NatWest Group is finalising plans to pay out near £450m in bonuses for final 12 months because it prepares for a return to full personal possession almost 17 years after its bailout.
The determine of roughly £450m will likely be about 25% larger than final 12 months’s bonus pot of £356m, reflecting NatWest’s sharply improved efficiency in 2024, in line with Metropolis sources.
Shares within the financial institution, which at one level was greater than 80%-owned by British taxpayers, have almost doubled during the last 12 months.
The Treasury has been quickly decreasing its stake in NatWest, with it now standing at just below 8%.
BlackRock, the world’s largest asset supervisor, holds a stake in NatWest of roughly 6%, which means it might substitute the Treasury as NatWest’s greatest investor as early as this month.
That might characterize one other vital milestone for NatWest’s board, chaired by Rick Haythornthwaite.
In October, the financial institution raised its revenue outlook after posting a 26% rise in third-quarter earnings.
After its shares closed at 433.1p on Friday afternoon, it now has a market capitalisation of near £35bn.
Lena Wilson, the chair of the financial institution’s remuneration committee has been consulting main institutional shareholders about an overhaul of its boardroom pay coverage, with the proposals to be put to a vote at its spring AGM.
Below the plans, Paul Thwaite, who took over because the financial institution’s interim chief government in July 2023 earlier than being handed the function on a everlasting foundation in February, could be in line for a rise in his most annual bonus from 100pc of his base wage to 150%.
NatWest additionally intends to interchange its restricted share plan (RSP) for Mr Thwaite, which awarded him inventory value a most of 150% of his wage, with a efficiency share plan (PSP) which might pay him as much as thrice his primary pay every year.
Assuming his wage of just below £1.2m stays unchanged, that may imply him being in line for a most reward bundle – excluding pension contributions and different objects – of about £6.6m, up from roughly £4.2m immediately.
The possible enhance would deliver Mr Thwaite’s compensation extra carefully into line with friends together with Charlie Nunn at Lloyds Banking Group and CS Venkatakrishnan at Barclays – who himself is anticipated to see his annual pay capped at simply over £14m below a brand new coverage.
Mr Thwaite changed Dame Alison Rose after she was compelled to step down over the debanking row involving Nigel Farage, the Reform Social gathering chief.
Main Metropolis buyers who’ve been a part of the session course of are mentioned to be overwhelmingly supportive of the pay overhaul.
Throughout its earlier incarnation as Royal Financial institution of Scotland, the financial institution encountered annual controversy over its remuneration – for its chief executives and the broader workforce.
Within the speedy aftermath of its £45.5bn rescue by taxpayers throughout the monetary disaster of 2008, the pension bundle of Fred Goodwin, RBS’s former chief, and bonuses awarded to his successor, Stephen Hester, turned political complications for the governments of Gordon Brown and David Cameron.
In recent times, nonetheless, such conflagrations have been defused by a mixture of pay restraint and improved efficiency.
Even after the latest restoration in its valuation, taxpayers will see a loss operating to billions of kilos from NatWest’s emergency bailout.
A NatWest Group spokesperson declined to remark.
