NatWest finalises £450m bonus pot as return to non-public possession looms

NatWest Group is finalising plans to pay out near £450m in bonuses for final yr because it prepares for a return to full personal possession almost 17 years after its bailout.

Sky Information has learnt that the financial institution’s remuneration committee is near signing off the bonus pool forward of its annual outcomes announcement later this month.

The determine of roughly £450m shall be about 25% larger than final yr’s bonus pot of £356m, reflecting NatWest’s sharply improved efficiency in 2024, based on 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.

This weekend, Sky Information may also reveal that the state will stop to grow to be the corporate’s single-biggest shareholder inside a matter of weeks, primarily based on the present tempo of the federal government’s buying and selling plan, which drip-feeds inventory into the market.

BlackRock, the world’s largest asset supervisor, holds a stake in NatWest of roughly 6%, which means it may exchange the Treasury as NatWest’s largest investor as early as this month.

That will symbolize one other important 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.

Final yr, Sky Information revealed that NatWest was planning handy its chief government a possible multimillion pound pay increase because it returns to full personal possession.

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.

Underneath the plans, Paul Thwaite, who took over because the financial institution’s interim chief government in July 2023 earlier than being handed the position 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 switch 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 primary pay annually.

Assuming his wage of slightly below £1.2m stays unchanged, that will imply him being in line for a most reward bundle – excluding pension contributions and different gadgets – of about £6.6m, up from roughly £4.2m right now.

The potential 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 – who himself is predicted to see his annual pay capped at simply over £14m underneath a brand new coverage.

Mr Thwaite changed Dame Alison Rose after she was pressured to step down over the debanking row involving Nigel Farage, the Reform Occasion chief.

Main Metropolis traders 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 rapid aftermath of its £45.5bn rescue by taxpayers in the course of the monetary disaster of 2008, the pension bundle of Fred Goodwin, RBS’s former chief, and bonuses awarded to his successor, Stephen Hester, grew to become political complications for the governments of Gordon Brown and David Cameron.

Lately, nonetheless, such conflagrations have been defused by a mixture of pay restraint and improved efficiency.

Even after the current restoration in its valuation, taxpayers will see a loss working to billions of kilos from NatWest’s emergency bailout.

A NatWest Group spokesperson declined to remark.