RBS Shareholders Should Oppose ‘Excessive’ Pay, PIRC Says

Royal Bank of Scotland Group Plc’s shareholders should oppose the bank’s plan for a reverse stock split and its remuneration report, said Pensions & Investment Research Consultants Ltd., a corporate-governance adviser.

Investors in Britain’s largest state-controlled bank should oppose the pay report because the long-term bonus awarded to Chief Executive Officer Stephen Hester was “excessive,” the adviser said in a letter to members yesterday.

Hester, who gave up a 963,000-pound bonus amid pressure from parliamentarians, could be awarded as much as about 10.1 million shares of the bank under a so-called long-term incentive performance-related plan through March 2014, according to the bank’s annual report. Shareholders should also oppose RBS’s annual report stock split because of the accounting standards the bank uses, it said.

RBS, which is 82 percent government-owned, holds its annual general meeting on May 30 and will ask investors to approve a reverse stock split, giving them one new share for every 10 they hold to reduce the shares’ volatility.

A spokesman for RBS declined to comment.

-- Editors: Jon Menon, Keith Campbell

To contact the reporter on this story: Howard Mustoe in London at hmustoe@bloomberg.net.

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