Showdown for RBS executives over pay packets

The group, 62 per cent owned by the taxpayer, will become the latest bank to face scrutiny over the discrepancy between pensions enjoyed by board members and those of the average worker.

Chief executive Ross McEwan receives a pension of £350,000, which amounts to 35 per cent of his £1 million basic salary, but those working in branches typically receive just 10 per cent.

The Investment Association, which oversees £7.7 trillion in assets, and shareholder society ShareSoc have both raised alarm over the arrangement.

The IA said in February that it will monitor and embarrass any company that pays pension contributions to new directors in a way not aligned to the majority of the workforce.

It is also asking companies to reduce the gap between the pensions of top executives and staff and will issue a “red-top” warning - the highest and most serious level - on firms which pay newly-appointed directors at rates above the majority of the workforce.

It wants pension payments for existing executives brought below 25 per cent.

ShareSoc, which is recommending investors vote against the RBS’s remuneration report at the Edinburgh AGM on April 26, has also highlighted that finance director Katie Murray receives a 10 per cent pension payment, much lower than Mr McEwan’s. RBS investors have also been urged to vote down the remuneration report by shareholder advisory firm PIRC, which is angry at Mr McEwan’s £3.6 million pay packet.

PIRC said elements of Mr McEwan’s pay award are “excessive”, and pointed to the fact he is paid 46 times more than the average bank employee. The bank will also release first quarter results on Friday.