RSA: Insurer Braced For Investor Showdown

The FTSE-100 insurance company RSA will hold crunch talks with some of its biggest shareholders next week amid growing anger about executive bonuses and the slashing of its full-year dividend.

I have learned that senior board members from RSA will meet a large number of City institutions at a meeting organised through the Association of British Insurers (ABI), the powerful body whose members control roughly one-fifth of the UK stock market.

The summit has been convened by RSA, best-known for its More Than consumer brand, in a desperate attempt to head off a full-scale shareholder revolt at next month's annual general meeting.

The talks between RSA and big shareholders are particularly sensitive because RSA is itself a prominent member of the ABI.  It is unclear how many of RSA's directors will attend the talks, although Martin Scicluna, the new chairman, is likely to be present.

Much of the anecdotal investor anger since RSA cut its final dividend by a third earlier this year has been directed at Simon Lee, the company's chief executive, although a major vote against his re-election is thought to be unlikely.

Earlier this month, an RSA spokeswoman told Sky its brokers "have not been proactively canvassing opinions on voting intentions".

"However, we naturally have regular dialogue with all our shareholders, both directly and through our corporate brokers, as every company does and it is normal practice to discuss voting intentions in the run-up to the AGM each year," she said.

Mr Lee took over from Andy Haste in November 2011. In February, the group announced a one-third cut to its dividend, prompting the biggest sell-off in RSA shares in nearly a decade - since when they have partly recovered.

Investors are not only wavering in their support for Mr Lee. Another big shareholder told Sky News it was likely to vote against RSA's remuneration report because the company had not followed the dividend cut by axing executive bonuses for last year altogether.

RSA did cut the bonus of Mr Lee in line with the dividend reduction but declined to follow the example of rival Aviva, which cut its payout to shareholders but paid no bonuses to executive directors.

One leading investor said on Thursday that Mr Lee should give up his cash bonus for 2012 of £480,000 if RSA wanted to avoid an embarrassing voting outcome at its AGM.

An RSA spokeswoman said the company "did not provide a running commentary on shareholder engagement".