed share allowance “circumvents the spirit” of the EU regulations on banking remuneration.

“In addition, it is noted that the CEO salary is above the upper quartile when compared with salaries of other CEOs in the comparator group”.

“Finally, the ratio between the CEO pay and the average employee pay is considered excessive”, it concluded.

PIRC also recommended rejection of other RBS resolutions including one that would “Authorise Issue of Equity with Pre-emptive Rights in Relation to the Issue of Equity Convertible Notes.”