A shareholder interest group today urged investors to oust RBS chairman Sir Howard Davies at its AGM next month after the bank refused to take steps to establish a shareholder committee.
ShareSoc said it had asked RBS to include a resolution at its next AGM to create a shareholder committee, which the taxpayer-backed lender declined to do. ShareSoc has now called for the bank's chair to be voted out.
"It is very disappointing that RBS are effectively taking the position that they will only make substantial improvements to their governance models and shareholder engagement processes if such improvements become mandatory," said Mark Northway, ShareSoc chairman. "This is a missed opportunity for RBS to lead from the front."
The shareholder group also expressed its disappointment that the bank had declined to share the legal advice it received advising it not to go ahead with such a motion. However, it is understood the bank is not doing so because the advice, in the lender's opinion, is subject to legal privilege.
At last year's AGM, Davies' reappointment won an overwhelming 99.86 per cent approval from shareholders.
ShareSoc is also calling on shareholders to vote down chief exec Ross McEwan's pay deal. The group argue that, although the £3.8m target pay for the New Zealand banker is very reasonable compared with the rest of the market, the share ownership guideline of 400 per cent of salary is "inadequate".
ShareSoc argued this means McEwan will be able to sell all but £4m of his shares whenever he wishes and so he "does not have enough skin in the game".
The shareholder group contended executives at the firm should have to hold onto shares for at least two years after they have left the bank, creating enough time for any legacy issues to become clear before they could cash in.
It has previously been reported McEwan will not be selling any of his shares while he is still boss of the bank, except those that need to be shed for tax purposes. It is understood this is still the case.
RBS chairman Davies said:
We have been very clear in our support for enhanced corporate governance and, in particular, stakeholder engagement and are actively participating in the government's ongoing consultation. RBS will adhere to the letter and the spirit of any new rules or guidelines the government might put in place.
I was pleased to note that a recent report from the Business, Energy and Industrial Strategy Committee firmly endorsed the idea of wider stakeholder panels.