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RBS bosses braced for grilling at AGM over pensions and wages

By Ravender Sembhy

Royal Bank of Scotland executives will be in the firing line next week when they are expected to be grilled by shareholders over pension perks for top bosses at the lender's annual meeting.

The group, 62% owned by the taxpayer, will become the latest bank 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, which amounts to 35% of his £1m basic salary, but those working in branches typically receive just 10%.

The Investment Association (IA), which oversees £7.7 trillion in assets, and shareholder society ShareSoc have both raised alarm over the arrangement.

The IA said in February that it will monitor and embarrass any company that pays pension contributions to new directors in a way not aligned to the majority of the workforce.

It is also asking companies to reduce the gap between the pensions of top executives and staff and will issue a "red-top" warning - the highest and most serious level - on firms which pay newly-appointed directors at rates above the majority.

It wants pension payments for existing executives brought below 25%.

ShareSoc, which is recommending investors vote against the RBS's remuneration report at the Edinburgh AGM on April 26, has also highlighted that finance director Katie Murray receives a 10% pension payment, much lower than Mr McEwan's.

RBS investors have also been urged to vote down the remuneration report by shareholder advisory company PIRC, which is angry at Mr McEwan's £3.6m pay packet.

PIRC said elements of Mr McEwan's pay award are "excessive", and pointed to the fact he is paid 46 times more than the average bank employee.

The New Zealander's pay packet last year consisted of a £1m basic salary, a £1m fixed share allowance and another £1.1m as part of a long-term incentive award.

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

At RBS, Mr McEwan's future is also expected to be focal point at the AGM, and the bank may be asked for a timeline of his departure.

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