RBS Chairman Says Bank Has Done More Than Others to Reduce PayRichard Partington
Edinburgh-based bank passed pay report with 99.6% backing
Howard Davies says lender is paying executives `responsibly'
Royal Bank of Scotland Group Plc has done more than any other bank to reduce executive compensation in the wake of the financial crisis, cutting the bonus pool at its investment bank by more than 90 percent since 2010, Chairman Howard Davies told shareholders.
RBS removed “exaggerated bonus levels that were paid in respect of unrealistic profits,” Davies, 65, said at the bank’s annual general meeting in Edinburgh on Wednesday. The company is “trying to pay responsibly for people who do a good job,” he said.
While Davies defended the bank from individual shareholders at the meeting who decried greed from top executives and board members, most investors backed the lender’s efforts. The company passed its compensation report for 2015 with the backing of about 99.6 percent of voting shareholders. That compares with 91 percent at London-based Standard Chartered Plc, which also held its annual shareholder meeting on Wednesday.
The bonus pool at the lender declined 11 percent last year as RBS shrank its investment bank, cutting thousands of jobs to focus on consumer lending in the U.K. and Ireland. Executive pay and bonuses have sparked a political outcry in recent years, with the government retaining a 73 percent stake in the lender more than seven years after it was bailed out.
The bank is “pleased” that it cut its securities unit before others, Davies said. “A number of other European banks have concluded that, in very difficult markets, they also need to downsize their investment banking operations.”
RBS may have received lower prices for assets in that business had it not moved more quickly than other banks to scale back its investment bank, Davies said.