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Shareholders vote against RBS pay Shareholders vote against RBS pay
(20 minutes later)
Royal Bank of Scotland shareholders have officially voted against the bank's pay and pensions policy at its annual general meeting in Edinburgh. Royal Bank of Scotland shareholders have voted against the bank's pay and pensions policy at its annual general meeting in Edinburgh.
However, RBS does not have to accept shareholders' demands.However, RBS does not have to accept shareholders' demands.
Former chief executive Sir Fred Goodwin was called a "benefits scrounger" as some shareholders criticised his £703,000 a year pension.Former chief executive Sir Fred Goodwin was called a "benefits scrounger" as some shareholders criticised his £703,000 a year pension.
Directors also faced calls from angry shareholders for its entire previous board to be jailed. Separately, Sir Fred has rejected renewed requests from the RBS chairman to voluntarily reduce his pension.
Current chairman Sir Philip Hampton asked for an "end to the public flogging" over its past mistakes. Sources have told the BBC that he feels he has honoured the terms of his contract and he expects RBS to honour the terms of their contract.
He has also repeated his request for Sir Fred to consider voluntarily reducing his pension. 'Public flogging'
During the AGM, shareholder John Waterson's call for the entire previous board to be jailed was greeted with applause from the audience.
Protesters gathered outside the AGM in EdinburghProtesters gathered outside the AGM in Edinburgh
Shareholder John Waterson accused former directors of being "collectively responsible for what has happened to this wonderful, great company", after the bank had to be rescued by the government last year. He accused former directors of being "collectively responsible for what has happened to this wonderful, great company", after the bank had to be rescued by the government last year.
All of those board members should be in jail, he said. The comments came despite chairman Sir Philip Hampton's calls for an "end to the public flogging" over its past mistakes.
His call was met by applause from the audience.
On their way into the meeting one couple told the BBC: "Mr Goodwin has a very nice pension. We are pensioners, we wouldn't mind a pension like he has, but we wouldn't have the guts to take it, not after what he has done."On their way into the meeting one couple told the BBC: "Mr Goodwin has a very nice pension. We are pensioners, we wouldn't mind a pension like he has, but we wouldn't have the guts to take it, not after what he has done."
However, another RBS investor, Nick Smith said: "I think they [the board] should be left alone to get on with it, we need banks to live."However, another RBS investor, Nick Smith said: "I think they [the board] should be left alone to get on with it, we need banks to live."
FROM THE TODAY PROGRAMME More from Today programme FROM THE TODAY PROGRAMME More from Today programme
Shareholders were also told that more redundancies are expected worldwide, although it is too early to say how many jobs will go or where the cuts will be made.
The bank has already announced 2,700 job cuts.
Public backlashPublic backlash
Former RBS chief executive Sir Fred Goodwin resigned in October after the government rescue, but was still given a £703,000-a-year pension - a decision which led to widespread outrage. Sir Fred Goodwin resigned in October after the government rescue, but was still given a £703,000-a-year pension - a decision which led to widespread outrage.
A government agency, as majority shareholder with a 68% stake in the bank, registered the public's anger at the pension awarded by voting against the bank's remuneration report. Speaking before the results of the vote were confirmed, Sir Philip told the BBC he was prepared for significant opposition.
However, RBS does not have to accept shareholders' demands.
The negotiations between Sir Philip Hampton and Sir Fred Goodwin over Sir Fred's sensational pension deal have descended into near farce BBC business editor Robert Peston Read Robert Peston's blog
Sir Philip Hampton told the BBC he was prepared for a major protest vote.
"I absolutely understand why shareholders have voted against it," he said. "It is overwhelmingly because [of] the concerns about Fred Goodwin's pension.""I absolutely understand why shareholders have voted against it," he said. "It is overwhelmingly because [of] the concerns about Fred Goodwin's pension."
"Remuneration obviously has been a big issue. It's been addressed by the world leaders in the G20 in recent days.""Remuneration obviously has been a big issue. It's been addressed by the world leaders in the G20 in recent days."
However, despite the chairman's request for Sir Fred to voluntarily give up some of his pension, the BBC's business editor Robert Peston says he is unlikely to do so. A government agency, as majority shareholder with a 68% stake in the bank, registered the public's anger at the pension awarded by voting against the bank's remuneration report.
Although Sir Fred has said he would consider this, he is yet to take any action, presumably, Mr Peston says, because he has calculated that his reputation has already been so damaged that the gesture would make little difference.
Blame gameBlame game
Shareholders were also told that more redundancies are expected worldwide, although it is too early to say how many jobs will go or where the cuts will be made.
The bank has already announced 2,700 UK job cuts.
In February RBS reported it made a loss of £24.1bn in 2008 - the largest annual loss in UK corporate history.In February RBS reported it made a loss of £24.1bn in 2008 - the largest annual loss in UK corporate history.
WHO IS SIR PHILIP HAMPTON? Chairman of Sainsbury since 2004Former finance director at Lloyds TSB, BT and British GasFormer chairman of UK Financial Investments - the company established by the government to manage its investmentsWHO IS SIR PHILIP HAMPTON? Chairman of Sainsbury since 2004Former finance director at Lloyds TSB, BT and British GasFormer chairman of UK Financial Investments - the company established by the government to manage its investments
Sir Philip blamed RBS's difficulties on its acquisition of the Dutch bank ABN Amro in 2007.Sir Philip blamed RBS's difficulties on its acquisition of the Dutch bank ABN Amro in 2007.
RBS had to write off £16.2bn last year because of previous acquisitions, most notably ABN Amro.RBS had to write off £16.2bn last year because of previous acquisitions, most notably ABN Amro.
The bank's new bosses are hoping to create a "firebreak" between a disastrous recent past and their plans to help RBS back into profit.The bank's new bosses are hoping to create a "firebreak" between a disastrous recent past and their plans to help RBS back into profit.
Michael Lamoureux, who founded the RBS shareholder action group, told the BBC the bank had perpetrated "the biggest crime in financial history in the UK" when it asked shareholders for an extra £12bn to shore up its finances last year.Michael Lamoureux, who founded the RBS shareholder action group, told the BBC the bank had perpetrated "the biggest crime in financial history in the UK" when it asked shareholders for an extra £12bn to shore up its finances last year.
He said shareholders had been "grossly misled in the prospectus" and were being contacted about taking a class action against RBS.He said shareholders had been "grossly misled in the prospectus" and were being contacted about taking a class action against RBS.
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