RBS directors get a rough ride over pay deals at company AGM

Royal Bank of Scotland directors had a rough ride from shareholders angered at their pay at today's annual general meeting, but the body representing the taxpayer's 83% stake voted in favour of the bumper packages.

Chief executive Stephen Hester's £7.7 million pay award was branded "obscene" by shareholders at the meeting in Edinburgh this afternoon.

However, the government's UK Financial Investments division gave its approval.

Hester and eight of his top team will share a bonus and shares pot totalling £28 million for last year.

While shareholders voiced their concern about the pay, the UKFI's vote was a foregone conclusion given that it had already been negotiating closely with the board over the issue.

In the event, 99.2% of shareholders approved of the remuneration report, which sets out how much the bank will pay its directors.

RBS chairman Philip Hampton claimed the pay deals were "competitive" but at the lower end of the scale on many levels.

Shareholder advisory group Pirc had urged investors to vote against the pay deals, particularly criticicising new long-term incentive awards offering up to four times salary.

In a lengthy and wide-ranging meeting, Hester pledged to keep the bank headquartered in Scotland.

He also said RBS lawyers were reading closely the controversial report by the Financial Services Authority which cleared the bank's former management of legal liability for its virtual collapse in the banking crisis.

The FSA initially refused to publish the report but after an outcry has said it will now make its full findings public. Hampton said he did not have a specific date on when the report would be published, saying there was "a bit of to-ing and fro-ing between the lawyers."