NatWest Group is at hand its chief government a possible multimillion pound pay increase because it returns to full personal possession after practically 17 years in state fingers.
The small print will likely be put to a vote at NatWest’s annual assembly subsequent spring, in accordance with guidelines requiring buyers to vote on remuneration insurance policies each three years.
Beneath 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, can 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 may pay him as much as thrice his fundamental pay every year.
Assuming his wage of just below £1.2m stays unchanged, that may imply him being in line for a most reward package deal – excluding pension contributions and different gadgets – of about £6.6m, up from roughly £4.2m right this moment.
Final yr, he was awarded a complete package deal of simply over £2.4m.
The potential improve 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.
“CEO target pay will continue to remain lower than UK banking peers and is positioned around the FTSE-50 mid-market level,” Ms Wilson wrote in her letter to shareholders.
Mr Thwaite changed Dame Alison Rose after she was pressured to step down over the debanking row involving Nigel Farage, the Reform Celebration chief.
Main Metropolis buyers who’ve been a part of the session course of are mentioned to be overwhelmingly supportive of the pay overhaul, notably within the wake of NatWest’s efficiency this yr, which has seen its shares surge by 90% throughout 2024.
Regulators have additionally begun to chill out guidelines imposed on bankers’ pay imposed after the 2008 disaster, with the Financial institution of England lately signalling plans to scale back the interval over which share awards vest and have to be held.
A NatWest Group spokesperson mentioned: “Our remuneration policy is subject to shareholder approval at our AGM and we would not comment on the detail of any proposed changes.
“Our goal with our remuneration coverage is to make sure alignment between government pay, efficiency and the long-term worth created for our shareholders.”
Government pay has been a delicate topic for NatWest, which was beforehand known as Royal Financial institution of Scotland Group, ever because it was rescued with £45.5bn of taxpayers’ cash in the course of the monetary disaster of 2008.
The pension package deal of Fred Goodwin, RBS’s former chief, and bonuses awarded to Stephen Hester, who was parachuted in to interchange him and stabilise the financial institution turned large political complications for the governments of Gordon Brown and David Cameron.
For the reason that sale of the taxpayer’s majority stake in RBS kicked off in 2015, bonuses have develop into a much less contentious problem for the financial institution.
On Friday, NatWest introduced that the Treasury’s stake had fallen under 10% for the primary time because the bailout.
“We are pleased with the sustained momentum in reducing HM Treasury’s stake in NatWest Group,” it mentioned.
“Returning the bank to full private ownership is a shared ambition and one that is in the interest of all our stakeholders.”
Even after the partial restoration in its valuation, taxpayers will see a loss working to billions of kilos from the emergency bailout.
On Friday, shares in NatWest closed at 405.5p, giving it a market capitalisation of £32.6bn.
