Tuesday, 31 March 2009

UKFI will vote against RBS remuneration report

It's confirmed via the UKFI website, and here's the official line:
John Kingman, chief executive of UKFI, said: “UK Financial Investments fully supports the approach the present RBS board is taking to remuneration matters, including in relation to the remuneration arrangements for the present chairman and chief executive. “Nevertheless, UKFI has decided that it cannot formally vote in favour of the resolution to approve the Remuneration Report. This is for one reason only. The Remuneration Report discloses, as a matter of record, the decision of former members of the RBS board to treat Sir Fred Goodwin and Johnny Cameron as retiring early at the request of RBS, so enabling them to take undiscounted pensions. That decision was taken in the past. Nevertheless, UKFI is not satisfied that it was in the company’s interest – and therefore UKFI’s as a value-oriented shareholder. UKFI therefore cannot vote in favour of it.”

Interesting - and welcome - that they have announced their voting intentions ahead of the meeting, which is more than any other UK investor does. Also, this will be the first time that a UK bank (maybe any bank?) has lost the vote on its remuneration report, and it took a state-sponsored investor to do it. Will be interesting to see if any fund managers actually voted for the rem report - I really wouldn't be surprised if they had given what a soft line most of them take on pay.

The next question is Tom McKillop. Given that he was chair at a company responsible for both arguably the worst corporate deal in UK history and certainly the worst example of rewards for failure surely his position on the remuneration committee at BP is untenable, and as a director in general. If we can't say this bloke isn't a good director, where do we draw the line?

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