RBS chairman feels heat as it emerges less than one in four board directors is a woman

PIRC, which advises investors on corporate governance issues, which was concerned that less than one in four members of the board are women, also criticised the level of executive pay at the Edinburgh-based bank.

In a report, PIRC said: "(Sir Howard) is the chairman of the nomination committee and no target has been set to increase the level of female representation on the board, which is currently insufficient at 23%.

"This ratio decreased below 25% following the appointment of Mark Seligman in April 2017.

"While the company acknowledges the updated targets published in the Hampton Alexander Report, there is no clear commitment to increase overall gender diversity at board level."

The bank, which received a government bailout in 2008 at the height of the financial crisis and remains 72 per cent taxpayer- owned, is also bracing for a shareholder backlash over a new remuneration policy, which will face a binding investor vote at its annual general meeting in Edinburgh on May 11.

The new proposals allow for chief executive Ross McEwan to earn a long-term award of 175 per cent of his £1 million base salary and finance chief Ewan Stevenson of 200 per cent, down from the previous level of 400 per cent for both.

Despite that, investor advisory group Institutional Shareholder Services (ISS) said this was not "sufficient", and recommended investors oppose the executive pay policy.

In addition, ISS expressed concern over proposals that would see executives remain in line for pay awards even after they leave the bank.

PIRC is also calling on shareholders to vote against the new pay scheme, stating: "The proposed disapplication of time pro-rating under the new policy is a major concern and cannot be supported.

"The executives should be rewarded for the period they served the company and nothing more."

Last month, when RBS reported the latest round of losses,  Sir Howard  had attempted to justify the need to pay bonuses by saying staff should not be penalised for the “sins of the past”.

Last week RBS reported its first quarterly profit since 2015, with Mr McEwan hailing the results as a "major milestone".

However, Chancellor Philip Hammond has also recently made the stark admission that the Government is prepared to sell its 72% stake in the lender at a loss to the public purse.

The Government bought its holding in the bank for £45 billion in 2008, at £5.02 a share, as part of a bailout at the height of the financial crisis.

But shares are now trading at just over half that price.

In March, it emerged the bank had awarded chief executive Ross McEwan a bonus worth £1.2 million less than a fortnight after the taxpayer-supported bank posted its ninth consecutive annual loss.

Papers show that Mr McEwan, received 512,000 shares as part of a £5.9 million equity payout to nine executives despite slumping £7 billion into the red last year as part of a package of incentive awards.

The management team were also share new long-term awards worth up to £22 million which are due to vest between 2020 and 2024 if they meet performance targets. Mr McEwan, who has a £3.8m salary, would be eligible for a bonus of 1,188,800 shares worth £2.85 million.

In February, when RBS reported another round of losses, the bank’s chairman, Sir Howard had attempted to justify the need to pay bonuses by saying staff should not be penalised for the “sins of the past”.

A year ago, the management team were awarded bonuses worth £17.4m.

An RBS spokesman said: “RBS is changing its remuneration structure to be simpler with greater long term alignment and significantly reduced maximum award levels. The aim of the new construct is to encourage sustainable long-term performance, with executive directors having significant alignment in shares both during and after employment."