Sir George Mathewson, the former Royal Bank of Scotland chairman who now chairs Stagecoach, has branded as "total nonsense" a complaint by corporate governance watchdog Pirc about the transport giant's executive remuneration.

After shareholders at the annual meeting in Perth had voted by an overwhelming 98.9% to approve the company’s remuneration report, Sir George said: “The whole board think it’s ridiculous.”

Pirc, which claims to be the UK’s leading independent advisory service on corporate governance, had urged its largely public and third sector shareholder members to vote against the report.

It objected that long-term incentive plan share payouts to directors Sir Brian Souter and Martin Griffiths had been brought forward by three months this year for tax reasons, even though the payouts were properly calculated at the right time.

Sir George was chairing his first annual meeting, only days after Stagecoach announced a bumper 47p a share windfall to shareholders which will deliver £50m to founder and chief executive Sir Brian and £37m to his sister and co-founder Ann Gloag, a non-executive director.

The special dividend, which will be voted on at a separate meeting, prompted a scathing attack last week from rail union leaders who said it was at the expense of rail passengers facing an 8% fare rise.

TSSA leader Gerry Doherty called the windfall “a scandal” while the RMT’s Bob Crow said it showed rail franchises were “a licence to print money”.

Sir Brian told The Herald: “Rail fares are determined by the Government, I don’t know where people can make that connection. What is the proposition they are making? It is just activists trying to exploit the situation.”

He went on: “We are making the payments because the company has performed very well across its whole portfolio over a long period of time, we have done some good business transactions and added business, and still been able to give money back to stakeholders.” He added that Stagecoach had not neglected investment as it had “the youngest fleet” of buses.

Sir George had told shareholders that Stagecoach’s UK bus operation boasted a sector-leading profit margin but also offered “the best value fares of any major operator in Britain”, while its rail performance and customer satisfaction levels were “among the best”.

Sir Brian said the company had resisted cutting back its core services during the recession, and continued to see passenger growth in most of its UK bus companies. He said the cut in bus service operators’ grant would add 2% to Stagecoach’s cost base, and went on: “We have been very careful not to hammer the farebox during this recession. We feel our customers are not in a position to fund big fare increases – but next year we will have to either trim some mileage or put fares up. We will do a combination of things to limit the damage.”

Sir Brian said he would continue to press the case for the development of coach services in the UK, citing Stagecoach’s successes with express services and park and ride, but he lamented: “We just can’t get this message across to people.”

Asked by one shareholder to explain the company’s twin joint venture bus operations in New York, Sir Brian said: “There are red buses and blue buses, whichever one you get on, we are getting 60% of the profit... I should also say there are yellow buses, so dinnae get on them.”

The chairman told one shareholder that the recent sale by Stagecoach of its Manchester Metrolink tram network would have “no effect” on the company’s interest in that field of operations. However Sir Brian declined to comment afterwards on the tram fiasco in Edinburgh.