Royal Bank of Scotland Group Plc accepted a special resolution put forward by investors for the creation of a shareholder committee that will allow them to have a say on executive pay and other matters, retail shareholder association ShareSoc said March 19.
RBS will allow the resolution to be put up for a shareholder vote at its annual general meeting in May, with the U.K. government having a big influence on the final decision, since it owns 70.48% of the bank. The proposal will need backing from 75% of shareholders to be approved.
The shareholder committee is likely to be advisory in nature, with no formal powers being stipulated, ShareSoc said, adding, however, that the committee could analyze and comment on the bank's strategy, governance, executive pay and other high-profile issues. If approved, the committee could include representatives of both institutional and individual shareholders and additional stakeholders.
The investors are supported and coordinated by advisory groups ShareSoc and the UK Shareholders' Association, which first handed the proposal to RBS in December 2016, to be put to a vote at its May 2017 annual general meeting. However, the resolution was rejected by RBS on legal grounds, the Financial Times reported.
A spokesperson for the bank told the FT that it had worked with ShareSoc and the UK Shareholders' Association "to ensure their resolution was in a fit state to be put to shareholders." A representative for the government body that controls the state's RBS stake declined to say how it would vote.