Royal Bank of Scotland – parent of Coutts, the UK private bank – will unveil plans for stricter performance targets in its executive pay scheme following consultations with shareholders including the UK government, according to the Financial Times.

It is reported that Philip Hampton, the bank’s chairman, will announce at the company’s annual general meeting on Wednesday that a “key trigger point” in the group’s long-term incentive plan will increase.

The plan, which pays out multi-million pound bonuses to executives if the targets in it are met, awards a significant portion of these rewards when RBS’s share price hits 50p, according to the report. The share price closed at 55.8p on Friday. 

However shareholders have reportedly expressed concerns over the scheme, as it is supposed to encourage executives to take a three- to five-year view of strengthening the bank.

Accordingly there have been “extensive discussions” between members of the bank’s board and its shareholders, the publication reported. The largest shareholder is the UK government’s holding fund, UKFI, which owns 84 per cent.

In a statement issued on Sunday, RBS reportedly said: “An extensive consultation has been undertaken and the remuneration committee will give close consideration to the range of shareholder views before reaching a final position.

“The share price has been hugely volatile in the last year and that needs to be taken account of in a way that ensures the scheme is both motivating and exacting in performance terms. This is the board’s intent and the remuneration committee will endeavour to align all interests in the matter.”