Royal Bank of Scotland was given shareholder backing for its exec pay shake-up today, despite criticism from advisory groups.
ISS and Pirc advised investors to reject the proposals, cutting long-term awards on offer to its chief executive and finance chief, suggesting they were insufficient.
Remuneration committee chair Sandy Crombie hit back yesterday, saying: “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.”
Less than four per cent of votes went against the bank’s pay policy at the AGM.
RBS also today defended the costs of its legal battle with former shareholders, due for court later this month.
Several politicians, including former business secretary Vince Cable, have condemned the bank for racking up defence costs of £125m, including at least £6.5m on former executives such as Fred Goodwin.
Chairman Howard Davies defended the bank today, telling shareholders: “The costs we are having to meet are high because of the extraordinary breadth and complexity of the case.
“And it is normal practice under company law, and indeed it is a legal obligation for the bank, that directors should be indemnified in relation to any third party civil legal action arising from their tenure at the bank.”
At its AGM in Edinburgh, RBS also today spoke about its contingency planning for Brexit, the possibility of the second Scottish referendum and appointed two new non-executive directors. Former KPMG UK head of banking John Hughes and Yasmin Jetha, formerly of Abbey National, will take up their roles on 21 June.
The bank also today reiterated its belief that it can return to profit in 2018.
On Brexit, Davies said: “The exit process has now been triggered but it will be a while before we see the implications for future financial regulation.
“Given the shape of our business, and its largely domestic focus, RBS will be less impacted than many of its peers.
“Our aim is to ensure continuity of service for our EU customers and we are actively exploring options to allow us to do so.”
He added: “One potentially significant outcome of the vote to leave the EU is that we might also be facing a second Scottish referendum.
“Before the last referendum, we said that RBS would continue its support for Scotland but would move its registered office to London.
“If there is a second referendum we will keep you informed of any contingency plans we might put in place.”