RBS faces shareholder discontent over staff bonuses

14th May 2013 13:05

Royal Bank of Scotland (RBS) is facing wrath from shareholders Tuesday over 607m pounds of employee bonuses awarded last year when it lost 5.2bn pounds.RBS will confront investors at its annual general meeting in Edinburgh following a "chastening" 2012. The bank is expected to argue it is on a stronger footing after its payouts infuriated shareholders. The 81% state-owned bank will also say it should be ready to go private by next year.RBS was last year hit by a string of scandals relating to payment protection insurance (PPI) and interest rate mis-selling and fines for LIBOR rigging.In early May, the group moved out of the red with a pre-tax profit £826m for the first three months of the year.Chief executive Stephen Hester said: "The clean-up of RBS can be accomplished under our own steam in the next year, year and a half."I think we will be substantially done next year."The bank gave out £607m staff rewards last year, which included £215m for investment bankers.It was, however, down 23% on £789m a year earlier as the company said it was trying to recover £302m for its LIBOR settlement.Shareholder advisory body Pirc is now urging investors to reject its pay report over excessive bonuses."The bottom line is that the bank, similarly to its major competitors, has a remuneration structure which can lead to excessive pay," it said.At the general meeting, RBS is also likely to face questions over an IT meltdown last summer which locked up to 17m customers out of their accounts which sparked an investigation by the Financial Conduct Authority.RD