Investor unrest

NatWest RBS facing backlash over executive pay

RBS and Alison Rose
Alison Rose is in line for a £5m pay package

NatWest, formerly Royal Bank of Scotland, is facing a growing investor rebellion over pay for its top management which could see chief executive Alison Rose taking home more than £5 million next year.

The Investment Association has added its concerns to those of shareholder advisory group Glass Lewis which over the weekend recommended investors reject a new policy that would significantly enhance the rewards to Ms Rose and finance director Katie Murray.

Institutional Shareholder Services (ISS) also raised concerns about the bank’s plans but decided that “qualified support” was an adequate response.

Unlike Glass Lewis and ISS, the Investment Association does not give recommendations to fund managers on how they should vote at AGMs.

Instead it draws attention to concerns over best practice through a colour-coded system, with an “amber-top” pointing to an issue that investors will need to consider. Its members include key fund managers who collectively manage more than £9.4 trillion for clients.

NatWest shareholders will vote on the latest proposals at its AGM in Edinburgh on 28 April and there will be concern that the unrest among shareholders will revive memories of fat cat bonuses which played a part in the hostility towards bankers following the crash in 2007-09.

The re-introduction of annual bonuses could result in Rose taking home a package worth £5.2 million for next year, based on current share price movements. She received total remuneration last year of £3.6m.

NatWest also wants to replace its long-term incentive share award scheme with a restricted share plan. which will have a lower maximum award as a percentage of salary than the previous incentive plan.

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