Investor groups raise red flags over CEO receiving annual payments worth 35% of salary

A shareholder rebellion is brewing before Royal Bank of Scotland’s annual general meeting as investor groups raise red flags over a pay policy that involves the chief executive receiving £350,000 per year in pension payments.

The Investment Association (IA) and individual shareholder society ShareSoc have released reports raising concern over pension payments for the bank’s CEO, Ross McEwan, which are out of line with the rest of its workforce.

McEwan is receiving annual pension payments worth 35% of his £1m salary, compared with the rest of its staff, who are offered 10%. The bank has addressed payments for its newest executive, finance chief Katie Murray, who receives a 10% pension payment worth £75,000 but has resisted making changes for its top boss.

The IA, which manages £7.7tn in assets of 250 members, has released its Institutional Voter Information Service (IVIS) report on RBS, which bears an “amber top” or warning over the bank’s remuneration report. RBS’s pay plans breach the association’s guidelines to bring pension payments for existing executives below 25%.

It is one of the first warnings on an IVIS company report due to executive pension payment breaches this year.

ShareSoc has issued its own guidelines to shareholders, recommending they vote against the bank’s latest remuneration report at the AGM on 26 April. “RBS should listen to what is being said and act,” ShareSoc said.

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