LONDON (Reuters) - The Royal Bank of Scotland (RBS.L) will allow a shareholder vote on whether to give retail investors more power over the British state-backed lender, ceding to a demand from shareholder groups that had fought for this since 2016.
Shareholder groups ShareSoc and the UK Shareholders’ Association (UKSA) said on Monday the bank had agreed to let investors consider the creation of an advisory committee including shareholder representatives that would have a say on high-profile and controversial issues like executive pay.
The vote will take place at the bank’s annual general meeting (AGM) in May via a special resolution, meaning it will need 75 percent of votes cast to succeed rather than the standard 50 percent.
ShareSoc director and co-ordinator of its RBS campaign, Cliff Weight, said ShareSoc and UKSA had been calling for better shareholder engagement for over 20 years.
“At last our efforts are being recognized,” he said. “A positive vote at the AGM will be a great step forward for shareholder democracy.”
As majority shareholder with a 71 percent stake, the British government’s position will be decisive in the vote. Prime Minister Theresa May said she would crack down on irresponsible capitalism when appointed in 2016.
ShareSoc and UKSA had previously said they would launch a campaign to persuade UK Financial Investments (UKFI), which manages the government’s shareholdings, and institutional shareholders to vote for the proposal.
UKFI declined to comment.
The two groups have been fighting to force a vote on the proposal since 2016, arguing the creation of a committee would improve corporate governance and avoid the mistakes that led to the bank’s 45.5 billion pound ($63.8 billion) state bailout in 2008. RBS had previously rejected a vote on the proposals on legal grounds.
“RBS has been very clear in its support for enhanced corporate governance and, in particular, stakeholder engagement,” an RBS spokeswoman said.
“We have liaised closely with ShareSoc and UKSA to ensure their resolution was in a fit state to be put to shareholders at this year’s AGM.”
($1 = 0.7128 pounds)
Reporting by Emma Rumney; Editing by Adrian Croft