RBS will overhaul its controversial executive pay scheme in response to shareholder pressure, it has been revealed.
Chairman Sir Philip Hampton will admit at RBS’s annual meeting on Wednesday that the share price target element of the scheme was set too low, according to the Telegraph. The scheme has been criticised for potentially paying out millions of pounds in bonuses.
An RBS spokseman said: “It is the board’s clear intention to ensure that pay for senior leaders at RBS is long-term, performance-determined and dependent on the successful recovery and turnaround of the company.
“The reformed structure will be put to a shareholder vote at the AGM and is designed to be at the leading edge of performance criteria.
“The board has asked the senior leaders at the company to deliver a five-year turnaround plan. If they are successful the shareholders will gain substantially. Only if they are successful will they receive competitive rewards that they will have clearly earned.”
A replacement bonus structure will be considered at after the bank’s interim management statement on 7 May.
Last year, nine in 10 RBS shareholders voted against the bank’s remuneration report.