EDINBURGH (Reuters) - Royal Bank of Scotland’s (RBS.L) chief executive needs to be given the freedom to complete his five-year turnaround plan without excessive interference, the part-nationalized UK bank’s chairman said.
“There are ... still risks on the horizon and the task of rebuilding RBS has some way to go,” Philip Hampton said on Wednesday at the bank’s annual shareholder meeting. “It is important ... that the RBS management team is given the support and the freedom they need to continue their work to make us still safer and stronger.”
A row flared up earlier this year with some politicians attacking the bonus proposed for CEO Stephen Hester, prompting criticism from business groups that there was too much political interference in the bank, 83 percent owned by Britain.
UK Financial Investments, which manages the government’s stake, said it voted in favor of all resolutions at the AGM, including on pay. That allowed the bank to avoid the backlash seen in past years and at its rival Barclays (BARC.L) last month, although there were some protests at the AGM and not all investors were happy.
“I’d like to see them show more restraint (on pay). There never used to be this kind of pay given out by Scottish banks,” said Tom Wilson, 74, a private shareholder.
Hampton said the task of turning around the bank was unprecedented, however, after RBS grew to become one of the world’s biggest banks before nearly collapsing in 2008.
“The business will need a top management team to be in place to have the best chance of maximizing value when the time comes for the UK government to sell its interests,” he said.
RBS’s insurance arm, Direct Line, was “increasingly well positioned for a planned flotation of the business”.
RBS has picked UBS UBSN.VX to work alongside Goldman Sachs (GS.N) and Morgan Stanley (MS.N) as bookrunners on the listing, which is targeted for the fourth quarter and could value the business at more than 3 billion pounds.
Reporting by Matt Scuffham; Writing by Steve Slater; Editing by Dan Lalor