NatWest Group is handy its chief govt a possible multimillion pound pay enhance because it returns to full non-public possession after practically 17 years in state arms.
Sky Information has learnt that the chair of the financial institution’s remuneration committee, Lena Wilson, is consulting main institutional shareholders about an overhaul of its boardroom pay coverage.
The main points might 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 govt 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 price 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 will 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 as we speak.
Final 12 months, he was awarded a complete bundle of simply over £2.4m.
The possible improve would convey Mr Thwaite’s compensation extra intently into line with friends together with Charlie Nunn at Lloyds Banking Group and CS Venkatakrishnan at Barclays.
“CEO goal pay will proceed to stay decrease than UK banking friends and is positioned across the FTSE-50 mid-market degree,” 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, significantly within the wake of NatWest’s efficiency this 12 months, 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 not too long ago signalling plans to scale back the interval over which share awards vest and should be held.
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A NatWest Group spokesperson mentioned: “Our remuneration coverage is topic to shareholder approval at our AGM and we might not touch upon the element of any proposed modifications.
“Our goal with our remuneration coverage is to make sure alignment between govt pay, efficiency and the long-term worth created for our shareholders.”
Govt 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 throughout the monetary disaster of 2008.
The pension bundle 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 grow to be a much less contentious problem for the financial institution.
On Friday, NatWest introduced that the Treasury’s stake had fallen beneath 10% for the primary time for the reason that bailout.
“We’re happy with the sustained momentum in lowering HM Treasury’s stake in NatWest Group,” it mentioned.
“Returning the financial institution to full non-public possession is a shared ambition and one that’s within the curiosity of all our stakeholders.”
Sky Information revealed in October that the federal government was on track to fully exit its NatWest shareholding by the center of 2025 – or sooner if it launches an institutional inserting of a part of its remaining stake.
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.
