RBS shareholders take aim at fat cat pensions

Royal Bank of Scotland directors are expected to come under fire this week over pension perks as shareholders gather in Edinburgh for the lender’s annual meeting.

The bank, which remains 62 per cent owned by the taxpayer, is likely to face scrutiny over the discrepancy between pensions enjoyed by board members and those of the average worker.

Chief executive Ross McEwan receives a pension of £350,000, amounting to 35 per cent of his £1 million basic salary, but those working in branches typically receive just 10 per cent.

The Investment Association, which oversees £7.7 trillion in assets, and shareholder society ShareSoc have both raised concerns.

ShareSoc, which is recommending investors vote against RBS’s remuneration report at Thursday’s meeting, has also highlighted that finance director Katie Murray receives a 10 per cent pension payment, much lower than McEwan’s.

RBS investors have also been urged to vote down the remuneration report by shareholder advisory firm Pirc, which has expressed anger at the chief executive’s overall £3.6m pay packet.

Pirc argued that elements of McEwan’s pay award were “excessive”, and pointed to the fact he is paid 46 times more than the average bank employee.

Other investor advisory groups Glass Lewis and ISS are recommending shareholders vote in favour of the RBS remuneration report.

For its part, the bank is to consult over its remuneration policy, including the pension plan, next year. Pensions are likely to become a major flashpoint during the AGM season.