Royal Bank of Scotland – AGM 29 April 2020
Item 2: Remuneration policy
A new policy introduces the discount to the executive LTI, which is not acceptable. The number of shares awarded may be calculated using a share price discounted to reflect the absence of the right to receive dividends or dividend equivalents during the vesting period. The discounted share price will be calculated with reference to estimated dividend yields based on market consensus and the length of the vesting period. Based on the year-end dividend yield, the discount over 3 years would reach c.18%. The proposal does not comply with the UK best practices and our policy.
Item 3: Remuneration report
The performance assessment of LTI awards is over-complex, which makes it difficult to evaluate the alignment between pay and performance. Furthermore, it is unclear if the pre-vesting performance is assessed on a three-year period. RBS has several KPIs in place but does not use them as performance metrics for the LTI. These awards are purely discretionary and their long-term character is under question.
The Board granted to Mr McEwan (CEO) a good leaver status even though he was appointed as CEO of National Australia Bank. We strongly disagree with this decision which offers the vesting of LTI outstanding to executive directors leaving the company for another employment. The LTI is not only an incentive but also a retention instrument and the employment conditions should be waived only in exceptional circumstances.
Royal Bank of Scotland Group is a banking and financial services company. Co.'s activities are organized in franchise basis; Personal and Business Banking (PBB) comprising UK PBB and Ulster Bank RoI segment, which serve individuals and small businesses in the U.K. and the Republic of Ireland; Commercial & Private Banking comprising, Commercial Banking and Private Banking segment, which serve commercial, corporate and private banking in the U.K. and Western Europe; RBS International, which serves retail, commercial and financial institution in Jersey, Luxembourg and London; and NatWest Markets, which provides risk management and financing solutions through its trading and sales operations.
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