RBS prepares for AGM pay vote

28th Apr 2010 12:26

Royal Bank of Scotland has begun its transition "from problem to opportunity", says chairman Philip Hampton, but all eyes will be on proposed revisions to the bank's controversial bonus scheme at this afternoon's AGM.In a statement published ahead of the meeting in Edinburgh, Hampton proposed to replace the existing Medium Term Performance Plan and Executive Share Option Plan with a new Long Term Incentive Plan. "Awards will be subject to tough performance criteria and to a stringent risk review, so that no awards will vest unless there has been effective risk management and good progress against the strategic plan during the performance period," he said. Shareholders will be asked to vote in favour of the new scheme, which will raise the target price that triggers bonus payments for bosses from 50p.Chief executive of the part-nationalised bank Stephen Hester, whose rolling three-year incentive plan runs until the end of 2012, will certainly see his targets increased, though by how much remains to be seen.It also looks like more jobs will go among the rank and file over the coming months. Hampton said that while the most substantial reductions have already been made, the cull is "not at an end". Thousands have already lost their jobs as a result of the financial crisis.The disposals programme is progressing following February's sale of the metals, oil and European energy businesses of RBS Sempra Commodities to JPMorgan for $1.7bn.There's been "satisfactory" buyer interest in the RBS branch network in England and Wales plus NatWest's Scottish branches, and in the card payment acquiring unit Global Merchant Services.The general insurance business will either be sold or floated at some stage, "though this looks unlikely before 2012", Hampton said.First quarter results are due at the end of next week.