Royal Bank of Scotland bosses are set to face awkward questions ranging from pension provisions and executive pay to the treatment of business customers and its lending practices at its annual meeting this week.
Shareholders will get the chance to quiz Ross McEwan, the chief executive, and the rest of the board at the company’s Gogarburn conference centre on the outskirts of Edinburgh on Wednesday afternoon.
The Times has learnt that some Scottish members of the Bully-Banks pressure group plan to attend the gathering. The group is made up primarily of small business owners who believe that they were mis-sold complex loans by Britain’s biggest banks.
The treatment of companies by the bank’s disbanded global restructuring group also seems likely to crop up. Alongside that, representatives from the Unite union intend to ask the board to justify its “shameless” raid on staff pensions.
The bank announced plans this year to pass on £18 million of employer’s national insurance costs to 27,000 staff who are part of its defined-benefit pension scheme. A spokesman from Unite confirmed that a senior representative would be at the meeting and noted that the majority of its members at the bank were also shareholders.
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ShareAction, a charity that campaigns to reform the investment landscape, also has concerns over the pension changes and will have representatives at the meeting. However, they intend to ask about how RBS is aligning its business model with the international agreement to limit global temperature rise to 2 degrees, agreed at the UN climate summit in Paris.
The charity said: “Like many banks, RBS’s current business model relies on commercial loans and project financing activities which are increasingly vulnerable to financial risks associated with the impact of climate change.”
Other campaign groups, such as Move Your Money, will be inside the auditorium. Move Your Money plans to raise the issue of RBS’s commitments to avoid last-bank-in-town branch closures.
The organisation, along with Debt Resistance UK, also wants to ask about high-interest so-called lender option borrower option (Lobo) loans that RBS has issued to councils, including Edinburgh and Glasgow, where substantial job cuts are planned.
Further scrutiny of executive pay arrangements at the bank is also likely to come up. Pirc, the shareholder and corporate governance group, will not have anyone at the meeting but is recommending voting against the bank’s remuneration report.
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Among its concerns are the nature of the remuneration arrangements for the executive directors. It said that Mr McEwan’s pay was above the upper quartile when compared with other banks and that the ratio between his rewards and those of the average employee was “excessive”.
The news that dividend repayments are not likely to resume until well into 2018 is unlikely to ease the mood in the room. Shareholders will be keen to find out more about the problems surrounding the bank’s increasingly expensive Williams & Glyn spin-off.
However, with the government still holding a 73 per cent stake, the chance of the bank being defeated on any of the resolutions remains slim.
