NatWest Plans 43% Pay Increase for CEO Ahead of Full Privatization

NatWest is seeking to raise its chief executive’s maximum pay by over 40% as the bank prepares to return to full private ownership, nearly 17 years after being rescued by taxpayers during the 2008 financial crisis.

Formerly known as the Royal Bank of Scotland, the high street lender paid its CEO, Paul Thwaite, $6.2 million in his first full year at the helm in 2024—just below his maximum potential payout of $6.8 million. The bank’s board has now proposed increasing his maximum earnings by 43%, potentially allowing him to earn up to $9.7 million for a single year’s performance. According to projections in NatWest’s annual report, his total pay package could rise to approximately $12 million if the bank’s share price were to climb by 50%, since a large portion of his compensation is tied to long-term stock-based bonuses.

Banker Bonuses Surge as Privatization Nears

The proposed pay hike coincides with NatWest’s decision to raise its banker bonus pool by 24% to $563.6 million, the largest since 2013. This increase aligns with the bank’s expectations that it will transition back to full private ownership later this year.

The UK Treasury had injected nearly $58 billion into RBS during the financial crisis, resulting in taxpayers owning approximately 84% of the bank. Over time, that stake has been gradually reduced to below 7% through incremental share sales. The same approach is expected to continue until the government’s remaining holdings are fully sold off. A previous campaign led by the former Conservative government, which aimed to sell shares directly to the public with broadcaster Sir Trevor McDonald as its frontman, was ultimately abandoned.

Thwaite has indicated that the bank is on track to return to private hands by June.

Profits Rise Alongside CEO Pay Proposal

NatWest reported a modest 0.3% increase in pre-tax profits for 2024, reaching $7.8 billion. Additionally, the bank announced a year-end dividend payout totaling $1.5 billion, which will be distributed among shareholders, including the Treasury. Based on its current stake of just under 7%, the government could receive approximately $105.8 million from this distribution.

While Thwaite’s new pay policy will require shareholder approval at NatWest’s annual general meeting in April, critics have voiced concerns over the return of high executive bonuses.

Criticism Over Rising Pay Culture

Campaigners have argued that reviving a high-bonus culture is not in the UK’s broader economic interest. Luke Hildyard, executive director of the High Pay Centre think tank, suggested that as the global financial crisis fades from memory, banks and large corporations are reverting to pay structures that exacerbated inequality and contributed to economic instability. He stated that such a trend is neither desirable nor beneficial for the economy.

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