UK: Shareholders vote against RBS pay

More than 90% of Royal Bank of Scotland shareholders have voted against the bank's pay and pensions policy at its annual general meeting in Edinburgh.

RBS, which does not have to make any changes as a result, said it was a "substantive" protest vote at Sir Fred Goodwin's £703,000 a year pension.

During the meeting, one shareholder called him a "benefits scrounger".

Separately, Sir Fred has rejected renewed requests from the RBS chairman to voluntarily reduce his pension.

Sources have told the BBC that he feels he has honoured the terms of his contract and he expects RBS to honour the terms of their contract.

After the vote, chairman Sir Philip said: "They said what they think - they don't much like Fred's pension.

"Overwhelmingly it's a protest vote. We need to take that on board."

'Public flogging'

During the AGM, shareholder John Waterson's call for the entire previous board to be jailed was greeted with applause from the audience.

He accused former directors of being "collectively responsible for what has happened to this wonderful, great company", after the bank had to be rescued by the government last year.

The comments came despite chairman Sir Philip Hampton's calls for an "end to the public flogging" over its past mistakes.

On their way into the meeting one couple told the BBC: "Mr Goodwin has a very nice pension. We are pensioners, we wouldn't mind a pension like he has, but we wouldn't have the guts to take it, not after what he has done."

However, another RBS investor, Nick Smith said: "I think they [the board] should be left alone to get on with it, we need banks to live."

Public backlash

Sir Fred Goodwin resigned in October after the government rescue, but was still given a £703,000-a-year pension - a decision which led to widespread outrage.

Speaking before the results of the vote were confirmed, Sir Philip told the BBC he was prepared for significant opposition.

"I absolutely understand why shareholders have voted against it," he said. "It is overwhelmingly because [of] the concerns about Fred Goodwin's pension."

"Remuneration obviously has been a big issue. It's been addressed by the world leaders in the G20 in recent days."

A government agency, as majority shareholder with a 68% stake in the bank, registered the public's anger at the pension awarded by voting against the bank's remuneration report.

Blame game

Shareholders were also told that more redundancies are expected worldwide, although it is too early to say how many jobs will go or where the cuts will be made.

The bank has already announced 2,700 UK job cuts.

In February RBS reported it made a loss of £24.1bn in 2008 - the largest annual loss in UK corporate history.

Sir Philip blamed RBS's difficulties on its acquisition of the Dutch bank ABN Amro in 2007.

RBS had to write off £16.2bn last year because of previous acquisitions, most notably ABN Amro.

The bank's new bosses are hoping to create a "firebreak" between a disastrous recent past and their plans to help RBS back into profit.

Michael Lamoureux, who founded the RBS shareholder action group, told the BBC the bank had perpetrated "the biggest crime in financial history in the UK" when it asked shareholders for an extra £12bn to shore up its finances last year.

He said shareholders had been "grossly misled in the prospectus" and were being contacted about taking a class action against RBS.

AMP Section Name:Executive Compensation
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  • 186 Financial Services, Insurance and Banking
  • 208 Regulation

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