Retail Investors Creating Pressure Over RBS Governance

  • Mar 26, 2019 GMT
  • Team Kalkine
Retail Investors Creating Pressure Over RBS Governance

The Royal Bank of Scotland Group plc (LSE: RBS) offers personal, premier, business, and international banking and related financial services through two major subsidiaries: The Royal Bank of Scotland and NatWest. Personal banking comprises accounts, cards, loans and mortgages, insurance, and investments. Premier banking contains accounts, mortgages, will writing and execution, and estate administration. Business banking includes cards and payments, business loans and finances, business support, and international finance. International banking encompasses personal, corporate, and offshore banking. The bank operates in Europe, Asia, the Middle East and North America. RBS is headquartered in Edinburgh, the UK.

British Bank is experiencing pressure from retail investors who are seeking more control over corporate governance and say their stance is exonerated by an escalating row over executive pay.

Bank will arrange a vote at its annual general meeting which is scheduled on April 25, 2019, on whether to establish a committee of shareholder representatives that would meet with the board members and executives regularly.

Last year a similar proposal was defeated post a two-year conflict, but Director of shareholders rights group (ShareSoc), Cliff Weight, said that this latest exclamation over significantly high pension offering justified a second poll.

Royal Bank of Scotland is one among the several banks that have come under the radar of investors and market activists in recent weeks over the considerably high pension remittance to the senior managers.

As per media reports, Chief of RBS, Ross McEwan is all set to get a payment of £350,000 this year which is equivalent to the 35 per cent of his base salary. The code of corporate governance recommends that executives pension payment should be in line with the majority of employees, which is capped at about 10 per cent of the base salary.

Although, the bank has said we did not see establishing a committee, which will not be in the best interest of the company, quoting concerns over the difficulty in finding a representative panel.

Share Performance – 1 Year

At the time of writing (as on Mar-25-19) before the market close (Source: Thomson Reuters)

At the time of writing (as on March 25, 2019, at 03:55 PM GMT) before the market close, shares were quoting at GBX 249.40, surged by 1.3 points or 0.54% against its previous day close price. During the last one-year shares have reached a 52w high of GBX 288.98 and a 52w low of GBX 194.44 and at the current price level shares were trading 14.1% below its 52w high level and 27.65% above its 52w low level.

On a year-to-date basis, the stock has delivered a price return of 17.87%, although on 1-year basis stock has delivered marginal return of 0.2%. The stock was carrying a beta of 0.76 which make it comparatively less volatile against the benchmark index. Total outstanding market capitalisation was around £29.80 billion and dividend yield of 2.2 per cent.

At the volume standpoint, stock’s 5-day average daily volume was 10.49% higher against its 30-day average daily volume traded on the London Stock Exchange.

At the Simple Moving Average (SMA) standpoint, the share was trading above its 60-day and 200-day simple moving average.

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