RBS Vote Result Analysis

The resolution on the remuneration report at Royal Bank of Scotland Group plc represents the highest ever “Total Dissent” vote on the remuneration report since the introduction of the requirement for the report to be put forward to a non-binding vote.

Manifest’s analysis of the voting, which includes the 3.6 billion votes cast as abstentions, shows that a mere 8.49% of shareholders supported the resolution, with 80.14% voting against and 11.37% submitting abstentions. Total dissent of 91.51% edges out United Business Media (2005) and Freeport (2003) for the highest ever shareholder rebellion on the remuneration report.

The highest single against vote is still recorded by Freeport plc at 81% of votes cast against. Freeport’s dissent could have been higher but sadly they declined to disclose the abstain votes at the time.

Bearing in mind that the average Remuneration Report dissent is a mere 6.9%, the RBS result shows the extreme dissatisfaction of shareholders over the much-publicised RBS remuneration debacle. Shareholders have sent a resounding message to companies, to the Board of RBS and to its former CEO, Fred Goodwin, that reward for failure is not acceptable, however it is dressed up.

Even before their most recent troubles RBS has been no stranger to voting dissent on remuneration with its 2007 proposals for a new executive share plan attracting just over 26% dissent.

On a turnout of 80.96%, the RBS outturn is the 3rd highest FTSE 100 so far this year behind Thomas Cook Group and TUI Travel at 82.55% and 85.4% respectively. Putting that into context, 13 FTSE100 AGMs managed an AGM turnout of over 80%  at AGMs during 2008, the average FTSE 100 turnout for AGMs being 63.0%. Based on the 13 sets of results disclosed so far in 2009, the 2009 average outturn is running at just under 67%.

The official voting results from the RBS meeting show a 90.42% vote against. The official results exclude abstentions which are not considered to be a vote in law.

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